-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D6fmCjN8Q7PuBcvHpmDR4RRTqUOaRcvYl1PcZdsgOHhWyABboJncORvlF2TIxkjk d7uCqaOef+6JalGmmMWvMw== 0000072741-01-500024.txt : 20010501 0000072741-01-500024.hdr.sgml : 20010501 ACCESSION NUMBER: 0000072741-01-500024 CONFORMED SUBMISSION TYPE: U5S PUBLIC DOCUMENT COUNT: 44 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHEAST UTILITIES SYSTEM CENTRAL INDEX KEY: 0000072741 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 042147929 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U5S SEC ACT: SEC FILE NUMBER: 001-05324 FILM NUMBER: 1614838 BUSINESS ADDRESS: STREET 1: 174 BRUSH HILL AVE CITY: WEST SPRINGFIELD STATE: MA ZIP: 01090-0010 BUSINESS PHONE: 4137855871 MAIL ADDRESS: STREET 1: 107 SELDON ST CITY: BERLIN STATE: CT ZIP: 06037-1616 U5S 1 u5s2000.txt Commission File Number: 30-246 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-1004 FORM U5S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2000 Filed pursuant to the Public Utility Holding Company Act of 1935 by NORTHEAST UTILITIES 174 Brush Hill Avenue, West Springfield, Massachusetts 01090-0010 (Corporate Address) Selden Street, Berlin, Connecticut 06037-1616 (Principal Headquarters) NORTHEAST UTILITIES FORM U5S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2000 TABLE OF CONTENTS ----------------- Item Page - ---- ---- 1. System Companies and Investments Therein...................... 2 2. Acquisitions or Sales of Utility Assets....................... 13 3. Issue, Sale, Pledge, Guarantee, or Assumption of System Securities............................................. 13 4. Acquisition, Redemption or Retirement of System Securities.... 15 5. Investments in Securities of Nonsystem Companies.............. 18 6. Officers and Directors........................................ 20 7. Contributions and Public Relations............................ 53 8. Service, Sales and Construction Contracts..................... 53 9. Wholesale Generators and Foreign Utility Companies............ 55 10. Financial Statements and Exhibits............................. 57 Report of Independent Public Accountants...................... F-1 Signature..................................................... F-2 ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF DECEMBER 31, 2000 Name of Company - --------------- No. of Common % of Name of Owner Shares Owned Voting Power - ------------- ------------- ------------ Northeast Utilities (NU) (1) Name of Issuer - -------------- The Connecticut Light and Power Company (CL&P) (2)(3)* 7,584,884 100% Public Service Company of New Hampshire (PSNH) (2)(3)* 1,000 100 Western Massachusetts Electric Company (WMECO) (2)(3)* 590,093 100 North Atlantic Energy Corporation (NAEC) (3) 1,000 100 Holyoke Water Power Company (HWP) (3)* 480,000 100 Northeast Utilities Service Company (NUSCO) (4) 1 100 Northeast Nuclear Energy Company (NNECO) (5) 1,500 100 North Atlantic Energy Service Corporation (NAESCO) (6) 1,000 100 The Quinnehtuk Company (7) 3,500 100 The Rocky River Realty Company (RRR) (7) 100 100 Yankee Energy System, Inc. (YES) (8) 1,000 100 Charter Oak Energy, Inc. (COE) (9)* 100 100 NU Enterprises, Inc. (NUEI) 100 100 Name of Company - --------------- Issuer Owner's Name of Owner Book Value Book Value - ------------- ---------- ---------- (000's) (000's) Northeast Utilities (NU) (1) Name of Issuer - -------------- The Connecticut Light and Power Company (CL&P) (2)(3)* $732,744 $732,744 Public Service Company of New Hampshire (PSNH) (2)(3)* 549,294 549,294 Western Massachusetts Electric Company (WMECO) (2)(3)* 171,896 171,896 North Atlantic Energy Corporation (NAEC) (3) 160,959 160,959 Holyoke Water Power Company (HWP) (3)* 2,788 2,788 Northeast Utilities Service Company (NUSCO) (4) 1 1 Northeast Nuclear Energy Company (NNECO) (5) 15,683 15,683 North Atlantic Energy Service Corporation (NAESCO) (6) 13 13 The Quinnehtuk Company (7) (2,494) (2,494) The Rocky River Realty Company (RRR) (7) 684 684 Yankee Energy System, Inc. (8) 484,155 484,155 Charter Oak Energy, Inc. (COE) (9)* 18,867 18,867 NU Enterprises, Inc. (NUEI) 115,327 115,327 Name of Company - --------------- No. of Common % of Name of Owner Shares Owned Voting Power - ------------- ------------- ------------ The Connecticut Light and Power Company (2)(3)*** Name of Issuer - -------------- CL&P Receivables Corporation (CRC) 100 100 CL&P Capital, L.P. - 100 Electric Power, Incorporated** 100 100 The Connecticut Steam Company** 10 100 The Nutmeg Power Company** 60 100 Name of Owner - ------------- Public Service Company of New Hampshire (2)(3) Name of Issuer - -------------- Properties, Inc. (7) 200 100 Name of Company - --------------- Issuer Owner's Name of Owner Book Value Book Value - ------------- ---------- ---------- (000's) (000's) The Connecticut Light and Power Company (2)(3)*** Name of Issuer - -------------- CL&P Receivables Corporation (CRC) $98,797 $98,797 CL&P Capital, L.P. 3,100 3,100 Electric Power, Incorporated** 1 1 The Connecticut Steam Company** 1 1 The Nutmeg Power Company** 2 2 Name of Owner - ------------- Public Service Company of New Hampshire (2)(3) Name of Issuer - -------------- Properties, Inc. (7) 3,533 3,533 Name of Company - --------------- No. of Common % of Name of Owner Shares Owned Voting Power - ------------- ------------- ------------ Holyoke Water Power Company (3) Name of Issuer - -------------- Holyoke Power and Electric Company (HP&E) 4,850 100 Name of Owner - ------------- Charter Oak Energy, Inc. (9) Name of Issuer - -------------- COE Development Corporation 100 100 COE Argentina II Corporation 100 100 COE Ave Fenix Corporation 100 100 Name of Owner - ------------- HEC Inc. Name of Issuer Select Energy Contracting, Inc. 100 100 Southwest HEC Energy Services L.L.C. (10) - 100 HEC Energy Consulting Canada, Inc. 100 100 Reeds Ferry Supply Co., Inc. 100 100 HEC/Tobyhanna Energy Project, Inc. 100 100 ERI/HEC EFA-Med, L.L.C. (11) - 50 Name of Company - --------------- Issuer Owner's Name of Owner Book Value Book Value - ------------- ---------- ---------- (000's) (000's) Holyoke Water Power Company (3) Name of Issuer - -------------- Holyoke Power and Electric Company (HP&E) $ 390 $ 390 Name of Owner - ------------- Charter Oak Energy, Inc. (9) Name of Issuer - -------------- COE Development Corporation 1,614 1,614 COE Argentina II Corporation 29 29 COE Ave Fenix Corporation 16,029 16,029 Name of Owner - ------------- HEC Inc. (9) Name of Issuer - -------------- Select Energy Contracting, Inc. 14,766 14,766 Southwest HEC Energy Services L.L.C. (10) - - HEC Energy Consulting Canada, Inc. 1 1 Reeds Ferry Supply Co., Inc. (21) (21) HEC/Tobyhanna Energy Project, Inc. 183 183 ERI/HEC EFA-Med, L.L.C. (11) - - Name of Company - --------------- No. of Common % of Name of Owner Shares Owned Voting Power - ------------- ------------- ------------ NU Enterprises, Inc. Name of Issuer - -------------- Northeast Generation Company (NGC) 100 100 Northeast Generation Services Company (NGS) 100 100 Select Energy Portland Pipeline, Inc. (SEPPI) 100 100 Select Energy, Inc. (Select Energy) 100 100 Mode 1 Communications, Inc. (Mode 1) 100 100 HEC Inc. (HEC)* 100 100 Name of Company - --------------- Name of Owner - ------------- Yankee Energy System, Inc. (8) Name of Issuer - -------------- Yankee Gas Services Company (Yankee Gas) (8) 1,000 100 NorConn Properties, Inc. (NorConn) (7) (8) 100 100 Housatonic Corporation (Housatonic) (8) 100 100 Yankee Energy Financial Services (YEFSCO) (8) 200 100 Yankee Energy Services Company (YESCO) (8) 200 100 R. M. Services, Inc. (RMS) (8) 200 100 Yankee Energy Marketing Company (8)** 200 100 Name of Company - --------------- Issuer Owner's Name of Owner Book Value Book Value - ------------- ---------- ---------- (000's) (000's) NU Enterprises, Inc. Name of Issuer - -------------- Northeast Generation Company (NGC) $ 47,635 $ 47,635 Northeast Generation Services Company (NGS) 650 650 Select Energy Portland Pipeline, (SEPPI) Inc. 5,386 5,386 Select Energy, Inc. (Select Energy) 15,473 15,473 Mode 1 Communications, Inc. (Mode 1) 10,079 10,079 HEC Inc. (HEC)* 25,457 25,457 Name of Company - --------------- Name of Owner - ------------- Yankee Energy System, Inc. (8) Name of Issuer - -------------- Yankee Gas Services Company (Yankee Gas) (8) 467,202 467,202 NorConn Properties, Inc. (NorConn) (7) (8) 217 217 Housatonic Corporation (Housatonic) (8) 27 27 Yankee Energy Financial Services (YEFSCO) (8) 1,300 1,300 Yankee Energy Services Company (YESCO) (8) 6,695 6,695 R. M. Services, Inc. (RMS) (8) 9,358 9,358 Yankee Energy Marketing Company (8)** - - *Consolidated. **Inactive. ***Exempt holding company - see Commission Release Nos. 13048 and 14947. (1) For information regarding NU's investment in the hydro-transmission companies, see Note A to Item 1. (2) For information regarding CL&P's, PSNH's and WMECO's investment in regional nuclear generating companies, see Note A to Item 1. (3) Electric utility operating subsidiary. (4) Service company which provides support services for the NU system companies. (5) Agent for the NU system companies and other New England utilities in operating the Millstone nuclear facilities. (6) Agent for the joint owners in operating the Seabrook nuclear facility. (7) Subsidiary which constructs, acquires or leases some of the property and facilities used by one or more of the system companies. (8) On March 1, 2000, NU completed its acquisition of Yankee Energy System, Inc. (Yankee), the parent company of Yankee Gas Services Company (Yankee Gas), Connecticut's largest natural gas distribution system. Other subsidiaries of Yankee are NorConn Properties, Inc., Housatonic Corporation, Yankee Energy Financial Services, Yankee Energy Services Company, and R. M. Services, Inc. (9) Directly and through its subsidiaries, COE formerly developed and invested in cogeneration, small power production and other forms of nonutility generation and in exempt wholesale generators and foreign utility companies, as permitted under the Energy Policy Act of 1992. Now inactive. (10) Southwest HEC Energy Services L.L.C. was dissolved on November 21, 2000. The business was transferred to HEC Inc. (11) Formed as a Delaware limited liability company on September 18, 2000. HEC ownes 50% membership interest. Formed to perform energy services work for the United States Navy. Note A: The following are CL&P's, PSNH's and WMECO's total investments in regional nuclear generating companies and NU's investments in New England Hydro-Transmission Electric Company, Inc. and New England Hydro-Transmission Corporation: No. of % Carrying Common of Value Shares Voting to Name of Owner Name of Issuer Owned Power Owners - ------------- -------------- ------- ------ ------- (000's) The Connecticut Light and Power Company: Connecticut Yankee Atomic Power Co. (b) 120,750 34.5% $26,118 Maine Yankee Atomic Power Co. (b) 60,000 12.0 8,581 Vermont Yankee Nuclear Power Corp. (c) 37,242 9.5 5,125 Yankee Atomic Electric Co. (b) 37,583 24.5 1,571 Public Service Company of New Hampshire: Connecticut Yankee Atomic Power Co. (b) 17,500 5.0 3,988 Maine Yankee Atomic Power Co. (b) 25,000 5.0 3,483 Vermont Yankee Nuclear Power Corp. (c) 15,681 4.0 2,084 Yankee Atomic Electric Co. (b) 10,738 7.0 410 Western Massachusetts Electric Company: Connecticut Yankee Atomic Power Co. (b) 33,250 9.5 7,182 Maine Yankee Atomic Power Co. (b) 15,000 3.0 2,132 Vermont Yankee Nuclear Power Corp. (c) 9,800 2.5 1,354 Yankee Atomic Electric Co. (b) 10,738 7.0 449 Total System Investment: Connecticut Yankee Atomic Power Co. (b) 171,500 49.0 37,288 Maine Yankee Atomic Power Co. (b) 100,000 20.0 14,196 Vermont Yankee Nuclear Power Corp. (c) 62,723 16.0 8,563 Yankee Atomic Electric Co. (b) 59,059 38.5 2,430 Northeast Utilities: New England Hydro-Transmission Electric Company, Inc. 906,324 22.66 10,071 New England Hydro-Transmission Corp. 4,871 22.66 4,939 (b) Yankee Atomic Electric Co.'s, Connecticut Yankee Atomic Power Co.'s and Maine Yankee Atomic Power Co.'s nuclear power plants were shut down permanently on February 26, 1992, December 4, 1996, and August 6, 1997, respectively. (c) On October 15, 1999, Vermont Yankee Nuclear Power Corporation agreed to sell its nuclear generating unit to Amergen Energy Company, LLC. The deal was rejected by the Vermont Public Service Board as insufficient but the power station is expected to be sold to potential bidders by the end of 2001. ITEM 2. ACQUISITIONS OR SALES OF UTILITY ASSETS Restructuring laws in Connecticut required CL&P and WMECO to divest of their nonnuclear generation assets. On March 14, 2000, CL&P and WMECO closed on the sale of 1,289 megawatts (MW) of hydroelectric generation assets to NU subsidiary Northeast Generation Company. The total consideration received from the sale was $865.5 million. ITEM 3. ISSUE, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF SYSTEM SECURITIES Descriptions of transactions involving the issue, sale, pledge, guarantee, or assumption of system securities, including short-term borrowings, have been filed pursuant to Rule 24, with the exception of certain NU guarantees incident to the procurement of surety bonds and the issue of certain securities, as described below. In the ordinary course of their businesses, the NU subsidiary companies are required to provide surety or performance bonds. From time to time, NU guarantees the payment of such a bond by its subsidiary through the indemnification of the surety company or agency which has agreed to provide the bond. NU's guarantee of these surety bonds is exempt from the provisions of Section 12(b) of the Public Utility Holding Company Act of 1935, pursuant to Rule 45(b)(6) thereunder. As of December 31, 2000, NU had $8.4 million of such guarantees outstanding, which was the highest amount outstanding during 2000. In addition, information relating to the following issuances has been has been filed on Form U-6B-2 in accordance with Rule 52: 1. On April 4, 2000, PSNH entered into two letters of credit and reimbursement agreements totaling $115.4 million, which support its Series D and E pollution control revenue bonds (PCRBs). The new letters of credit, which replaced similar letters of credit that were set to expire on April 12, 2000, allow the PCRBs to remain in a flexible, floating interest rate mode. Form U-6B-2 for this transaction was filed on April 12, 2000. 2. On October 24, 2000, CL&P, The Bank of New York and certain participating banks identified therein entered into a Standby Bond Purchase Agreement. The expiration date of this liquidity facility is October 23, 2001. Form U-6B-2 for this transaction was filed on November 2, 2000. 3. On September 15, 2000, Toronto-Dominion Bank extended the expiration dates of two letters of credit originally issued for the account of Holyoke Water Power Company (HWP) in support of outstanding bonds in the aggregate principal amount of $23.3 million to November 6, 2001. Forms U-6B-2 were filed on September 20, 2000. 4. On December 12, 2000, Canadian Imperial Bank of Commerce, New York Agency, extended the expiration date of a letter of credit originally issued for the account of HWP in support of outstanding bonds in the principal amount of $15 million to December 31, 2001. Form U-6B-2 for this transaction was filed on February 6, 2001. ITEM 4. ACQUISITION, REDEMPTION OR RETIREMENT OF SYSTEM SECURITIES (1) Amounts Acquired -------------------------------- No. of Shares or Name of Issuer and Title of Issue Principal Amount Consideration - --------------------------------- ---------------- ------------- NU Enterprises, Inc. (Consolidated) Other Notes/Agreements - 7.6300% First Union Bank/John Hancock $ 26,477,000 $ 26,477,000 ============ ============ Yankee Energy Systems, Inc. 10.0700% Series AE $ 18,050,000 $ 18,050,000 8.4800% Series B 20,000,000 20,000,000 8.6300% Series C 20,000,000 20,000,000 7.1900% Series E 30,000,000 30,000,000 6.2000% Series F 50,000,000 50,000,000 6.7500% Series D 20,000,000 20,000,000 ------------ ------------ $158,050,000 $158,000,000 ============ ============ Other Notes/Agreements - 6.2400% NorConn Properties, Inc. - Series A-B $ 5,000,000 $ 5,000,000 ============ ============ Amounts Retired/Debt Repayment -------------------------------- No. of Shares or Name of Issuer and Title of Issue Principal Amount Consideration - --------------------------------- ---------------- ------------- The Connecticut Light and Power Company First Mortgage Bonds - 5.7500% Series XX $159,000,000 $159,000,000 7.3750% Series TT 20,000,000 20,000,000 ------------ ------------ $179,000,000 $179,000,000 ============ ============ Other Notes/Agreements - (2) Other $ 70,635 $ 70,635 ------------ ------------ $ 70,635 $ 70,635 ============ ============ Western Massachusetts Electric Company 7.7500% Series Y $ 50,000,000 $ 50,000,000 7.7500% Series V 44,150,000 44,150,000 ------------ ------------ $ 94,150,000 $ 94,150,000 ============ ============ Public Service Company of New Hampshire Other Notes/Agreements - Variable Series D $ 39,500,000 $ 39,500,000 Variable Series E 69,700,000 69,700,000 ------------ ------------ $109,200,000 $109,200,000 ============ ============ NU Enterprises, Inc. (Consolidated) Other Notes/Agreements - Arizona Public Service Company $ 725,000 $ 725,000 ============ ============ NU Parent 8.58% Series A Note $ 14,000,000 $ 14,000,000 8.38% Series B Note 6,000,000 6,000,000 ------------ ------------ $ 20,000,000 $ 20,000,000 ============ ============ The Rocky River Realty Company Other Notes/Agreements - 7.875% Installment Note (2) $ 981,000 $ 981,000 6.620% Mortgage Note 80,014 80,014 8.810% Series A Note (3) 987,697 987,697 ------------ ------------ $ 2,048,711 $ 2,048,711 ============ ============ Northeast Nuclear Energy Company Other Notes/Agreements - 7.67% Senior Notes $ 6,011,110 $ 6,011,110 ============ ============ North Atlantic Energy Corporation First Mortgage Bonds - 9.05% Series A $ 70,000,000 $ 70,000,000 ============ ============ Other Notes/Agreements Term Note (2) $200,000,000 $200,000,000 ============ ============ Yankee Energy Systems, Inc. Other Notes/Agreements 6.2400% NorConn Properties, Inc. - Series A-B $ 3,400,000 $ 3,400,000 ============ ============ (1) For acquisitions, redemptions or retirements of system securities, other than preferred stock, all transactions exempt pursuant to Rule 42(b)(2) or (4). (2) Unsecured. (3) Secured. ITEM 5. INVESTMENTS IN SECURITIES OF NONSYSTEM COMPANIES Name of Owner Name of Issuer Security Owned (1) - ------------- -------------- ------------------ Western Massachusetts Massachusetts Mutual Note Electric Company Life Insurance Public Service Company Amoskeag Industries, Inc. Stock of New Hampshire Northeast Utilities Connecticut Seed Limited Partnership (Parent) Ventures, Ltc. Interest 9 Subsidiaries (2) Various Stock, Debentures and Notes Mode 1 Communications, NEON Communications, Inc. Stock Inc. (3) Select Energy Portland Portland Natural Partnership Pipeline, Inc. Gas Transmission Interest NU Enterprises, Inc. (4) Acumentrics Corporation Stock % of Number Voting Carrying Name of Owner of Shares Power Value to Owners - ------------- --------- ------ --------------- (000's) Western Massachusetts - - $ 190 Electric Company ======= Public Service Company 1,000 - $ 100 of New Hampshire ======= Northeast Utilities (Parent) - - $ 14 ======= 9 Subsidiaries (2) - - $ 105 ======= Mode 1 Communications, 4,774,038 25.4% $12,949 Inc. (3) ======= Select Energy Portland Pipeline, Inc. - - $ 3,268 ======= NU Enterprises, Inc. (4) 500,000 5% $10,000 ======= (1) Recorded at cost on owners' books. Partnership interests are accounted for under the equity method of accounting. (2) CL&P, WMECO, HWP, The Quinnehtuk Company, NUSCO, NU Parent, PSNH, Yankee Energy System and RRR. (3) Mode 1 is a wholly owned subsidiary of NU. In July 1998, Mode 1's equity investments, FiveCom LLC and NECOM LLC, were reorganized along with other related companies to form a new company, NorthEast Optic Network, Inc. (NEON), now called NEON Communications, Inc. Mode 1's ownership interest of 40.78 percent in the new company was equal to its combined ownership interest in FiveCom LLC and NECOM LLC. In August 1998, NEON issued 4,000,000 new common shares on the open market in an initial public offering (IPO). In September 2000, two unaffiliated companies agreed to acquire 4,607,878 shares of NEON over time pursuant to a milestone schedule. Assuming the issuance of all shares, Mode 1 would own 20.5 percent of NEON on a fully diluted basis. (4) In September 2000, NU Enterprises, Inc. purchased 500,000 shares of Acumentrics Corporation Class A common stock. ITEM 6. OFFICERS AND DIRECTORS Part I. As of December 31, 2000 1. The following is a list of the names and principal business addresses of the individuals who are Trustees of Northeast Utilities (NU), but who are not officers or directors of any other NU system company. The names of the officers and directors of system companies appear in Section 2 below. Cotton Mather Cleveland Emery G. Olcott Mather Associates Packard BioScience Company 123 Main Street 800 Research Parkway P.O. Box 935 Meriden, CT 06450 New London, NH 03257 Sanford Cloud, Jr. William J. Pape II The National Conference for American-Republican, Inc. Community and Justice P.O. Box 2090 475 Park Avenue South, 19th Floor 398 Meadow Street New York, NY 10016 Waterbury, CT 06722-2090 Mr. William F. Conway Robert E. Patricelli c/o Northeast Utilities Women's Health USA, Inc. P.O. Box 270 22 Waterville Road Hartford, CT 06141-0270 Avon, CT 06001 E. Gail de Planque, Ph.D John F. Swope c/o Northeast Utilities c/o Northeast Utilities P.O. Box 270 P.O. Box 270 Hartford, CT 06141-0270 Hartford, CT 06141-0270 Raymond L. Golden John F. Turner c/o Northeast Utilities The Conservation Fund P.O. Box 270 1800 North Kent Street, Hartford, CT 06161-0270 Suite 1120 Arlington, VA 22209 Elizabeth T. Kennan c/o Northeast Utilities P.O. Box 270 Hartford, CT 06161-0270 2. Following are the names of and positions held by the officers and directors of all system companies (excluding the Trustees of Northeast Utilities who are listed in Section 1 above).
NAMES OF SYSTEM COMPANIES WITH WHICH CONNECTED AS OF DECEMBER 31, 2000 NU NUSCO CL&P -- ----- ---- Michael G. Morris CHB, P, CEO, T CH, P, CEO, D Bruce D. Kenyon PN Hugh C. MacKenzie PR P, D John H. Forsgren EVP, CFO, T EVP, CFO, D Cheryl W. Grise SVP, S, GC SVP, S, GC Gary D. Simon SVP Kerry J. Kuhlman (1) Gary A. Long (2) Dennis E. Welch (3) David H. Boguslawski VP, D Gregory B. Butler VP J. Kingsley Fink (3) John B. Keane VP, D VP Mary Jo Keating VP Robert J. Kost VP Steven P. Laden VP Jean M. LaVecchia VP Keith R. Marvin VP, CIO David R. McHale VP, TRS VP, TRS William J. Nadeau (4) John W. Noyes Rodney O. Powell VP, D Paul E. Ramsey (2) John J. Roman VP, C VP, C Lisa J. Thibdaue VP Richard L. Tower VP Kevin E. Walker (2) Roger C. Zaklukiewicz VP Robert A. Bersak (2) O. Kay Comendul S Thomas V. Foley (5) Randy A. Shoop TRS John P. Stack C Patricia A. Wood (1) John C. Collins (6) Gerald Letendre (7) Jane E. Newman (8) James E. Byrne (9) Paul J. McDonald (10) Melinda M. Phelps (11) E. Edward Booker (12) Eileen S. Kraus (13) John J. Rando (14) Patricia M. Worthy (15) William J. Quinlan Murry K. Staples (16 Gregory C. Picklesimer (16)
HP&E HWP PSNH ---- --- ---- Michael G. Morris C, CEO, D Bruce D. Kenyon Hugh C. MacKenzie P, D P, D D John H. Forsgren D Cheryl W. Grise Gary D. Simon Kerry J. Kuhlman D D Gary A. Long P, COO, D Dennis E. Welch David H. Boguslawski D D VP, D Gregory B. Butler J. Kingsley Fink John B. Keane Mary Jo Keating Robert J. Kost Steven P. Laden Jean M. LaVecchia Keith R. Marvin David R. McHale VP, TRS VP, TRS VP, TRS William J. Nadeau VP VP VP John W. Noyes Rodney O. Powell Paul E. Ramsey VP John J. Roman VP, C VP, C VP, C Lisa J. Thibdaue Richard L. Tower Kevin E. Walker VP Roger C. Zaklukiewicz VP VP Robert A. Bersak O. Kay Comendul S S S Thomas V. Foley CL CL Randy A. Shoop John P. Stack Patricia A. Wood John C. Collins D Gerald Letendre D Jane E. Newman D James E. Byrne Paul J. McDonald Melinda M. Phelps E. Edward Booker Eileen S. Kraus John J. Rando Patricia M. Worthy William J. Quinlan Murry K. Staples Gregory C. Picklesimer
WMECO Mode 1 PI ----- ------ -- Michael G. Morris C, CEO, D P, CEO, D Bruce D. Kenyon Hugh C. MacKenzie D John H. Forsgren D D Cheryl W. Grise Gary D. Simon D Kerry J. Kuhlman P, COO, D Gary A. Long P, D Dennis E. Welch David H. Boguslawski VP, D Gregory B. Butler J. Kingsley Fink John B. Keane Mary Jo Keating Robert J. Kost Steven P. Laden Jean M. LaVecchia Keith R. Marvin David R. McHale VP, TRS VP, TRS VP, TRS William J. Nadeau John W. Noyes VP Rodney O. Powell Paul E. Ramsey VP, D John J. Roman VP, C VP, C VP, C Lisa J. Thibdaue Richard L. Tower Kevin E. Walker Roger C. Zaklukiewicz VP Robert A. Bersak S, D O. Kay Comendul S Thomas V. Foley Randy A. Shoop John P. Stack Patricia A. Wood CL John C. Collins Gerald Letendre Jane E. Newman James E. Byrne D Paul J. McDonald D Melinda M. Phelps D E. Edward Booker Eileen S. Kraus John J. Rando Patricia M. Worthy William J. Quinlan Murry K. Staples Gregory C. Picklesimer
Quinn. RRR CRC ------ --- --- Michael G. Morris Bruce D. Kenyon Hugh C. MacKenzie D P, D P, D John H. Forsgren Cheryl W. Grise Gary D. Simon Kerry J. Kuhlman P, D Gary A. Long Dennis E. Welch David H. Boguslawski D D D Gregory B. Butler J. Kingsley Fink John B. Keane Mary Jo Keating Robert J. Kost Steven P. Laden Jean M. LaVecchia Keith R. Marvin David R. McHale VP, TRS VP, TRS William J. Nadeau John W. Noyes Rodney O. Powell D D Paul E. Ramsey John J. Roman VP, C VP, C Lisa J. Thibdaue Richard L. Tower Kevin E. Walker Roger C. Zaklukiewicz VP VP Robert A. Bersak O. Kay Comendul S S Thomas V. Foley Randy A. Shoop TRS John P. Stack C Patricia A. Wood CL John C. Collins Gerald Letendre Jane E. Newman James E. Byrne Paul J. McDonald Melinda M. Phelps H. Edward Booker D Eileen S. Kraus John J. Rando Patricia M. Worthy William J. Quinlan Murry K. Staples Gregory C. Picklesimer
Conn Steam Nutmeg Power EPI ---------- ------------ --- Michael G. Morris Bruce D. Kenyon Hugh C. MacKenzie P, D P, D P, D John H. Forsgren Cheryl W. Grise Gary D. Simon Kerry J. Kuhlman Gary A. Long Dennis E. Welch David H. Boguslawski VP VP VP Gregory B. Butler J. Kingsley Fink John B. Keane Mary Jo Keating Robert J. Kost Steven P. Laden Jean M. LaVecchia Keith R. Marvin David R. McHale William J. Nadeau John W. Noyes Rodney O. Powell Paul E. Ramsey John J. Roman Lisa J. Thibdaue Richard L. Tower Kevin E. Walker Roger C. Zaklukiewicz Robert A. Bersak O. Kay Comendul S, D S, D S, D Thomas V. Foley Randy A. Shoop TRS TRS TRS John P. Stack C C C Patricia A. Wood John C. Collins Gerald Letendre Jane E. Newman James E. Byrne Paul J. McDonald Melinda M. Phelps Eileen S. Kraus John J. Rando Patricia M. Worthy H. Edward Booker William J. Quinlan D D D Murry K. Staples Gregory C. Picklesimer
CL&P Cap. (23) YES YEFSCO -------------- --- ------ Michael G. Morris C, P, CEO, D C, P, CEO, D Bruce D. Kenyon Hugh C. MacKenzie John H. Forsgren EVP, CFO, D EVP, CFO, D Cheryl W. Grise SVP, S, GC, D SVP, S, GC Gary D. Simon Kerry J. Kuhlman Gary A. Long Dennis E. Welch SVP, COO, D SVP, COO, D David H. Boguslawski Gregory B. Butler J. Kingsley Fink John B. Keane Mary Jo Keating Robert J. Kost Steven P. Laden Jean M. LaVecchia Keith R. Marvin David R. McHale VP, TRS VP, TRS William J. Nadeau John W. Noyes Rodney O. Powell Paul E. Ramsey John J. Roman VP, C VP, C Lisa J. Thibdaue Richard L. Tower Kevin E. Walker Roger C. Zaklukiewicz Robert A. Bersak O. Kay Comendul Thomas V. Foley Randy A. Shoop John P. Stack Patricia A. Wood John C. Collins Gerald Letendre Jane E. Newman James E. Byrne Paul J. McDonald Melinda M. Phelps E. Edward Booker Eileen S. Kraus D John J. Rando D Patricia M. Worthy D William J. Quinlan Murry K. Staples Gregory C. Picklesimer
YGSCO YESCO NORCONN ----- ----- ------- Michael G. Morris C, P, CEO, D C, P, CEO, D C, P, CEO, D Bruce D. Kenyon Hugh C. MacKenzie John H. Forsgren EVP, CFO, D EVP, CFO, D EVP, CFO, D Cheryl W. Grise SVP, S, GC SVP, S, GC SVP, S, GC Gary D. Simon Kerry J. Kuhlman Gary A. Long Dennis E. Welch SVP, COO, D SVP, COO, D SVP, COO, D David H. Boguslawski J. Kingsley Fink VP Gregory B. Butler John B. Keane Mary Jo Keating Robert J. Kost Steven P. Laden Jean M. LaVecchia Keith R. Marvin David R. McHale VP, TRS VP, TRS VP, TRS William J. Nadeau John W. Noyes Rodney O. Powell Paul E. Ramsey John J. Roman VP, C VP, C VP, C Lisa J. Thibdaue Richard L. Tower Kevin E. Walker Roger C. Zaklukiewicz Robert A. Bersak O. Kay Comendul Thomas V. Foley Randy A. Shoop John P. Stack Patricia A. Wood John C. Collins Gerald Letendre Jane E. Newman James E. Byrne Paul J. McDonald Melinda M. Phelps E. Edward Booker Eileen S. Kraus John J. Rando Patricia M. Worthy William J. Quinlan Murry K. Staples Gregory C. Picklesimer
YEMCO RMS ----- --- Michael G. Morris C, P, CEO, D Bruce D. Kenyon Hugh C. MacKenzie John H. Forsgren EVP, CFO, D Cheryl W. Grise SVP, S, GC Gary D. Simon Kerry J. Kuhlman Gary A. Long Dennis E. Welch SVP, COO, D David H. Boguslawski Gregory B. Butler J. Kingsley Fink John B. Keane Mary Jo Keating Robert J. Kost Steven P. Laden Jean M. LaVecchia Keith R. Marvin David R. McHale VP, TRS VP, TRS William J. Nadeau John W. Noyes Rodney O. Powell Paul E. Ramsey John J. Roman VP, C VP, C Lisa J. Thibdaue Richard L. Tower Kevin E. Walker Roger C. Zaklukiewicz Robert A. Bersak O. Kay Comendul Thomas V. Foley Randy A. Shoop John P. Stack Patricia A. Wood John C. Collins Gerald Letendre Jane E. Newman James E. Byrne Paul J. McDonald Melinda M. Phelps E. Edward Booker Eileen S. Kraus John J. Rando Patricia M. Worthy William J. Quinlan Murry K. Staples P, D Gregory C. Picklesimer S, TRS
COE COE Argen II COE Ave Fenix --- ------------ ------------- Bruce D. Kenyon P, D P, D P, D Thomas W. Philbin (17) Dennis G. Morrissette (18) William W. Schivley Ted C. Feigenbaum (19) Leon J. Olivier (20) James B. Redden (17) Armando J. Barone (18) Joseph F. Bellefeuille (18) Paul J. Bohonowicz (18) H. Donald Burbank (17) John T. Carlin (20) David S. Dayton (17) Stephen J. Fabiani Linda A. Jensen (17) William J. Nadeau (4) D D D Raymond P. Necci (20) Frank C. Rothen (20) Frank P. Sabatino VP, D VP, D VP, D Jeffrey M. Warren (18) Carol L. Carver (17) Christopher Fogarty (18) Lillian M. Cuoco Michelle D. Gouin S S S Dennis R. Brown (4) William A. DiProfio (19) A. John Stremlaw (21) Neil Petchers (22) Eileen Martinsky (22) Britta MacIntosh (17) Scott Silver (22)
COE Develop HEC HEC Canada ----------- --- ---------- Bruce D. Kenyon P, D Thomas W. Philbin P, D P Dennis G. Morrissette William W. Schivley CHB, D Ted C. Feigenbaum Leon J. Olivier James B. Redden EVP, COO, D VP Armondo J. Barone Joseph F. Bellefeuille Paul J. Bohonowicz H. Donald Burbank VP VP John T. Carlin David S. Dayton VP, D VP Stephen J. Fabiani Linda A. Jensen VP, TRS, CL VP, TRS, S William J. Nadeau D Raymond P. Necci Frank C. Rothen Frank P. Sabatino VP, D Jeffrey M. Warren Carol L. Carver Christopher Fogarty Lillian M. Cuoco Michelle D. Gouin S Dennis R. Brown William A. DiProfio A. John Stremlaw D Neil Petchers Eileen Martinsky Britta MacIntosh Scott Silver
ERI/HEC (24) HTEP RFS ------------ ---- --- Bruce D. Kenyon Thomas W. Philbin P, D C, D Dennis G. Morrissette P, D William W. Schivley Ted C. Feigenbaum Leon J. Olivier James B. Redden VC, MC SVP, D D Armando J. Barone Joseph F. Bellefeuille SVP Paul J. Bohonowicz H. Donald Burbank John T. Carlin David S. Dayton D Stephen J. Fabiani D Linda A. Jensen TRS TRS, CL TRS William J. Nadeau Raymond P. Necci Frank C. Rothen Frank P. Sabatino Jeffrey M. Warren VP Carol L. Carver S Christopher Fogarty Lillian M. Cuoco Michelle D. Gouin Dennis R. Brown William A. DiProfio A. John Stremlaw Neil Petchers C, MC Eileen Martinsky S Britta MacIntosh MC Scott Silver MC
NEI NGC NGS --- --- --- Bruce D. Kenyon P, D P, D P, CEO, D Thomas W. Philbin D Dennis G. Morrissette William W. Schivley VP, D D Ted C. Feigenbaum Leon J. Olivier James B. Redden Armando J. Barone Joseph F. Bellefeuille Paul J. Bohonowicz H. Donald Burbank John T. Carlin David S. Dayton Stephen J. Fabiani Linda A. Jensen William J. Nadeau VP, D VP, COO, D Raymond P. Necci Frank C. Rothen Frank P. Sabatino VP, D VP, D Jeffrey M. Warren Carol L. Carver Christopher Fogarty Lillian M. Cuoco Michelle D. Gouin S S S Dennis R. Brown D William A. DiProfio A. John Stremlaw Neil Petchers Eileen Martinsky Britta MacIntosh Scott Silver
NAEC NAESCO NNECO Bruce D. Kenyon P, CEO, D P, CEO, D P, CEO, D Thomas W. Philbin Dennis G. Morrissette William W. Schivley Ted C. Feigenbaum EVP, CNO, D EVP, CNO, D Leon J. Olivier SVP, CNO, D James B. Redden Armando J. Barone Joseph F. Bellefeuille Paul J. Bohonowicz H. Donald Burbank John T. Carlin VP VP David S. Dayton Stephen J. Fabiani Linda A. Jensen William J. Nadeau Raymond P. Necci VP, D Frank C. Rothen VP Frank P. Sabatino Jeffrey M. Warren Carol L. Carver Christopher Fogarty Lillian M. Cuoco S S S Michelle D. Gouin Dennis R. Brown William A. DiProfio D D A. John Stremlaw Neil Petchers Eileen Martinsky Britta MacIntosh Scott Silver
Select SEPPI SECI ------ ----- ---- Bruce D. Kenyon P, D Thomas W. Philbin VP, D CHB, P, D Dennis G. Morrissette PNH, D William W. Schivley P, D D Ted C. Feigenbaum Leon J. Olivier James B. Redden D Armando J. Barone VP Joseph F. Bellefeuille SVP Paul J. Bohonowicz VP H. Donald Burbank PCT John T. Carlin David S. Dayton Stephen J. Fabiani VP, D VP, D D Linda A. Jensen TRS William J. Nadeau VP, D Raymond P. Necci Frank C. Rothen Frank P. Sabatino SVP, D Jeffrey M. Warren VP Carol L. Carver CL Christopher Fogarty C Lillian M. Cuoco Michelle D. Gouin S S Dennis R. Brown William A. DiProfio A. John Stremlaw Neil Petchers Eileen Martinsky Britta MacIntosh Scott Silver
The principal business address of the individuals listed above is 107 Selden Street, Berlin, Connecticut 06037, except as otherwise noted. (1) Principal business address is: Western Massachusetts Electric Company, 174 Brush Hill Road, West Springfield, Massachusetts 01089. (2) Principal business address is: Public Service Company of New Hampshire, 1000 Elm Street, Manchester, New Hampshire 03101. (3) Principal business address is: Yankee Energy System, Inc., 599 Research Parkway, Meriden, Connecticut 06450. (4) Principal business address is: Northeast Generation Services Company, 273 Dividend Road, Rocky Hill, Connecticut 06067. (5) Principal business address is: Holyoke Water Power Company, One Canal Street, Holyoke, Massachusetts 01040. (6) Mr. Collins' principal business address is: The Hitchcock Clinic, One Medical Center Drive, Lebanon, New Hampshire 03756. (7) Mr. Letendre's principal business address is: Diamond Casting & Machine Co., Inc., P.O. Box 420, Route 130, Hollis, New Hampshire 03049. (8) Ms. Newman's principal business address is: John F. Kennedy School of Government, Harvard University, 79 JFK Street, Cambridge, Massachusetts 02138. (9) Mr. Byrne's principal business address is: Finneran, Byrne & Dreschler, L.L.P, Eastern Harbor Office Park, 50 Redfield Street, Boston, Massachusetts 02122. (10) Mr. McDonald's principal business address is: 2205 Boston Road, N-128, Wilbraham, Massachusetts 01095. (11) Ms. Phelps' principal business address is: Bulkley, Richardson and Gelinas, LLP, 1500 Main Street, Suite 2700, P.O. Box 15507, Springfield, Massachusetts 01115. (12) Mr. Booker's principal business address is: AMACAR Group, 6525 Morrison Boulevard, Suite 318, Charlotte, North Carolina 28211 (13) Ms. Kraus' principal business address is 209 Tunxis Road, West Hartford, Connecticut 06107. (14) Mr. Rando's principal business address is 165 Little Harbor Road, P.O. Box 2011, New Castle, New Hampshire 03854. (15) Ms. Worthy's principal business address is Howard University School of Law, 2900 Van Ness Street, N. W., Washington, D.C. 20008. (16) Principal business address is: R. M. Services, Inc., 222 Pitkin Street, East Hartford, Connecticut 06108. (17) Principal business address is: HEC Inc., 24 Prime Parkway, Natick, Massachusetts 01760. (18) Principal business address is: Select Energy Contracting, Inc., 605 Front Street, Manchester, New Hampshire 03102. (19) Principal business address is: North Atlantic Energy Service Corporation, Lafayette Road, Route 1, Seabrook, New Hampshire 03874. (20) Principal business address is: Northeast Nuclear Energy Company, Rope Ferry Road, Waterford, Connecticut 06385. (21) Mr. Stremlaw's principal business address is: 242 Simcoe Street, Niagra-on-the-Lake, Ontario Canada, L0S 1J0. (22) Principal business address is: ERI Services, Inc., 350 Fairfield Avenue, Bridgeport, CT 06604. (23) CL&P Capital is a partnership in which CL&P serves as general partner and NUSCO serves as limited partner. (24) ERI/HEC EFA-Med, LLC is a Delaware limited liability company formed to perform energy services work for the United States Navy. HEC Inc. owns 50% membership interest and ERI Services, Inc., owns 50% membership ownership interest. KEY: AT - Associate Trustee AVP - Assistant Vice President C - Controller CAO - Chief Administrative Officer CEO - Chief Executive Officer CFO - Chief Financial Officer CIO - Chief Information Officer CH - Chairman CHB - Chairman of the Board CH(E) - Chairman of the Executive Committee CL - Clerk COMP - Comptroller CNO - Chief Nuclear Officer D - Director DS - Director of Services EVP - Executive Vice President ED - Executive Director GC - General Counsel MC - Member of Management Committee P - President PG - President - Generation Group PN - President - Nuclear Group PR - President - Retail Business Group PCT - President - Connecticut Division PNH - President - New Hampshire Division S - Secretary SVP - Senior Vice President T - Trustee TRS - Treasurer VP - Vice President NU - Northeast Utilities CL&P - The Connecticut Light and Power Company CL&P Cap. - CL&P Capital, L.L.C. COE - Charter Oak Energy, Inc. COE Argen II - COE Argentina II Corp. COE Ave Fenix - COE Ave Fenix Corporation COE Develop - COE Development Corporation Conn Steam - The Connecticut Steam Company CRC - CL&P Receivables Corporation EPI - Electric Power, Incorporated ERI/HEC - ERI/HEC EFA-Med, LLC HEC - HEC Inc. HEC Canada - HEC Energy Consulting Canada Inc. HWP - Holyoke Water Power Company Mode 1 - Mode 1 Communications, Inc. NAEC - North Atlantic Energy Corporation NAESCO - North Atlantic Energy Service Corporation NGC - Northeast Generation Company NGS - Northeast Generation Services Company NNECO - Northeast Nuclear Energy Company NORCONN - NorConn Properties, Inc. NUEI - NU Enterprises, Inc. NUSCO - Northeast Utilities Service Company Nutmeg Power - The Nutmeg Power Company PI - Properties, Inc. PSNH - Public Service Company of New Hampshire Quinn. - The Quinnehtuk Company RFS - Reeds Ferry Supply Co., Inc. RMS - R. M. Services, Inc. RRR - The Rocky River Realty Company SECI - Select Energy Contracting, Inc. Select - Select Energy, Inc. SEPPI - Select Energy Portland Pipeline, Inc. WMECO - Western Massachusetts Electric Company YES - Yankee Energy System, Inc. YEFSCO - Yankee Energy Financial Services Company YESCO - Yankee Energy Services Company YGSCO - Yankee Gas Services Company Part II. The following is a list of the Officers, Directors and Trustees who have financial connections within the provisions of Section 17(c) of of the Act. Name and Position Name of Location of Held in Applicable Officer or Financial Financial Exemption Director Institution Institution Rule* (1) (2) (3) (4) Thomas V. Foley Hampden Savings Bank Trustee E Springfield, MA "A" designates Rule 70(b)(1), (2), (3) and (4); "B" designates Rule 70(c)(1) and (2); "C" designates Rule 70(d)(1), (2), (3) and (4); "D" designates Rule 70(e)(1) and (2); and "E" designates Rule 70(f)(1) and (2). Part III. The information provided herein is applicable to all system companies, except as indicated otherwise. a. Compensation Of Trustees, Directors, and Executive Officers During 2000, each Trustee who was not an employee of NU or its subsidiaries was compensated at an annual rate of $20,000 cash plus 500 common shares of NU, and received $1,000 for each meeting attended of the Board or its Committees. A non-employee Trustee who participates in a meeting of the Board or any of its Committees by conference telephone receives $675 per meeting. Also, a non-employee Trustee who is asked by either the Board of Trustees or the Chairman of the Board to perform extra services in the interest of the NU system may receive additional compensation of $1,000 per day plus necessary expenses. The Chairs of the Audit, the Compensation, the Corporate Affairs, the Corporate Governance and the Nuclear Committees were compensated at an additional annual rate of $3,500. In addition to the above compensation, Dr. Kennan is paid at the annual rate of $30,000 for the extra services performed as Lead Trustee. The Chair of the Nuclear Committee receives an additional retainer at the rate of $25,000 per year. Under the terms of the Incentive Plan adopted by shareholders at the 1998 Annual Meeting, each non-employee Trustee is eligible for stock-based grants. During 2000 each such Trustee was granted nonqualified options to purchase 2,500 common shares of NU. Receipt of shares acquired on exercise of these options may be deferred pursuant to the terms of the Northeast Utilities Deferred Compensation Plan for Executives. In February 2000, each non-employee Trustee was granted nonqualified options to purchase 2,500 common shares. Prior to the beginning of each calendar year, each non-employee Trustee may irrevocably elect to have all or any portion of the annual retainer fee paid in the form of common shares of NU. Pursuant to the Northeast Utilities Deferred Compensation Plan for Trustees, each Trustee may also irrevocably elect to defer receipt of some or all cash and/or share compensation. During 2000 each non-employee Director of PSNH and WMECO was compensated at an annual rate of $10,000 cash, and received $500 for each meeting attended of the Board of Directors or, in the case of PSNH, its committees. A non-employee Director who participates in a meeting of the Board of Directors or any of its committees by conference telephone receives $300 per meeting. Also, committee chairs were compensated at an additional annual rate of $1,500. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires Trustees and certain officers of NU and persons who beneficially own more than 10 percent of the outstanding common shares of NU to file reports of ownership and changes in ownership with the SEC and the New York Stock Exchange. Based on review of copies of such forms furnished to NU, or written representations that no Form 5 was required, NU believes that for the year ended December 31, 2000, all such reporting requirements were complied with in a timely manner except that Mr. Cloud failed to include on his Form 3 shares of NU acquired in the Yankee merger, and Mr. Pape failed to report until 2001, 800 shares of CL&P preferred stock acquired in 1994 by a privately-held corporation of which he is a 7.9 percent owner. SUMMARY COMPENSATION TABLE CL&P, PSNH, WMECO, and NAEC The following tables present the cash and non-cash compensation received by the Chief Executive Officer and the next four highest paid executive officers of NU, CL&P, PSNH, WMECO, and NAEC, in accordance with rules of the SEC:
Annual Compensation Long Term Compensation -------------------------------------------- ---------------------- Awards Payouts Securities Other Restrict- Underlying Long Term All Annual ed Stock Options/ Incentive Other Compensa- Award(s) Stock Program Compen- Name and Salary tion ($) ($) Appreciation Payouts sation ($) Principal Position Year ($) Bonus ($) (Note 1) (Note 2) Rights (#) ($) (Note 3) - ------------------ ---- ------ --------- --------- -------- ------------ --------- ---------- Michael G. Morris 2000 830,770 1,200,000 - - 140,000 - 27,326 Chairman of the Board, President 1999 783,173 1,253,300 92,243 348,611 118,352 - 23,210 and Chief Executive Officer 1998 757,692 891,000 134,376 255,261 64,574 - 22,731 Bruce D. Kenyon 2000 504,616 475,000 - - 20,000 - 16,274 President - Generation Group 1999 500,000 - - 77,690 20,804 462,500 15,000 1998 500,000 300,000 - - 21,236 - 14,800 John H. Forsgren 2000 444,615 450,000 - - 36,000 - 5,100 Executive Vice President and 1999 429,904 400,000 - 122,682 32,852 87,003 12,888 Chief Financial Officer 1998 373,077 - - - 73,183 - 104,800 Hugh C. MacKenzie 2000 270,000 250,000 - - 15,000 - 5,100 President - Retail Business Group 1999 270,000 250,000 - 73,612 19,712 - 108,100 1998 270,000 - - - 15,496 42,972 7,500 Cheryl W. Grise 2000 279,616 290,000 - - 23,000 - 8,795 Senior Vice President, 1999 244,712 250,000 - 73,612 19,712 - 82,247 Secretary and General Counsel 1998 209,231 - - - 12,916 20,720 6,123 (in NU, CL&P, PSNH and WMECO tables only) Ted C. Feigenbaum 2000 261,539 145,000 - - 12,000 216,200 8,198 Executive Vice President and 1999 260,000 130,000 - 28,620 7,664 24,827 5,849 Chief Nuclear Officer of NAEC 1998 260,000 48,750 - 40,961 10,044 20,723 7,800 (in NAEC table only)
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants Grant Date Value Number of % of Total Securities Options/SARs Underlying Granted to Exercise or Grant Date Options/SARs Employees Base Price Expiration Present Name Granted (#) in Fiscal Year ($/sh) Date Value ($) (Note 4) - ---- ------------ -------------- ----------- ---------- ----------- Michael G. Morris 140,000 22.1 18.4375 2/20/2010 1,027,600 Bruce D. Kenyon 20,000 3.2 18.4375 2/20/2010 146,800 John H. Forsgren 36,000 5.7 18.4375 2/20/2010 264,240 Hugh C. MacKenzie 15,000 2.4 18.4375 2/20/2010 110,100 Cheryl W. Grise 23,000 3.6 18.4375 2/20/2010 168,820 Ted C. Feigenbaum 12,000 1.9 18.4375 2/20/2010 88,080
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
Shares With Respect to Number of Securities Value of Unexercised Which Underlying Unexercised In-the-Money SARs Were Value Options/SARs Options/SARs Exercised Realized at Fiscal Year End (#) at Fiscal Year End ($) Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable Michael G. Morris - - 495,692 327,234 6,543,905 3,221,429 Bruce D. Kenyon - - 66,424 33,869 658,708 245,405 John H. Forsgren - - 134,605 57,901 1,244,361 413,203 Hugh C. MacKenzie 39,020 380,445 61,087 28,141 (Note 5) 618,289 209,563 Cheryl W. Grise - - 43,977 36,141 436,164 256,063 Ted C. Feigenbaum - - 12,599 36,733 103,518 231,392
Notes to Summary Compensation and Option/SAR Grants Tables: 1. Other annual compensation for Mr. Morris consists of 1998 and 1999 relocation expense reimbursements. 2. At December 31, 2000, the aggregate restricted stock holdings by the five individuals named in the table for NU, CL&P, WMECO, and PSNH were 31,070 shares with a value of $753,448 and for NAEC were 29,062 shares with a value of $704,754. Awards shown for 1998 have vested. Awards shown for 1999 vest one-third on February 23, 2000, one-third on February 23, 2001, and one-third on February 23, 2002. No restricted stock was awarded in 2000. Dividends paid on restricted stock are either paid out or reinvested into additional shares. 3. "All Other Compensation" for 2000 consists of employer matching contributions under the Northeast Utilities Service Company 401(k) Plan, generally available to all eligible employees ($5,100 for each named officer), and matching contributions under the Deferred Compensation Plan for Executives (Mr. Morris - $22,226, Mr. Kenyon - $11,174, Mrs. Grise - $3,695, and Mr. Feigenbaum - $3,098). 4. These options were granted on February 22, 2000, under the Northeast Utilities Incentive Plan. All options granted vest one-third on February 22, 2001, one-third on February 22, 2002, and one-third on February 22, 2003. Valued using the Black-Scholes option pricing model, with the following assumptions: Volatility: 26.06 percent (36 months of monthly data); Risk-free rate: 6.55 percent; Dividend yield: 1.82 percent; Exercise date: February 22, 2010. 5. Mr. MacKenzie's unvested stock options vested and became exercisable upon his retirement on January 1, 2001. PENSION BENEFITS The following table shows the estimated annual retirement benefits payable to an executive officer of NU upon retirement, assuming that retirement occurs at age 65 and that the officer is at that time not only eligible for a pension benefit under the Northeast Utilities Service Company Retirement Plan (the Retirement Plan) but also eligible for the make-whole benefit and the target benefit under the Supplemental Executive Retirement Plan for Officers of NU system companies (the Supplemental Plan). The Supplemental Plan is a non- qualified pension plan providing supplemental retirement income to system officers. The make-whole benefit under the Supplemental Plan, available to all officers, makes up for benefits lost through application of certain tax code limitations on the benefits that may be provided under the Retirement Plan, and includes as "compensation" awards under the executive incentive plans and deferred compensation (as earned). The target benefit further supplements these benefits and is available to officers at the Senior Vice President level and higher who are selected by the Board of Trustees to participate in the target benefit and who remain in the employ of NU companies until at least age 60 (unless the Board of Trustees sets an earlier age). The benefits presented below are based on a straight life annuity beginning at age 65 and do not take into account any reduction for joint and survivorship annuity payments. Final average compensation for purposes of calculating the target benefit is the highest average annual compensation of the participant during any 36 consecutive months compensation was earned. Compensation taken into account under the target benefit described above includes salary, bonus, restricted stock awards, and long-term incentive payouts shown in the Summary Compensation Table, but does not include employer matching contributions under the 401k Plan. In the event that an officer's employment terminates because of disability, the retirement benefits shown above would be offset by the amount of any disability benefits payable to the recipient that are attributable to contributions made by NU and its subsidiaries under long term disability plans and policies. ANNUAL BENEFIT Final Average Years of Credited Service Compensation 15 20 25 30 35 $ 200,000 $ 72,000 $ 96,000 $120,000 $120,000 $120,000 250,000 90,000 120,000 150,000 150,000 150,000 300,000 108,000 144,000 180,000 180,000 180,000 350,000 126,000 168,000 210,000 210,000 210,000 400,000 144,000 192,000 240,000 240,000 240,000 450,000 162,000 216,000 270,000 270,000 270,000 500,000 180,000 240,000 300,000 300,000 300,000 600,000 216,000 288,000 360,000 360,000 360,000 700,000 252,000 336,000 420,000 420,000 420,000 800,000 288,000 384,000 480,000 480,000 480,000 900,000 324,000 432,000 540,000 540,000 540,000 1,000,000 360,000 480,000 600,000 600,000 600,000 1,100,000 396,000 528,000 660,000 660,000 660,000 1,200,000 432,000 576,000 720,000 720,000 720,000 Each of the executive officers of NU named in the Summary Compensation Table is currently eligible for a target benefit, except Messrs. Morris and Kenyon, whose Employment Agreements provide specially calculated retirement benefits, based on their previous arrangements with CMS Energy/Consumers Energy Company (CMS Energy) and South Carolina Electric and Gas, respectively. Mr. Morris's agreement provides that upon retirement after reaching the fifth anniversary of his employment date (or upon disability or termination without cause or following a change in control, as defined) he will be entitled to receive a special retirement benefit calculated by applying the benefit formula of the CMS Energy Supplemental Executive Retirement Plan to all compensation earned from the NU system and to all service rendered to the Company and CMS Energy. If Mr. Kenyon retires with at least three years of service with the Company, he will be deemed to have 2 extra years of service for purpose of his special retirement benefit. If after achieving three years of service he voluntarily terminates employment following a "substantial change in responsibilities resulting from a material change in the business of Northeast Utilities", he will be deemed to have an additional year of service for purpose of his special retirement benefit, and if he retires with at least 3 years of service with the Company, he will receive a lump sum payment of $500,000. In addition, Mr. Forsgren's Employment Agreement provides for supplemental pension benefits based on crediting up to 10 years additional service and providing payments equal to 25 percent of salary for up to 15 years following retirement, reduced by four percentage points for each year that his age is less than 65 years at retirement. As of December 31, 2000, the executive officers named in the Summary Compensation Table had the following years of credited service for purposes of calculating target benefits under the Supplemental Plan (or in the case of Messrs. Morris and Kenyon, for purposes of calculating the special retirement benefits under their respective Employment Agreements): Mr. Morris - 22, Mr. Kenyon - 6, Mr. Forsgren - 4, Mr. MacKenzie - 35, Mrs. Grise - 20, and Mr. Feigenbaum - 15. In addition, Mr. Forsgren had 9 years of service for purposes of his supplemental pension benefit and would have 25 years of service for such purpose if he were to retire at age 65. Assuming that retirement were to occur at age 65 for these officers, retirement would occur with 33, 13, 15, 47, 36 and 29 years of credited service, respectively. EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS NUSCO has entered into employment agreements (the Officer Agreements) with each of the named executive officers. The Officer Agreements are also binding on NU and on each majority-owned subsidiary of NU. Each Officer Agreement obligates the officer to perform such duties as may be directed by the NUSCO Board of Directors or the NU Board of Trustees, protect the Company's confidential information, and refrain, while employed by the Company and for a period of time thereafter, from competing with the Company in a specified geographic area. Each Officer Agreement provides that the officer's base salary will not be reduced below certain levels without the consent of the officer, and that the officer will participate in specified benefits under the Supplemental Executive Retirement Plan or other supplemental retirement programs (see Pension Benefits, above) and/or in certain executive incentive programs at specified incentive opportunity levels. Each Officer Agreement provides for a specified employment term and for automatic one-year extensions of the employment term unless at least six months' notice of non-renewal is given by either party. The employment term may also be ended by the Company for "cause", as defined, at any time (in which case no supplemental retirement benefit, if any, shall be due), or by the officer on thirty days' prior written notice for any reason. Absent "cause", the Company may remove the officer from his or her position on 60 days' prior written notice, but in the event the officer is so removed and signs a release of all claims against the Company, the officer will receive one or two years' base salary and annual incentive payments, specified employee welfare and pension benefits, and vesting of stock appreciation rights, options and restricted stock. Under the terms of an Officer Agreement, upon any termination of employment following a change of control, as defined, between (a) the earlier of the date shareholders approve a change of control transaction or a change of control transaction occurs and (b) the earlier of the date, if any, on which the Board of Trustees abandons the transaction or the date 2 years following the change of control, if the officer signs a release of all claims against the Company, the officer will be entitled to certain payments including a multiple (not to exceed four) of annual base salary, annual incentive payments, specified employee welfare and pension benefits, and vesting of stock appreciation rights, options and restricted stock. Certain of the change in control provisions may be modified by the Board of Trustees prior to a change in control, on at least two years' notice to the affected officer(s). Besides the terms described above, the Officer Agreements of Messrs. Morris, Kenyon and Forsgren provide for a specified salary, cash, restricted stock and/or stock options upon employment, special incentive programs and/or special retirement benefits. See Pension Benefits, above, for further description of these provisions. The descriptions of the various agreements set forth above are for purpose of disclosure in accordance with the proxy and other disclosure rules of the SEC and shall not be controlling on any party; the actual terms of the agreements themselves determine the rights and obligations of the parties. b. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The following table provides information as of February 28, 2001, as to the beneficial ownership of the equity securities of NU by each Trustee, each of the five highest paid executive officers of NU and its subsidiaries, and Directors and executive officers of system companies. Unless otherwise noted, each Trustee, Director and executive officer has sole voting and investment power with respect to the listed shares. No equity securities of other system companies are owned by Trustees, Directors or executive officers. Amount and Nature of Title of Beneficial Percent of Class Name Ownership Class (1) NU Common David H. Boguslawski 23,246 (2) NU Common James E. Byrne 0 NU Common Cotton Mather Cleveland 15,169 (3) NU Common Sanford Cloud, Jr. 10,913 (4) NU Common John C. Collins 0 NU Common William F. Conway 14,280 (3)(5) NU Common E. Gail de Planque 12,256 (3) NU Common William A. DiProfio 5,326 (6) NU Common Ted C. Feigenbaum 38,459 (7) NU Common John H. Forsgren 115,014 (8) NU Common Raymond L. Golden 13,210 (9) NU Common George R. Gram II 6,634 (10) NU Common Cheryl W. Grise 51,396 (11) NU Common Elizabeth T. Kennan 13,600 (3) NU Common Bruce D. Kenyon 109,458 (12) NU Common Kerry J. Kuhlman 14,509 (13) NU Common Gerald Letendre 0 NU Common Gary A. Long 13,078 (14) NU Common Hugh C. MacKenzie 18,360 (15) NU Common Paul J. McDonald 500 NU Common Michael G. Morris 621,767 (16) NU Common Jane E. Newman 0 NU Common Emery G. Olcott 17,751 (4) NU Common William J. Pape II 9,203 (3)(17) NU Common Robert E. Patricelli 17,877 (3) NU Common Melinda M. Phelps 0 NU Common Rodney O. Powell 8,288 (18) NU Common John F. Swope 15,814 (3) NU Common John F. Turner 9,705 (3)(19) (1) As of February 28, 2001, there were 148,798,232 common shares of NU outstanding. The percentage of such shares beneficially owned by any Director or Executive Officer, and by all Directors and Executive Officers of CL&P, PSNH, WMECO and NAEC as a group, does not exceed one percent. (2) Includes 730 restricted shares, as to which Mr. Boguslawski has sole voting power but no dispositive power. Includes 15,512 shares that could be acquired by Mr. Boguslawski pursuant to currently exercisable options. (3) Includes 8,750 shares that could be acquired by the beneficial owner pursuant to currently exercisable options. (4) Includes 3,750 shares that could be acquired by the beneficial owner pursuant to currently exercisable options. (5) Includes 5,530 shares held jointly by Mr. Conway and his wife, who share voting and investment power. (6) Mr. DiProfio retired effective January 1, 2001. Beneficial ownership is given as of December 31, 2000, and includes 1,198 restricted shares, as to which Mr. DiProfio had sole voting power but no dispositive power, and 879 shares that could be acquired by Mr. DiProfio pursuant to then exercisable options. The restricted shares and 3,296 unvested options vested upon Mr. DiProfio's retirement. (7) Includes 639 restricted shares, as to which Mr. Feigenbaum has sole voting power but no dispositive power. Includes 19,153 shares that could be acquired by Mr. Feigenbaum pursuant to currently exercisable options. (8) Includes 2,738 restricted shares, as to which Mr. Forsgren has sole voting power but no dispositive power. Includes 107,087 shares that could be acquired by Mr. Forsgren pursuant to currently exercisable options. (9) Includes 6,250 shares that could be acquired by Mr. Golden pursuant to currently exercisable options. (10) Includes 5,283 shares that could be acquired by Mr. Gram pursuant to currently exercisable options. (11) Includes 1,643 restricted shares, as to which Mrs. Grise has sole voting power, but no dispositive power. Includes 33,724 shares that could be acquired by Mrs. Grise pursuant to currently exercisable options. Includes 265 shares held by Mrs. Grise's husband as custodian for her children, with whom she shares voting and dispositive power. (12) Includes 1,734 restricted shares, as to which Mr. Kenyon has sole voting power but no dispositive power. Includes 41,772 shares that could be acquired by Mr. Kenyon pursuant to currently exercisable options. (13) Includes 342 restricted shares, as to which Ms. Kuhlman has sole voting power but no dispositive power. Includes 8,395 shares that could be acquired by Ms. Kuhlman pursuant to currently exercisable options. (14) Includes 319 restricted shares, as to which Mr. Long has sole voting power but no dispositive power. Includes 7,590 shares that could be acquired by Mr. Long pursuant to currently exercisable options. (15) Mr. MacKenzie retired effective January 1, 2001. Beneficial ownership is given as of December 31, 2000, and includes 3,285 restricted shares, as to which Mr. MacKenzie had sole voting power but no dispositive power, and 22,067 shares that could be acquired by Mr. MacKenzie pursuant to then exercisable options. Mr. MacKenzie's restricted stock and 28,141 unvested options vested upon his retirement. (16) Includes 7,779 restricted shares, as to which Mr. Morris has sole voting power but no dispositive power. Includes 573,476 shares that could be acquired by Mr. Morris pursuant to currently exercisable options. Includes 13,499 shares held jointly by Mr. Morris and his wife, who share voting and investment power. (17) Includes 5,176 shares as to which Mr. Pape shares voting and dispositive power. Includes 1,250 shares that could be acquired by Mr. Pape pursuant to currently exercisable options. In addition, Mr. Pape shares beneficial ownership of 800 shares of CL&P 4.50% Preferred Series 1956. (18) Includes 249 restricted shares, as to which Mr. Powell has sole voting power but no dispositive power. Includes 6,750 shares that could be acquired by Mr. Powell pursuant to currently exercisable options. (19) Includes 955 shares held jointly by Mr. Turner and his wife, who share voting and investment power. c. CONTRACTS AND TRANSACTIONS OF TRUSTEES, DIRECTORS AND EXECUTIVE OFFICERS WITH SYSTEM COMPANIES This disclosure was included in the discussion of employment contracts in Part III, Section (a) above. d. INDEBTEDNESS OF TRUSTEES, DIRECTORS AND EXECUTIVE OFFICERS OF SYSTEM COMPANIES No Trustee, Director or executive officer was indebted to a system company during 2000. e. PARTICIPATION OF TRUSTEES, DIRECTORS AND EXECUTIVE OFFICERS IN BONUS AND PROFIT-SHARING ARRANGEMENTS This disclosure was included in the discussion of compensation in Part III, Section (a) above. f. RIGHTS TO INDEMNITY OF TRUSTEES, DIRECTORS AND EXECUTIVE OFFICERS No disclosures were made in any system company's most recent proxy statement or annual report on Form 10-K with respect to the rights to indemnity of Trustees, Directors or executive officers. ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS 1. There were no expenditures, disbursements or payments made during 2000 in money, goods or services, directly or indirectly to or for the account of any political party, candidate for public office or holder of such office, or any committee or agent therefore; and 2. There were no expenditures, disbursements or payments made during 2000 to citizens groups or public relations counsel. ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS PART I: The following energy management and/or demand-side management and other services to one or more system companies follows: Serving Receiving Transaction Company Company Compensation - ----------- ------- --------- ------------ (Thousands of Dollars) Worker Compensation Costs PSNH NAESCO $136 Electrical Maintenance Services PSNH NAESCO $ 95 Vehicle Lease Charges PSNH NAESCO $ 19 Mechanical Maintenance Services PSNH NAESCO $184 Human Resources Service PSNH NAESCO $ 6 Insurance Costs PSNH NAESCO $ 34 Miscellaneous Services PSNH NAESCO $ (1) Newington Station building and outside storage PSNH NAESCO $186** **Includes operation and maintenance charges and property taxes associated with leased property. Serving Receiving Transaction Company Company Compensation - ----------- ------- --------- ------------ (Thousands of Dollars) Electrical Maintenance Services NGS NNECO $ 92 Implementation Services NGS NNECO $ 451 Mechanical Maintenance Services NGS NNECO $ 140 Human Resources Services NGS NNECO $1,550 Miscellaneous Services NGS NNECO $ 30 Contained Inspection Program NGS NNECO $ 109 Auxiliary Steam Installation Service NGS NNECO $ 312 Spent Fuel Pool Cooling MOD NGS NNECO $ 179 Security MOD Project Support NGS NNECO $ 598 Diesel Mechanics NGS NNECO $ 193 CMF Outage Services NGS NNECO $ 46 POSL Services NGS NNECO $ 126 CMF Rigging Loft Support NGS NNECO $ 76 PART II: See Item 6, Part III(c). PART III: None to be reported. ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES PART I: (a) Identification of Company 1. Northeast Generation Company (NGC) 2. Location: 107 Selden Street Berlin, CT 06037 3. Business Address: Same 4. Description: NGC owns and operates a portfolio of 1,289 MW of generating assets in New England which was acquired in March 2000, as a result of the auctions by NGC's affiliates, The Connecticut Light and Power Company (CL&P) and Western Massachusetts Electric Company (WMECO) in their electric restructuring activities. The table below lists these generating assets: Capacity Asset Location Type (MW) - ----- -------- ---- -------- Northfield Mountain Erving, MA Pumped Storage 1,080.0 Cabot Montague, MA Conventional Hydro 53.0 Turners Falls Montague, MA Conventional Hydro 6.3 Falls Village Falls Village, CT Conventional Hydro 11.0 Bulls Bridge New Milford, CT Conventional Hydro 8.4 Rocky River New Milford, CT Conventional Hydro/ Pumped Storage 29.9 Shepaug Southbury, CT Conventional Hydro 43.4 Stevenson Monroe, CT Conventional Hydro 28.9 Robertsville Colebrook, CT Conventional Hydro 0.6 Bantam Litchfield, CT Conventional Hydro 0.3 Scotland Windham, CT Conventional Hydro 2.2 Tunnel Preston, CT Conventional Hydro 2.1 Taftville Norwich, CT Conventional Hydro 2.0 Tunnel ICU Preston, CT Internal Combustion Unit 20.8 ------- Total 1,288.9 ======= 5. System Company that Holds Interest: Northeast Generation Company, a Connecticut corporation, is a wholly- owned subsidiary of NU Enterprises, Inc., the holding company for Northeast Utilities unregulated businesses. 6. EWG or FUCO: EWG (b) Capital Investment in Company by NU, Direct or Indirect 1. Type: Capital contribution 2. Amount: $466.2 million 3. Debt: None 4. Other financial obligations with recourse to NU or another system company: None 5. Guarantees by NU: None Transfer of assets to an affiliated EWG or FUCO: Market value: None Book value: None Sale price: None (c) State the ratio of debt to common equity and earnings as of 12/31/00: Ratio of debt to common equity as of 12/31/00: .806 Ratio of debt to earnings/(loss) as of 12/31/00: 15.232 (d) Service, Sales or Construction Contracts: NGC has a Power Sales and Purchase Agreement, dated December 27, 1999, with Select Energy, Inc. (Select), an affiliate of NGC. The term of this agreement is six years (through December 31, 2005) with an option for renewal. The agreement sets forth the terms and conditions by which Select purchases the capacity, associated energy, and ancillary services from the NGC assets. During 2000, Select paid NGC $108.3 million under this contract. NGC has a Management and Operation Agreement, dated February 1, 2000, as amended March 1, 2000, with Northeast Generation Services Company (NGS), an affiliate of NGC, to manage and operate the NGC generating assets. This agreement is in effect until March 15, 2006. The scope of services that NGS renders to NGC under this agreement includes management, operations, maintenance, administration, labor, consumables, water, supervision, and other goods and services necessary for the safe, efficient and reliable management, operation and maintenance of the NGC assets on a daily basis. During 2000, NGC paid NGS $13.8 million under this contract. NGC has a Service Contract with Northeast Utilities Service Company (NUSCO), an affiliate of NGCS, dated January 4, 1999. This agreement was extended through the year 2000 for a one-year period by a renewal agreement dated December 31, 1999. Under this contract, NUSCO agrees to provide NGC with services such as corporate and secretarial, financial planning, accounting, taxes, insurance, budgets, data processing, purchasing, and other administrative services. During 2000, NGC paid NUSCO under this contract $1.1 million. PART II. An organizational chart showing the relationship of the foreign utility company to other NU system companies is provided as Exhibit H. Required financial data is provided as Exhibit I. PART III. (a) NU's aggregate investment in EWGs and FUCOs, respectively, as of 12/31/00: EWGs: $469.5 million FUCOS: $ 0.0 million (b) Ratio of aggregate investment to aggregate retained earnings of NU's public-utility subsidiary companies as of 12/31/00: .76 ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS Page ---- Financial Statements filed pursuant to the Public Utility Holding Company Act of 1935 Report of Independent Public Accountants F-1 Signature F-2 Financial Statements as of and for the year ended December 31, 1999 Northeast Utilities and Subsidiaries: Consolidating Balance Sheet F-4--F-7 Consolidating Statement of Income F-8--F-9 Consolidating Statement of Retained Earnings F-10--F-11 Consolidating Statement of Capital Surplus, Paid In F-10--F-11 Consolidating Statement of Cash Flows F-12--F-13 The Connecticut Light and Power Company and Subsidiaries: Consolidating Balance Sheet F-14--F-15 Consolidating Statement of Income F-16 Consolidating Statement of Retained Earnings F-17 Consolidating Statement of Capital Surplus, Paid In F-17 Consolidating Statement of Cash Flows F-18 Public Service Company of New Hampshire and Subsidiary: Consolidating Balance Sheet F-20--F-21 Consolidating Statement of Income F-22 Consolidating Statement of Retained Earnings F-23 Consolidating Statement of Capital Surplus, Paid In F-23 Consolidating Statement of Cash Flows F-24 Western Massachusetts Electric Company and Subsidiary: Consolidating Balance Sheet F-26--F-27 Consolidating Statement of Income F-28 Consolidating Statement of Retained Earnings F-29 Consolidating Statement of Capital Surplus, Paid In F-29 Consolidating Statement of Cash Flows F-30 Holyoke Water Power Company and Subsidiary: Consolidating Balance Sheet F-32--F-33 Consolidating Statement of Income F-34 Consolidating Statement of Retained Earnings F-35 Consolidating Statement of Capital Surplus, Paid In F-35 Consolidating Statement of Cash Flows F-36 Yankee Energy System, Inc. and Subsidiaries: Consolidating Balance Sheet F-38--F-41 Consolidating Statement of Income F-42--F-43 Consolidating Statement of Retained Earnings F-44--F-45 Consolidating Statement of Capital Surplus, Paid In F-44--F-45 Consolidating Statement of Cash F-46--F-47 Charter Oak Energy Incorporated and Subsidiaries: Consolidating Balance Sheet F-48--F-49 Consolidating Statement of Income F-50--F-51 Consolidating Statement of Retained Earnings F-52 Consolidating Statement of Capital Surplus, Paid In F-52 Consolidating Statement of Cash F-54--F-55 HEC Inc. and Subsidiaries: Consolidating Balance Sheet F-56--F-57 Consolidating Statement of Income F-58 Consolidating Statement of Retained Earnings F-59 Consolidating Statement of Capital Surplus, Paid In F-59 Consolidating Statement of Cash Flows F-60--F-61 NU Enterprises, Inc. and Subsidiaries: Consolidating Balance Sheet F-62--F-65 Consolidating Statement of Income F-66--F-67 Consolidating Statement of Retained Earnings F-68--F-69 Consolidating Statement of Capital Surplus, Paid In F-58--F-59 Consolidating Statement of Cash Flows F-70--F-71 Notes to Financial Statements F-72 Exhibits E-1--E-2 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ---------------------------------------- To Northeast Utilities and Subsidiaries: We have audited the accompanying consolidated balance sheets and consolidated statements of capitalization of Northeast Utilities (a Massachusetts trust) and subsidiaries as of December 31, 2000 and 1999, and the related consolidated statements of income, comprehensive income, shareholders' equity, cash flows, and income taxes for each of the three years in the period ended December 31, 2000, included in the 2000 annual report to shareholders and incorporated by reference in this Form U5S, and have issued our report thereon dated January 23, 2001 (except with respect to the matters discussed in Note 15, as to which the date is March 13, 2001). These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Northeast Utilities and subsidiaries as of December 31, 2000 and 1999, and the results of their operations and cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States. /s/ Arthur Andersen LLP Arthur Andersen LLP Hartford, Connecticut January 23, 2001 SIGNATURE Northeast Utilities, a registered holding company, has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, pursuant to the requirements of the Public Utility Holding Company Act of 1935. NORTHEAST UTILITIES By: /s/ John J. Roman --------------------------------- John J. Roman Vice President and Controller April 26, 2001 NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Balance Sheet (a) Assets December 31, 2000 (Thousands of Dollars)
The Connecticut Public Service Light and Company of Northeast Power Company New Hampshire Utilities (consolidated) (consolidated) (parent) (b) (b) ----------- -------------- -------------- Utility Plant, at cost: Electric $ 0 $5,756,098 $1,506,168 Other 0 0 8,588 ----------- -------------- -------------- 0 5,756,098 1,514,756 Less: Accumulated provision for depreciation 0 4,210,429 714,792 ----------- -------------- -------------- 0 1,545,669 799,964 Construction work in progress 0 128,835 27,251 Nuclear fuel, net 0 79,672 1,924 ----------- -------------- -------------- Total net utility plant 0 1,754,176 829,139 ----------- -------------- -------------- Other Property and Investments: Nuclear decommissioning trusts, at market 0 536,912 7,362 Investments in regional nuclear generating companies, at equity 0 41,395 9,965 Investments in subsidiary companies, at equity 2,687,804 0 0 Other, at cost 15,025 33,708 3,475 ----------- -------------- -------------- 2,702,829 612,015 20,802 ----------- -------------- -------------- Current Assets: Cash and cash equivalents 1,058 5,461 116,482 Special Deposits 0 0 0 Investments in securitizable assets 0 98,146 0 Notes receivable from affiliated companies 94,400 38,000 0 Receivables, net 868 29,245 71,992 Accounts receivable from affiliated companies 3,908 103,763 2,239 Taxes receivable from affiliated companies 0 0 10,005 Accrued utility revenues 0 0 41,844 Fuel, materials, and supplies, at average cost 0 36,332 28,760 Unrealized gains on mark-to-market transaction 0 0 0 Prepayments and other 3,744 32,291 14,783 ----------- -------------- -------------- 103,978 343,238 286,105 ----------- -------------- -------------- Deferred Charges: Regulatory assets 0 1,835,967 924,847 Accumulated deferred income taxes 0 0 0 Unamortized debt expense 13 14,794 9,067 Deferred receivable from affiliated company 0 0 3,240 Goodwill and other purchased intangible assets 0 0 0 Prepaid pension 0 170,672 0 Other 321 33,336 9,096 ----------- -------------- -------------- 334 2,054,769 946,250 ----------- -------------- -------------- Total Assets $2,807,141 $4,764,198 $2,082,296 =========== ============== ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Balance Sheet (a) Assets December 31, 2000 (Thousands of Dollars)
Western Massachusetts Holyoke Electric Water Power Company North Atlantic Company (consolidated) Energy (consolidated) (b) Corporation (b) -------------- -------------- -------------- Utility Plant, at cost: Electric $1,112,405 $719,353 $101,117 Other 0 0 0 -------------- -------------- -------------- 1,112,405 719,353 101,117 Less: Accumulated provision for depreciation 792,923 223,465 81,933 -------------- -------------- -------------- 319,482 495,888 19,184 Construction work in progress 22,813 8,710 970 Nuclear fuel, net 18,296 28,369 0 -------------- -------------- -------------- Total net utility plant 360,591 532,967 20,154 -------------- -------------- -------------- Other Property and Investments: Nuclear decommissioning trusts, at market 144,921 50,863 0 Investments in regional nuclear generating companies, at equity 11,117 0 0 Investments in subsidiary companies, at equity 0 0 0 Other, at cost 6,249 0 3,476 -------------- -------------- -------------- 162,287 50,863 3,476 -------------- -------------- -------------- Current Assets: Cash and cash equivalents 985 118 1,865 Special Deposits 0 0 0 Investments in securitizable assets 0 0 0 Notes receivable from affiliated companies 0 27,800 16,200 Receivables, net 36,364 0 862 Accounts receivable from affiliated companies 16,146 50,796 5,065 Taxes receivable from affiliated companies 0 722 825 Accrued utility revenues 21,222 0 0 Fuel, materials, and supplies, at average cost 1,606 14,003 4,763 Unrealized gains on mark-to-market transaction 0 0 0 Prepayments and other 4,817 2,000 768 -------------- -------------- -------------- 81,140 95,439 30,348 -------------- -------------- -------------- Deferred Charges: Regulatory assets 392,247 48,068 0 Accumulated deferred income taxes 0 0 0 Unamortized debt expense 1,822 847 792 Deferred receivable from affiliated company 0 0 0 Goodwill and other purchased intangible assets 0 0 0 Prepaid pension 45,473 0 771 Other 4,258 780 323 -------------- -------------- -------------- 443,800 49,695 1,886 -------------- -------------- -------------- Total Assets $1,047,818 $728,964 $ 55,864 ============== ============== ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Balance Sheet (a) Assets December 31, 2000 (Thousands of Dollars)
Northeast Northeast Utilities Nuclear North Atlantic Service Energy Energy Service Company Company Corporation --------- --------- -------------- Utility Plant, at cost: Electric $ 0 $37,876 $ 0 Other 111,814 0 0 --------- --------- -------------- 111,814 37,876 0 Less: Accumulated provision for depreciation 88,114 15,771 0 --------- --------- -------------- 23,700 22,105 0 Construction work in progress 9,937 416 0 Nuclear fuel, net 0 0 0 --------- --------- -------------- Total net utility plant 33,637 22,521 0 --------- --------- -------------- Other Property and Investments: Nuclear decommissioning trusts, at market 0 0 0 Investments in regional nuclear generating companies, at equity 0 0 0 Investments in subsidiary companies, at equity 0 0 0 Other, at cost 7,158 0 0 --------- --------- -------------- 7,158 0 0 --------- --------- -------------- Current Assets: Cash and cash equivalents 45,375 0 3,095 Special Deposits 0 0 0 Investments in securitizable assets 0 0 0 Notes receivable from affiliated companies 79,400 9,300 0 Receivables, net 130,338 4,517 25,586 Accounts receivable from affiliated companies 10,156 39,894 147 Taxes receivable from affiliated companies 0 362 0 Accrued utility revenues 0 0 0 Fuel, materials, and supplies, at average cost 147 71,358 35 Unrealized gains on mark-to-market transaction 0 0 0 Prepayments and other 2,638 1,188 1,058 --------- --------- -------------- 268,054 126,619 29,921 --------- --------- -------------- Deferred Charges: Regulatory assets 0 0 0 Accumulated deferred income taxes 0 42,252 0 Unamortized debt expense 0 0 0 Deferred receivable from affiliated company 0 0 0 Goodwill and other purchased intangible assets 0 0 0 Prepaid pension 28,352 0 0 Other 37,030 33,723 35,248 --------- --------- -------------- 65,382 75,975 35,248 --------- --------- -------------- Total Assets $374,231 $225,115 $65,169 ========= ========= ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Balance Sheet (a) Assets December 31, 2000 (Thousands of Dollars)
Yankee Energy Charter Oak The The Rocky Systems, Inc. Energy, Inc. Quinnehtuk River Realty (consolidated) (consolidated) Company Company (b) (b) ---------- ------------ -------------- -------------- Utility Plant, at cost: Electric $ 0 $ 0 $ 0 $ 52 Other 1,639 89,376 608,153 0 ---------- ------------ -------------- -------------- 1,639 89,376 608,153 52 Less: Accumulated provision for depreciation 1,211 35,730 245,214 52 ---------- ------------ -------------- -------------- 428 53,646 362,939 0 Construction work in progress 1 2,456 18,723 0 Nuclear fuel, net 0 0 0 0 ---------- ------------ -------------- -------------- Total net utility plant 429 56,102 381,662 0 ---------- ------------ -------------- -------------- Other Property and Investments: Nuclear decommissioning trusts, at market 0 0 0 0 Investments in regional nuclear generating companies, at equity 0 0 0 0 Investments in subsidiary companies, at equity 0 0 0 0 Other, at cost 1,140 1,929 11,411 0 ---------- ------------ -------------- -------------- 1,140 1,929 11,411 0 ---------- ------------ -------------- -------------- Current Assets: Cash and cash equivalents 44 0 6,459 3,021 Special Deposits 0 0 0 0 Investments in securitizable assets 0 0 0 0 Notes receivable from affiliated companies 0 0 0 0 Receivables, net 0 0 58,697 0 Accounts receivable from affiliated companies 0 314 77 0 Taxes receivable from affiliated companies 0 0 0 1,963 Accrued utility revenues 0 0 38,057 0 Fuel, materials, and supplies, at average cost 0 0 3,404 0 Unrealized gains on mark-to-market transaction 0 0 0 0 Prepayments and other 0 570 23,323 0 ---------- ------------ -------------- -------------- 44 884 130,017 4,984 ---------- ------------ -------------- -------------- Deferred Charges: Regulatory assets 4 0 54,649 0 Accumulated deferred income taxes 32 0 0 14,198 Unamortized debt expense 0 44 1,270 0 Deferred receivable from affiliated company 0 0 0 0 Goodwill and other purchased intangible assets 0 0 302,614 0 Prepaid pension 0 0 42,988 0 Other 0 0 14,334 0 ---------- ------------ -------------- -------------- 36 44 415,855 14,198 ---------- ------------ -------------- -------------- Total Assets $1,649 $58,959 $938,945 $19,182 ========== ============ ============== ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Balance Sheet (a) Assets December 31, 2000 (Thousands of Dollars)
NU Enterprises, Inc. (consolidated) (b) Eliminations Consolidated -------------- ------------ ------------ Utility Plant, at cost: Electric $265,761 $ 128,654 $ 9,370,176 Other 42,157 0 861,727 -------------- ------------ ------------ 307,918 128,654 10,231,903 Less: Accumulated provision for depreciation 156,838 (474,809) 7,041,279 -------------- ------------ ------------ 151,080 603,463 3,190,624 Construction work in progress 8,220 0 228,330 Nuclear fuel, net 0 0 128,261 -------------- ------------ ------------ Total net utility plant 159,300 603,463 3,547,215 -------------- ------------ ------------ Other Property and Investments: Nuclear decommissioning trusts, at market 0 0 740,058 Investments in regional nuclear generating companies, at equity 0 0 62,477 Investments in subsidiary companies, at equity 0 2,687,804 0 Other, at cost 26,217 (27,502) 137,291 -------------- ------------ ------------ 26,217 2,660,302 939,826 -------------- ------------ ------------ Current Assets: Cash and cash equivalents 43,555 27,502 200,017 Special Deposits 2,538 2,538 0 Investments in securitizable assets 0 0 98,146 Notes receivable from affiliated companies 800 265,900 0 Receivables, net 134,361 19,967 472,863 Accounts receivable from affiliated companies 131,789 364,295 0 Taxes receivable from affiliated companies 0 13,877 0 Accrued utility revenues 0 (19,967) 121,090 Fuel, materials, and supplies, at average cost 3,303 0 163,711 Unrealized gains on mark-to-market transaction 26,876 26,876 0 Prepayments and other 8,462 1,112 94,528 -------------- ------------ ------------ 351,684 702,100 1,150,355 -------------- ------------ ------------ Deferred Charges: Regulatory assets 0 (655,019) 3,910,801 Accumulated deferred income taxes 282,645 339,127 0 Unamortized debt expense 4,828 0 33,475 Deferred receivable from affiliated company 0 3,240 0 Goodwill and other purchased intangible assets 21,774 0 324,389 Prepaid pension 1,368 150,077 139,546 Other 54,850 51,758 171,542 -------------- ------------ ------------ 365,465 (110,817) 4,579,753 -------------- ------------ ------------ Total Assets $902,666 $3,855,048 $10,217,149 ============== ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Balance Sheet (a) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
The Connecticut Public Service Light and Company of Northeast Power Company New Hampshire Utilities (consolidated) (consolidated) (parent) (b) (b) ----------- -------------- -------------- Capitalization: Common shareholders' equity: Common shares $ 693,345 $ 75,849 $ 1 Capital surplus, paid in 927,059 413,192 424,909 Capital surplus, paid in 215,000 0 0 Deferred contribution plan-employee stock ownership plan (114,463) 0 0 Retained earnings 495,873 243,197 123,177 Accumulated other comprehensive income 1,769 506 1,207 ----------- -------------- -------------- Total common shareholders' equity 2,218,583 732,744 549,294 Preferred stock not subject to mandatory redemption 0 116,200 0 Preferred stock subject to mandatory redemption 0 0 0 Long-term debt 117,000 1,072,688 407,285 ----------- -------------- -------------- Total capitalization 2,335,583 1,921,632 956,579 ----------- -------------- -------------- Minority Interest in Consolidated Subsidiary 0 100,000 0 ----------- -------------- -------------- Obligations Under Capital Leases 0 39,910 91,702 ----------- -------------- -------------- Current Liabilities: Notes payable to banks 436,000 115,000 0 Notes payable to affiliated company 0 0 0 Long-term debt and preferred stock-current portion 21,000 160,000 24,268 Obligations under capital leases-current portion 0 89,959 537,528 Accounts payable 966 153,944 45,892 Accounts payable to affiliated companies 18 122,106 54,008 Accrued taxes 1,135 32,901 657 Accrued interest 6,961 13,995 4,962 Other 20 31,324 13,112 ----------- -------------- -------------- 466,100 719,229 680,427 ----------- -------------- -------------- Deferred Credits: Accumulated deferred income taxes 5,026 977,439 179,928 Accumulated deferred investment tax credits 0 99,771 27,348 Deferred contractual obligations 0 160,590 41,499 Decommissioning obligation-Millstone 1 0 580,320 0 Deferred pension costs 0 0 41,216 Other 432 165,307 63,597 ----------- -------------- -------------- 5,458 1,983,427 353,588 ----------- -------------- -------------- Total Capitalization and Liabilities $2,807,141 $4,764,198 $2,082,296 =========== ============== ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Balance Sheet (a) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
Western Massachusetts Holyoke Electric Water Power Company North Atlantic Company (consolidated) Energy (consolidated) (b) Corporation (b) -------------- -------------- -------------- Capitalization: Common shareholders' equity: Common shares $ 14,752 $ 1 $ 2,400 Capital surplus, paid in 94,010 160,999 6,000 Capital surplus, paid in 0 0 0 Deferred contribution plan-employee stock ownership plan 0 0 0 Retained earnings 62,952 (41) (5,607) Accumulated other comprehensive income 182 0 (5) -------------- -------------- -------------- Total common shareholders' equity 171,896 160,959 2,788 Preferred stock not subject to mandatory redemption 20,000 0 0 Preferred stock subject to mandatory redemption 15,000 0 0 Long-term debt 139,425 65,000 38,300 -------------- -------------- -------------- Total capitalization 346,321 225,959 41,088 -------------- -------------- -------------- Minority Interest in Consolidated Subsidiary 0 0 0 -------------- -------------- -------------- Obligations Under Capital Leases 5,935 0 0 -------------- -------------- -------------- Current Liabilities: Notes payable to banks 110,000 200,000 0 Notes payable to affiliated company 600 0 0 Long-term debt and preferred stock-current portion 61,500 70,000 0 Obligations under capital leases-current portion 20,986 0 0 Accounts payable 25,298 16,543 1,175 Accounts payable to affiliated companies 8,611 1,389 5,071 Accrued taxes 8,471 0 785 Accrued interest 4,703 2,716 770 Other 7,671 276 105 -------------- -------------- -------------- 247,840 290,924 7,906 -------------- -------------- -------------- Deferred Credits: Accumulated deferred income taxes 224,711 184,763 326 Accumulated deferred investment tax credits 17,580 0 0 Deferred contractual obligations 42,519 0 0 Decommissioning obligation-Millstone 1 136,130 0 0 Deferred pension costs 0 0 0 Other 26,782 27,318 6,544 -------------- -------------- -------------- 447,722 212,081 6,870 -------------- -------------- -------------- Total Capitalization and Liabilities $1,047,818 $728,964 $55,864 ============== ============== ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Balance Sheet (a) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
Northeast Northeast Utilities Nuclear North Atlantic Service Energy Energy Service Company Company Corporation --------- --------- -------------- Capitalization: Common shareholders' equity: Common shares $ 0 $ 15 $ 1 Capital surplus, paid in 1 15,350 9 Capital surplus, paid in 0 0 0 Deferred contribution plan-employee stock ownership plan 0 0 0 Retained earnings 0 439 3 Accumulated other comprehensive income 0 (121) 0 --------- --------- -------------- Total common shareholders' equity 1 15,683 13 Preferred stock not subject to mandatory redemption 0 0 0 Preferred stock subject to mandatory redemption 0 0 0 Long-term debt 0 0 0 --------- --------- -------------- Total capitalization 1 15,683 13 --------- --------- -------------- Minority Interest in Consolidated Subsidiary 0 0 0 --------- --------- -------------- Obligations Under Capital Leases 31 0 0 --------- --------- -------------- Current Liabilities: Notes payable to banks 0 0 0 Notes payable to affiliated company 120,500 0 0 Long-term debt and preferred stock-current portion 0 0 0 Obligations under capital leases-current portion 5 737 0 Accounts payable 61,734 36,303 18,946 Accounts payable to affiliated companies 89,568 16,281 2,478 Accrued taxes 2,134 0 481 Accrued interest 0 0 0 Other 21,009 53,799 6,733 --------- --------- -------------- 294,950 107,120 28,638 --------- --------- -------------- Deferred Credits: Accumulated deferred income taxes 1,600 0 235 Accumulated deferred investment tax credits 0 979 0 Deferred contractual obligations 0 0 0 Decommissioning obligation-Millstone 1 0 0 0 Deferred pension costs 0 76,969 31,893 Other 77,649 24,364 4,390 --------- --------- -------------- 79,249 102,312 36,518 --------- --------- -------------- Total Capitalization and Liabilities $374,231 $225,115 $65,169 ========= ========= ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Balance Sheet (a) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
Yankee Energy Charter Oak The The Rocky Systems, Inc. Energy, Inc. Quinnehtuk River Realty (consolidated) (consolidated) Company Company (b) (b) ---------- ------------ -------------- -------------- Capitalization: Common shareholders' equity: Common shares $ 350 $ 10 $ 0 $ 0 Capital surplus, paid in 155 0 484,888 83,944 Capital surplus, paid in 0 0 0 0 Deferred contribution plan-employee stock ownership plan 0 0 0 0 Retained earnings (2,999) 674 (733) (65,077) Accumulated other comprehensive income 0 0 0 0 ---------- ------------ -------------- -------------- Total common shareholders' equity (2,494) 684 484,155 18,867 Preferred stock not subject to mandatory redemption 0 0 0 0 Preferred stock subject to mandatory redemption 0 0 0 0 Long-term debt 0 10,278 153,140 0 ---------- ------------ -------------- -------------- Total capitalization (2,494) 10,962 637,295 18,867 ---------- ------------ -------------- -------------- Minority Interest in Consolidated Subsidiary 0 0 0 0 ---------- ------------ -------------- -------------- Obligations Under Capital Leases 0 0 0 0 ---------- ------------ -------------- -------------- Current Liabilities: Notes payable to banks 0 0 46,600 0 Notes payable to affiliated company 3,600 20,100 18,000 0 Long-term debt and preferred stock-current portion 0 2,223 1,050 0 Obligations under capital leases-current portion 0 0 0 0 Accounts payable 0 250 43,996 94 Accounts payable to affiliated companies 43 1,774 2,679 5 Accrued taxes 232 32 18,387 16 Accrued interest 0 135 3,596 0 Other 0 1,310 4,322 0 ---------- ------------ -------------- -------------- 3,875 25,824 138,630 115 ---------- ------------ -------------- -------------- Deferred Credits: Accumulated deferred income taxes 0 1,432 71,038 0 Accumulated deferred investment tax credits 0 0 7,476 0 Deferred contractual obligations 0 0 0 0 Decommissioning obligation-Millstone 1 0 0 0 0 Deferred pension costs 0 0 0 0 Other 268 20,741 84,506 200 ---------- ------------ -------------- -------------- 268 22,173 163,020 200 ---------- ------------ -------------- -------------- Total Capitalization and Liabilities $1,649 $58,959 $938,945 $19,182 ========== ============ ============== ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Balance Sheet (a) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
NU Enterprises, Inc. (consolidated) (b) Eliminations Consolidated -------------- ------------ ------------ Capitalization: Common shareholders' equity: Common shares $ 0 $ 93,379 $ 693,345 Capital surplus, paid in 155,510 1,838,968 927,059 Capital surplus, paid in 0 0 215,000 Deferred contribution plan-employee stock ownership plan 0 0 (114,463) Retained earnings (40,183) 315,801 495,873 Accumulated other comprehensive income 0 1,769 1,769 -------------- ------------ ------------ Total common shareholders' equity 115,327 2,249,917 2,218,583 Preferred stock not subject to mandatory redemption 0 0 136,200 Preferred stock subject to mandatory redemption 0 0 15,000 Long-term debt 55,277 28,800 2,029,593 -------------- ------------ ------------ Total capitalization 170,604 2,278,717 4,399,376 -------------- ------------ ------------ Minority Interest in Consolidated Subsidiary 0 0 100,000 -------------- ------------ ------------ Obligations Under Capital Leases 0 90,345 47,234 -------------- ------------ ------------ Current Liabilities: Notes payable to banks 402,377 0 1,309,977 Notes payable to affiliated company 103,100 265,900 0 Long-term debt and preferred stock-current portion 0 0 340,041 Obligations under capital leases-current portion 0 536,570 112,645 Accounts payable 133,843 0 538,983 Accounts payable to affiliated companies 44,965 348,996 0 Accrued taxes 3,688 14,832 54,088 Accrued interest 3,292 0 41,131 Other 21,201 15,950 144,931 -------------- ------------ ------------ 712,466 1,182,248 2,541,796 -------------- ------------ ------------ Deferred Credits: Accumulated deferred income taxes 0 61,004 1,585,494 Accumulated deferred investment tax credits 0 0 153,155 Deferred contractual obligations 0 0 244,608 Decommissioning obligation-Millstone 1 0 23,890 692,560 Deferred pension costs 0 150,077 0 Other 19,596 68,767 452,926 -------------- ------------ ------------ 19,596 303,738 3,128,743 -------------- ------------ ------------ Total Capitalization and Liabilities $902,666 $3,855,048 $10,217,149 ============== ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Income (a) Year Ended December 31, 2000 (Thousands of Dollars)
The Connecticut Public Service Light and Company of Northeast Power Company New Hampshire Utilities (consolidated) (consolidated) (parent) (b) (b) --------- -------------- -------------- Operating Revenues $ 0 $2,935,922 $1,291,332 --------- -------------- -------------- Operating Expenses: Operation- Fuel, purchased and net interchange power 0 1,665,806 853,563 Other 15,319 412,230 122,268 Maintenance 10 136,141 47,429 Depreciation 0 117,305 43,873 Amortization of regulatory assets, net 0 97,315 45,874 Federal and state income taxes 2,708 130,994 45,324 Taxes other than income taxes 6 137,846 42,321 --------- -------------- -------------- Total operating expenses 18,043 2,697,637 1,200,652 --------- -------------- -------------- Operating (Loss)/Income (18,043) 238,285 90,680 --------- -------------- -------------- Other Income/(Loss): Equity in earnings of subsidiaries 23,553 0 0 Equity in earnings of regional nuclear generating and transmission companies 2,553 8,246 1,535 Nuclear related costs 0 (14,099) (1,000) Other, net 9,134 (7,071) 13,825 Minority interest in loss of subsidiary 0 (9,300) 0 Deferred nuclear plant return-other funds 0 0 0 Income taxes 2,036 30,940 68 --------- -------------- -------------- Other income/(loss), net 37,276 8,716 14,428 --------- -------------- -------------- Income before interest charges 19,233 247,001 105,108 --------- -------------- -------------- Interest Charges: Interest on long-term debt 12,969 89,841 37,510 Other interest 34,850 9,025 47 Deferred interest-nuclear plants 0 0 0 --------- -------------- -------------- Interest charges, net 47,819 98,866 37,557 --------- -------------- -------------- Net (Loss)/Income before extraordinary loss, net of tax benefit (28,586) 148,135 67,551 Extraordinary loss, net of tax benefit 0 0 (214,217) --------- -------------- -------------- Net (Loss)/Income $(28,586) $ 148,135 $(146,666) ========= ============== ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Income (a) Year Ended December 31, 2000 (Thousands of Dollars)
Western Massachusetts Holyoke Electric Water Power Company North Atlantic Company (consolidatd) Energy (consolidated) (b) Corporation (b) ------------- -------------- -------------- Operating Revenues $513,678 $274,319 $ 75,633 ------------- -------------- -------------- Operating Expenses: Operation- Fuel, purchased and net interchange power 246,130 12,923 48,085 Other 75,940 40,650 6,072 Maintenance 33,111 20,268 6,693 Depreciation 17,693 27,823 2,049 Amortization of regulatory assets, net 47,775 85,176 (1) Federal and state income taxes 21,174 35,675 2,402 Taxes other than income taxes 17,759 7,727 3,320 ------------- -------------- -------------- Total operating expenses 459,582 230,242 68,620 ------------- -------------- -------------- Operating (Loss)/Income 54,096 44,077 7,013 ------------- -------------- -------------- Other Income/(Loss): Equity in earnings of subsidiaries 0 0 0 Equity in earnings of regional nuclear generating and transmission companies 2,251 0 0 Nuclear related costs (2,808) 0 0 Other, net 1,242 (6,544) (472) Minority interest in loss of subsidiary 0 0 0 Deferred nuclear plant return-other funds 0 2,112 0 Income taxes 6,029 22,792 645 ------------- -------------- -------------- Other income/(loss), net 6,714 18,360 173 ------------- -------------- -------------- Income before interest charges 60,810 62,437 7,186 ------------- -------------- -------------- Interest Charges: Interest on long-term debt 14,051 32,247 2,644 Other interest 11,491 1,423 (15) Deferred interest-nuclear plants 0 (3,726) 0 ------------- -------------- -------------- Interest charges, net 25,542 29,944 2,629 ------------- -------------- -------------- Net (Loss)/Income before extraordinary loss, net of tax benefit 35,268 32,493 4,557 Extraordinary loss, net of tax benefit 0 0 (19,664) ------------- -------------- -------------- Net (Loss)/Income $ 35,268 $ 32,493 $(15,107) ============= ============== ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Income (a) Year Ended December 31, 2000 (Thousands of Dollars)
Northeast Northeast Utilities Nuclear North Atlantic Service Energy Energy Service Company Company Corporation --------- --------- -------------- Operating Revenues $278,217 $331,979 $171,349 --------- --------- -------------- Operating Expenses: Operation- Fuel, purchased and net interchange power 0 0 7,509 Other 242,290 209,789 102,464 Maintenance 12,388 107,544 56,327 Depreciation 14,978 1,119 0 Amortization of regulatory assets, net 0 0 0 Federal and state income taxes (863) (2,022) (339) Taxes other than income taxes 11,977 11,288 4,583 --------- --------- -------------- Total operating expenses 280,770 327,718 170,544 --------- --------- -------------- Operating (Loss)/Income (2,553) 4,261 805 --------- --------- -------------- Other Income/(Loss): Equity in earnings of subsidiaries 0 0 0 Equity in earnings of regional nuclear generating and transmission companies 0 0 0 Nuclear related costs 0 0 0 Other, net 5,103 560 (705) Minority interest in loss of subsidiary 0 0 0 Deferred nuclear plant return-other funds 0 0 0 Income taxes 0 0 0 --------- --------- -------------- Other income/(loss), net 5,103 560 (705) --------- --------- -------------- Income before interest charges 2,550 4,821 100 --------- --------- -------------- Interest Charges: Interest on long-term debt 0 546 0 Other interest 2,550 2,526 99 Deferred interest-nuclear plants 0 0 0 --------- --------- -------------- Interest charges, net 2,550 3,072 99 --------- --------- -------------- Net (Loss)/Income before extraordinary loss, net of tax benefit 0 1,749 1 Extraordinary loss, net of tax benefit 0 0 0 --------- --------- -------------- Net (Loss)/Income $ 0 $ 1,749 $ 1 ========= ========= ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Income (a) Year Ended December 31, 2000 (Thousands of Dollars)
Yankee Energy The The Rocky System, Inc. Quinnehtuk River Realty (consolidated) Company Company (b) ---------- ------------ -------------- Operating Revenues $ 204 $6,706 $261,687 ---------- ------------ -------------- Operating Expenses: Operation- Fuel, purchased and net interchange power 0 0 135,307 Other 24 1,141 54,748 Maintenance 0 0 5,343 Depreciation 54 2,450 23,225 Amortization of regulatory assets, net 0 0 0 Federal and state income taxes (149) (1) 9,479 Taxes other than income taxes 157 1,377 16,645 ---------- ------------ -------------- Total operating expenses 86 4,967 244,747 ---------- ------------ -------------- Operating (Loss)/Income 118 1,739 16,940 ---------- ------------ -------------- Other Income/(Loss): Equity in earnings of subsidiaries 0 0 0 Equity in earnings of regional nuclear generating and transmission companies 0 0 0 Nuclear related costs 0 0 0 Other, net (9) 636 (7,634) Minority interest in loss of subsidiary 0 0 0 Deferred nuclear plant return-other funds 0 0 0 Income taxes 0 0 3,666 ---------- ------------ -------------- Other income/(loss), net (9) 636 (3,968) ---------- ------------ -------------- Income before interest charges 109 2,375 12,972 ---------- ------------ -------------- Interest Charges: Interest on long-term debt 0 1,132 10,295 Other interest 227 1,243 3,404 Deferred interest-nuclear plants 0 0 0 ---------- ------------ -------------- Interest charges, net 227 2,375 13,699 ---------- ------------ -------------- Net (Loss)/Income before extraordinary loss, net of tax benefit (118) 0 (727) Extraordinary loss, net of tax benefit 0 0 0 ---------- ------------ -------------- Net (Loss)/Income $(118) 0 $ (727) ========== ============ ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Income (a) Year Ended December 31, 2000 (Thousands of Dollars)
NU Charter Oak Enterprises, Energy, Inc. Inc. (consolidated) (consolidated) (b) (b) Eliminations -------------- -------------- ------------ Operating Revenues $ 0 $1,899,688 $2,164,096 -------------- -------------- ------------ Operating Expenses: Operation- Fuel, purchased and net interchange power 0 1,661,276 1,309,373 Other 279 151,260 584,282 Maintenance 0 13,280 182,652 Depreciation 0 5,898 16,668 Amortization of regulatory assets, net 0 0 0 Federal and state income taxes (84) 2,303 16,568 Taxes other than income taxes 0 11,327 27,746 -------------- -------------- ------------ Total operating expenses 195 1,845,344 2,137,289 -------------- -------------- ------------ Operating (Loss)/Income (195) 54,344 26,807 -------------- -------------- ------------ Other Income/(Loss): Equity in earnings of subsidiaries 0 0 23,553 Equity in earnings of regional nuclear generating and transmission companies 0 0 0 Nuclear related costs 0 0 0 Other, net 88 2,506 12,345 Minority interest in loss of subsidiary 0 0 0 Deferred nuclear plant return-other funds 0 0 2,112 Income taxes 2,130 0 0 -------------- -------------- ------------ Other income/(loss), net 2,218 2,506 38,010 -------------- -------------- ------------ Income before interest charges 2,023 56,850 64,817 -------------- -------------- ------------ Interest Charges: Interest on long-term debt 7 0 546 Other interest 0 49,785 18,051 Deferred interest-nuclear plants 0 0 (3,726) -------------- -------------- ------------ Interest charges, net 7 49,785 14,871 -------------- -------------- ------------ Net (Loss)/Income before extraordinary loss, net of tax benefit 2,016 7,065 49,946 Extraordinary loss, net of tax benefit 0 0 0 -------------- -------------- ------------ Net (Loss)/Income $2,016 $ 7,065 $ 49,946 ============== ============== ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Income (a) Year Ended December 31, 2000 (Thousands of Dollars) Consolidated ------------ Operating Revenues $5,876,620 ------------ Operating Expenses: Operation- Fuel, purchased and net interchange power 3,321,226 Other 850,192 Maintenance 255,884 Depreciation 239,798 Amortization of regulatory assets, net 276,139 Federal and state income taxes 230,031 Taxes other than income taxes 238,587 ------------ Total operating expenses 5,411,857 ------------ Operating (Loss)/Income 464,763 ------------ Other Income/(Loss): Equity in earnings of subsidiaries 0 Equity in earnings of regional nuclear generating and transmission companies 14,586 Nuclear related costs (17,907) Other, net (1,689) Minority interest in loss of subsidiary (9,300) Deferred nuclear plant return-other funds 0 Income taxes 68,306 ------------ Other income/(loss), net 53,996 ------------ Income before interest charges 518,759 ------------ Interest Charges: Interest on long-term debt 200,697 Other interest 98,605 Deferred interest-nuclear plants 0 ------------ Interest charges, net 299,302 ------------ Net (Loss)/Income before extraordinary loss, net of tax benefit 219,457 Extraordinary loss, net of tax benefit (233,881) ------------ Net (Loss)/Income $ (14,424) ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements. NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Retained Earnings (a) Year Ended December 31, 2000 (Thousands of Dollars)
The Connecticut Public Service Light and Company of Northeast Power Company New Hampshire Utilities (consolidated) (consolidated) (parent) (b) (b) ---------- -------------- -------------- Balance at beginning of period $581,817 $153,254 $319,938 Additions: Net (loss)/income (28,586) 148,135 (146,666) Tax benefit/(expense) for 1993-1999 from reduction of NU parent losses 0 21,461 3,952 ---------- -------------- -------------- 553,231 322,850 177,224 ---------- -------------- -------------- Deductions: Dividends declared: Preferred stock (at required annual rates): The Connecticut Light and Power Company 0 7,402 0 Western Massachusetts Electric Company 0 0 0 Public Service Company of New Hampshire 0 0 3,962 Common shares: $.40 per share 57,358 0 0 $9.4944 per share 0 72,014 0 $50,000.00 per share 0 0 50,000 $20.34 per share 0 0 0 $42,000.00 per share 0 0 0 $10.42 per share 0 0 0 $1,333.33 per share 0 0 0 Allocation of benefits-ESOP 0 237 85 ---------- -------------- -------------- 57,358 79,653 54,047 ---------- -------------- -------------- Balance at end of period $495,873 $243,197 $123,177 ========== ============== ==============
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Capital Surplus, Paid In (a) Year Ended December 31, 2000 (Thousands of Dollars)
The Connecticut Public Service Light and Company of Northeast Power Company New Hampshire Utilities (consolidated) (consolidated) (parent) (b) (b) ---------- -------------- -------------- Balance at beginning of period $776,290 $665,598 $424,654 Acquisition of Yankee Energy System, Inc. Redemption of preferred stock (749) (749) 0 Repurchase of common shares 0 (253,620) 0 Cash capital contribution from 0 0 0 Northeast Utilities 0 0 0 Issuance of 11,388,032 common shares 164,443 0 0 Dividends declared on common stock: 0 0 0 $100,000.00 per share 0 0 0 Allocation of benefits-ESOP (1,617) 0 0 Common share repurchase transaction fee (13,786) 0 0 Capital stock expenses, net 2,478 1,963 255 Excess paid over carrying value of 0 0 0 assets transferred 0 0 0 ---------- -------------- -------------- Balance at end of period $927,059 $413,192 $424,909 ========== ============== ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Retained Earnings (a) Year Ended December 31, 2000 (Thousands of Dollars)
Western Massachusetts Holyoke Electric Water Power Company North Atlantic Company (consolidated) Energy (consolidated) (b) Corporation (b) -------------- -------------- -------------- Balance at beginning of period $38,712 $12,752 $14,481 Additions: Net (loss)/income 35,268 32,493 (15,107) Tax benefit/(expense) for 1993-1999 from reduction of NU parent losses 3,824 (3,286) 22 -------------- -------------- -------------- 77,804 41,959 (604) -------------- -------------- -------------- Deductions: Dividends declared: Preferred stock (at required annual rates): The Connecticut Light and Power Company 0 0 0 Western Massachusetts Electric Company 2,798 0 0 Public Service Company of New Hampshire 0 0 0 Common shares: $.40 per share 0 0 0 $9.4944 per share 0 0 0 $50,000.00 per share 0 0 0 $20.34 per share 12,002 0 0 $42,000.00 per share 0 42,000 0 $10.42 per share 0 0 5,000 $1,333.33 per share 0 0 0 Allocation of benefits-ESOP 52 0 3 -------------- -------------- -------------- 14,852 42,000 5,003 -------------- -------------- -------------- Balance at end of period $62,952 $ (41) $(5,607) ============== ============== ==============
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Capital Surplus, Paid In (a) Year Ended December 31, 2000 (Thousands of Dollars)
Western Massachusetts Holyoke Electric Water Power Company North Atlantic Company (consolidated) Energy (consolidated) (b) Corporation (b) -------------- -------------- -------------- Balance at beginning of period $171,691 $160,999 $6,000 Acquisition of Yankee Energy System, Inc. Redemption of preferred stock 0 0 0 Repurchase of common shares (77,940) 0 0 Cash capital contribution from 0 0 0 Northeast Utilities 0 0 0 Issuance of 11,388,032 common shares 0 0 0 Dividends declared on common stock: 0 0 0 $100,000.00 per share 0 0 0 Allocation of benefits-ESOP 0 0 0 Common share repurchase transaction fee 0 0 0 Capital stock expenses, net 259 0 0 Excess paid over carrying value of 0 0 0 assets transferred 0 0 0 -------------- -------------- -------------- Balance at end of period $ 94,010 $160,999 $6,000 ============== ============== ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Retained Earnings (a) Year Ended December 31, 2000 (Thousands of Dollars)
Northeast Nuclear North Atlantic The Energy Energy Service Quinnehtuk Company Corporation Company --------- -------------- -------------- Balance at beginning of period $ 675 $2 $(2,881) Additions: Net (loss)/income 1,749 1 (118) Tax benefit/(expense) for 1993-1999 from reduction of NU parent losses 15 0 0 --------- -------------- -------------- 2,439 3 (2,999) --------- -------------- -------------- Deductions: Dividends declared: Preferred stock (at required annual rates): The Connecticut Light and Power Company 0 0 0 Western Massachusetts Electric Company 0 0 0 Public Service Company of New Hampshire 0 0 0 Common shares: $.40 per share 0 0 $9.4944 per share 0 0 0 $50,000.00 per share 0 0 0 $20.34 per share 0 0 0 $42,000.00 per share 0 0 0 $10.42 per share 0 0 0 $1,333.33 per share 2,000 0 0 Allocation of benefits-ESOP 0 0 0 --------- -------------- -------------- 2,000 0 0 --------- -------------- -------------- Balance at end of period $ 439 $3 $(2,999) ========= ============== ==============
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Capital Surplus, Paid In (a) Year Ended December 31, 2000 (Thousands of Dollars)
Northeast Northeast Utilities Nuclear North Atlantic Service Energy Energy Service Company Company Corporation --------- -------------- -------------- Balance at beginning of period $1 $15,350 $9 Acquisition of Yankee Energy System, Inc. 0 Redemption of preferred stock 0 0 0 Repurchase of common shares 0 0 0 Cash capital contribution from 0 0 0 Northeast Utilities 0 0 0 Issuance of 11,388,032 common shares 0 0 0 Dividends declared on common stock: 0 0 0 $100,000.00 per share 0 0 0 Allocation of benefits-ESOP 0 0 0 Common share repurchase transaction fee 0 0 0 Capital stock expenses, net 0 0 0 Excess paid over carrying value of 0 0 0 assets transferred 0 0 0 --------- -------------- -------------- Balance at end of period $1 $15,350 $9 ========= ============== ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Retained Earnings (a) Year Ended December 31, 2000 (Thousands of Dollars)
Yankee Energy Charter Oak The Rocky System, Inc. Energy, Inc. River Realty (consolidated) (consolidated) Company (b) (b) -------------- ------------- -------------- Balance at beginning of period $674 $ 0 $(67,093) Additions: Net (loss)/income 0 (727) 2,016 Tax benefit/(expense) for 1993-1999 from reduction of NU parent losses 0 0 0 -------------- ------------- -------------- 674 (727) (65,077) -------------- ------------- -------------- Deductions: Dividends declared: Preferred stock (at required annual rates): The Connecticut Light and Power Company 0 0 0 Western Massachusetts Electric Company 0 0 0 Public Service Company of New Hampshire 0 0 0 Common shares: $.40 per share 0 0 0 $9.4944 per share 0 0 0 $50,000.00 per share 0 0 0 $20.34 per share 0 0 0 $42,000.00 per share 0 0 0 $10.42 per share 0 0 0 $1,333.33 per share 0 0 0 Allocation of benefits-ESOP 0 6 0 -------------- ------------- -------------- 0 6 0 -------------- ------------- -------------- Balance at end of period $674 $(733) $(65,077) ============== ============= ==============
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Capital Surplus, Paid In (a) Year Ended December 31, 2000 (Thousands of Dollars)
Yankee Energy Charter Oak The System, Inc. Energy, Inc. Quinnehtuk (consolidated) (consolidated) Company (b) (b) -------------- ------------- -------------- Balance at beginning of period $155 $ 0 $90,194 Acquisition of Yankee Energy System, Inc. 0 484,888 0 Redemption of preferred stock 0 0 0 Repurchase of common shares 0 0 0 Cash capital contribution from 0 0 0 Northeast Utilities 0 0 3,750 Issuance of 11,388,032 common shares 0 0 0 Dividends declared on common stock: 0 0 0 $100,000.00 per share 0 0 (10,000) Allocation of benefits-ESOP 0 0 0 Common share repurchase transaction fee 0 0 0 Capital stock expenses, net 0 0 0 Excess paid over carrying value of 0 0 0 assets transferred 0 0 0 -------------- ------------- -------------- Balance at end of period $155 $484,888 $83,944 ============== ============= ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Retained Earnings (a) Year Ended December 31, 2000 (Thousands of Dollars)
NU Enterprises, Inc. (consolidated) (b) Eliminations Consolidated -------------- ------------ ------------ Balance at beginning of period $(47,223) $423,292 $581,817 Additions: Net (loss)/income 7,065 49,948 (14,424) Tax benefit/(expense) for 1993-1999 from reduction of NU parent losses 0 25,986 0 -------------- ------------ ------------ (40,158) 499,226 567,393 -------------- ------------ ------------ Deductions: Dividends declared: Preferred stock (at required annual rates): The Connecticut Light and Power Company 0 0 7,402 Western Massachusetts Electric Company 0 0 2,798 Public Service Company of New Hampshire 0 0 3,962 Common shares: $.40 per share 0 0 57,358 $9.4944 per share 0 72,014 0 $50,000.00 per share 0 50,000 0 $20.34 per share 0 12,002 0 $42,000.00 per share 0 42,000 0 $10.42 per share 0 5,000 0 $1,333.33 per share 0 2,000 0 Allocation of benefits-ESOP 25 409 0 -------------- ------------ ------------ 25 183,425 71,520 -------------- ------------ ------------ Balance at end of period $(40,183) $315,801 $495,873 ============== ============ ============
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Capital Surplus, Paid In (a) Year Ended December 31, 2000 (Thousands of Dollars)
NU Enterprises, Inc. (consolidated) (b) Eliminations Consolidated -------------- ------------ ------------ Balance at beginning of period $121,745 $1,656,396 $776,290 Acquisition of Yankee Energy System, Inc. 0 484,888 0 Redemption of preferred stock 0 (749) (749) Repurchase of common shares 0 (331,560) 0 Cash capital contribution from 0 0 0 Northeast Utilities 478,900 482,650 0 Issuance of 11,388,032 common shares 0 0 164,443 Dividends declared on common stock: 0 0 0 $100,000.00 per share 0 (10,000) 0 Allocation of benefits-ESOP 0 0 (1,617) Common share repurchase transaction fee 0 0 (13,786) Capital stock expenses, net 0 2,478 2,478 Excess paid over carrying value of 0 0 0 assets transferred (445,135) (445,135) 0 -------------- ------------ ------------ Balance at end of period $155,510 $1,838,968 $927,059 ============== ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
The Connecticut Public Service Light and Company of Northeast Power Company New Hampshire Utilities (consolidated) (consolidated) (parent) (b) (b) ------------ -------------- -------------- Operating Activities: (Loss)/income before extraordinary loss $ (28,586) $ 148,135 $ 67,551 Adjustments to reconcile to net cash provided by/(used in) operating activities: Depreciation 0 117,305 43,873 Deferred income taxes and investment tax credits, net (276) 5,672 (521) Amortization of regulatory assets, net 0 97,315 45,874 Amortization of recoverable energy costs 0 4,155 (35,886) Nuclear related costs 0 14,099 1,000 Tax benefit for 1993-1999 from reduction of NU parent losses 0 21,461 3,952 Allocation of ESOP benefits 0 (237) (85) Equity in earnings of subsidiary companies (23,553) 0 0 Cash dividends received from subsidiary companies 183,016 0 0 Transfer/gain on sale of utility plant 0 25,444 0 Net other sources/(uses) of cash 3,276 (112,915) 38,545 Changes in working capital: Receivables and accrued utility revenues, net 4,200 (109,938) 20,597 Fuel, materials and supplies 0 1,271 9,316 Accounts payable (7,475) 171,729 23,110 Accrued taxes 1,135 (136,313) (33,048) Investments in securitizable assets 0 9,474 0 Other working capital (excludes cash) (3,001) 3,204 6,646 ------------ -------------- -------------- Net cash flows provided by/(used in) operating activities 128,736 259,861 190,924 ------------ -------------- -------------- Investing Activities: Investment in plant: Electric and other utility plant 0 (208,249) (69,500) Nuclear fuel 0 (35,709) (1,153) ------------ -------------- -------------- Net cash flows used for investments in plant 0 (243,958) (70,653) Investment in NU system Money Pool (49,100) (38,000) 0 Investment in subsidiaries (117,631) 0 0 Investment in nuclear decommissioning trusts 0 (25,133) (686) Net proceeds from the sale of utility plant 0 686,807 0 Other investment activities, net 1,489 10,246 2,268 Capital contributions from Northeast Utilities 0 0 0 Payment for purchase of Yankee, net of cash acquired (260,347) 0 0 ------------ -------------- -------------- Net cash flows (used in)/provided by investing activities (425,589) 389,962 (69,071) ------------ -------------- -------------- Financing Activities: Issuance of common shares 4,269 0 0 Issuance of long-term debt 0 0 0 Net increase/(decrease) in short-term debt 371,000 13,300 0 Reacquisitions and retirements of long-term debt (20,000) (179,071) (109,200) Reacquisitions and retirements of preferred stock 0 (99,539) (25,732) Repurchase of common shares 0 (300,000) 0 Cash dividends on preferred stock 0 (7,402) (3,962) Cash dividends on common shares (57,358) (72,014) (50,000) ------------ -------------- -------------- Net cash flows provided by/(used in) financing activities 297,911 (644,726) (188,894) ------------ -------------- -------------- Net increase/(decrease) in cash for the period 1,058 5,097 (67,041) Cash and cash equivalents - beginning of period 0 364 183,523 ------------ -------------- -------------- Cash and cash equivalents - end of period $ 1,058 $ 5,461 $ 116,482 ============ ============== ============== Supplemental Cash Flow Information: Cash paid/(refunded) during the year for: Interest, net of amounts capitalized $ 39,099 $ 96,735 $ 38,819 Income taxes $ 1,430 $ 226,380 $ 22,575 Increase in obligations: Niantic Bay Fuel Trust and other capital leases $ 0 $ 6,535 $ 0 Seabrook Power Contracts $ 0 $ 0 $ 0 Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
Western Massachusetts Holyoke Electric North Water Power Company Atlantic Company (consolidated) Energy (consolidated) (b) Corporation (b) -------------- ------------ -------------- Operating Activities: (Loss)/income before extraordinary loss $ 35,268 $ 32,493 $ 4,557 Adjustments to reconcile to net cash provided by/(used in) operating activities: Depreciation 17,693 27,823 2,049 Deferred income taxes and investment tax credits, net (11,549) (25,579) 181 Amortization of regulatory assets, net 47,775 85,176 (1) Amortization of recoverable energy costs 9,386 0 0 Nuclear related costs 2,808 0 0 Tax benefit for 1993-1999 from reduction of NU parent losses 3,824 (3,286) 22 Allocation of ESOP benefits (52) 0 (3) Equity in earnings of subsidiary companies 0 0 0 Cash dividends received from subsidiary companies 0 0 0 Transfer/gain on sale of utility plant 0 0 0 Net other sources/(uses) of cash (28,834) 13,284 (917) Changes in working capital: Receivables and accrued utility revenues, net (24,637) (27,956) (308) Fuel, materials and supplies 1,491 (915) 624 Accounts payable 17,727 5,432 3,142 Accrued taxes 7,882 0 614 Investments in securitizable assets 0 0 0 Other working capital (excludes cash) (7,321) 11,148 (1,441) -------------- ------------ -------------- Net cash flows provided by/(used in) operating activities 71,461 117,620 8,519 -------------- ------------ -------------- Investing Activities: Investment in plant: Electric and other utility plant (27,267) (6,586) (1,083) Nuclear fuel (7,848) (17,222) 0 -------------- ------------ -------------- Net cash flows used for investments in plant (35,115) (23,808) (1,083) Investment in NU system Money Pool 0 28,600 (700) Investment in subsidiaries 0 0 0 Investment in nuclear decommissioning trusts (3,437) (10,294) 0 Net proceeds from the sale of utility plant 185,787 0 0 Other investment activities, net 3,589 0 0 Capital contributions from Northeast Utilities 0 0 0 Payment for purchase of Yankee, net of cash acquired 0 0 0 -------------- ------------ -------------- Net cash flows (used in)/provided by investing activities 150,824 (5,502) (1,783) -------------- ------------ -------------- Financing Activities: Issuance of common shares 0 0 0 Issuance of long-term debt 0 0 0 Net increase/(decrease) in short-term debt (21,800) 200,000 0 Reacquisitions and retirements of long-term debt (94,150) (270,000) 0 Reacquisitions and retirements of preferred stock (1,500) 0 0 Repurchase of common shares (90,000) 0 0 Cash dividends on preferred stock (2,798) 0 0 Cash dividends on common shares (12,002) (42,000) (5,000) -------------- ------------ -------------- Net cash flows provided by/(used in) financing activities (222,250) (112,000) (5,000) -------------- ------------ -------------- Net increase/(decrease) in cash for the period 35 118 1,736 Cash and cash equivalents - beginning of period 950 0 129 -------------- ------------ -------------- Cash and cash equivalents - end of period $ 985 $ 118 $ 1,865 ============== ============ ============== Supplemental Cash Flow Information: Cash paid/(refunded) during the year for: Interest, net of amounts capitalized $ 26,055 $ 28,349 $ 2,220 Income taxes $ 18,554 $ 28,053 $ 1,716 Increase in obligations: Niantic Bay Fuel Trust and other capital leases $ 1,532 $ 0 $ 0 Seabrook Power Contracts $ 0 $ 0 $ 0 Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
North Northeast Northeast Atlantic Utilities Nuclear Energy Service Energy Service Company Company Corporation ------------ ------------- ------------ Operating Activities: (Loss)/income before extraordinary loss $ 0 $ 1,749 $ 1 Adjustments to reconcile to net cash provided by/(used in) operating activities: Depreciation 14,978 1,119 0 Deferred income taxes and investment tax credits, net 9,584 (4,376) (7) Amortization of regulatory assets, net 0 0 0 Amortization of recoverable energy costs 0 0 0 Nuclear related costs 0 0 0 Tax benefit for 1993-1999 from reduction of NU parent losses 0 15 0 Allocation of ESOP benefits 0 0 0 Equity in earnings of subsidiary companies 0 0 0 Cash dividends received from subsidiary companies 0 0 0 Transfer/gain on sale of utility plant 0 0 0 Net other sources/(uses) of cash (25,297) (2,624) (108) Changes in working capital: Receivables and accrued utility revenues, net (52,829) 34,794 (9,111) Fuel, materials and supplies 11 2,441 63 Accounts payable 46,381 (11,933) 11,346 Accrued taxes 1,961 (10,442) 115 Investments in securitizable assets 0 0 0 Other working capital (excludes cash) 4,796 11,771 (1,144) ------------ ------------- ------------ Net cash flows provided by/(used in) operating activities (415) 22,514 1,155 ------------ ------------- ------------ Investing Activities: Investment in plant: Electric and other utility plant (9,431) 297 0 Nuclear fuel 0 0 0 ------------ ------------- ------------ Net cash flows used for investments in plant (9,431) 297 0 Investment in NU system Money Pool (21,200) (9,300) 0 Investment in subsidiaries 0 0 0 Investment in nuclear decommissioning trusts 0 0 0 Net proceeds from the sale of utility plant 0 0 0 Other investment activities, net 1,659 0 0 Capital contributions from Northeast Utilities 0 0 0 Payment for purchase of Yankee, net of cash acquired 0 0 0 ------------ ------------- ------------ Net cash flows (used in)/provided by investing activities (28,972) (9,003) 0 ------------ ------------- ------------ Financing Activities: Issuance of common shares 0 0 0 Issuance of long-term debt 0 0 0 Net increase/(decrease) in short-term debt 11,300 (5,500) 0 Reacquisitions and retirements of long-term debt 0 (6,011) 0 Reacquisitions and retirements of preferred stock 0 0 0 Repurchase of common shares 0 0 0 Cash dividends on preferred stock 0 0 0 Cash dividends on common shares 0 (2,000) 0 ------------ ------------- ------------ Net cash flows provided by/(used in) financing activities 11,300 (13,511) 0 ------------ ------------- ------------ Net increase/(decrease) in cash for the period (18,087) 0 1,155 Cash and cash equivalents - beginning of period 63,462 0 1,940 ------------ ------------- ------------ Cash and cash equivalents - end of period $ 45,375 $ 0 $ 3,095 ============ ============= ============ Supplemental Cash Flow Information: Cash paid/(refunded) during the year for: Interest, net of amounts capitalized $ 0 $ 2,110 $ 0 Income taxes $ (13,784) $ 13,341 $ (359) Increase in obligations: Niantic Bay Fuel Trust and other capital leases $ 0 $ 0 $ 0 Seabrook Power Contracts $ 0 $ 0 $ 0 Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
The Rocky Yankee Energy The River System, Inc. Quinnehtuk Realty (consolidated) Company Company (b) ----------- ------------ -------------- Operating Activities: (Loss)/income before extraordinary loss $ (118) $ 0 $ (727) Adjustments to reconcile to net cash provided by/(used in) operating activities: Depreciation 54 2,450 23,225 Deferred income taxes and investment tax credits, net (176) (115) 11,227 Amortization of regulatory assets, net 0 0 0 Amortization of recoverable energy costs 0 0 0 Nuclear related costs 0 0 0 Tax benefit for 1993-1999 from reduction of NU parent losses 0 0 0 Allocation of ESOP benefits 0 0 (6) Equity in earnings of subsidiary companies 0 0 0 Cash dividends received from subsidiary companies 0 0 0 Transfer/gain on sale of utility plant 0 0 0 Net other sources/(uses) of cash (1) (1,176) (17,286) Changes in working capital: Receivables and accrued utility revenues, net 0 5,911 6,336 Fuel, materials and supplies 0 0 (216) Accounts payable 19 1,582 26,161 Accrued taxes 26 26 (5,124) Investments in securitizable assets 0 0 0 Other working capital (excludes cash) 219 77 (17,235) ----------- ------------ -------------- Net cash flows provided by/(used in) operating activities 23 8,755 26,355 ----------- ------------ -------------- Investing Activities: Investment in plant: Electric and other utility plant 0 (3,851) (21,585) Nuclear fuel 0 0 0 ----------- ------------ -------------- Net cash flows used for investments in plant 0 (3,851) (21,585) Investment in NU system Money Pool 0 0 0 Investment in subsidiaries 0 0 0 Investment in nuclear decommissioning trusts 0 0 0 Net proceeds from the sale of utility plant 0 0 0 Other investment activities, net 1 573 6,959 Capital contributions from Northeast Utilities 0 0 0 Payment for purchase of Yankee, net of cash acquired 0 0 0 ----------- ------------ -------------- Net cash flows (used in)/provided by investing activities 1 (3,278) (14,626) ----------- ------------ -------------- Financing Activities: Issuance of common shares 0 0 0 Issuance of long-term debt 0 0 0 Net increase/(decrease) in short-term debt 0 (3,500) (5,400) Reacquisitions and retirements of long-term debt 0 (2,049) (4,350) Reacquisitions and retirements of preferred stock 0 0 0 Repurchase of common shares 0 0 0 Cash dividends on preferred stock 0 0 0 Cash dividends on common shares 0 0 0 ----------- ------------ -------------- Net cash flows provided by/(used in) financing activities 0 (5,549) (9,750) ----------- ------------ -------------- Net increase/(decrease) in cash for the period 24 (72) 1,979 Cash and cash equivalents - beginning of period 20 72 4,480 ----------- ------------ -------------- Cash and cash equivalents - end of period $ 44 $ 0 $ 6,459 =========== ============ ============== Supplemental Cash Flow Information: Cash paid/(refunded) during the year for: Interest, net of amounts capitalized $ 226 $ 2,467 $ 10,371 Income taxes $ (180) $ (219) $ (352) Increase in obligations: Niantic Bay Fuel Trust and other capital leases $ 0 $ 0 $ 0 Seabrook Power Contracts $ 0 $ 0 $ 0 Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
NU Charter Oak Enterprises, Energy, Inc. Inc. (consolidated) (consolidated) (b) (b) -------------- --------------- Operating Activities: (Loss)/income before extraordinary loss $ 2,016 $ 7,065 Adjustments to reconcile to net cash provided by/(used in) operating activities: Depreciation 0 5,898 Deferred income taxes and investment tax credits, net 1,563 16,162 Amortization of regulatory assets, net 0 0 Amortization of recoverable energy costs 0 0 Nuclear related costs 0 0 Tax benefit for 1993-1999 from reduction of NU parent losses 0 0 Allocation of ESOP benefits 0 (25) Equity in earnings of subsidiary companies 0 0 Cash dividends received from subsidiary companies 0 0 Transfer/gain on sale of utility plant 0 0 Net other sources/(uses) of cash 290 (39,668) Changes in working capital: Receivables and accrued utility revenues, net 0 (156,191) Fuel, materials and supplies 0 236 Accounts payable (95) 72,994 Accrued taxes 16 2,154 Investments in securitizable assets 0 0 Other working capital (excludes cash) 5,053 20,129 -------------- --------------- Net cash flows provided by/(used in) operating activities 8,843 (71,246) -------------- --------------- Investing Activities: Investment in plant: Electric and other utility plant 0 (6,375) Nuclear fuel 0 0 -------------- --------------- Net cash flows used for investments in plant 0 (6,375) Investment in NU system Money Pool 0 21,200 Investment in subsidiaries 0 0 Investment in nuclear decommissioning trusts 0 0 Net proceeds from the sale of utility plant 0 (869,794) Other investment activities, net 0 (10,226) Capital contributions from Northeast Utilities 3,750 478,900 Payment for purchase of Yankee, net of cash acquired 0 0 -------------- --------------- Net cash flows (used in)/provided by investing activities 3,750 (386,295) -------------- --------------- Financing Activities: Issuance of common shares 0 0 Issuance of long-term debt 0 26,477 Net increase/(decrease) in short-term debt 0 471,077 Reacquisitions and retirements of long-term debt 0 (725) Reacquisitions and retirements of preferred stock 0 0 Repurchase of common shares 0 0 Cash dividends on preferred stock 0 0 Cash dividends on common shares (10,000) 0 -------------- --------------- Net cash flows provided by/(used in) financing activities (10,000) 496,829 -------------- --------------- Net increase/(decrease) in cash for the period 2,593 39,288 Cash and cash equivalents - beginning of period 428 4,267 -------------- --------------- Cash and cash equivalents - end of period $ 3,021 $ 43,555 ============== =============== Supplemental Cash Flow Information: Cash paid/(refunded) during the year for: Interest, net of amounts capitalized $ 0 $ 34,543 Income taxes $ (6,162) $ (37,607) Increase in obligations: Niantic Bay Fuel Trust and other capital leases $ 0 $ 0 Seabrook Power Contracts $ 0 $ 0 Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NORTHEAST UTILITIES AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
Eliminations Consolidated ------------- ------------- Operating Activities: (Loss)/income before extraordinary loss $ 49,946 $ 219,457 Adjustments to reconcile to net cash provided by/(used in) operating activities: Depreciation 16,668 239,798 Deferred income taxes and investment tax credits, net 17,907 (16,117) Amortization of regulatory assets, net 0 276,139 Amortization of recoverable energy costs 8,258 (30,603) Nuclear related costs 0 17,907 Tax benefit for 1993-1999 from reduction of NU parent losses 25,986 0 Allocation of ESOP benefits (409) 0 Equity in earnings of subsidiary companies (23,553) 0 Cash dividends received from subsidiary companies 183,016 0 Transfer/gain on sale of utility plant 25,444 0 Net other sources/(uses) of cash (84,875) (88,549) Changes in working capital: Receivables and accrued utility revenues, net (204,265) (104,868) Fuel, materials and supplies 1,872 12,450 Accounts payable 188,971 171,148 Accrued taxes (42,891) (128,107) Investments in securitizable assets 0 9,474 Other working capital (excludes cash) 32,647 254 ------------- ------------- Net cash flows provided by/(used in) operating activities 194,722 578,383 ------------- ------------- Investing Activities: Investment in plant: Electric and other utility plant (894) (352,736) Nuclear fuel (646) (61,286) ------------- ------------- Net cash flows used for investments in plant (1,540) (414,022) Investment in NU system Money Pool (68,500) 0 Investment in subsidiaries (117,631) 0 Investment in nuclear decommissioning trusts 0 (39,550) Net proceeds from the sale of utility plant 2,800 0 Other investment activities, net 45,036 (28,478) Capital contributions from Northeast Utilities 482,650 0 Payment for purchase of Yankee, net of cash acquired 0 (260,347) ------------- ------------- Net cash flows (used in)/provided by investing activities 342,815 (742,397) ------------- ------------- Financing Activities: Issuance of common shares 0 4,269 Issuance of long-term debt 0 26,477 Net increase/(decrease) in short-term debt 68,500 961,977 Reacquisitions and retirements of long-term debt 0 (685,555) Reacquisitions and retirements of preferred stock 0 (126,771) Repurchase of common shares (390,000) 0 Cash dividends on preferred stock 0 (14,162) Cash dividends on common shares (193,016) (57,358) ------------- ------------- Net cash flows provided by/(used in) financing activities (514,516) 108,877 ------------- ------------- Net increase/(decrease) in cash for the period 23,021 (55,137) Cash and cash equivalents - beginning of period 4,481 255,154 ------------- ------------- Cash and cash equivalents - end of period $ 27,502 $ 200,017 ============= ============= Supplemental Cash Flow Information: Cash paid/(refunded) during the year for: Interest, net of amounts capitalized $ 11,259 $ 269,735 Income taxes $ 0 $ 253,383 Increase in obligations: Niantic Bay Fuel Trust and other capital leases $ 0 $ 8,067 Seabrook Power Contracts $ 0 $ 0 Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES (a) Consolidating Balance Sheet (b) Assets December 31, 2000 (Thousands of Dollars)
The Connecticut CL&P Light and Receivables CL&P Power Company Corporation Capital,L.P. ------------- ----------- ------------ Utility Plant, at original cost: Electric $5,756,096 $ 0 $ 0 Less: Accumulated provision for depreciation 4,210,429 0 0 ------------- ----------- ------------ 1,545,667 0 0 Construction work in progress 128,835 0 0 Nuclear fuel, net 79,672 0 0 ------------- ----------- ------------ Total net utility plant 1,754,174 0 0 ------------- ----------- ------------ Other Property and Investments: Nuclear decommissioning trusts, at market 536,912 0 0 Investments in regional nuclear generating companies, at equity 41,395 0 0 Investments in subsidiary companies, at equity 31,194 0 0 Other, at cost 33,701 0 0 ------------- ----------- ------------ 643,202 0 0 ------------- ----------- ------------ Long-term Loan Receivable 0 0 103,100 ------------- ----------- ------------ Current Assets: Cash and special deposits 4,948 168 288 Investments in securitizable assets 21,719 268,146 0 Notes receivable from affiliated companies 38,000 0 0 Receivables, net 29,245 0 0 Accounts receivable from affiliated companies 149,896 30,720 0 Fuel, materials, and supplies, at average cost 36,332 0 0 Prepayments and other 32,291 0 0 ------------- ----------- ------------ 312,431 299,034 288 ------------- ----------- ------------ Deferred Charges: Regulatory assets 1,835,967 0 0 Unamortized debt expense 14,794 0 0 Prepaid pensions 170,672 0 0 Other 33,336 0 0 ------------- ----------- ------------ 2,054,769 0 0 ------------- ----------- ------------ Total Assets $4,764,576 $299,034 $103,388 ============= =========== ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not included are the following inactive subsidiaries: The Connecticut Transmission Corporation, The Connecticut Steam Company and The Nutmeg Power Company. (b) Not covered by auditors' report.
THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES (a) Consolidating Balance Sheet (b) Assets December 31, 2000 (Thousands of Dollars)
The City and Electric Suburban Research Power, Electric and Park, Incorporated Gas Company Incorporated (inactive) (inactive) (inactive) ------------ ------------ ------------ Utility Plant, at original cost: Electric $2 $0 $ 0 Less: Accumulated provision for depreciation 0 0 0 ------------ ------------ ------------ 2 0 0 Construction work in progress 0 0 0 Nuclear fuel, net 0 0 0 ------------ ------------ ------------ Total net utility plant 2 0 0 ------------ ------------ ------------ Other Property and Investments: Nuclear decommissioning trusts, at market 0 0 0 Investments in regional nuclear generating companies, at equity 0 0 0 Investments in subsidiary companies, at equity 0 0 0 Other, at cost 0 0 0 ------------ ------------ ------------ 0 0 0 ------------ ------------ ------------ Long-term Loan Receivable 0 0 0 ------------ ------------ ------------ Current Assets: Cash and special deposits 0 1 56 Investments in securitizable assets 0 0 0 Notes receivable from affiliated companies 0 0 0 Receivables, net 0 0 0 Accounts receivable from affiliated companies 0 0 0 Fuel, materials, and supplies, at average cost 0 0 0 Prepayments and other 0 0 0 ------------ ------------ ------------ 0 1 56 ------------ ------------ ------------ Deferred Charges: Regulatory assets 0 0 0 Unamortized debt expense 0 0 0 Prepaid pensions 0 0 0 Other 0 0 0 ------------ ------------ ------------ 0 0 0 ------------ ------------ ------------ Total Assets $2 $1 $56 ============ ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not included are the following inactive subsidiaries: The Connecticut Transmission Corporation, The Connecticut Steam Company and The Nutmeg Power Company. (b) Not covered by auditors' report.
THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES (a) Consolidating Balance Sheet (b) Assets December 31, 2000 (Thousands of Dollars) Eliminations Consolidated ------------ ------------ Utility Plant, at original cost: Electric $ 0 $5,756,098 Less: Accumulated provision for depreciation 0 4,210,429 ------------ ------------ 0 1,545,669 Construction work in progress 0 128,835 Nuclear fuel, net 0 79,672 ------------ ------------ Total net utility plant 0 1,754,176 ------------ ------------ Other Property and Investments: Nuclear decommissioning trusts, at market 0 536,912 Investments in regional nuclear generating companies, at equity 0 41,395 Investments in subsidiary companies, at equity 31,194 0 Other, at cost (7) 33,708 ------------ ------------ 31,187 612,015 ------------ ------------ Long-term Loan Receivable 103,100 0 ------------ ------------ Current Assets: Cash and special deposits 0 5,461 Investments in securitizable assets 191,719 98,146 Notes receivable from affiliated companies 0 38,000 Receivables, net 0 29,245 Accounts receivable from affiliated companies 76,853 103,763 Fuel, materials, and supplies, at average cost 0 36,332 Prepayments and other 0 32,291 ------------ ------------ 268,572 343,238 ------------ ------------ Deferred Charges: Regulatory assets 0 1,835,967 Unamortized debt expense 0 14,794 Prepaid pensions 0 170,672 Other 0 33,336 ------------ ------------ 0 2,054,769 ------------ ------------ Total Assets $402,859 $4,764,198 ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not included are the following inactive subsidiaries: The Connecticut Transmission Corporation, The Connecticut Steam Company and The Nutmeg Power Company. (b) Not covered by auditors' report. THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES (a) Consolidating Balance Sheet (b) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
The Connecticut CL&P Light and Receivables CL&P Power Company Corporation Capital,L.P. ------------- ----------- ------------ Common stockholder's equity: Common stock $ 75,849 $ 0 $ 0 Capital surplus, paid in 413,192 70,829 3,100 Retained earnings 243,197 27,968 0 Accumulated other comprehensive income 506 0 0 ------------- ----------- ------------ Total common stockholder's equity 732,744 98,797 3,100 Preferred stock not subject to mandatory redemption 116,200 0 0 MIPS Preferred stock 0 0 100,000 Long-term debt 1,175,788 0 0 ------------- ----------- ------------ Total capitalization 2,024,732 98,797 103,100 ------------- ----------- ------------ Minority Interest in Common Equity of Subsidiary 0 0 0 ------------- ----------- ------------ Obligations Under Capital Leases 39,910 0 0 ------------- ----------- ------------ Current Liabilities: Notes payable to banks 115,000 170,000 0 Notes payable to affiliated companies 0 0 0 Long-term debt and preferred stock- current portion 160,000 0 0 Obligations under capital leases- current portion 89,959 0 0 Accounts payable 153,944 0 0 Accounts payable to affiliated companies 122,106 0 288 Accrued taxes 30,179 2,722 0 Accrued interest 13,995 27,515 0 Other 31,324 0 0 ------------- ----------- ------------ 716,507 200,237 288 ------------- ----------- ------------ Deferred Credits and Other Long-term Liabilities: Accumulated deferred income taxes 977,439 0 0 Accumulated deferred investment tax credits 99,771 0 0 Deferred contractual obligations 160,590 0 0 Decommissioning obligation-Millstone 1 580,320 0 0 Other 165,307 0 0 ------------- ----------- ------------ 1,983,427 0 0 ------------- ----------- ------------ Total Capitalization and Liabilities $4,764,576 $299,034 $103,388 ============= =========== ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not included are the following inactive subsidiaries: The Connecticut Transmission Corporation, The Connecticut Steam Company and The Nutmeg Power Company. (b) Not covered by auditors' report.
THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES (a) Consolidating Balance Sheet (b) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
The City and Electric Suburban Research Power, Electric and Park, Incorporated Gas Company Incorporated (inactive) (inactive) (inactive) ------------ ------------ ------------ Common stockholder's equity: Common stock $1 $1 $ 5 Capital surplus, paid in 0 0 0 Retained earnings 0 0 51 Accumulated other comprehensive income 0 0 0 ------------ ------------ ------------ Total common stockholder's equity 1 1 56 Preferred stock not subject to mandatory redemption 0 0 0 MIPS Preferred stock 0 0 0 Long-term debt 0 0 0 ------------ ------------ ------------ Total capitalization 1 1 56 ------------ ------------ ------------ Minority Interest in Common Equity of Subsidiary 0 0 0 ------------ ------------ ------------ Obligations Under Capital Leases 0 0 0 ------------ ------------ ------------ Current Liabilities: Notes payable to banks 0 0 0 Notes payable to affiliated companies 1 0 0 Long-term debt and preferred stock- current portion 0 0 0 Obligations under capital leases- current portion 0 0 0 Accounts payable 0 0 0 Accounts payable to affiliated companies 0 0 0 Accrued taxes 0 0 0 Accrued interest 0 0 0 Other 0 0 0 ------------ ------------ ------------ 1 0 0 ------------ ------------ ------------ Deferred Credits and Other Long-term Liabilities: Accumulated deferred income taxes 0 0 0 Accumulated deferred investment tax credits 0 0 0 Deferred contractual obligations 0 0 0 Decommissioning obligation-Millstone 1 0 0 0 Other 0 0 0 ------------ ------------ ------------ 0 0 0 ------------ ------------ ------------ Total Capitalization and Liabilities $2 $1 $56 ============ ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not included are the following inactive subsidiaries: The Connecticut Transmission Corporation, The Connecticut Steam Company and The Nutmeg Power Company. (b) Not covered by auditors' report.
THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES (a) Consolidating Balance Sheet (b) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars) Eliminations Consolidated ------------ ------------ Common stockholder's equity: Common stock $ 7 $ 75,849 Capital surplus, paid in 73,929 413,192 Retained earnings 28,019 243,197 Accumulated other comprehensive income 0 506 ------------ ------------ Total common stockholder's equity 101,955 732,744 Preferred stock not subject to mandatory redemption 0 116,200 MIPS Preferred stock 100,000 0 Long-term debt 103,100 1,072,688 ------------ ------------ Total capitalization 305,055 1,921,632 ------------ ------------ Minority Interest in Common Equity of Subsidiary (100,000) 100,000 ------------ ------------ Obligations Under Capital Leases 0 39,910 ------------ ------------ Current Liabilities: Notes payable to banks 170,000 115,000 Notes payable to affiliated companies 1 0 Long-term debt and preferred stock- current portion 0 160,000 Obligations under capital leases- current portion 0 89,959 Accounts payable 0 153,944 Accounts payable to affiliated companies 288 122,106 Accrued taxes 0 32,901 Accrued interest 27,515 13,995 Other 0 31,324 ------------ ------------ 197,804 719,229 ------------ ------------ Deferred Credits and Other Long-term Liabilities: Accumulated deferred income taxes 0 977,439 Accumulated deferred investment tax credits 0 99,771 Deferred contractual obligations 0 160,590 Decommissioning obligation-Millstone 1 0 580,320 Other 0 165,307 ------------ ------------ 0 1,983,427 ------------ ------------ Total Capitalization and Liabilities $402,859 $4,764,198 ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not included are the following inactive subsidiaries: The Connecticut Transmission Corporation, The Connecticut Steam Company and The Nutmeg Power Company. (b) Not covered by auditors' report. THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES(a) Consolidating Statement of Income(b) Year Ended December 31, 2000 (Thousands of Dollars)
The Connecticut Research Light and CL&P Park, Power Receivables CL&P Incorporated Company Corporation Capital,L.P. (Inactive) ----------- ----------- ------------ ------------ Operating Revenues $2,935,922 $ 0 $ 0 $0 ----------- ----------- ------------ ------------ Operating Expenses: Operation- Fuel, purchased and net interchange power 1,665,806 0 0 0 Other 411,732 498 0 0 Maintenance 136,141 0 0 0 Depreciation 117,305 0 0 0 Amortization of regulatory assets, net 97,315 0 0 0 Federal and state income taxes 126,438 4,556 0 0 Taxes other than income taxes 137,846 0 0 0 ----------- ----------- ------------ ------------ Total operating expenses 2,692,583 5,054 0 0 ----------- ----------- ------------ ------------ Operating Income/(Loss) 243,339 (5,054) 0 0 ----------- ----------- ------------ ------------ Other Income: Equity in earnings of regional nuclear generating and transmission companies 8,246 0 0 0 Nuclear related costs (14,099) 0 0 0 Other, net (2,537) 22,937 9,588 0 Minority interest in loss of subsidiary (9,300) 0 0 0 Income taxes 30,940 0 0 0 ----------- ----------- ------------ ------------ Other income, net 13,250 22,937 9,588 0 ----------- ----------- ------------ ------------ Income before interest charges 256,589 17,883 9,588 0 ----------- ----------- ------------ ------------ Interest Charges: Interest on long-term debt 89,841 0 0 0 Other interest 18,613 11,013 0 0 ----------- ----------- ------------ ------------ Interest charges, net 108,454 11,013 0 0 ----------- ----------- ------------ ------------ Net Income $ 148,135 $ 6,870 $9,588 $0 =========== =========== ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not included are the following inactive subsidiaries: Electric Power, Incorporated, The City and Suburban Electric and Gas Company, The Connecticut Steam Company and The Nutmeg Power Company. (b) Not covered by auditors' report.
THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES(a) Consolidating Statement of Income(b) Year Ended December 31, 2000 (Thousands of Dollars) Eliminations Consolidated ------------ ------------ Operating Revenues $ 0 $2,935,922 ------------ ------------ Operating Expenses: Operation- Fuel, purchased and net interchange power 0 1,665,806 Other 0 412,230 Maintenance 0 136,141 Depreciation 0 117,305 Amortization of regulatory assets, net 0 97,315 Federal and state income taxes 0 130,994 Taxes other than income taxes 0 137,846 ------------ ------------ Total operating expenses 0 2,697,637 ------------ ------------ Operating Income/(Loss) 0 238,285 ------------ ------------ Other Income: Equity in earnings of regional nuclear generating and transmission companies 0 8,246 Nuclear related costs 0 (14,099) Other, net 37,059 (7,071) Minority interest in loss of subsidiary 0 (9,300) Income taxes 0 30,940 ------------ ------------ Other income, net 37,059 8,716 ------------ ------------ Income before interest charges 37,059 247,001 ------------ ------------ Interest Charges: Interest on long-term debt 0 89,841 Other interest 20,601 9,025 ------------ ------------ Interest charges, net 20,601 98,866 ------------ ------------ Net Income $16,458 $ 148,135 ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not included are the following inactive subsidiaries: Electric Power, Incorporated, The City and Suburban Electric and Gas Company, The Connecticut Steam Company and The Nutmeg Power Company. (b) Not covered by auditors' report. THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES (a) Consolidating Statement of Retained Earnings (b) Year Ended December 31, 2000 (Thousands of Dollars)
The Connecticut Light and CL&P Power Receivables CL&P Company Corporation Capital,L.P. ------------ ----------- ------------ Balance at beginning of period $153,254 $21,098 $ 0 Addition: Net income 148,135 6,870 9,588 Tax benefit for 1993-1999 from reduction of NU parent losses 21,461 0 0 ------------ ----------- ------------ 322,850 27,968 9,588 Deductions: ------------ ----------- ------------ Dividends declared: Preferred stock (at required annual rates) 7,402 0 0 Common stock $9.4944 per share 72,014 0 0 MIPS Partnership distribution 0 0 9,300 Cash distribution to The Connecticut Light and Power Company 0 0 288 Allocation of benefits-ESOP 237 0 0 ------------ ----------- ------------ Total deductions 79,653 0 9,588 ------------ ----------- ------------ Balance at end of period $243,197 $27,968 $ 0 ============ =========== ============
THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES (a) Consolidating Statement of Capital Surplus, Paid In (b) Year Ended December 31, 2000 (Thousands of Dollars)
The Connecticut Light and CL&P Power Receivables CL&P Company Corporation Capital,L.P. ------------ ----------- ------------ Balance at beginning of period $665,598 $70,829 $3,100 Repurchase of common stock (253,620) 0 0 Redemption of preferred stock (749) 0 0 1,963 0 0 Capital stock expenses, net ------------ ----------- ------------ $413,192 $70,829 $3,100 Balance at end of period ============ =========== ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not included are the following inactive subsidiaries: Electric Power, Incorporated, The City and Suburban Electric and Gas Company, The Connecticut Steam Company and The Nutmeg Power Company. (b) Not covered by auditors' report.
THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES (a) Consolidating Statement of Retained Earnings (b) Year Ended December 31, 2000 (Thousands of Dollars)
Research Park, Incorporated (Inactive) Eliminations Consolidated ------------ ------------ ------------ Balance at beginning of period $51 $21,149 $153,254 Addition: Net income 0 16,459 148,135 Tax benefit for 1993-1999 from reduction of NU parent losses 0 0 21,461 ------------ ------------ ------------ 51 37,608 322,850 Deductions: ------------ ------------ ------------ Dividends declared: Preferred stock (at required annual rates) 0 0 7,402 Common stock $9.4944 per share 0 0 72,014 MIPS Partnership distribution 0 9,300 0 Cash distribution to The Connecticut Light and Power Company 0 288 0 Allocation of benefits-ESOP 0 0 237 ------------ ------------ ------------ Total deductions 0 9,588 79,653 ------------ ------------ ------------ Balance at end of period $51 $28,020 $243,197 ============ ============ ============
THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES (a) Consolidating Statement of Capital Surplus, Paid In (b) Year Ended December 31, 2000 (Thousands of Dollars)
Research Park, Incorporated (Inactive) Eliminations Consolidated ------------ ------------ ------------ Balance at beginning of period $0 $73,929 $665,598 Repurchase of common stock 0 0 (253,620) Redemption of preferred stock 0 0 (749) 0 0 1,963 Capital stock expenses, net ------------ ------------ ------------ $0 $73,929 $413,192 Balance at end of period ============ ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not included are the following inactive subsidiaries: Electric Power,Incorporated, The City and Suburban Electric and Gas Company, The Connecticut Steam Company and The Nutmeg Power Company. (b) Not covered by auditors' report.
THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES Consolidating Statement of Cash Flows (a)(b) Year Ended December 31, 2000 (Thousands of Dollars)
The Connecticut CL&P Light and Receivables CL&P Power Company Corporation Capital, LP ------------- ------------ ------------- Operating Activities: Income after interest charges $ 148,135 $ 6,870 $ 9,588 Adjustments to reconcile to net cash provided by operating activities: Depreciation 117,305 0 0 Deferred income taxes and investment tax credits, net 5,672 0 0 Amortization of regulatory assets, net 97,315 0 0 Amortization of recoverable energy costs 4,155 0 0 Nuclear related costs 14,099 0 0 Tax benefit for 1993-1999 from reduction of NU parent losses 21,461 0 0 Allocation of ESOP benefits (237) 0 0 Gain on sale of utility plant 25,444 0 0 Net other uses of cash (112,915) 0 0 Changes in working capital: Receivables (131,778) (21,602) 0 Fuel, materials and supplies 1,271 0 0 Accounts payable 173,470 (1,740) 0 Accrued taxes (132,466) (3,847) 0 Investment in securitizable assets 32,429 9,474 0 Other working capital (excludes cash) 3,204 11,013 (9,588) -------------- ------------ ------------- Net cash flows provided by operating activities 266,564 168 0 -------------- ------------ ------------- Investing Activities: Investments in plant: Electric utility plant (208,249) 0 0 Nuclear fuel (35,709) 0 0 -------------- ------------ ------------- Net cash flows used for investments in plant (243,958) 0 0 Investment in NU system Money Pool (38,000) 0 0 Investments in nuclear decommissioning trusts (25,133) 0 0 Other investment activities, net 3,375 0 0 Net proceeds from the transfer of utility plant 686,807 0 0 -------------- ------------ ------------- Net cash flows provided by/(used in) investing activities 383,091 0 0 -------------- ------------ ------------- Financing Activities: Net increase in short-term debt 13,300 0 0 Reacquisitions and retirements of long-term debt (179,071) 0 0 Reacquisitions and retirements of preferred stock (99,539) 0 0 Repurchase of common shares (300,000) 0 0 MIPS partnership distribution 0 0 0 Cash distribution to CL&P 0 0 0 Cash dividends on preferred stock (7,402) 0 0 Cash dividends on common shares (72,014) 0 0 -------------- ------------ ------------- Net cash flows used in financing activities (644,726) 0 0 -------------- ------------ ------------- Net increase in cash for the period 4,929 168 0 Cash - beginning of period 19 0 288 -------------- ------------ ------------- Cash - end of period $ 4,948 $ 168 $ 288 ============== ============ ============= Supplemental Cash Flow Information: Cash paid during the year for: Interest, net of amounts capitalized $ 106,323 $ 0 $ 0 ============== ============ ============= Income taxes $ 217,977 $ 8,403 $ 0 ============== ============ ============= Increase in obligations: Niantic Bay Fuel Trust and other capital leases $ 6,535 $ 0 $ 0 ============== ============ ============= Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not included are the following inactive subsidiaries: Electric Power, Incorporated, The City and Suburban Electric and Gas Company, The Connecticut Transmission Corporation, The Connecticut Steam Company and The Nutmeg Power Company. (b) Not covered by auditors' report.
THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES Consolidating Statement of Cash Flows (a)(b) Year Ended December 31, 2000 (Thousands of Dollars)
Research Park, Incorporated Eliminations Consolidated ------------- ------------- -------------- Operating Activities: Income after interest charges $ 0 $ 16,458 $ 148,135 Adjustments to reconcile to net cash provided by operating activities: Depreciation 0 0 117,305 Deferred income taxes and investment tax credits, net 0 0 5,672 Amortization of regulatory assets, net 0 0 97,315 Amortization of recoverable energy costs 0 0 4,155 Nuclear related costs 0 0 14,099 Tax benefit for 1993-1999 from reduction of NU parent losses 0 0 21,461 Allocation of ESOP benefits 0 0 (237) Gain on sale of utility plant 0 0 25,444 Net other uses of cash 0 0 (112,915) Changes in working capital: Receivables 0 (43,442) (109,938) Fuel, materials and supplies 0 0 1,271 Accounts payable 0 0 171,729 Accrued taxes 0 0 (136,313) Investment in securitizable assets 0 32,430 9,474 Other working capital (excludes cash) 0 1,425 3,204 ------------- ------------- -------------- Net cash flows provided by operating activities 0 6,871 259,861 ------------- ------------- -------------- Investing Activities: Investments in plant: Electric utility plant 0 0 (208,249) Nuclear fuel 0 0 (35,709) ------------- ------------- -------------- Net cash flows used for investments in plant 0 0 (243,958) Investment in NU system Money Pool 0 0 (38,000) Investments in nuclear decommissioning trusts 0 0 (25,133) Other investment activities, net 0 (6,871) 10,246 Net proceeds from the transfer of utility plant 0 0 686,807 ------------- ------------- -------------- Net cash flows provided by/(used in) investing activities 0 (6,871) 389,962 ------------- ------------- -------------- Financing Activities: Net increase in short-term debt 0 0 13,300 Reacquisitions and retirements of long-term debt 0 0 (179,071) Reacquisitions and retirements of preferred stock 0 0 (99,539) Repurchase of common shares 0 0 (300,000) MIPS partnership distribution 0 0 0 Cash distribution to CL&P 0 0 0 Cash dividends on preferred stock 0 0 (7,402) Cash dividends on common shares 0 0 (72,014) ------------- ------------- -------------- Net cash flows used in financing activities 0 0 (644,726) ------------- ------------- -------------- Net increase in cash for the period 0 0 5,097 Cash - beginning of period 56 0 364 ------------- ------------- -------------- Cash - end of period $ 56 $ 0 $ 5,461 ============= ============= ============== Supplemental Cash Flow Information: Cash paid during the year for: Interest, net of amounts capitalized $ 0 $ 9,588 $ 96,735 ============= ============= ============== Income taxes $ 0 $ 0 $ 226,380 ============= ============= ============== Increase in obligations: Niantic Bay Fuel Trust and other capital leases $ 0 $ 0 $ 6,535 ============= ============= ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not included are the following inactive subsidiaries: Electric Power, Incorporated, The City and Suburban Electric and Gas Company, The Connecticut Transmission Corporation, The Connecticut Steam Company and The Nutmeg Power Company. (b) Not covered by auditors' report.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES (a) Consolidating Balance Sheet (b) Assets December 31, 2000 (Thousands of Dollars)
Public Service Company of Properties, New Hampshire Inc. Eliminations Consolidated -------------- ----------- ------------ ------------ Utility Plant, at cost: Electric $1,505,967 $ 201 $ 0 $1,506,168 Other 0 8,588 0 8,588 -------------- ----------- ------------ ------------ 1,505,967 8,789 0 1,514,756 Less: Accumulated provision for depreciation 711,340 3,452 0 714,792 -------------- ----------- ------------ ------------ 794,627 5,337 0 799,964 Construction work in progress 27,251 0 0 27,251 Nuclear fuel, net 1,924 0 0 1,924 -------------- ----------- ------------ ------------ Total net utility plant 823,802 5,337 0 829,139 -------------- ----------- ------------ ------------ Other Property and Investments: Nuclear decommissioning trusts, at market 7,362 0 0 7,362 Investments in regional nuclear generating companies, at equity 16,293 0 6,328 9,965 Investments in subsidiary companies, Other, at cost 3,225 250 0 3,475 -------------- ----------- ------------ ------------ 26,880 250 6,328 20,802 -------------- ----------- ------------ ------------ Current Assets: Cash and cash equivalents 115,135 1,347 0 116,482 Receivables, net 71,992 0 0 71,992 Accounts receivable from affiliated companies 2,798 153 712 2,239 Taxes receivable from affiliated companies 9,983 22 0 10,005 Accrued utility revenues 41,844 0 0 41,844 Fuel, materials, and supplies, at average cost 28,760 0 0 28,760 Prepayments and other 14,750 33 0 14,783 -------------- ----------- ------------ ------------ 285,262 1,555 712 286,105 -------------- ----------- ------------ ------------ Deferred Charges: Regulatory assets 924,847 0 0 924,847 Unamortized debt expense 9,067 0 0 9,067 Deferred receivable from affiliated company 3,240 0 0 3,240 Other 9,096 0 0 9,096 -------------- ----------- ------------ ------------ 946,250 0 0 946,250 -------------- ----------- ------------ ------------ Total Assets $2,082,194 $7,142 $7,040 $2,082,296 ============== =========== ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not included is New Hampshire Electric Company which is an inactive subsidiary. (b) Not covered by auditors' report.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES (a) Consolidating Balance Sheet (b) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
Public Service Company of Properties, New Hampshire Inc. Eliminations Consolidated -------------- ----------- ------------ ------------ Capitalization: Common stockholder's equity: Common stock $ 1 $ 1 $ 1 $ 1 Capital surplus, paid in 424,909 0 0 424,909 Retained earnings 123,177 3,532 3,532 123,177 Accumulated other comprehensive income 1,207 0 0 1,207 -------------- ----------- ------------ ------------ Total common stockholder's equity 549,294 3,533 3,533 549,294 Long-term debt 407,285 2,795 2,795 407,285 -------------- ----------- ------------ ------------ Total capitalization 956,579 6,328 6,328 956,579 -------------- ----------- ------------ ------------ Obligations Under Seabrook Power Contracts and Other Capital Leases 91,702 0 0 91,702 -------------- ----------- ------------ ------------ Current Liabilities: Long-term debt and preferred stock- current portion 24,268 0 0 24,268 Obligations under Seabrook Power Contracts and other capital leases-current portion 537,528 0 0 537,528 Accounts payable 45,847 45 0 45,892 Accounts payable to affiliated companies 54,157 563 712 54,008 Accrued taxes 656 1 0 657 Accrued interest 4,962 0 0 4,962 Other 13,112 0 0 13,112 -------------- ----------- ------------ ------------ 680,530 609 712 680,427 -------------- ----------- ------------ ------------ Deferred Credits and Other Long-term Liabilities: Accumulated deferred income taxes 179,723 205 0 179,928 Accumulated deferred investment tax credits 27,348 0 0 27,348 Deferred contractual obligations 41,499 0 0 41,499 Deferred revenue from affiliated company 3,240 0 0 3,240 Deferred pension costs 41,216 0 0 41,216 Other 60,357 0 0 60,357 -------------- ----------- ------------ ------------ 353,383 205 0 353,588 -------------- ----------- ------------ ------------ Total Capitalization and Liabilities $2,082,194 $7,142 $7,040 $2,082,296 ============== =========== ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not included is New Hampshire Electric Company which is an inactive subsidiary. (b) Not covered by auditors' report.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES Consolidating Statement of Income (a) Year Ended December 31, 2000 (Thousands of Dollars)
Public Service Company of Properties, New Hampshire Inc. Eliminations Consolidated --------------- ----------- ------------ ------------ Operating Revenues $1,291,280 $1,127 $1,075 $1,291,332 --------------- ----------- ------------ ------------ Operating Expenses: Operation- Fuel, purchased and net interchange power 853,563 0 0 853,563 Other 123,337 6 1,075 122,268 Maintenance 47,429 0 0 47,429 Depreciation 43,873 0 0 43,873 Amortization of regulatory assets, net 45,874 0 0 45,874 Federal and state income taxes 45,080 244 0 45,324 Taxes other than income taxes 42,194 127 0 42,321 --------------- ----------- ------------ ------------ Total operating expenses 1,201,350 377 1,075 1,200,652 --------------- ----------- ------------ ------------ Operating Income 89,930 750 0 90,680 --------------- ----------- ------------ ------------ Other Income/(Loss): Equity in earnings of regional nuclear nuclear generating companies and subsidiary company 1,896 0 361 1,535 Nuclear related costs (1,000) 0 0 (1,000) Other, net 14,214 (147) 242 13,825 Income taxes 68 0 0 68 --------------- ----------- ------------ ------------ Other income/(loss), net 15,178 (147) 603 14,428 --------------- ----------- ------------ ------------ Income before interest charges 105,108 603 603 105,108 --------------- ----------- ------------ ------------ Interest Charges: Interest on long-term debt 37,510 0 0 37,510 Other interest 47 242 242 47 --------------- ----------- ------------ ------------ Interest charges, net 37,557 242 242 37,557 --------------- ----------- ------------ ------------ Income before extraordinary loss, net of tax benefit 67,551 361 361 67,551 Extraordinary loss, net of tax benefit (214,217) 0 0 (214,217) --------------- ----------- ------------ ------------ Net (Loss)/Income $ (146,666) $ 361 $ 361 $ (146,666) =============== =========== ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES Consolidating Statement of Retained Earnings (a) Year Ended December 31, 2000 (Thousands of Dollars)
Public Service Company of Properties, New Hampshire Inc. Eliminations Consolidated -------------- ----------- ------------ ------------ Balance at beginning of period $319,938 $3,171 $3,171 $319,938 Addition: Net income (146,666) 361 361 (146,666) Tax benefit for 1993-1999 from reduction of NU parent losses 3,952 0 0 3,952 -------------- ----------- ------------ ------------ 177,224 3,532 3,532 177,224 -------------- ----------- ------------ ------------ Deductions: Dividends declared: Preferred stock 3,962 0 0 3,962 Common stock $50,000.00 per share 50,000 0 0 50,000 Allocation of benefits-ESOP 85 0 0 85 -------------- ----------- ------------ ------------ Total deductions 54,047 0 0 54,047 -------------- ----------- ------------ ------------ Balance at end of period $123,177 $3,532 $3,532 $123,177 ============== =========== ============ ============
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES Consolidating Statement of Capital Surplus, Paid In (a) Year Ended December 31, 1999 (Thousands of Dollars)
Public Service Company of Properties, New Hampshire Inc. Eliminations Consolidated -------------- ----------- ------------ ------------ Balance at beginning of period $424,654 $0 $0 $424,654 Capital stock expenses, net 255 0 0 255 -------------- ----------- ------------ ------------ Balance at end of period $424,909 $0 $0 $424,909 ============== =========== ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) (b) Year Ended December 31, 2000 (Thousands of Dollars)
Public Service Company of Properties, New Hampshire Inc. --------------- ------------- Operating Activities: Income before extraordinary loss $ 67,551 $ 361 Adjustments to reconcile to net cash provided by operating activities: Depreciation 43,873 0 Deferred income taxes and investment tax credits, net (512) (10) Amortization of recoverable energy costs (35,886) 0 Tax benefit for 1993-1999 from reduction of NU parent losses 3,952 0 Amortization of regulatory assets, net 45,874 0 Allocation of ESOP benefits (85) 0 Net other sources of cash 38,694 852 Changes in working capital: Receivables and accrued utility revenues 20,569 (29) Fuel, materials and supplies 9,316 0 Accounts payable 23,090 77 Accrued taxes (32,787) (260) Other working capital (excludes cash) 6,645 1 --------------- ------------- Net cash flows provided by operating activities 190,294 992 --------------- ------------- Investing Activities: Investment in plant: Electric utility plant (69,500) 0 Nuclear fuel (1,153) 0 --------------- ------------- Net cash flows used for investments in plant (70,653) 0 Investment in NU system money pool 0 0 Investment in nuclear decommissioning trusts (686) 0 Other investment activities, net 2,486 0 --------------- ------------- Net cash flows (used in)/provided by investing activities (68,853) 0 --------------- ------------- Financing Activities: Reacquisitions and retirements of long-term debt (109,200) (580) Reacquisitions and retirements of preferred stock (25,732) 0 Cash dividends on preferred stock (3,962) 0 Cash dividends on common shares (50,000) 0 --------------- ------------- Net cash flows used in financing activities (188,894) (580) --------------- ------------- Net (decrease)/increase in cash for the period (67,453) 412 Cash and cash equivalents - beginning of period 182,588 935 --------------- ------------- Cash and cash equivalents - end of period $ 115,135 $ 1,347 =============== ============= Supplemental Cash Flow Information: Cash paid during the year for: Interest, net of amounts capitalized $ 38,819 $ 242 =============== ============= Income taxes $ 22,070 $ 505 =============== ============= Increase in obligations: Seabrook Power Contracts and other capital leases $ (96,208) $ 0 =============== ============= Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not included is New Hampshire Electric Company which is an inactive subsidiary. (b) Not covered by auditors' report.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) (b) Year Ended December 31, 2000 (Thousands of Dollars)
Eliminations Consolidated ------------- ------------- Operating Activities: Income before extraordinary loss $ 361 $ 67,551 Adjustments to reconcile to net cash provided by operating activities: Depreciation 0 43,873 Deferred income taxes and investment tax credits, net 0 (521) Amortization of recoverable energy costs 0 (35,886) Tax benefit for 1993-1999 from reduction of NU parent losses 0 3,952 Amortization of regulatory assets, net 0 45,874 Allocation of ESOP benefits 0 (85) Net other sources of cash 0 39,545 Changes in working capital: Receivables and accrued utility revenues (57) 20,597 Fuel, materials and supplies 0 9,316 Accounts payable 57 23,110 Accrued taxes 0 (33,048) Other working capital (excludes cash) 0 6,646 ------------- ------------- Net cash flows provided by operating activities 361 190,924 ------------- ------------- Investing Activities: Investment in plant: Electric utility plant 0 (69,500) Nuclear fuel 0 (1,153) ------------- ------------- Net cash flows used for investments in plant 0 (70,653) Investment in NU system money pool 0 0 Investment in nuclear decommissioning trusts 0 (686) Other investment activities, net 219 2,268 ------------- ------------- Net cash flows (used in)/provided by investing activities 219 (69,071) ------------- ------------- Financing Activities: Reacquisitions and retirements of long-term debt (580) (109,200) Reacquisitions and retirements of preferred stock 0 (25,732) Cash dividends on preferred stock 0 (3,962) Cash dividends on common shares 0 (50,000) ------------- ------------- Net cash flows used in financing activities (580) (188,894) ------------- ------------- Net (decrease)/increase in cash for the period 0 (67,041) Cash and cash equivalents - beginning of period 0 183,523 ------------- ------------- Cash and cash equivalents - end of period $ 0 $ 116,482 ============= ============= Supplemental Cash Flow Information: Cash paid during the year for: Interest, net of amounts capitalized $ 242 $ 38,819 ============= ============= Income taxes $ 0 $ 22,575 ============= ============= Increase in obligations: Seabrook Power Contracts and other capital leases $ (96,208) $ 0 ============= ============= Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not included is New Hampshire Electric Company which is an inactive subsidiary. (b) Not covered by auditors' report.
WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY Consolidating Balance Sheet (a) Assets December 31, 2000 (Thousands of Dollars)
Western Massachusetts WMECO Electric Receivables Company Corporation Eliminations Consolidated ------------- ----------- ------------ ------------ Utility Plant, at cost: Electric $1,112,405 $ 0 $ 0 $1,112,405 Less: Accumulated provision for depreciation 792,923 0 0 792,923 ------------- ----------- ------------ ------------ 319,482 0 0 319,482 Construction work in progress 22,813 0 0 22,813 Nuclear fuel, net 18,296 0 0 18,296 ------------- ----------- ------------ ------------ Total net utility plant 360,591 0 0 360,591 ------------- ----------- ------------ ------------ Other Property and Investments: Nuclear decommissioning trusts, at market 144,921 0 0 144,921 Investments in regional nuclear generating companies, at equity 11,117 0 0 11,117 Investments in subsidiary companies, at equity (11) 0 (11) 0 Other, at cost 6,249 0 0 6,249 ------------- ----------- ------------ ------------ 162,276 0 (11) 162,287 ------------- ----------- ------------ ------------ Current Assets: Cash and special deposits 887 98 0 985 Receivables, net 36,364 0 0 36,364 Accounts receivable from affiliated companies 16,252 0 106 16,146 Accrued utility revenue 21,222 0 0 21,222 Fuel, materials, and supplies, at average cost 1,606 0 0 1,606 Prepayments and other 4,817 0 0 4,817 ------------- ----------- ------------ ------------ 81,148 98 106 81,140 ------------- ----------- ------------ ------------ Deferred Charges: Regulatory assets 392,247 0 0 392,247 Unamortized debt expense 1,822 0 0 1,822 Prepaid pension 45,473 0 0 45,473 Other 4,258 0 0 4,258 ------------- ----------- ------------ ------------ 443,800 0 0 443,800 ------------- ----------- ------------ ------------ Total Assets $1,047,815 $98 $ 95 $1,047,818 ============= =========== ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY Consolidating Balance Sheet (a) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
Western Massachusetts WMECO Electric Receivables Company Corporation Eliminations Consolidated ------------- ----------- ------------ ------------ Capitalization: Common stockholder's equity: Common stock $ 14,752 $ 0 $ 0 $ 14,752 Capital surplus, paid in 94,010 60 60 94,010 Retained earnings 62,952 (71) (71) 62,952 Accumulated other comprehensive income 182 0 0 182 ------------- ----------- ------------ ------------ Total common stockholder's equity 171,896 (11) (11) 171,896 Preferred stock not subject to mandatory redemption 20,000 0 0 20,000 Preferred stock subject to mandatory redemption 15,000 0 0 15,000 Long-term debt 139,425 0 0 139,425 ------------- ----------- ------------ ------------ Total capitalization 346,321 (11) (11) 346,321 ------------- ----------- ------------ ------------ Obligations Under Capital Leases 5,935 0 0 5,935 ------------- ----------- ------------ ------------ Current Liabilities: Notes payable to banks 110,000 0 0 110,000 Notes payable to affiliated companies 600 0 0 600 Long-term debt and preferred stock- current portion 61,500 0 0 61,500 Obligations under capital leases- current portion 20,986 0 0 20,986 Accounts payable 25,298 106 106 25,298 Accounts payable to affiliated companies 8,611 0 0 8,611 Accrued taxes 8,468 3 0 8,471 Accrued interest 4,703 0 0 4,703 Other 7,671 0 0 7,671 ------------- ----------- ------------ ------------ 247,837 109 106 247,840 ------------- ----------- ------------ ------------ Deferred Credits and Other Long-term Liabilities: Accumulated deferred income taxes 224,711 0 0 224,711 Accumulated deferred investment tax credits 17,580 0 0 17,580 Deferred contractual obligations 42,519 0 0 42,519 Decommissioning obligation- Millstone 1 136,130 0 0 136,130 Other 26,782 0 0 26,782 ------------- ----------- ------------ ------------ 447,722 0 0 447,722 ------------- ----------- ------------ ------------ Total Capitalization and Liabilities $1,047,815 $ 98 $ 95 $1,047,818 ============= =========== ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY Consolidating Statement of Income (a) Year Ended December 31, 2000 (Thousands of Dollars)
Western Massachusetts WMECO Electric Receivables Company Corporation Eliminations Consolidated ------------- ----------- ------------ ------------ Operating Revenues $513,678 $0 $0 $513,678 ------------- ----------- ------------ ------------ Operating Expenses: Operation- Fuel, purchased and net interchange power 246,130 0 0 246,130 Other 75,940 0 0 75,940 Maintenance 33,111 0 0 33,111 Depreciation 17,693 0 0 17,693 Amortization of regulatory assets, net 47,775 0 0 47,775 Federal and state income taxes 21,174 0 0 21,174 Taxes other than income taxes 17,759 0 0 17,759 ------------- ----------- ------------ ------------ Total operating expenses 459,582 0 0 459,582 ------------- ----------- ------------ ------------ Operating Income 54,096 0 0 54,096 ------------- ----------- ------------ ------------ Other Income/(Loss): Equity in earnings of regional nuclear generating companies 2,251 0 0 2,251 Nuclear related costs (2,808) 0 0 (2,808) Other, net 1,242 0 0 1,242 Income taxes 6,029 0 0 6,029 ------------- ----------- ------------ ------------ Other income, net 6,714 0 0 6,714 ------------- ----------- ------------ ------------ Income before interest charges 60,810 0 0 60,810 ------------- ----------- ------------ ------------ Interest Charges: Interest on long-term debt 14,051 0 0 14,051 Other interest 11,491 0 0 11,491 ------------- ----------- ------------ ------------ Interest charges, net 25,542 0 0 25,542 ------------- ----------- ------------ ------------ Net Income $ 35,268 $0 $0 $ 35,268 ============= =========== ============ ============ The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY Consolidating Statement of Retained Earnings (a) Year Ended December 31, 2000 (Thousands of Dollars)
Western Massachusetts WMECO Electric Receivables Company Corporation Eliminations Consolidated ------------- ----------- ------------ ------------ Balance at beginning of period $38,712 $(71) $(71) $38,712 Addition: Net income 35,268 0 0 35,268 Tax benefit for 1993-1999 from reduction of NU parent losses 3,824 0 0 3,824 ------------- ----------- ------------ ------------ 77,804 (71) (71) 77,804 ------------- ----------- ------------ ------------ Deductions: Dividends declared: Preferred stock 2,798 0 0 2,798 Common stock $20.34 per share 12,002 0 0 12,002 Allocation of benefits-ESOP 52 0 0 52 ------------- ----------- ------------ ------------ Total deductions 14,852 0 0 14,852 ------------- ----------- ------------ ------------ Balance at end of period $62,952 $(71) $(71) $62,952 ============= =========== ============ ============
WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY Consolidating Statement of Capital Surplus, Paid In (a) Year Ended December 31, 2000 (Thousands of Dollars)
Western Massachusetts WMECO Electric Receivables Company Corporation Eliminations Consolidated ------------- ----------- ------------ ------------ Balance at beginning of period $171,691 $60 $60 $171,691 Repurchase of common stock (77,940) 0 0 (77,940) Capital stock expenses, net 259 0 0 259 ------------- ----------- ------------ ------------ Balance at end of period $ 94,010 $60 $60 $ 94,010 ============= =========== ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
Western Massachusetts WMECO Electric Receivables Company Corporation --------------- ------------ Operating Activities: Income after interest charges $ 35,268 $ 0 Adjustments to reconcile to net cash provided by/(used in) operating activities: Depreciation 17,693 0 Deferred income taxes and investment tax credits, net (11,549) 0 Amortization of regulatory assets, net 47,775 0 Amortization of recoverable energy costs, net 9,386 0 Nuclear related costs 2,808 0 Tax benefit for 1993-1999 from reduction of NU parent losses 3,824 0 Allocation of ESOP benefits (52) 0 Net other uses of cash (28,834) 0 Changes in working capital: Receivables and accrued utility revenues (24,637) 0 Fuel, materials and supplies 1,491 0 Accounts payable 17,727 0 Accrued taxes 7,895 (13) Other working capital (excludes cash) (7,321) 0 --------------- ------------ Net cash flows provided by/(used in) operating activities 71,474 (13) --------------- ------------ Investing Activities: Investments in plant: Electric utility plant (27,267) 0 Nuclear fuel (7,848) 0 --------------- ------------ Net cash flows used for investments in plant (35,115) 0 Investments in nuclear decommissioning trusts (3,437) 0 Other investment activities, net 3,589 0 Net proceeds from the transfer of utility plant 185,787 0 --------------- ------------ Net cash flows provided by investing activities 150,824 0 --------------- ------------ Financing Activities: Net decrease in short-term debt (21,800) 0 Reacquisitions and retirements of long-term debt (94,150) 0 Reacquisitions and retirements of preferred stock (1,500) 0 Repurchase of common shares (90,000) 0 Cash dividends on preferred stock (2,798) 0 Cash dividends on common shares (12,002) 0 --------------- ------------ Net cash flows used in financing activities (222,250) 0 --------------- ------------ Net increase/(decrease) in cash for the period 48 (13) Cash - beginning of period 839 111 --------------- ------------ Cash - end of period $ 887 $ 98 =============== ============ Supplemental Cash Flow Information: Cash paid/(refunded) during the year for: Interest, net of amounts capitalized $ 26,055 $ 0 =============== ============ Income taxes $ 18,542 $ 12 =============== ============ Increase in obligations: Niantic Bay Fuel Trust and other capital leases $ 1,532 $ 0 =============== ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
Eliminations Consolidated ------------- ------------- Operating Activities: Income after interest charges $ 0 $ 35,268 Adjustments to reconcile to net cash provided by/(used in) operating activities: Depreciation 0 17,693 Deferred income taxes and investment tax credits, net 0 (11,549) Amortization of regulatory assets, net 0 47,775 Amortization of recoverable energy costs, net 0 9,386 Nuclear related costs 0 2,808 Tax benefit for 1993-1999 from reduction of NU parent losses 0 3,824 Allocation of ESOP benefits 0 (52) Net other uses of cash 0 (28,834) Changes in working capital: Receivables and accrued utility revenues 0 (24,637) Fuel, materials and supplies 0 1,491 Accounts payable 0 17,727 Accrued taxes 0 7,882 Other working capital (excludes cash) 0 (7,321) ------------- ------------- Net cash flows provided by/(used in) operating activities 0 71,461 ------------- ------------- Investing Activities: Investments in plant: Electric utility plant 0 (27,267) Nuclear fuel 0 (7,848) ------------- ------------- Net cash flows used for investments in plant 0 (35,115) Investments in nuclear decommissioning trusts 0 (3,437) Other investment activities, net 0 3,589 Net proceeds from the transfer of utility plant 0 185,787 ------------- ------------- Net cash flows provided by investing activities 0 150,824 ------------- ------------- Financing Activities: Net decrease in short-term debt 0 (21,800) Reacquisitions and retirements of long-term debt 0 (94,150) Reacquisitions and retirements of preferred stock 0 (1,500) Repurchase of common shares 0 (90,000) Cash dividends on preferred stock 0 (2,798) Cash dividends on common shares 0 (12,002) ------------- ------------- Net cash flows used in financing activities 0 (222,250) ------------- ------------- Net increase/(decrease) in cash for the period 0 35 Cash - beginning of period 0 950 ------------- ------------- Cash - end of period $ 0 $ 985 ============= ============= Supplemental Cash Flow Information: Cash paid/(refunded) during the year for: Interest, net of amounts capitalized $ 0 $ 26,055 ============= ============= Income taxes $ 0 $ 18,554 ============= ============= Increase in obligations: Niantic Bay Fuel Trust and other capital leases $ 0 $ 1,532 ============= ============= Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
HOLYOKE WATER POWER COMPANY AND SUBSIDIARY Consolidating Balance Sheet (a) Assets December 31, 2000 (Thousands of Dollars)
Holyoke Holyoke Water Power and Power Electric Company Company Eliminations Consolidated -------- --------- ------------ ------------ Utility Plant, at cost: Electric $99,699 $1,418 $ 0 $101,117 Less: Accumulated provision for depreciation 80,901 1,032 0 81,933 -------- --------- ------------ ------------ 18,798 386 0 19,184 Construction work in progress 970 0 0 970 -------- --------- ------------ ------------ Total net utility plant 19,768 386 0 20,154 -------- --------- ------------ ------------ Other Property and Investments: Investments in subsidiary company, at equity 939 0 939 0 Other, at cost 3,476 0 0 3,476 -------- --------- ------------ ------------ 4,415 0 939 3,476 -------- --------- ------------ ------------ Current Assets: Cash 0 1,865 0 1,865 Notes receivables from affiliated companies 16,200 0 0 16,200 Receivables, net 862 0 0 862 Accounts receivable from affiliated companies 4,708 4,165 3,807 5,065 Taxes receivable 825 0 0 825 Fuel, materials, and supplies, at average cost 4,763 0 0 4,763 Prepayments and other 768 0 0 768 -------- --------- ------------ ------------ 28,126 6,030 3,807 30,348 -------- --------- ------------ ------------ Deferred Charges: Unamortized debt expense 792 0 0 792 Accumulated deferred income taxes 0 35 35 0 Prepaid pension 771 0 0 771 Other 323 0 0 323 -------- --------- ------------ ------------ 1,886 35 35 1,886 -------- --------- ------------ ------------ Total Assets $54,195 $6,451 $4,781 $55,864 ======== ========= ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
HOLYOKE WATER POWER COMPANY AND SUBSIDIARY Consolidating Balance Sheet (a) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
Holyoke Holyoke Water Power and Power Electric Company Company Eliminations Consolidated -------- --------- ------------ ------------ Capitalization: Common stockholder's equity: Common stock $ 2,400 $ 485 $ 485 $ 2,400 Capital surplus, paid in 6,000 0 0 6,000 Retained earnings (5,607) (95) (95) (5,607) Accumulated other comprehensive income (5) 0 0 (5) -------- --------- ------------ ------------ Total common stockholder's equity 2,788 390 390 2,788 Long-term debt 38,300 424 424 38,300 -------- --------- ------------ ------------ Total capitalization 41,088 814 814 41,088 -------- --------- ------------ ------------ Current Liabilities: Accounts payable 1,173 2 0 1,175 Accounts payable to affiliated companies 3,414 5,465 3,807 5,071 Accrued taxes 756 29 0 785 Accrued interest 770 0 0 770 Other 89 16 0 105 -------- --------- ------------ ------------ 6,202 5,512 3,807 7,906 -------- --------- ------------ ------------ Deferred Credits and Other Long-term Liabilities: Accumulated deferred income taxes 361 0 35 326 Other 6,544 125 125 6,544 -------- --------- ------------ ------------ 6,905 125 160 6,870 -------- --------- ------------ ------------ Total Capitalization and Liabilities $54,195 $6,451 $4,781 $55,864 ======== ========= ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
HOLYOKE WATER POWER COMPANY AND SUBSIDIARY Consolidating Statement of Income (a) Year Ended December 31, 2000 (Thousands of Dollars)
Holyoke Holyoke Water Power and Power Electric Company Company Eliminations Consolidated -------- --------- ------------ ------------ Operating Revenues $54,736 $68,231 $47,334 $75,633 -------- --------- ------------ ------------ Operating Expenses: Operation- Fuel, purchased and net interchange power 27,194 68,136 47,245 48,085 Other 6,059 102 89 6,072 Maintenance 6,693 0 0 6,693 Depreciation 2,025 24 0 2,049 Amortization of regulatory assets, net (1) 0 0 (1) Federal and state income taxes 2,418 (16) 0 2,402 Taxes other than income taxes 3,282 38 0 3,320 -------- --------- ------------ ------------ Total operating expenses 47,670 68,284 47,334 68,620 -------- --------- ------------ ------------ Operating Income/(Loss) 7,066 (53) 0 7,013 -------- --------- ------------ ------------ Other Income/(Loss): Other, net (518) 0 (46) (472) Income taxes 638 7 0 645 -------- --------- ------------ ------------ Other income/(loss), net 120 7 (46) 173 -------- --------- ------------ ------------ Income/(loss) before interest charges 7,186 (46) (46) 7,186 -------- --------- ------------ ------------ Interest Charges: Interest on long-term debt 2,644 0 0 2,644 Other interest (15) 21 21 (15) -------- --------- ------------ ------------ Interest charges, net 2,629 21 21 2,629 -------- --------- ------------ ------------ Income/(loss) before extraordinary loss, net of tax benefit 4,557 (67) (67) 4,557 Extraordinary loss, net of tax benefit (19,664) 0 0 (19,664) -------- --------- ------------ ------------ Net Loss $15,107) $ (67) $ (67) $(15,107) ======== ========= ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
HOLYOKE WATER POWER COMPANY AND SUBSIDIARY Consolidating Statement of Retained Earnings(a) Year Ended December 31, 2000 (Thousands of Dollars)
Holyoke Holyoke Water Power and Power Electric Company Company Eliminations Consolidated -------- --------- ------------ ------------ Balance at beginning of period $14,481 $(28) $(28) $14,481 Addition: Net loss (15,107) (67) (67) (15,107) Tax benefit for 1993-1999 from reduction of NU parent losses 22 0 0 22 -------- --------- ------------ ------------ (604) (95) (95) (604) Deductions: -------- --------- ------------ ------------ Common stock dividend declared: $10.42 per share 5,000 0 0 5,000 Allocation of benefits-ESOP 3 0 0 3 -------- --------- ------------ ------------ Total deductions 5,003 0 0 5,003 Balance at end of period $(5,607) $(95) $(95) $(5,607) ======== ========= ============ ============
HOLYOKE WATER POWER COMPANY AND SUBSIDIARY Consolidating Statement of Capital Surplus, Paid In (a) Year Ended December 31, 2000 (Thousands of Dollars)
Holyoke Holyoke Water Power and Power Electric Company Company Eliminations Consolidated -------- --------- ------------ ------------ Balance at beginning of period $6,000 0 0 $6,000 -------- --------- ------------ ------------ Balance at end of period $6,000 0 0 $6,000 ======== ========= ============ ============ Note: Individual companies may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
HOLYOKE WATER POWER COMPANY AND SUBSIDIARY Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
Holyoke Holyoke Power and Water Power Electric Company Company ------------- ------------ Operating Activities: Income/(loss) before extraordinary loss $ 4,557 $ (67) Adjustments to reconcile to net cash provided by/(used in) operating activities: Depreciation 2,025 24 Deferred income taxes, net 175 6 Amortization of regulatory assets, net (1) 0 Tax benefit for 1993-1999 from reduction of NU parent losses 22 0 Allocation of ESOP benefits (3) 0 Net other (uses)/sources of cash (917) 22 Changes in working capital: Receivables, net 1,270 1,340 Fuel, materials and supplies 624 0 Accounts payable (234) 458 Accrued taxes 585 29 Other working capital (excludes cash) (1,495) 53 ------------- ------------ Net cash flows provided by/(used in) operating activities 6,608 1,865 ------------- ------------ Investing Activities: Investment in plant: Electric utility plant (1,083) 0 Investment in NU system Money Pool (700) 0 Other investment activities, net 46 0 ------------- ------------ Net cash flows (used in)/provided by investing activities (1,737) 0 ------------- ------------ Financing Activities: Cash dividends on common shares (5,000) 0 ------------- ------------ Net cash flows used in financing activities (5,000) 0 ------------- ------------ Net (decrease)/increase in cash for the period (129) 1,865 Cash - beginning of period 129 0 ------------- ------------ Cash - end of period $ 0 $ 1,865 ============= ============ Supplemental Cash Flow Information: Cash paid/(refunded) during the year for: Interest, net of amounts capitalized $ 2,220 $ 21 ============= ============ Income taxes $ 1,809 $ (93) ============= ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
HOLYOKE WATER POWER COMPANY AND SUBSIDIARY Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
Eliminations Consolidated ------------- ------------- Operating Activities: Income/(loss) before extraordinary loss $ (67) $ 4,557 Adjustments to reconcile to net cash provided by/(used in) operating activities: Depreciation 0 2,049 Deferred income taxes, net 0 181 Amortization of regulatory assets, net 0 (1) Tax benefit for 1993-1999 from reduction of NU parent losses 0 22 Allocation of ESOP benefits 0 (3) Net other (uses)/sources of cash 21 (917) Changes in working capital: Receivables, net 2,919 (308) Fuel, materials and supplies 0 624 Accounts payable (2,919) 3,142 Accrued taxes 0 614 Other working capital (excludes cash) 0 (1,441) ------------- ------------- Net cash flows provided by/(used in) operating activities (46) 8,519 ------------- ------------- Investing Activities: Investment in plant: Electric utility plant 0 (1,083) Investment in NU system Money Pool 0 (700) Other investment activities, net 46 0 ------------- ------------- Net cash flows (used in)/provided by investing activities 46 (1,783) ------------- ------------- Financing Activities: Cash dividends on common shares 0 (5,000) ------------- ------------- Net cash flows used in financing activities 0 (5,000) ------------- ------------- Net (decrease)/increase in cash for the period 0 1,736 Cash - beginning of period 0 129 ------------- ------------- Cash - end of period $ 0 $ 1,865 ============= ============= Supplemental Cash Flow Information: Cash paid/(refunded) during the year for: Interest, net of amounts capitalized $ 21 $ 2,220 ============= ============= Income taxes $ 0 $ 1,716 ============= ============= Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Consolidating Balance Sheet (a) Assets December 31, 2000 (Thousands of Dollars)
Yankee Energy Yankee Gas NorConn System, Services Properties, Inc. Company Inc. ------------- ----------- ------------ Utility Plant, at cost: Gas $ 0 $608,153 $ 0 Less: Accumulated provision for depreciation 0 245,214 0 ------------- ----------- ------------ 0 362,939 0 Construction work in progress 0 18,723 0 ------------- ----------- ------------ Total net utility plant 0 381,662 0 ------------- ----------- ------------ Other Property and Investments: Investments in subsidiary companies, at equity 484,795 0 0 Other, at cost 0 294 1,966 ------------- ----------- ------------ 484,795 294 1,966 ------------- ----------- ------------ Current Assets: Cash 535 4,824 0 Notes receivable form affiliated companies 5,280 0 0 Receivables, net 0 54,386 0 Receivables from affiliated companies 1,110 9,246 181 Taxes receivable 697 0 0 Accrued utility revenue 0 38,057 0 Fuel, materials, and supplies, at average cost 0 3,194 0 Prepayments and other 0 23,315 0 ------------- ----------- ------------ 7,622 133,022 181 ------------- ----------- ------------ Deferred Charges: Regulatory assets 0 54,649 0 Accumulated deferred income taxes 0 0 143 Unamortized debt expense 0 1,267 3 Goodwill and other purchased intangible assets 0 294,442 0 Prepaid pension 0 42,649 0 Other 764 0 0 ------------- ----------- ------------ 764 393,007 146 ------------- ----------- ------------ Total Assets $493,181 $907,985 $2,293 ============= =========== ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Consolidating Balance Sheet (a) Assets December 31, 2000 (Thousands of Dollars)
Yankee Yankee Energy Energy Housatonic Financial Services Corporation Services Company -------------- ------------ --------------- Utility Plant, at cost: Gas $ 0 $ 0 $ 0 Less: Accumulated provision for depreciation 0 0 0 -------------- ------------ --------------- 0 0 0 Construction work in progress 0 0 0 -------------- ------------ --------------- Total net utility plant 0 0 0 -------------- ------------ --------------- Other Property and Investments: Investments in subsidiary companies, at equity 0 0 2 Other, at cost 0 132 4,847 -------------- ------------ --------------- 0 132 4,849 -------------- ------------ --------------- Current Assets: Cash 0 8 0 Notes receivable form affiliated companies 0 0 0 Receivables, net 127 3,046 415 Receivables from affiliated companies 3 2 11 Taxes receivable 0 0 1,672 Accrued utility revenue 0 0 0 Fuel, materials, and supplies, at average cost 0 0 210 Prepayments and other 0 8 0 -------------- ------------ --------------- 130 3,064 2,308 -------------- ------------ --------------- Deferred Charges: Regulatory assets 0 0 0 Accumulated deferred income taxes 0 29 1,298 Unamortized debt expense 0 0 0 Goodwill and other purchased intangible assets 0 0 427 Prepaid pension 0 0 0 Other 257 68 14,176 -------------- ------------ --------------- 257 97 15,901 -------------- ------------ --------------- Total Assets $387 $3,293 $23,058 ============== ============ =============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Consolidating Balance Sheet (a) Assets December 31, 2000 (Thousands of Dollars)
R.M. Services Company Eliminations Consolidated --------------- ------------- ------------ Utility Plant, at cost: Gas $ 0 $ 0 $608,153 Less: Accumulated provision for depreciation 0 0 245,214 --------------- ------------- ------------ 0 0 362,939 Construction work in progress 0 0 18,723 --------------- ------------- ------------ Total net utility plant 0 0 381,662 --------------- ------------- ------------ Other Property and Investments: Investments in subsidiary companies, at equity 0 484,796 0 Other, at cost 4,173 0 11,411 --------------- ------------- ------------ 4,173 484,796 11,411 --------------- ------------- ------------ Current Assets: Cash 1,091 0 6,459 Notes receivable form affiliated companies 0 5,280 0 Receivables, net 723 0 58,697 Receivables from affiliated companies 222 10,696 77 Taxes receivable 0 2,370 0 Accrued utility revenue 0 0 38,057 Fuel, materials, and supplies, at average cost 0 0 3,404 Prepayments and other 0 0 23,323 --------------- ------------- ------------ 2,036 18,346 130,017 --------------- ------------- ------------ Deferred Charges: Regulatory assets 0 0 54,649 Accumulated deferred income taxes 55 1,525 0 Unamortized debt expense 0 0 1,270 Goodwill and other purchased intangible assets 7,745 0 302,614 Prepaid pension 339 0 42,988 Other 0 932 14,334 --------------- ------------- ------------ 8,139 2,457 415,855 --------------- ------------- ------------ Total Assets $14,348 $505,599 $938,945 =============== ============= ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Consolidating Balance Sheet (a) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
Yankee Energy Yankee Gas NorConn System, Services Properties, Inc. Company Inc. ------------- ----------- ------------ Common stockholder's equity: Common stock $ 0 $ 5 $ 1 Capital surplus, paid in 484,888 466,048 9 Retained earnings (733) 1,149 207 ------------- ----------- ------------ Total common stockholder's equity 484,155 467,202 217 Long-term debt 0 151,640 1,500 ------------- ----------- ------------ Total capitalization 484,155 618,842 1,717 ------------- ----------- ------------ Current Liabilities: Notes payable to banks 0 46,600 0 Notes payable to affiliated companies 0 3,000 57 Long-term debt and preferred stock-current portion 0 950 100 Accounts payable 0 43,661 27 Accounts payable to affiliated companies 9,026 2,828 15 Accrued taxes 0 19,622 369 Accrued interest 0 3,587 8 Other 0 4,087 0 ------------- ----------- ------------ 9,026 124,335 576 ------------- ----------- ------------ Deferred Credits and Other Long-term Liabilities: Accumulated deferred income taxes 0 72,562 0 Accumulated deferred investment tax credit 0 7,476 0 Other 0 84,770 0 ------------- ----------- ------------ 0 164,808 0 ------------- ----------- ------------ Total Capitalization and Liabilities $493,181 $907,985 $2,293 ============= =========== ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Consolidating Balance Sheet (a) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
Yankee Yankee Energy Energy Housatonic Financial Services Corporation Services Company -------------- ------------ --------------- Common stockholder's equity: Common stock $ 10 $ 1 $ 1 Capital surplus, paid in 2 2,352 7,881 Retained earnings 15 58 (1,187) -------------- ------------ --------------- Total common stockholder's equity 27 1,300 6,695 Long-term debt 0 0 0 -------------- ------------ --------------- Total capitalization 27 1,300 6,695 -------------- ------------ --------------- Current Liabilities: Notes payable to banks 0 0 0 Notes payable to affiliated companies 349 1,782 15,634 Long-term debt and preferred stock-current portion 0 0 0 Accounts payable 10 68 54 Accounts payable to affiliated companies 0 18 426 Accrued taxes 0 57 0 Accrued interest 1 0 0 Other 0 1 156 -------------- ------------ --------------- 360 1,926 16,270 -------------- ------------ --------------- Deferred Credits and Other Long-term Liabilities: Accumulated deferred income taxes 0 0 0 Accumulated deferred investment tax credit 0 0 0 Other 0 67 93 -------------- ------------ --------------- 0 67 93 -------------- ------------ --------------- Total Capitalization and Liabilities $387 $3,293 $23,058 ============== ============ =============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Consolidating Balance Sheet (a) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
R.M. Services Company Eliminations Consolidated --------------- ------------- ------------ Common stockholder's equity: Common stock $ 1 $ 19 $ 0 Capital surplus, paid in 9,298 484,477 484,888 Retained earnings 59 301 (733) --------------- ------------- ------------ Total common stockholder's equity 9,358 484,797 484,155 Long-term debt 0 0 153,140 --------------- ------------- ------------ Total capitalization 9,358 484,797 637,295 --------------- ------------- ------------ Current Liabilities: Notes payable to banks 0 0 46,600 Notes payable to affiliated companies 2,458 5,279 18,000 Long-term debt and preferred stock-current portion 0 0 1,050 Accounts payable 175 0 43,996 Accounts payable to affiliated companies 1,063 10,696 2,679 Accrued taxes 708 2,370 18,387 Accrued interest 0 0 3,596 Other 78 0 4,322 --------------- ------------- ------------ 4,482 18,345 138,630 --------------- ------------- ------------ Deferred Credits and Other Long-term Liabilities: Accumulated deferred income taxes 0 1,525 71,038 Accumulated deferred investment tax credit 0 0 7,476 Other 508 932 84,506 --------------- ------------- ------------ 508 2,457 163,020 --------------- ------------- ------------ Total Capitalization and Liabilities $14,348 $505,599 $938,945 =============== ============= ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Consolidating Statement of Income (a) Year Ended December 31, 2000 (Thousands of Dollars)
Yankee Energy Yankee Gas NorConn System, Services Properties, Inc. Company Inc. ----------- ---------- ---------- Operating Revenues $ 0 $251,233 $950 ----------- ---------- ---------- Operating Expenses: Operation- Fuel, purchased and net interchange power 0 135,306 0 Other 743 45,303 132 Maintenance 0 5,343 0 Depreciation 0 21,688 212 Federal and state income taxes 0 9,477 0 Taxes other than income taxes 0 16,604 0 ----------- ---------- ---------- Total operating expenses 743 233,721 344 ----------- ---------- ---------- Operating (Loss)/Income (743) 17,512 606 ----------- ---------- ---------- Other Income/(Loss): Equity in earnings of subsidiaries 1,524 0 0 Other, net (425) (7,091) 0 Income taxes 130 2,974 (141) ----------- ---------- ---------- Other income/(loss), net 1,229 (4,117) (141) ----------- ---------- ---------- Income before interest charges 486 13,395 465 ----------- ---------- ---------- Interest Charges: Interest on long-term debt 0 10,023 272 Other interest 1,213 2,217 (14) ----------- ---------- ---------- Interest Charges, Net 1,213 12,240 258 ----------- ---------- ---------- Net (Loss)/Income $ (727) $ 1,155 $207 =========== ========== ========== Yankee Energy System, Inc. and Subsidiary merged with Northeast Utilities on March 1, 2000. Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Consolidating Statement of Income (a) Year Ended December 31, 2000 (Thousands of Dollars)
Yankee Energy Yankee Financial Energy Housatonic Services Services Corporation Company Company ------------- ------------ --------------- Operating Revenues $1,250 $208 $4,089 ------------- ------------ --------------- Operating Expenses: Operation- Fuel, purchased and net interchange power 0 0 0 Other 1,205 61 4,606 Maintenance 0 0 0 Depreciation 0 198 460 Federal and state income taxes 0 0 0 Taxes other than income taxes 0 0 0 ------------- ------------ --------------- Total operating expenses 1,205 259 5,066 ------------- ------------ --------------- Operating (Loss)/Income 45 (51) (977) ------------- ------------ --------------- Other Income/(Loss): Equity in earnings of subsidiaries 0 0 0 Other, net 0 178 (134) Income taxes 0 (6) 911 ------------- ------------ --------------- Other income/(loss), net 0 172 777 ------------- ------------ --------------- Income before interest charges 45 121 (200) ------------- ------------ --------------- Interest Charges: Interest on long-term debt 0 0 0 Other interest 30 63 987 ------------- ------------ --------------- Interest Charges, Net 30 63 987 ------------- ------------ --------------- Net (Loss)/Income $ 15 $ 58 $(1,187) ============= ============ =============== Yankee Energy System, Inc. and Subsidiary merged with Northeast Utilities on March 1, 2000. Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Consolidating Statement of Income (a) Year Ended December 31, 2000 (Thousands of Dollars)
R.M. Services, Inc. Eliminations Consolidated ------------ ------------ ------------ Operating Revenues $6,705 $2,747 $261,687 ------------ ------------ ------------ Operating Expenses: Operation- Fuel, purchased and net interchange power 0 0 135,307 Other 5,445 2,747 54,748 Maintenance 0 0 5,343 Depreciation 668 0 23,225 Federal and state income taxes 2 0 9,479 Taxes other than income taxes 42 0 16,645 ------------ ------------ ------------ Total operating expenses 6,157 2,747 244,747 ------------ ------------ ------------ Operating (Loss)/Income 548 0 16,940 ------------ ------------ ------------ Other Income/(Loss): Equity in earnings of subsidiaries 0 1,524 0 Other, net (163) 0 (7,634) Income taxes (202) 0 3,666 ------------ ------------ ------------ Other income/(loss), net (365) 1,524 (3,968) ------------ ------------ ------------ Income before interest charges 183 1,524 12,972 ------------ ------------ ------------ Interest Charges: Interest on long-term debt 0 0 10,295 Other interest 124 1,217 3,404 ------------ ------------ ------------ Interest Charges, Net 124 1,217 13,699 ------------ ------------ ------------ Net (Loss)/Income $ 59 $ 307 $ (727) ============ ============ ============ Yankee Energy System, Inc. and Subsidiary merged with Northeast Utilities on March 1, 2000. Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Consolidating Statement of Retained Earnings (a) Year Ended December 31, 2000 (Thousands of Dollars)
Yankee Energy Yankee Gas NorConn System, Services Properties, Inc. Company Inc. ------------ ----------- ------------ Balance at beginning of period $ 0 $ 0 $ 0 Additions: Net (loss)/income (727) 1,155 207 ------------ ----------- ------------ (727) 1,155 207 ------------ ----------- ------------ Deductions: Allocation of benefits-ESOP 6 6 0 ------------ ----------- ------------ Total deductions 6 6 0 ------------ ----------- ------------ Balance at end of period $(733) $1,149 $207 ============ =========== ============
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Consolidating Statement of Capital Surplus, Paid In (a) Year Ended December 31, 2000 (Thousands of Dollars)
Yankee Energy Yankee Gas NorConn System, Services Properties, Inc. Company Inc. ------------ ----------- ------------ Balance at beginning of period $ 0 $ 0 $0 Acquisition of Yankee Energy System, Inc. 484,888 471,048 9 Dividend declared on common shares: $5,000.00 per share 0 (5,000) 0 ------------ ----------- ------------ Balance at end of period $484,888 $466,048 $9 ============ =========== ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Consolidating Statement of Retained Earnings (a) Year Ended December 31, 2000 (Thousands of Dollars)
Yankee Energy Yankee Financial Energy Housatonic Services Services Corporation Company Company ------------ ------------ ------------ Balance at beginning of period $ 0 $ 0 $ 0 Additions: Net (loss)/income 15 58 (1,187) ------------ ------------ ------------ 15 58 (1,187) ------------ ------------ ------------ Deductions: Allocation of benefits-ESOP 0 0 0 ------------ ------------ ------------ Total deductions 0 0 0 ------------ ------------ ------------ Balance at end of period $15 $58 $(1,187) ============ ============ ============
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Consolidating Statement of Capital Surplus, Paid In (a) Year Ended December 31, 2000 (Thousands of Dollars)
Yankee Energy Yankee Financial Energy Housatonic Services Services Corporation Company Company ------------ ------------ ------------ Balance at beginning of period $0 $ 0 $ 0 Acquisition of Yankee Energy System, Inc. 2 1,241 7,881 Dividend declared on common shares: $5,000.00 per share 0 0 0 ------------ ------------ ------------ Balance at end of period $2 $1,241 $7,881 ============ ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Consolidating Statement of Retained Earnings (a) Year Ended December 31, 2000 (Thousands of Dollars)
R.M. Services, Inc. Eliminations Consolidated -------------- ------------ ------------ Balance at beginning of period $ 0 $ 0 $ 0 Additions: Net (loss)/income 59 307 (727) -------------- ------------ ------------ 59 307 (727) -------------- ------------ ------------ Deductions: Allocation of benefits-ESOP 0 6 6 -------------- ------------ ------------ Total deductions 0 6 6 -------------- ------------ ------------ Balance at end of period $59 $301 $(733) ============== ============ ============
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Consolidating Statement of Capital Surplus, Paid In (a) Year Ended December 31, 2000 (Thousands of Dollars)
R.M. Services, Inc. Eliminations Consolidated -------------- ------------ ------------ Balance at beginning of period $ 0 $ 0 $ 0 Acquisition of Yankee Energy System, Inc. 9,298 489,477 484,888 Dividend declared on common shares: $5,000.00 per share 0 (5,000) 0 -------------- ------------ ------------ Balance at end of period $9,298 $484,477 $484,888 ============== ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
Yankee Energy Yankee Gas NorConn System, Services Properties, Inc. Company Inc. --------- ----------- ------------ Operating Activities: (Loss)/income after interest charges $ (727) $ 1,155 $ 207 Adjustments to reconcile to net cash provided by/(used in) operating activities: Depreciation 0 21,688 212 Deferred income taxes and investment tax credits, net 0 11,227 0 Allocation of ESOP benefits (6) (6) 0 Net other sources/(uses) of cash 9,384 (15,645) (1,270) Changes in working capital: Accounts receivable (1,110) (4,052) (93) Fuel, materials and supplies 0 (464) 0 Accounts payable (42) 29,257 29 Accrued taxes 568 (3,968) 161 Other working capital (excludes cash) (794) (15,883) (17) --------- ----------- ------------ Net cash flows provided/(used in) by operating activities 7,273 23,309 (771) --------- ----------- ------------ Investing Activities: Investment in plant: Electric and other utility plant 0 (21,585) 0 --------- ----------- ------------ Net cash flows used for investments in plant 0 (21,585) 0 Investment in NU system Money Pool 18,249 2,500 0 Other Investments 0 0 4,170 --------- ----------- ------------ Net cash flows provided by/(used in) investing activities 18,249 (19,085) 4,170 --------- ----------- ------------ Financing Activities: Net (decrease)/increase in short-term debt (27,500) 4,600 1 Cash dividends on common shares 0 (5,000) 0 Reacquisitions and retirements of long-term debt 0 (950) (3,400) --------- ----------- ------------ Net cash flows (used in)/provided by financing activities (27,500) (1,350) (3,399) --------- ----------- ------------ Net (decrease)/increase in cash for the period (1,978) 2,874 0 Cash - beginning of period 2,513 1,950 0 --------- ----------- ------------ Cash - end of period $ 535 $ 4,824 $ 0 ========= =========== ============ Supplemental Cash Flow Information: Cash paid/(refunded) during the year for: Interest, net of amounts capitalized $ 1,213 $ 8,924 $ 241 ========= =========== ============ Income taxes $ 0 $ (352) $ 0 ========= =========== ============ Yankee Energy System, Inc. and Subsidiaries merged with Northeast Utilities on March 1, 2000. Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
Yankee Energy Yankee Financial Energy Housatonic Services Services Corporation Company Company ------------ ---------- ---------- Operating Activities: (Loss)/income after interest charges $ 15 $ 58 $ (1,187) Adjustments to reconcile to net cash provided by/(used in) operating activities: Depreciation 0 198 460 Deferred income taxes and investment tax credits, net 0 0 0 Allocation of ESOP benefits 0 0 0 Net other sources/(uses) of cash (277) (345) (4,862) Changes in working capital: Accounts receivable 573 (1,194) 7,783 Fuel, materials and supplies 0 0 248 Accounts payable (16) (20) (333) Accrued taxes 0 25 455 Other working capital (excludes cash) 1 0 (2,706) ------------ ---------- ---------- Net cash flows provided/(used in) by operating activities 296 (1,278) (142) ------------ ---------- ---------- Investing Activities: Investment in plant: Electric and other utility plant 0 0 0 ------------ ---------- ---------- Net cash flows used for investments in plant 0 0 0 Investment in NU system Money Pool 0 0 0 Other Investments 0 177 4,598 ------------ ---------- ---------- Net cash flows provided by/(used in) investing activities 0 177 4,598 ------------ ---------- ---------- Financing Activities: Net (decrease)/increase in short-term debt (296) 1,099 (4,456) Cash dividends on common shares 0 0 0 Reacquisitions and retirements of long-term debt 0 0 0 ------------ ---------- ---------- Net cash flows (used in)/provided by financing activities (296) 1,099 (4,456) ------------ ---------- ---------- Net (decrease)/increase in cash for the period 0 (2) 0 Cash - beginning of period 0 10 0 ------------ ---------- ---------- Cash - end of period $ 0 $ 8 $ 0 ============ ========== ========== Supplemental Cash Flow Information: Cash paid/(refunded) during the year for: Interest, net of amounts capitalized $ 29 $ 70 $ 987 ============ ========== ========== Income taxes $ 0 $ 0 $ 0 ============ ========== ========== Yankee Energy System, Inc. and Subsidiaries merged with Northeast Utilities on March 1, 2000. Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
R.M. Services, Inc. Eliminations Consolidated --------- ------------- ------------- Operating Activities: (Loss)/income after interest charges $ 59 $ 307 $ (727) Adjustments to reconcile to net cash provided by/(used in) operating activities: Depreciation 668 0 23,225 Deferred income taxes and investment tax credits, net 0 0 11,227 Allocation of ESOP benefits 0 (6) (6) Net other sources/(uses) of cash (606) 3,661 (17,286) Changes in working capital: Accounts receivable 680 (3,746) 6,336 Fuel, materials and supplies 0 0 (216) Accounts payable 463 3,177 26,161 Accrued taxes 188 2,555 (5,124) Other working capital (excludes cash) (213) (2,379) (17,235) --------- ------------- ------------- Net cash flows provided/(used in) by operating activities 1,239 3,569 26,355 --------- ------------- ------------- Investing Activities: Investment in plant: Electric and other utility plant 0 0 (21,585) --------- ------------- ------------- Net cash flows used for investments in plant 0 0 (21,585) Investment in NU system Money Pool 0 20,749 0 Other Investments (1,135) 854 6,959 --------- ------------- ------------- Net cash flows provided by/(used in) investing activities (1,135) 21,603 (14,626) --------- ------------- ------------- Financing Activities: Net (decrease)/increase in short-term debt 980 (20,172) (5,400) Cash dividends on common shares 0 (5,000) 0 Reacquisitions and retirements of long-term debt 0 0 (4,350) --------- ------------- ------------- Net cash flows (used in)/provided by financing activities 980 (25,172) (9,750) --------- ------------- ------------- Net (decrease)/increase in cash for the period 1,084 0 1,979 Cash - beginning of period 7 0 4,480 --------- ------------- ------------- Cash - end of period $ 1,091 $ 0 $ 6,459 ========= ============= ============= Supplemental Cash Flow Information: Cash paid/(refunded) during the year for: Interest, net of amounts capitalized $ 124 $ 1,217 $ 10,371 ========= ============= ============= Income taxes $ 0 $ 0 $ (352) ========= ============= ============= Yankee Energy System, Inc. and Subsidiaries merged with Northeast Utilities on March 1, 2000. Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
CHARTER OAK ENERGY INCORPORATED AND SUBSIDIARIES Consolidating Balance Sheet (a) Assets December 31, 2000 (Thousands of Dollars)
Charter Oak COE Development COE Argentina II Energy, Inc. Corporation Corp. ------------ --------------- ---------------- Utility Plant, at cost: Electric $ 40 $ 11 $ 0 Less: Accumulated provision for depreciation 40 11 0 ------------ --------------- ---------------- Total net utility plant 0 0 0 ------------ --------------- ---------------- Other Property and Investments: Investments in subsidiary companies, at equity 17,672 0 0 ------------ --------------- ---------------- Current Assets: Cash 262 247 29 Receivables, net 0 214 0 Accounts receivable from affiliated companies 2,500 1,169 0 Taxes receivable 34 0 0 ------------ --------------- ---------------- 2,796 1,630 29 ------------ --------------- ---------------- Deferred Charges: Accumulated deferred income taxes 81 0 0 ------------ --------------- ---------------- Total Assets $20,549 $1,630 $29 ============ =============== ================ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
CHARTER OAK ENERGY INCORPORATED AND SUBSIDIARIES Consolidating Balance Sheet (a) Assets December 31, 2000 (Thousands of Dollars)
COE Ave Fenix Corporation Eliminations Consolidated ------------- ------------ ------------ Utility Plant, at cost: Electric $ 0 $ 0 $ 52 Less: Accumulated provision for depreciation 0 0 52 ------------- ------------ ------------ Total net utility plant 0 0 0 ------------- ------------ ------------ Other Property and Investments: Investments in subsidiary companies, at equity 0 17,672 0 ------------- ------------ ------------ Current Assets: Cash 2,484 0 3,021 Receivables, net 0 214 0 Accounts receivable from affiliated companies 0 3,669 0 Taxes receivable 1,928 0 1,963 ------------- ------------ ------------ 4,412 3,883 4,984 ------------- ------------ ------------ Deferred Charges: Accumulated deferred income taxes 14,118 0 14,198 ------------- ------------ ------------ Total Assets $18,530 $21,555 $19,182 ============= ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
CHARTER OAK ENERGY INCORPORATED AND SUBSIDIARIES Consolidating Balance Sheet (a) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
Charter Oak COE Development COE Argentina II Energy, Inc. Corporation Corp. ------------ --------------- ---------------- Capitalization: Common stockholder's equity: Common stock $ 0 $ 0 $ 0 Capital surplus, paid in 83,944 17,373 1,571 Retained earnings (65,077) (15,759) (1,542) ------------ --------------- ---------------- Total common stockholder's equity 18,867 1,614 29 ------------ --------------- ---------------- Total capitalization 18,867 1,614 29 ------------ --------------- ---------------- Current Liabilities: Accounts payable 308 0 0 Accounts payable to affiliated companies 1,174 0 0 Accrued taxes 0 16 0 ------------ --------------- ---------------- 1,482 16 0 ------------ --------------- ---------------- Other deferred credits 200 0 0 ------------ --------------- ---------------- Total Capitalization and Liabilities $20,549 $ 1,630 $ 29 ============ =============== ================ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
CHARTER OAK ENERGY INCORPORATED AND SUBSIDIARIES Consolidating Balance Sheet (a) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
COE Ave Fenix Corporation Eliminations Consolidated ------------- ------------ ------------ Capitalization: Common stockholder's equity: Common stock $ 0 $ 0 $ 0 Capital surplus, paid in 55,884 74,827 83,944 Retained earnings (39,855) (57,155) (65,077) ------------- ------------ ------------ Total common stockholder's equity 16,029 17,672 18,867 ------------- ------------ ------------ Total capitalization 16,029 17,672 18,867 ------------- ------------ ------------ Current Liabilities: Accounts payable 1 214 94 Accounts payable to affiliated companies 2,500 3,669 5 Accrued taxes 0 0 16 ------------- ------------ ------------ 2,501 3,883 115 ------------- ------------ ------------ Other deferred credits 0 0 200 ------------- ------------ ------------ Total Capitalization and Liabilities $18,530 $21,555 $19,182 ============= ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES Consolidating Statement of Income (a) Year Ended December 31, 2000 (Thousands of Dollars)
COE Charter Oak Development COE Argentina II Energy, Inc. Corporation Corp. ------------ ----------- --------------- Operating Revenues $ 0 $ 0 $0 ------------ ----------- --------------- Operating Expenses: Operation-Other 310 (34) 0 Federal and state income taxes (100) 17 0 ------------ ----------- --------------- Total operating expenses 210 (17) 0 ------------ ----------- --------------- Operating (Loss)/Income (210) 17 0 ------------ ----------- --------------- Other Income: Equity in earnings of subsidiaries 2,168 0 0 Other, net 65 7 0 Income taxes 0 0 0 ------------ ----------- --------------- Other income, net 2,233 7 0 ------------ ----------- --------------- Income before interest charges 2,023 24 0 ------------ ----------- --------------- Interest Charges 7 0 0 ------------ ----------- --------------- Net Income $2,016 $24 $0 ============ =========== =============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES Consolidating Statement of Income (a) Year Ended December 31, 2000 (Thousands of Dollars)
COE Ave Fenix Corporation EliminationsConsolidated ---------------- ----------- ------------- Operating Revenues $ 0 $ 0 $ 0 ---------------- ----------- ------------- Operating Expenses: Operation-Other 3 0 279 Federal and state income taxes 0 0 (84) ---------------- ----------- ------------- Total operating expenses 3 0 195 ---------------- ----------- ------------- Operating (Loss)/Income (3) 0 (195) ---------------- ----------- ------------- Other Income: Equity in earnings of subsidiaries 0 2,168 0 Other, net 17 0 88 Income taxes 2,130 0 2,130 ---------------- ----------- ------------- Other income, net 2,147 2,168 2,218 ---------------- ----------- ------------- Income before interest charges 2,144 2,168 2,023 ---------------- ----------- ------------- Interest Charges 0 0 7 ---------------- ----------- ------------- Net Income $2,144 $2,168 $2,016 ================ =========== ============= Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES Consolidating Statement of Retained Earnings (a) Year Ended December 31, 2000 (Thousands of Dollars)
COE Charter Oak Development COE Argentina II Energy, Inc. Corporation Corp. ------------ ----------- ---------------- Balance at beginning of period $(67,093) $(15,783) $(1,542) Addition: Net income 2,016 24 0 ------------ ----------- ---------------- Balance at end of period $(65,077) $(15,759) $(1,542) ============ =========== ================
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES Consolidating Statement of Capital Surplus, Paid In (a) Year Ended December 31, 2000 (Thousands of Dollars)
COE Charter Oak Development COE Argentina II Energy, Inc. Corporation Corp. ------------ ----------- ---------------- Balance at beginning of period $90,194 $17,523 $1,571 Capital contributions from Northeast Utilities 3,750 0 0 Charter Oak Energy, Inc. 0 0 0 Dividend declared on common stock: $100,000.00 per share (10,000) 0 0 $1,500.00 per share 0 (150) 0 $8,500.00 per share 0 0 0 Balance at end of period ------------ ----------- ---------------- Balance at end of period $83,944 $17,373 $1,571 ============ =========== ================ Note: Individual companies may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES Consolidating Statement of Retained Earnings (a) Year Ended December 31, 2000 (Thousands of Dollars)
COE Ave Fenix Corporation Eliminations Consolidated ------------- ------------ ------------ Balance at beginning of period $(41,999) $(59,323) $(67,093) Addition: Net income 2,144 2,168 2,016 ------------- ------------ ------------ Balance at end of period $(39,855) $(57,155) $(65,077) ============= ============ ============
CHARTER OAK ENERGY, INC. AND SUBSIDIARIES Consolidating Statement of Capital Surplus, Paid In (a) Year Ended December 31, 2000 (Thousands of Dollars)
COE Ave Fenix Corporation Eliminations Consolidated ------------- ------------ ------------ Balance at beginning of period $56,734 $75,827 $90,194 Capital contributions from Northeast Utilities 0 0 3,750 Charter Oak Energy, Inc. 0 0 0 Dividend declared on common stock: $100,000.00 per share 0 0 (10,000) $1,500.00 per share 0 (150) 0 $8,500.00 per share (850) (850) 0 Balance at end of period ------------- ------------ ------------ Balance at end of period $55,884 $74,827 $83,944 ============= ============ ============ Note: Individual companies may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
CHARTER OAK ENERGY AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
Charter Oak Charter Oak Development Energy, Inc. Corporation ------------- ------------ Operating Activities: Income after interest charges $ 2,016 $ 24 Adjustments to reconcile to net cash provided by operating activities: Deferred income taxes (80) 0 Net other sources/(uses) of cash 289 0 Changes in working capital: Accounts receivable (1,750) 0 Accounts payable (29) 0 Accrued taxes 0 16 Other working capital (excludes cash) 7,124 68 ------------- ------------ Net cash flows provided by operating activities 7,570 108 ------------- ------------ Investing Activities: Investment in plant: Other investments (1,168) 0 Capital contributions 3,750 0 ------------- ------------ Net cash flows provided by/(used in) investing activities 2,582 0 ------------- ------------ Financing Activities: Cash dividends on common shares (10,000) (150) ------------- ------------ Net cash flows used in financing activities (10,000) (150) ------------- ------------ Net increase/(decrease) in cash for the period 152 (42) Cash - beginning of period 110 289 ------------- ------------ Cash - end of period $ 262 $ 247 ============= ============ Supplemental Cash Flow Information: Cash refunded during the year for: Interest, net of amounts capitalized $ 0 $ 0 ============= ============ Income taxes $ (709) $ (68) ============= ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
CHARTER OAK ENERGY AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
COE COE Ave Argentina II Fenix Corp. Corp. ------------- ------------ Operating Activities: Income after interest charges $ 0 $ 2,144 Adjustments to reconcile to net cash provided by operating activities: Deferred income taxes 0 1,643 Net other sources/(uses) of cash 0 (1) Changes in working capital: Accounts receivable 0 0 Accounts payable 0 1,686 Accrued taxes 0 0 Other working capital (excludes cash) 0 (2,138) ------------- ------------ Net cash flows provided by operating activities 0 3,334 ------------- ------------ Investing Activities: Investment in plant: Other investments 0 0 Capital contributions 0 0 ------------- ------------ Net cash flows provided by/(used in) investing activities 0 0 ------------- ------------ Financing Activities: Cash dividends on common shares 0 (850) ------------- ------------ Net cash flows used in financing activities 0 (850) ------------- ------------ Net increase/(decrease) in cash for the period 0 2,484 Cash - beginning of period 29 0 ------------- ------------ Cash - end of period $ 29 $ 2,484 ============= ============ Supplemental Cash Flow Information: Cash refunded during the year for: Interest, net of amounts capitalized $ 0 $ 0 ============= ============ Income taxes $ 0 $ (5,385) ============= ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
CHARTER OAK ENERGY AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
Eliminations Consolidated ------------- ------------- Operating Activities: Income after interest charges $ 2,168 $ 2,016 Adjustments to reconcile to net cash provided by operating activities: Deferred income taxes 0 1,563 Net other sources/(uses) of cash (1) 290 Changes in working capital: Accounts receivable (1,750) 0 Accounts payable 1,750 (95) Accrued taxes 0 16 Other working capital (excludes cash) 1 5,053 ------------- ------------- Net cash flows provided by operating activities 2,168 8,843 ------------- ------------- Investing Activities: Investment in plant: Other investments (1,168) 0 Capital contributions 0 3,750 ------------- ------------- Net cash flows provided by/(used in) investing activities (1,168) 3,750 ------------- ------------- Financing Activities: Cash dividends on common shares (1,000) (10,000) ------------- ------------- Net cash flows used in financing activities (1,000) (10,000) ------------- ------------- Net increase/(decrease) in cash for the period 0 2,593 Cash - beginning of period 0 428 ------------- ------------- Cash - end of period $ 0 $ 3,021 ============= ============= Supplemental Cash Flow Information: Cash refunded during the year for: Interest, net of amounts capitalized $ 0 $ 0 ============= ============= Income taxes $ 0 $ (6,162) ============= ============= Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
HEC INC. AND SUBSIDIARIES Consolidating Balance Sheet (a) Assets December 31, 2000 (Thousands of Dollars)
Southwest Select Energy HEC Energy Contracting, Services L.L.C. HEC Inc. Inc. (b) ------------ ------------- --------------- Utility Plant, at cost: Other $ 5,731 $23,738 $0 Less: Accumulated provision for depreciation 3,695 3,331 0 ------------ ------------- --------------- Total net utility plant 2,036 20,407 0 ------------ ------------- --------------- Other Property and Investments: Investments in subsidiary companies, at equity 18,720 0 0 Other, at cost 1 0 0 ------------ ------------- --------------- 18,721 0 0 ------------ ------------- --------------- Current Assets: Cash 1,018 1,684 0 Receivables, net 3,882 11,382 0 Accounts receivable from affiliated companies 8,876 364 0 Other material and supplies, at average cost 0 495 0 Prepayments and other 367 262 0 ------------ ------------- --------------- 14,143 14,187 0 ------------ ------------- --------------- Deferred Charges: Other 20,652 0 0 ------------ ------------- --------------- Total Assets $55,552 $34,594 $0 ============ ============= =============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) Southwest HEC Energy Services L.L.C. was dissolved on November 21, 2000. The business was transferred to HEC Inc.
HEC INC. AND SUBSIDIARIES Consolidating Balance Sheet (a) Assets December 31, 2000 (Thousands of Dollars)
HEC Energy Reeds Ferry HEC/Tobyhanna Consulting Supply Co., Energy Canada, Inc. Inc. Project, Inc. ------------ ------------ -------------- Utility Plant, at cost: Other $ 9 $295 $ 0 Less: Accumulated provision for depreciation 9 28 0 ------------ ------------ -------------- Total net utility plant 0 267 0 ------------ ------------ -------------- Other Property and Investments: Investments in subsidiary companies, at equity 0 0 0 Other, at cost 0 0 0 ------------ ------------ -------------- 0 0 0 ------------ ------------ -------------- Current Assets: Cash 23 7 3,102 Receivables, net 0 0 417 Accounts receivable from affiliated companies 0 77 191 Other material and supplies, at average cost 0 0 0 Prepayments and other 0 0 0 ------------ ------------ -------------- 23 84 3,710 ------------ ------------ -------------- Deferred Charges: Other 0 0 23,708 ------------ ------------ -------------- Total Assets $23 $351 $27,418 ============ ============ ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) Southwest HEC Energy Services L.L.C. was dissolved on November 21, 2000. The business was transferred to HEC Inc.
HEC INC. AND SUBSIDIARIES Consolidating Balance Sheet (a) Assets December 31, 2000 (Thousands of Dollars) Eliminations Consolidated ------------ ------------ Utility Plant, at cost: Other $ 0 $29,773 Less: Accumulated provision for depreciation 0 7,063 ------------ ------------ Total net utility plant 0 22,710 ------------ ------------ Other Property and Investments: Investments in subsidiary companies, at equity 18,720 0 Other, at cost 1 0 ------------ ------------ 18,721 0 ------------ ------------ Current Assets: Cash 0 5,834 Receivables, net 287 15,394 Accounts receivable from affiliated companies 9,193 316 Other material and supplies, at average cost 0 495 Prepayments and other 0 629 ------------ ------------ 9,480 22,668 ------------ ------------ Deferred Charges: Other 1,042 43,318 ------------ ------------ Total Assets $29,243 $88,696 ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) Southwest HEC Energy Services L.L.C. was dissolved on November 21, 2000. The business was transferred to HEC Inc. HEC INC. AND SUBSIDIARIES Consolidating Balance Sheet (a) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
Southwest Select Energy HEC Energy Contracting, Services L.L.C. HEC Inc. Inc. (b) ------------ ------------- --------------- Capitalization: Common stockholder's equity: Common stock $ 0 $ 0 $0 Capital surplus, paid in 24,900 14,910 0 Retained earnings 575 (144) 0 ------------ ------------- --------------- Total common stockholder's equity 25,475 14,766 0 Long-term debt 0 0 0 ------------ ------------- --------------- Total capitalization 25,475 14,766 0 ------------ ------------- --------------- Current Liabilities: Notes payable to affiliated company 15,300 3,790 0 Accounts payable 2,687 3,439 0 Accounts payable to affiliated companies 952 8,583 0 Accrued taxes 0 307 0 Accrued interest 0 0 0 Other 10,956 2,521 0 ------------ ------------- --------------- 29,895 18,640 0 ------------ ------------- --------------- Deferred Credits and Other Long-term Liabilities: Accumulated deferred income taxes 182 148 0 Other 0 1,040 0 ------------ ------------- --------------- 182 1,188 0 ------------ ------------- --------------- Total Capitalization and Liabilities $55,552 $34,594 $0 ============ ============= =============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) Southwest HEC Energy Services L.L.C. was dissolved on November 21, 2000. The business was transferred to HEC Inc.
HEC INC. AND SUBSIDIARIES Consolidating Balance Sheet (a) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
HEC Energy Reeds Ferry HEC/Tobyhanna Consulting Supply Co., Energy Canada, Inc. Inc. Project, Inc. ------------ ------------ -------------- Capitalization: Common stockholder's equity: Common stock $ 0 $ 4 $ 0 Capital surplus, paid in 7 3 0 Retained earnings (6) (28) 183 ------------ ------------ -------------- Total common stockholder's equity 1 (21) 183 Long-term debt 0 0 26,477 ------------ ------------ -------------- Total capitalization 1 (21) 26,660 ------------ ------------ -------------- Current Liabilities: Notes payable to affiliated company 0 0 0 Accounts payable 0 77 0 Accounts payable to affiliated companies 14 295 0 Accrued taxes 0 0 0 Accrued interest 0 0 757 Other 8 0 1 ------------ ------------ -------------- 22 372 758 ------------ ------------ -------------- Deferred Credits and Other Long-term Liabilities: Accumulated deferred income taxes 0 0 0 Other 0 0 0 ------------ ------------ -------------- 0 0 0 ------------ ------------ -------------- Total Capitalization and Liabilities $23 $351 $27,418 ============ ============ ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) Southwest HEC Energy Services L.L.C. was dissolved on November 21, 2000. The business was transferred to HEC Inc.
HEC INC. AND SUBSIDIARIES Consolidating Balance Sheet (a) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars) Eliminations Consolidated ------------ ------------ Capitalization: Common stockholder's equity: Common stock $ 4 $ 0 Capital surplus, paid in 14,920 24,900 Retained earnings 5 575 ------------ ------------ Total common stockholder's equity 14,929 25,475 Long-term debt 0 26,477 ------------ ------------ Total capitalization 14,929 51,952 ------------ ------------ Current Liabilities: Notes payable to affiliated company 3,790 15,300 Accounts payable (16) 6,219 Accounts payable to affiliated companies 9,193 652 Accrued taxes 307 0 Accrued interest 0 757 Other 0 13,486 ------------ ------------ 13,274 36,414 ------------ ------------ Deferred Credits and Other Long-term Liabilities: Accumulated deferred income taxes 0 330 Other 1,040 0 ------------ ------------ 1,040 330 ------------ ------------ Total Capitalization and Liabilities $29,243 $88,696 ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) Southwest HEC Energy Services L.L.C. was dissolved on November 21, 2000. The business was transferred to HEC Inc. HEC INC. AND SUBSIDIARIES Consolidating Statement of Income (a) Year Ended December 31, 2000 (Thousands of Dollars) Southwest Select HEC Energy Energy Services Contracting, L.L.C. HEC Inc. Inc. (b) --------- ------------ ---------- Operating Revenues $43,939 $38,024 $1,961 --------- ------------ ---------- Operating Expenses: Operation-Other 41,713 34,958 2,127 Maintenance 37 417 7 Depreciation 187 1,392 16 Federal and state income taxes 593 417 0 Taxes other than income taxes 474 426 42 --------- ------------ ---------- Total operating expenses 43,004 37,610 2,192 --------- ------------ ---------- Operating Income/(Loss) 935 414 (231) --------- ------------ ---------- Other Income/(Loss) 132 69 28 --------- ------------ ---------- Income/(loss) before interest charges/(income) 1,067 483 (203) --------- ------------ ---------- Interest Charges/(Income) 354 701 (115) --------- ------------ ---------- Net Income/(Loss) $ 713 $ (218) $ (88) ========= ============ ========== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) Southwest HEC Energy Services L.L.C. was dissolved on November 21, 2000. The business was transferred to HEC Inc. HEC INC. AND SUBSIDIARIES Consolidating Statement of Income (a) Year Ended December 31, 2000 (Thousands of Dollars) HEC/ HEC Energy Reeds Tobyhanna Consulting Ferry Energy Canada, Supply Project, Inc. Co., Inc. Inc. ---------- --------- --------- Operating Revenues $ 0 $776 $ 0 ---------- --------- --------- Operating Expenses: Operation-Other 7 776 0 Maintenance 0 0 0 Depreciation 0 20 0 Federal and state income taxes (1) 0 1 Taxes other than income taxes 0 0 0 ---------- --------- --------- Total operating expenses 6 796 1 ---------- --------- --------- Operating Income/(Loss) (6) (20) (1) ---------- --------- --------- Other Income/(Loss) 1 0 1,039 ---------- --------- --------- Income/(loss) before interest charges/(income) (5) (20) 1,038 ---------- --------- --------- Interest Charges/(Income) 2 0 855 ---------- --------- --------- Net Income/(Loss) $(7) $(20) $ 183 ========== ========= ========= Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) Southwest HEC Energy Services L.L.C. was dissolved on November 21, 2000. The business was transferred to HEC Inc. HEC INC. AND SUBSIDIARIES Consolidating Statement of Income (a) Year Ended December 31, 2000 (Thousands of Dollars) Eliminations Consolidated ------------ ------------- Operating Revenues $2,116 $82,583 ------------ ------------- Operating Expenses: Operation-Other 2,116 77,464 Maintenance 0 461 Depreciation 0 1,614 Federal and state income taxes 0 1,010 Taxes other than income taxes 0 942 ------------ ------------- Total operating expenses 2,116 81,491 ------------ ------------- Operating Income/(Loss) 0 1,092 ------------ ------------- Other Income/(Loss) (127) 1,395 ------------ ------------- Income/(loss) before interest charges/(income) (127) 2,487 ------------ ------------- Interest Charges/(Income) 23 1,774 ------------ ------------- Net Income/(Loss) $ (150) $ 713 ============ ============= Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) Southwest HEC Energy Services L.L.C. was dissolved on November 21, 2000. The business was transferred to HEC Inc. HEC INC. AND SUBSIDIARIES Consolidating Statement of Retained Earnings (a) Year Ended December 31, 2000 (Thousands of Dollars) Southwest Select HEC Energy HEC Energy Energy Services Consulting Contracting, L.L.C. Canada, HEC Inc. Inc. (b) Inc. -------- ------------ ---------- ---------- Balance at beginning of period $(132) $ 77 $(248) $ 1 Addition: Net income/(loss) 713 (218) (88) (7) -------- ------------ ---------- ---------- 581 (141) (336) (6) -------- ------------ ---------- ---------- Deductions: Close out of retained earnings due to transferring subsidiary to HEC Inc. 0 0 (336) 0 Allocation of benefits-ESOP 6 3 0 0 -------- ------------ ---------- ---------- Total deductions 6 3 (336) 0 -------- ------------ ---------- ---------- Balance at end of period $ 575 $(144) $ 0 $(6) ======== ============ ========== ========== HEC INC. AND SUBSIDIARIES Consolidating Statement of Capital Surplus, Paid In (a) Year Ended December 31, 2000 (Thousands of Dollars) Southwest HEC Energy HEC Energy Select Energy Services Consulting Contracting, L.L.C. Canada, HEC Inc. Inc. (b) Inc. -------- ------------ ---------- ---------- Balance at beginning of period $19,000 $ 9,010 $0 $7 Capital contributions from: NU Enterprises, Inc. 5,900 0 0 0 HEC Inc. 0 5,900 0 0 -------- ------------ ---------- ---------- Balance at end of period $24,900 $14,910 $0 $7 ======== ============ ========== ========== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) Subsidiary was dissolved on November 21, 2000 and transferred to HEC Inc. HEC INC. AND SUBSIDIARIES Consolidating Statement of Retained Earnings (a) Year Ended December 31, 2000 (Thousands of Dollars) HEC/ Reeds Tobyhanna Ferry Energy Supply Project, Co., Inc. Inc. Eliminations Consolidated -------- --------- ------------ ------------ Balance at beginning of period $ (8) $ 0 $(178) $(132) Addition: Net income/(loss) (20) 183 (150) 713 -------- --------- ------------ ------------ (28) 183 (328) 581 -------- --------- ------------ ------------ Deductions: Close out of retained earnings due to transferring subsidiary to HEC Inc. 0 0 (336) 0 Allocation of benefits-ESOP 0 0 3 6 -------- --------- ------------ ------------ Total deductions 0 0 (333) 6 -------- --------- ------------ ------------ Balance at end of period $(28) $183 $ 5 $ 575 ======== ========= ============ ============ HEC INC. AND SUBSIDIARIES Consolidating Statement of Capital Surplus, Paid In (a) Year Ended December 31, 2000 (Thousands of Dollars) HEC/ Reeds Tobyhanna Ferry Energy Supply Project, Co., Inc. Inc. Eliminations Consolidated -------- --------- ------------ ------------ Balance at beginning of period $3 $0 $ 9,020 $19,000 Capital contributions from: NU Enterprises, Inc. 0 0 0 5,900 HEC Inc. 0 0 5,900 0 -------- --------- ------------ ------------ Balance at end of period $3 $0 $14,920 $24,900 ======== ========= ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) Subsidiary was dissolved on November 21, 2000 and transferred to HEC Inc. HEC INC. AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
Select Southwest Energy HEC Energy Contracting Services HEC Inc. Inc. L.L.C. --------- ---------- ---------- Operating Activities: Income/(loss) after interest charges $ 713 $ (218) $ (88) Adjustments to reconcile to net cash used in by operating activities: Depreciation 187 1,392 16 Deferred income taxes and investment tax credits, net (209) 0 0 Allocation of ESOP benefits (6) (3) 0 Other (uses)/sources of cash (14,423) (6,980) 444 Changes in working capital: Receivables and accrued utility revenues (5,807) (8,757) 380 Fuel, materials and supplies 0 (306) 0 Accounts payable (1,288) 10,148 (648) Accrued taxes (450) 307 0 Other working capital (excludes cash) 8,699 (126) (155) --------- ---------- ---------- Net cash flows used in operating activities (12,584) (4,543) (51) --------- ---------- ---------- Investing Activities: Investment in plant: Electric utility plant 0 (688) 0 --------- ---------- ---------- Net cash flows used for investments in plant 0 (688) 0 Investment in subsidiaries (5,835) 0 0 Capital contributions 5,900 5,900 0 --------- ---------- ---------- Net cash flows provided by investing activities 65 5,212 0 --------- ---------- ---------- Financing Activities: Issuance of long term debt 0 0 0 Net increase in short-term debt 11,800 1 0 Reacquisitions and retirements of long term debt 0 0 (725) --------- ---------- ---------- Net cash flows provided by/(used in) financing activities 11,800 1 (725) --------- ---------- ---------- Net (decrease)/increase in cash for the period (719) 670 (776) Cash - beginning of period 1,737 1,014 776 --------- ---------- ---------- Cash - end of period $ 1,018 $ 1,684 $ 0 ========= ========== ========== Supplemental Cash Flow Information: Cash (refunded)/paid during the year for: Interest, net of amounts capitalized $ (407) $ 0 $ 0 ========= ========== ========== Income taxes $ 1,235 $ 6 $ 0 ========= ========== ========== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
HEC INC. AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
HEC/ HEC Energy Reeds Tobyhanna Consulting Ferry Energy Canada, Supply Project, Inc. Co. Inc. Inc. ----------- --------- ---------- Operating Activities: Income/(loss) after interest charges $ (7) $ (20) $ 183 Adjustments to reconcile to net cash used in by operating activities: Depreciation 0 20 0 Deferred income taxes and investment tax credits, net 0 0 0 Allocation of ESOP benefits 0 0 0 Other (uses)/sources of cash 0 0 (23,708) Changes in working capital: Receivables and accrued utility revenues 0 63 (608) Fuel, materials and supplies 0 0 0 Accounts payable (46) 0 0 Accrued taxes 0 (63) 0 Other working capital (excludes cash) (1) 0 758 ---------- --------- ---------- Net cash flows used in operating activities (54) 0 (23,375) ---------- --------- ---------- Investing Activities: Investment in plant: Electric utility plant 0 0 0 ---------- --------- ---------- Net cash flows used for investments in plant 0 0 0 Investment in subsidiaries 0 0 0 Capital contributions 0 0 0 ---------- --------- ---------- Net cash flows provided by investing activities 0 0 0 ---------- --------- ---------- Financing Activities: Issuance of long term debt 0 0 26,477 Net increase in short-term debt 0 0 0 Reacquisitions and retirements of long term debt 0 0 0 ---------- --------- ---------- Net cash flows provided by/(used in) financing activities 0 0 26,477 ---------- --------- ---------- Net (decrease)/increase in cash for the period (54) 0 3,102 Cash - beginning of period 77 7 0 ---------- --------- ---------- Cash - end of period $ 23 $ 7 $ 3,102 ========== ========= ========== Supplemental Cash Flow Information: Cash (refunded)/paid during the year for: Interest, net of amounts capitalized $ 0 $ 0 $ 0 ========== ========= ========== Income taxes $ 0 $ 0 $ 0 ========== ========= ========== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
HEC INC. AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
Eliminations Consolidated ------------- ------------ Operating Activities: Income/(loss) after interest charges $ (150) $ 713 Adjustments to reconcile to net cash used in by operating activities: Depreciation 0 1,614 Deferred income taxes and investment tax credits, net 0 (209) Allocation of ESOP benefits (3) (6) Other (uses)/sources of cash 84 (44,750) Changes in working capital: Receivables and accrued utility revenues (8,046) (6,683) Fuel, materials and supplies 0 (306) Accounts payable 7,804 362 Accrued taxes 244 (450) Other working capital (excludes cash) 1 9,174 ------------- --------- Net cash flows used in operating activities (66) (40,541) ------------- --------- Investing Activities: Investment in plant: Electric utility plant 0 (688) ------------- --------- Net cash flows used for investments in plant 0 (688) Investment in subsidiaries (5,835) 0 Capital contributions 5,900 5,900 ------------- --------- Net cash flows provided by investing activities 65 5,212 ------------- --------- Financing Activities: Issuance of long term debt 0 26,477 Net increase in short-term debt 1 11,800 Reacquisitions and retirements of long term debt 0 (725) ------------- --------- Net cash flows provided by/(used in) financing activities 1 37,552 ------------- --------- Net (decrease)/increase in cash for the period 0 2,223 Cash - beginning of period 0 3,611 ------------- --------- Cash - end of period $ 0 $ 5,834 ============= ========= Supplemental Cash Flow Information: Cash (refunded)/paid during the year for: Interest, net of amounts capitalized $ 0 $ (406) ============= ========= Income taxes $ 0 $ 1,241 ============= ========= Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report.
NU ENTERPRISES, INC. AND SUBSIDIARIES Consolidating Balance Sheet (a) Assets December 31, 2000 (Thousands of Dollars)
Northeast NU Northeast Generation Enterprises, Generation Services Inc. Company Company ------------- ----------- ------------ Utility Plant, at cost: Electric $ 0 $264,855 $ 0 Other 0 0 1,741 ------------- ----------- ------------ 0 264855 1,741 Less: Accumulated provision for depreciation 0 147,216 764 ------------- ----------- ------------ 0 117,639 977 Construction work in progress 0 8,094 (168) ------------- ----------- ------------ Total net utility plant 0 125,733 809 ------------- ----------- ------------ Other Property and Investments: Investments in subsidiary companies, at equity 579,232 0 0 Other, at cost 10,000 0 0 ------------- ----------- ------------ 589,232 0 0 ------------- ----------- ------------ Current Assets: Cash 0 37,177 128 Special deposits 0 0 0 Notes receivable form affiliated companies 0 0 0 Receivables, net 0 0 2,040 Accounts receivable from affiliated companies 0 11,419 9,422 Taxes receivable 41 0 0 Fuel, materials, and supplies, at average cost 0 1,935 215 Unrealized gains on mark-to-market transactions 0 0 0 Prepayments and other 0 1,626 666 ------------- ----------- ------------ 41 52,157 12,471 ------------- ----------- ------------ Deferred Charges: Accumulated deferred income taxes 66 278,320 0 Unamortized debt expense 0 4,828 0 Intangibles 0 0 0 Prepaid pension 0 0 0 Other 0 23 97 ------------- ----------- ------------ 66 283,171 97 ------------- ----------- ------------ Total Assets $589,339 $461,061 $13,377 ============= =========== ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NU ENTERPRISES, INC. AND SUBSIDIARIES Consolidating Balance Sheet (a) Assets December 31, 2000 (Thousands of Dollars)
Select Energy Mode 1 Portland Select Communications, Pipeline, Inc. Energy, Inc. Inc. -------------- ------------ --------------- Utility Plant, at cost: Electric $ 0 $ 0 $ 906 Other 0 10,643 0 -------------- ------------ --------------- 0 10,643 906 Less: Accumulated provision for depreciation 0 1,771 25 -------------- ------------ --------------- 0 8,872 881 Construction work in progress 0 241 53 -------------- ------------ --------------- Total net utility plant 0 9,113 934 -------------- ------------ --------------- Other Property and Investments: Investments in subsidiary companies, at equity 0 0 0 Other, at cost 3,268 0 12,949 -------------- ------------ --------------- 3,268 0 12,949 -------------- ------------ --------------- Current Assets: Cash 355 0 61 Special deposits 0 2,538 0 Notes receivable form affiliated companies 0 0 800 Receivables, net 0 116,388 607 Accounts receivable from affiliated companies 0 126,920 0 Taxes receivable 151 5,409 0 Fuel, materials, and supplies, at average cost 0 0 0 Unrealized gains on mark-to-market transactions 0 26,876 0 Prepayments and other 0 32,940 0 -------------- ------------ --------------- 506 311,071 1,468 -------------- ------------ --------------- Deferred Charges: Accumulated deferred income taxes 1,613 5,890 0 Unamortized debt expense 0 0 0 Intangibles 0 21,774 0 Prepaid pension 0 1,368 0 Other 0 1,166 33 -------------- ------------ --------------- 1,613 30,198 33 -------------- ------------ --------------- Total Assets $5,387 $350,382 $15,384 ============== ============ =============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NU ENTERPRISES, INC. AND SUBSIDIARIES Consolidating Balance Sheet (a) Assets December 31, 2000 (Thousands of Dollars)
HEC Inc. (consolidated) (b) Eliminations Consolidated --------------- ------------- ------------ Utility Plant, at cost: Electric $ 0 $ 0 $265,761 Other 29,773 0 42,157 --------------- ------------- ------------ 29,773 0 307,918 Less: Accumulated provision for depreciation 7,063 0 156,838 --------------- ------------- ------------ 22,710 0 151,080 Construction work in progress 0 0 8,220 --------------- ------------- ------------ Total net utility plant 22,710 0 159,300 --------------- ------------- ------------ Other Property and Investments: Investments in subsidiary companies, at equity 0 579,232 0 Other, at cost 0 0 26,217 --------------- ------------- ------------ 0 579,232 26,217 --------------- ------------- ------------ Current Assets: Cash 5,834 0 43,555 Special deposits 0 0 2,538 Notes receivable form affiliated companies 0 0 800 Receivables, net 15,394 69 134,361 Accounts receivable from affiliated companies 316 16,288 131,789 Taxes receivable 0 5,601 0 Fuel, materials, and supplies, at average cost 495 (658) 3,303 Unrealized gains on mark-to-market transactions 0 0 26,876 Prepayments and other 629 27,399 8,462 --------------- ------------- ------------ 22,668 48,699 351,684 --------------- ------------- ------------ Deferred Charges: Accumulated deferred income taxes 0 3,244 282,645 Unamortized debt expense 0 0 4,828 Intangibles 0 0 21,774 Prepaid pension 0 0 1,368 Other 43,318 (10,215) 54,850 --------------- ------------- ------------ 43,318 (6,971) 365,465 --------------- ------------- ------------ Total Assets $88,696 $620,960 $902,666 =============== ============= ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NU ENTERPRISES, INC. AND SUBSIDIARIES Consolidating Balance Sheet (a) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
Northeast NU Northeast Generation Enterprises, Generation Services Inc. Company Company ------------- ----------- ------------ Common stockholder's equity: Common stock $ 0 $ 0 $ 0 Capital surplus, paid in 600,645 24,375 2,010 Retained earnings (40,183) 23,260 (1,360) ------------- ----------- ------------ Total common stockholder's equity 560,462 47,635 650 Long-term debt 28,800 0 0 ------------- ----------- ------------ Total capitalization 589,262 47,635 650 ------------- ----------- ------------ Current Liabilities: Notes payable to banks 0 402,377 0 Notes payable to affiliated companies 0 0 3,100 Advance from parent, non-interest bearing 0 0 0 Accounts payable 59 1,771 2,742 Accounts payable to affiliated companies 18 732 4,997 Accrued taxes 0 5,840 1,795 Accrued interest 0 1,893 0 Other 0 813 60 ------------- ----------- ------------ 77 413,426 12,694 ------------- ----------- ------------ Deferred Credits and Other Long-term Liabilities: Accumulated deferred income taxes 0 0 0 Other 0 0 33 ------------- ----------- ------------ 0 0 33 ------------- ----------- ------------ Total Capitalization and Liabilities $589,339 $461,061 $13,377 ============= =========== ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NU ENTERPRISES, INC. AND SUBSIDIARIES Consolidating Balance Sheet (a) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
Select Energy Mode 1 Portland Select Communications, Pipeline, Inc. Energy, Inc. Inc. -------------- ------------ --------------- Common stockholder's equity: Common stock $ 0 $ 0 $ 0 Capital surplus, paid in 9,257 90,151 14,357 Retained earnings (3,871) (74,678) (4,278) -------------- ------------ --------------- Total common stockholder's equity 5,386 15,473 10,079 Long-term debt 0 0 0 -------------- ------------ --------------- Total capitalization 5,386 15,473 10,079 -------------- ------------ --------------- Current Liabilities: Notes payable to banks 0 0 0 Notes payable to affiliated companies 0 84,700 0 Advance from parent, non-interest bearing 0 29,400 0 Accounts payable 0 123,053 0 Accounts payable to affiliated companies 1 54,750 102 Accrued taxes 0 1,706 17 Accrued interest 0 642 0 Other 0 23,463 1 -------------- ------------ --------------- 1 317,714 120 -------------- ------------ --------------- Deferred Credits and Other Long-term Liabilities: Accumulated deferred income taxes 0 0 2,914 Other 0 17,195 2,271 -------------- ------------ --------------- 0 17,195 5,185 -------------- ------------ --------------- Total Capitalization and Liabilities $5,387 $350,382 $15,384 ============== ============ =============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NU ENTERPRISES, INC. AND SUBSIDIARIES Consolidating Balance Sheet (a) Capitalization and Liabilities December 31, 2000 (Thousands of Dollars)
HEC Inc. (consolidated) (b) Eliminations Consolidated --------------- ------------- ------------ Common stockholder's equity: Common stock $ 0 $ 1 $ 0 Capital surplus, paid in 24,900 610,184 155,510 Retained earnings 575 (60,353) (40,183) --------------- ------------- ------------ Total common stockholder's equity 25,475 549,832 115,327 Long-term debt 26,477 0 55,277 --------------- ------------- ------------ Total capitalization 51,952 549,832 170,604 --------------- ------------- ------------ Current Liabilities: Notes payable to banks 0 0 402,377 Notes payable to affiliated companies 15,300 0 103,100 Advance from parent, non-interest bearing 0 29,400 0 Accounts payable 6,219 0 133,843 Accounts payable to affiliated companies 652 16,288 44,965 Accrued taxes 0 5,670 3,688 Accrued interest 757 0 3,292 Other 13,486 16,622 21,201 --------------- ------------- ------------ 36,414 67,980 712,466 --------------- ------------- ------------ Deferred Credits and Other Long-term Liabilities: Accumulated deferred income taxes 330 3,245 0 Other 0 (97) 19,596 --------------- ------------- ------------ 330 3,148 19,596 --------------- ------------- ------------ Total Capitalization and Liabilities $88,696 $620,960 $902,666 =============== ============= ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NU ENTERPRISES, INC. AND SUBSIDIARIES Consolidating Statement of Income(a) Year Ended December 31, 2000 (Thousands of Dollars) Northeast NU Northeast Generation Enterprises, Generation Service, Inc. Company Company ------------ ---------- ---------- Operating Revenues $ 0 $108,473 $44,395 ------------ ---------- ---------- Operating Expenses: Operation- Fuel, purchased and net interchange power 0 0 1,760 Other 322 11,855 29,518 Maintenance 0 9,092 12,839 Depreciation 0 2,417 79 Federal and state income taxes (129) 17,522 (139) Taxes other than income taxes 0 5,690 321 ------------ ---------- ---------- Total operating expenses 193 46,576 44,378 ------------ ---------- ---------- Operating (Loss)/Income (193) 61,897 17 ------------ ---------- ---------- Other Income/(Loss): Equity in earnings of subsidiaries 7,263 0 0 Other, net 4 1,061 (44) ------------ ---------- ---------- Other income/(loss), net 7,267 1,061 (44) ------------ ---------- ---------- Income/(Loss) before interest charges 7,074 62,958 (27) ------------ ---------- ---------- Interest Charges borrowed funds 9 36,542 205 ------------ ---------- ---------- Net Income/(Loss) $7,065 $ 26,416 $ (232) ============ ========== ========== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statments. NU ENTERPRISES, INC. AND SUBSIDIARIES Consolidating Statement of Income(a) Year Ended December 31, 2000 (Thousands of Dollars)
Select Energy Portland MODE 1 Pipeline, Select Communications, Inc. Energy, Inc. Inc. ------------- ------------ --------------- Operating Revenues $ 0 $1,786,514 $ 194 ------------- ------------ --------------- Operating Expenses: Operation- Fuel, purchased and net interchange power 0 1,767,810 0 Other 7 37,080 102 Maintenance 0 (24) 0 Depreciation 0 2,480 21 Federal and state income taxes (2,469) (16,411) 2,919 Taxes other than income taxes 0 4,373 0 ------------- ------------ --------------- Total operating expenses (2,462) 1,795,308 3,042 ------------- ------------ --------------- Operating (Loss)/Income 2,462 (8,794) (2,848) ------------- ------------ --------------- Other Income/(Loss): Equity in earnings of subsidiaries 0 0 0 Other, net (6,285) 486 6,601 ------------- ------------ --------------- Other income/(loss), net (6,285) 486 6,601 ------------- ------------ --------------- Income/(Loss) before interest charges (3,823) (8,308) 3,753 ------------- ------------ --------------- Interest Charges borrowed funds 35 11,219 2 ------------- ------------ --------------- Net Income/(Loss) $(3,858) $ (19,527) $3,751 ============= ============ =============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NU ENTERPRISES, INC. AND SUBSIDIARIES Consolidating Statement of Income(a) Year Ended December 31, 2000 (Thousands of Dollars)
HEC Inc. Consolidated (b) Eliminations Consolidated ------------ ------------ ------------ Operating Revenues $82,583 $122,471 $1,899,688 ------------ ------------ ------------ Operating Expenses: Operation- Fuel, purchased and net interchange power 0 108,294 1,661,276 Other 77,464 5,089 151,260 Maintenance 461 9,088 13,280 Depreciation 1,614 713 5,898 Federal and state income taxes 1,010 0 2,303 Taxes other than income taxes 942 0 11,327 ------------ ------------ ------------ Total operating expenses 81,491 123,184 1,845,344 ------------ ------------ ------------ Operating (Loss)/Income 1,092 (713) 54,344 ------------ ------------ ------------ Other Income/(Loss): Equity in earnings of subsidiaries 0 7,263 0 Other, net 1,395 713 2,506 ------------ ------------ ------------ Other income/(loss), net 1,395 7,976 2,506 ------------ ------------ ------------ Income/(Loss) before interest charges 2,487 7,263 56,850 ------------ ------------ ------------ Interest Charges borrowed funds 1,774 0 49,785 ------------ ------------ ------------ Net Income/(Loss) $ 713 $ 7,263 $ 7,065 ============ ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NU ENTERPRISES, INC. AND SUBSIDIARIES Consolidating Statement of Retained Earnings (a) Year Ended December 31, 2000 (Thousands of Dollars)
Northeast NU Northeast Generation Enterprises, Generation Service, Inc. Company Company ------------ ----------- ------------ Balance at beginning of period $(47,223) $(3,156) $(1,124) Additions: Net income/(loss) 7,065 26,416 (232) ------------ ----------- ------------ (40,158) 23,260 (1,356) ------------ ----------- ------------ Deductions: Allocation of benefits-ESOP 25 0 4 ------------ ----------- ------------ Total deductions 25 0 4 ------------ ----------- ------------ Balance at end of period $(40,183) $23,260 $(1,360) ============ =========== ============
NU ENTERPRISES, INC. AND SUBSIDIARIES Consolidating Statement of Capital Surplus, Paid In (a) Year Ended December 31, 2000 (Thousands of Dollars)
Northeast NU Northeast Generation Enterprises, Generation Service, Inc. Company Company ------------ ----------- ------------ Balance at beginning of period $121,745 $ 6,510 $2,010 Capital contribution from Northeast Utilities 478,900 0 0 Capital Contribution from NU Enterprises, Inc. 0 463,000 0 Excess paid over carrying value of assets transferred 0 (445,135) 0 ------------ ----------- ------------ Balance at end of period $600,645 $ 24,375 $2,010 ============ =========== ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NU ENTERPRISES, INC. AND SUBSIDIARIES Consolidating Statement of Retained Earnings (a) Year Ended December 31, 2000 (Thousands of Dollars)
Select Energy Portland MODE 1 Pipeline, Select Communication Inc. Energy, Inc. Inc. ------------ ------------ ------------ Balance at beginning of period $ (13) $(55,136) $(8,029) Additions: Net income/(loss) (3,858) (19,527) 3,751 ------------ ------------ ------------ (3,871) (74,663) (4,278) ------------ ------------ ------------ Deductions: Allocation of benefits-ESOP 0 15 0 ------------ ------------ ------------ Total deductions 0 15 0 ------------ ------------ ------------ Balance at end of period $(3,871) $(74,678) $(4,278) ============ ============ ============
NU ENTERPRISES, INC. AND SUBSIDIARIES Consolidating Statement of Capital Surplus, Paid In (a) Year Ended December 31, 2000 (Thousands of Dollars)
Select Energy Portland MODE 1 Pipeline, Select Communication Inc. Energy, Inc. Inc. ------------ ------------ ------------ Balance at beginning of period $9,257 $90,151 $14,357 Capital contribution from Northeast Utilities 0 0 0 Capital Contribution from NU Enterprises, Inc. 0 0 0 Excess paid over carrying value of assets transferred 0 0 0 ------------ ------------ ------------ Balance at end of period $9,257 $90,151 $14,357 ============ ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NU ENTERPRISES, INC. AND SUBSIDIARIES Consolidating Statement of Retained Earnings (a) Year Ended December 31, 2000 (Thousands of Dollars)
HEC Inc. (consolidated) (b) Eliminations Consolidated -------------- ------------ ------------ Balance at beginning of period $(132) $(67,591) $(47,223) Additions: Net income/(loss) 713 7,263 7,065 -------------- ------------ ------------ 581 (60,328) (40,158) -------------- ------------ ------------ Deductions: Allocation of benefits-ESOP 6 25 25 -------------- ------------ ------------ Total deductions 6 25 25 -------------- ------------ ------------ Balance at end of period $ 575 $(60,353) $(40,183) ============== ============ ============
NU ENTERPRISES, INC. AND SUBSIDIARIES Consolidating Statement of Capital Surplus, Paid In (a) Year Ended December 31, 2000 (Thousands of Dollars)
HEC Inc. Consolidated (b) Eliminations Consolidated -------------- ------------ ------------ Balance at beginning of period $19,000 $141,284 $121,745 Capital contribution from Northeast Utilities 0 0 478,900 Capital Contribution from NU Enterprises, Inc. 5,900 468,900 0 Excess paid over carrying value of assets transferred 0 0 (445,135) -------------- ------------ ------------ Balance at end of period $24,900 $610,184 $155,510 ============== ============ ============ Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NU ENTERPRISES, INC. AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
Northeast NU Northeast Generation Enterprises, Generation Services Inc. Company Company ---------- ---------- ---------- Operating Activities: Income/(loss) after interest charges $ 7,065 $ 26,416 $ (232) Adjustments to reconcile to net cash provided by/(used in) operating activities: Depreciation 0 2,417 79 Deferred income taxes and investment tax credits, net (66) 19,245 0 Allocation of ESOP benefits (25) 0 (4) Net other sources/(uses) of cash 0 1,533 (884) Changes in working capital: Accounts receivable 0 (11,419) (8,946) Fuel, materials and supplies 0 (62) (215) Accounts payable 48 (780) 6,003 Accrued taxes 0 5,840 1,795 Other working capital (excludes cash) 56 (202) 247 ---------- ---------- ---------- Net cash flows provided by/(used in) operating activities 7,078 42,988 (2,157) ---------- ---------- ---------- Investing Activities: Investment in plant: Electric and other utility plant 0 (1,394) 0 ---------- ---------- ---------- Net cash flows used for investments in plant 0 (1,394) 0 Investment in NU system Money Pool 100 0 0 Other investments (486,138) 0 0 Capital contributions 478,900 463,000 0 Net cash payment for transfer of assets 0 (869,794) 0 ---------- ---------- ---------- Net cash flows (used in)/provided by investing activities (7,138) (408,188) 0 ---------- ---------- ---------- Financing Activities: Issuance of long-term debt 0 0 0 Net increase in short-term debt 0 402,377 2,200 Reacquisitions and retirements of long-term debt 0 0 0 ---------- ---------- ---------- Net cash flows provided by financing activities 0 402,377 2,200 ---------- ---------- ---------- Net (decrease)/increase in cash for the period (60) 37,177 43 Cash - beginning of period 60 0 85 ---------- ---------- ---------- Cash - end of period $ 0 $ 37,177 $ 128 ========== ========== ========== Supplemental Cash Flow Information: Cash paid/(refunded) during the year for: Interest, net of amounts capitalized $ 7 $ 29,287 $ 134 ========== ========== ========== Income taxes $ (119) $ (7,725) $ (1,147) ========== ========== ========== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NU ENTERPRISES, INC. AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
Select Energy Portland MODE 1 Pipeline, Select Communications, Inc. Energy, Inc. Inc. ---------- ------------- -------------- Operating Activities: Income/(loss) after interest charges $ (3,858) $ (19,527) $ 3,751 Adjustments to reconcile to net cash provided by/(used in) operating activities: Depreciation 0 2,480 21 Deferred income taxes and investment tax credits, net (1,998) (3,541) 2,732 Allocation of ESOP benefits 0 (15) 0 Net other sources/(uses) of cash 0 (2,526) 323 Changes in working capital: Accounts receivable 0 (144,091) (596) Fuel, materials and supplies 0 0 0 Accounts payable (317) 84,011 (854) Accrued taxes 0 1,416 (779) Other working capital (excludes cash) 243 11,749 0 ---------- ------------- -------------- Net cash flows provided by/(used in) operating activities (5,930) (70,044) 4,598 ---------- ------------- -------------- Investing Activities: Investment in plant: Electric and other utility plant 0 (3,976) (317) ---------- ------------- -------------- Net cash flows used for investments in plant 0 (3,976) (317) Investment in NU system Money Pool 0 18,900 2,200 Other investments 6,285 0 (6,511) Capital contributions 0 0 0 Net cash payment for transfer of assets 0 0 0 ---------- ------------- -------------- Net cash flows (used in)/provided by investing activities 6,285 14,924 (4,628) ---------- ------------- -------------- Financing Activities: Issuance of long-term debt 0 0 0 Net increase in short-term debt 0 54,700 0 Reacquisitions and retirements of long-term debt 0 0 0 ---------- ------------- -------------- Net cash flows provided by financing activities 0 54,700 0 ---------- ------------- -------------- Net (decrease)/increase in cash for the period 355 (420) (30) Cash - beginning of period 0 420 91 ---------- ------------- -------------- Cash - end of period $ 355 $ 0 $ 61 ========== ============= ============== Supplemental Cash Flow Information: Cash paid/(refunded) during the year for: Interest, net of amounts capitalized $ 0 $ 5,521 $ 0 ========== ============= ============== Income taxes $ (713) $ (30,112) $ 967 ========== ============= ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NU ENTERPRISES, INC. AND SUBSIDIARIES Consolidating Statement of Cash Flows (a) Year Ended December 31, 2000 (Thousands of Dollars)
HEC Inc. (consolidated) (b) Eliminations Consolidated ------------- ------------ -------------- Operating Activities: Income/(loss) after interest charges $ 713 $ 7,263 $ 7,065 Adjustments to reconcile to net cash provided by/(used in) operating activities: Depreciation 1,614 713 5,898 Deferred income taxes and investment tax credits, net (209) 0 16,162 Allocation of ESOP benefits (6) (25) (25) Net other sources/(uses) of cash (44,750) (6,634) (39,668) Changes in working capital: Accounts receivable (6,683) (15,545) (156,191) Fuel, materials and supplies (306) (819) 236 Accounts payable 362 15,479 72,994 Accrued taxes (450) 5,668 2,154 Other working capital (excludes cash) 9,174 1,138 20,129 ------------- ------------ -------------- Net cash flows provided by/(used in) operating activities (40,541) 7,238 (71,246) ------------- ------------ -------------- Investing Activities: Investment in plant: Electric and other utility plant (688) 0 (6,375) ------------- ------------ -------------- Net cash flows used for investments in plant (688) 0 (6,375) Investment in NU system Money Pool 0 0 21,200 Other investments 0 (476,138) (10,226) Capital contributions 5,900 468,900 478,900 Net cash payment for transfer of assets 0 0 (869,794) ------------- ------------ -------------- Net cash flows (used in)/provided by investing activities 5,212 (7,238) (386,295) ------------- ------------ -------------- Financing Activities: Issuance of long-term debt 26,477 0 26,477 Net increase in short-term debt 11,800 0 471,077 Reacquisitions and retirements of long-term debt (725) 0 (725) ------------- ------------ -------------- Net cash flows provided by financing activities 37,552 0 496,829 ------------- ------------ -------------- Net (decrease)/increase in cash for the period 2,223 0 39,288 Cash - beginning of period 3,611 0 4,267 ------------- ------------ -------------- Cash - end of period $ 5,834 $ 0 $ 43,555 ============= ============ ============== Supplemental Cash Flow Information: Cash paid/(refunded) during the year for: Interest, net of amounts capitalized $ (406) $ 0 $ 34,543 ============= ============ ============== Income taxes $ 1,241 $ 0 $ (37,607) ============= ============ ============== Note: Individual columns may not add to Consolidated due to rounding. The accompanying notes are an integral part of these financial statements. (a) Not covered by auditors' report. (b) See supporting statements.
NOTES TO FINANCIAL STATEMENTS NU Reference is made to "Notes to Consolidated Financial Statements" contained on pages 32 through 64 in NU's 2000 Annual Report to Shareholders, which information is incorporated herein by reference. CL&P Reference is made to "Notes to Consolidated Financial Statements" contained on pages 18 through 40 in CL&P's 2000 Annual Report, which information is incorporated herein by reference. PSNH Reference is made to "Notes to Financial Statements" contained on pages 16 through 37 in PSNH's 2000 Annual Report, which information is incorporated herein by reference. WMECO Reference is made to "Notes to Consolidated Financial Statements" contained on pages 16 through 36 in WMECO's 2000 Annual Report, which information is incorporated herein by reference. NAEC Reference is made to "Notes to Financial Statements" contained on pages 14 through 26 in NAEC's 2000 Annual Report, which information is incorporated herein by reference. EXHIBITS The following exhibits are incorporated by reference to the indicated SEC file number, unless a single asterisk appears next to the exhibit reference. A single asterisk indicates exhibits which are filed herewith. A # further indicates that the exhibit is filed under cover of Form SE. EXHIBIT NUMBER DESCRIPTION A. ANNUAL REPORTS A.1 Annual Reports filed under the Securities Exchange Act of 1934 A.1.1 2000 Annual Report on Form 10-K for NU. (File No. 1-5324) A.1.2 2000 Annual Report on Form 10-K for CL&P. (File No. 0-11419) A.1.3 2000 Annual Report on Form 10-K for PSNH. (File No. 1-6392) A.1.4 2000 Annual Report on Form 10-K for WMECO. (File No. 0-7624) A.1.5 2000 Annual Report on Form 10-K for NAEC. (File No. 33-43508) A.2 Annual Reports and Reports to the FERC on Form 1 A.2.1 1999 Annual Report to Shareholders of Maine Yankee Atomic Power Company. (Exhibit A.1, 1999 National Grid USA U5S, File No. 30-33) A.2.2 1999 Annual Report to Shareholders of Vermont Yankee Nuclear Power Corporation. (Exhibit A.2, 1999 National Grid USA U5S, File No. 30-33) A.2.3 1999 FERC Form 1 of Vermont Yankee Nuclear Power Corporation. (Exhibit 6.a, 1999 National Grid USA U5S, File No. 30-33) A.2.4 1999 Annual Report to Shareholders of New England Hydro- Transmission Electric Company, Inc. (Exhibit A.2.5, 1999 NU Form U5S, File No. 30-246) A.2.5 1999 Annual Report to Shareholders of New England Hydro- Transmission Corporation. (Exhibit A.2.6, 1999 NU Form U5S, File No. 30-246) B. CHARTERS, ARTICLES OF INCORPORATION, TRUST AGREEMENTS, BY-LAWS, AND OTHER FUNDAMENTAL DOCUMENTS OF ORGANIZATION B.1 Northeast Utilities B.1.1 Declaration of Trust of NU, as amended through May 24, 1988. (Exhibit 3.1.1, 1988 NU Form 10-K, File No. 1-5324) B.2 The Connecticut Light and Power Company B.2.1 Certificate of Incorporation of CL&P, restated to March 22, 1994. (Exhibit 3.2.1, 1993 NU Form 10-K, File No. 1-5324) B.2.2 Certificate of Amendment to Certificate of Incorporation of CL&P, dated December 26, 1996. (Exhibit 3.2.2, 1996 NU Form 10-K, File No. 1-5324) B.2.3 Certificate of Amendment to Certificate of Incorporation of CL&P, dated April 27, 1998. (Exhibit 3.2.3, 1998 NU Form 10-K, File No. 1-5324) B.2.4 By-Laws of CL&P, as amended to January 1, 1997. (Exhibit 3.2.3, 1996 NU Form 10-K, File No. 1-5324) B.3 Public Service Company of New Hampshire B.3.1 Articles of Incorporation, as amended to May 16, 1991. (Exhibit B.3.1, 1997 NU Form U53, File No. 30-246) B.3.2 By-Laws of PSNH, as amended to November 1, 1993. (Exhibit 3.3.2, 1993 NU Form 10-K, File No. 1-5324) B.4 Western Massachusetts Electric Company B.4.1 Articles of Organization of WMECO, restated to February 23, 1995. (Exhibit 3.4.1, 1994 NU Form 10-K, File No. 1-5324) B.4.2 By-Laws of WMECO, as amended to April 1, 1999. (Exhibit 3.1, 1999 NU Form 10-Q, File No. 1-5324) B.4.3 By-Laws of WMECO, as further amended to May 1, 2000. (Exhibit 3.1, 2000 NU Form 10-Q for the Quarter Ended June 30, 2000, File No. 1-5324) B.5 North Atlantic Energy Corporation B.5.1 Articles of Incorporation of NAEC dated September 20, 1991. (Exhibit 3.5.1, 1993 NU Form 10-K, File No. 1-5324) B.5.2 Articles of Amendment dated October 16, 1991, and June 2, 1992, to Articles of Incorporation of NAEC. (Exhibit 3.5.2, 1993 NU Form 10-K, File No. 1-5324) B.5.3 By-Laws of NAEC, as amended to November 8, 1993. (Exhibit 3.5.3, 1993 NU Form 10-K, File No. 1-5324) B.5.4 By-Laws of NAEC, as amended to June 1, 2000. (Exhibit 3.1, 2000 NU Form 10-Q for the Quarter Ended September 30, 2000, File No. 1-5324) B.6 The Quinnehtuk Company B.6.1 Articles of Organization of The Quinnehtuk Company dated December 14, 1928, and Articles of Amendment dated December 18, 1930. (Exhibit B.6.1, 1997 NU Form U5S, File No. 30-246) B.6.2 Amendment to Certificate of Incorporation of The Quinnehtuk Company dated June 10, 1975. (Exhibit B.6.2, 1993 NU Form U5S, File No. 30-246) B.6.3 By-Laws of The Quinnehtuk Company as amended to February 11, 1998. (Exhibit B.6.3, 1997 NU Form U5S, File No. 30-246) B.7 The Rocky River Realty Company B.7.1 Certificate of Incorporation, as amended, of The Rocky River Realty Company. (Exhibit 1.9, 1977 NU Form U5S, File No. 30-246) B.7.2 Certificate of Amendment to Certificate of Incorporation of The Rocky River Realty Company, dated December 26, 1996. (Exhibit B.7.2, 1996 NU Form U5S, File No. 30-246) B.7.3 Certificate of Amendment to Certificate of Incorporation of the Rocky River Realty Company, dated April 27, 1998. (Exhibit B.7.3, 1997 NU Form U5S, File No. 30-246) B.7.4 By-Laws of The Rocky River Realty Company, as amended to February 11, 1998. (Exhibit B.7.4, 1997 NU Form U5S, File No. 30-246) B.8 Electric Power, Incorporated B.8.1 Charter of Electric Power, Incorporated dated January 1, 1955. (Exhibit B.9, 1983 NU Form U5S, File No. 30-246) B.8.2 Amendment to Charter of Electric Power, Incorporated (Special Act No. 133, Volume XXXI, page 103, approved June 11, 1963). (Exhibit B.9.1, 1983 NU Form U5S, File No. 30-246) B.8.3 Certificate of Amendment to Certificate of Incorporation of Electric Power, Incorporated, dated December 26, 1996. (Exhibit B.10.3, 1996 NU Form U5S, File No. 30-246) B.8.4 By-Laws of Electric Power, Incorporated as amended to February 15, 1952. (Exhibit B.9.2, 1983 NU Form U5S, File No. 30-246) B.9 The Nutmeg Power Company B.9.1 Certificate of Organization of The Nutmeg Power Company dated July 19, 1954. (Exhibit B.11, 1983 NU Form U5S, File No. 30-246) B.9.2 Certificate of Amendment to the Certificate of Incorporation of The Nutmeg Power Company, dated December 26, 1996. (Exhibit B.11.2, 1996 NU Form U5S, File No. 30-246) B.9.3 By-Laws of The Nutmeg Power Company as amended to January 1, 1997. (Exhibit B.11.3, 1996 NU Form U5S, File No. 30-246) B.10 The Connecticut Steam Company B.10.1 Certificate of Incorporation of The Connecticut Steam Company dated May 13, 1965, including Special Act No. 325, an Act Incorporating The Connecticut Steam Company (Special Acts 1963, Senate Bill No. 704, approved June 24, 1963). (Exhibit B.12, 1983 NU Form U5S, File No. 30-246) B.10.2 Certificate of Amendment to Certificate of Incorporation of The Connecticut Steam Company, dated December 26, 1996. (Exhibit B.12.2, 1996 NU Form U5S, File No. 30-246) B.10.3 By-Laws of The Connecticut Steam Company, as amended to January 1, 1997. (Exhibit B.12.3, 1996 NU Form U5S, File No. 30-246) B.11 Holyoke Water Power Company B.11.1 Charter of Holyoke Water Power Company, as amended. (Exhibit 1.8, 1977 NU Form U5S, File No. 30-246) B.11.2 By-Laws of Holyoke Water Power Company, as amended to February 11, 1998. (Exhibit B.14.2, NU Form U5S, File No. 30-246) B.12 Holyoke Power and Electric Company B.12.1 Charter of Holyoke Power and Electric Company dated December 5, 1925. (Exhibit B.15, 1983 NU Form U5S, File No. 30-246) B.12.2 Chapter 147 of the Massachusetts Acts of 1926 amending the Charter of Holyoke Power and Electric Company, as recorded with the Office of the Secretary of the Commonwealth on March 29, 1926. (Exhibit B.15.1, 1983 NU Form U5S, File No. 30-246) B.12.3 By-laws of Holyoke Power and Electric Company, as amended to February 11, 1998. (Exhibit B.15.3, 1997 NU U5S, File No. 30-246) B.13 Northeast Utilities Service Company B.13.1 Charter of Northeast Utilities Service Company, as amended to February 20, 1974. (Exhibit B.16, 1983 NU Form U5S, File No. 30-246) B.13.2 Certificate of Amendment to Certificate of Incorporation of Northeast Utilities Service Company, dated December 26, 1996. (Exhibit B.16.2, 1996 NU Form U5S, File No. 30-246) B.13.3 Certificate of Amendment to Certificate of Incorporation of Northeast Utilities Service Company, dated April 27, 1998. (Exhibit B.16.3, 1997 NU Form U5S, File No. 30-246) B.13.4 By-Laws of Northeast Utilities Service Company as amended to January 1, 1997. (Exhibit B.16.3, 1996 NU Form U5S, File No. 30-246) B.14 Northeast Nuclear Energy Company B.14.1 Charter of Northeast Nuclear Energy Company as amended to April 24, 1974. (Exhibit B.17, 1983 NU Form U5S, File No. 30-246) B.14.2 Certificate of Amendment to Certificate of Incorporation of Northeast Nuclear Energy Company, dated December 26, 1996. (Exhibit B.17.2, 1996 NU Form U5S, File No. 30-246) B.14.3 Certificate of Amendment to Certificate of Incorporation of Northeast Nuclear Energy Company, dated April 27, 1998. (Exhibit B.17.3, 1997 NU Form U5S, File No. 30-246) B.14.4 By-Laws of Northeast Nuclear Energy Company, as amended to February 11, 1998. (Exhibit B.17.4, 1997 NU Form U5S, File No. 30-246) * B.14.5 By-Laws of Northeast Nuclear Energy Company, as amended to June 1, 2000. B.15 NU Enterprises, Inc. B.15.1 Certificate of Incorporation of NU Enterprises, Inc. dated December 28, 1998. (Exhibit B.15.1, 1999 NU Form U5S, File No. 30-246) B.15.2 By-Laws of NU Enterprises, Inc. dated January 4, 1999. (Exhibit B.15.2, 1999 NU Form U5S, File No. 30-246) * B.16.3 By-Laws of NU Enterprises, Inc., as amended to June 1, 2000. B.16 HEC, Inc. B.16.1 Articles of Organization of HEC Inc. dated June 19, 1990. (Exhibit B.19, 1990 NU Form U5S, File No. 30-246) B.16.2 By-Laws of HEC Inc., as amended, June 30, 1999. (Exhibit B.16.2, 1999 NU Form U5S, File No. 30-246) B.17 Select Energy Contracting, Inc. F/K/A HEC International Corporation B.17.1 Articles of Organization of Select Energy Contracting, Inc. F/K/A HEC International Corporation dated October 12, 1994. (Exhibit B.19.1, 1994 NU Form U5S, File No. 30-246) B.17.2 Amendment to Articles of Organization of Select Energy Contracting, Inc. F/K/A HEC International Corporation, dated July 8, 1999 (Exhibit B.17.2, 1999 NU Form U5S, File No. 30-246) B.17.3 By-Laws of Select Energy Contracting, Inc. F/K/A HEC International Corporation dated June 30, 1999. (Exhibit B.17.3, 1999 NU Form U5S, File No. 30-246) B.18 HEC Energy Consulting Canada Inc. B.18.1 Articles of Incorporation of HEC Energy Consulting Canada Inc. dated October 24, 1994. (Exhibit B.20.1, 1994 NU Form U5S, File No. 30-246) B.18.2 By-Laws of HEC Energy Consulting Canada Inc. dated October 24, 1994. (Exhibit B.20.2, 1994 NU Form U5S, File No. 30-246) B.19 HEC/Tobyhanna Energy Project, Inc. B.19.1 Articles of Organization of HEC/Tobyhanna Energy Project, Inc. dated September 28, 1999. (Exhibit B.19.1, 1999 NU Form U5S, File No. 30-246) B.19.2 By-Laws of HEC/Tobyhanna Energy Project, Inc., dated September 28, 1999. (Exhibit B.19.2, 1999 NU Form U5S, File No. 30-246) B.20 Reeds Ferry Supply Co., Inc. B.20.1 Articles of Agreement of Reeds Ferry Supply Co., Inc., dated June 25, 1964. (Exhibit B.20.1, 1999 NU Form U5S, File No. 30-246) B.20.2 By-Laws of Reeds Ferry Supply Co., Inc., as Amended and Restated August 4, 1999. (Exhibit B.20.2, 1999 NU Form U5S, File No. 30-246) B.21 North Atlantic Energy Service Corporation B.21.1 Articles of Incorporation; and Certificate of Amendment of North Atlantic Energy Service Corporation dated June 1, 1992. (Exhibit B.21, 1992 NU Form U5S, File No. 30-246) B.21.2 By-Laws of North Atlantic Energy Service Corporation, as amended to November 8, 1993. (Exhibit B.19.2, 1993 NU Form U5S, File No. 30-246) * B.21.3 By-Laws of North Atlantic Energy Service Corporation, as amended to June 1, 2000. B.22 Connecticut Yankee Atomic Power Company B.22.1 Certificate of Incorporation of Connecticut Yankee Atomic Power Company and amendments dated to November 20, 1964. (Exhibit B.20.1, 1993 NU Form U5S, File No. 30-246) B.22.2 Certificate of Amendment to Certificate of Incorporation of Connecticut Yankee Atomic Power Company, dated December 26, 1996. (Exhibit B.22.2, 1996 NU Form U5S, File No. 30-246) B.22.3 Certificate of Amendment to Certificate of Incorporation of Connecticut Yankee Atomic Power Company, dated October 15, 1998. (Exhibit B.22.3, 1998 NU U5S, File No. 30-246) B.22.4 By-laws of Connecticut Yankee Atomic Power Company, as amended to March 31, 1999. (Exhibit B.22.4, 1998 NU U5S, File No. 30-246) B.23 Properties, Inc. B.23.1 Articles of Agreement of Properties, Inc. as amended to June 1, 1983. (Exhibit B.21.1, 1993 NU Form U5S, File No. 30-246) B.23.2 By-laws of Properties, Inc., amended and restated as of February 7, 1996. (Exhibit B.23.2, 1995 NU Form U5S, File No. 30-246) B.24 Charter Oak Energy, Inc. B.24.1 Certificate of Incorporation of Charter Oak Energy, Inc., dated September 28, 1988. (Exhibit B.16, 1989 NU Form U5S, File No. 30-246) B.24.2 Certificate of Amendment to Certificate of Incorporation of Charter Oak Energy, Inc., dated December 26, 1996. (Exhibit B.25.2, 1996 NU Form U5S, File No. 30-246) B.24.3 Certificate of Amendment to Certificate of Incorporation of Charter Oak Energy Inc., dated April 27, 1998. (Exhibit B.25.3, 1997 NU Form U5S, File No. 30-246) B.24.4 By-Laws of Charter Oak Energy, Inc., as amended to January 1, 1997. (Exhibit B.25.3, 1996 NU Form U5S, File No. 30-246) * B.24.5 By-Laws of Charter Oak Energy, Inc., as amended to June 1, 2000. B.25 COE Development Corporation B.25.1 Certificate of Incorporation of COE Development Corporation dated November 6, 1992. (Exhibit B.26.1, 1993 NU Form U5S, File No. 30-246) B.25.2 Certificate of Amendment to Certificate of Incorporation of COE Development Corporation, dated December 26, 1996. (Exhibit B.26.2, 1996 NU Form U5S, File No. 30-246) B.25.3 Certificate of Amendment to Certificate of Incorporation of COE Development Corporation, dated April 27, 1998. (Exhibit B.27.3, 1997 NU Form U5S File No. 30-246) B.25.4 By-Laws of COE Development Corporation, as amended to January 1, 1997. (Exhibit B.26.4, 1996 NU Form U5S, File No. 30-246) * B.25.5 By-Laws of COE Development Corporation, as amended to June 1, 2000. B.26 COE Argentina II Corp. B.26.1 Certificate of Incorporation of COE Argentina II Corp. dated March 14, 1994. (Exhibit B.27.1, 1994 NU Form U5S, File No. 30-246) B.26.2 Certificate of Amendment to Certificate of Incorporation of COE Argentina II Corp., dated December 26, 1996. (Exhibit B.27.2, 1996 NU Form U5S, File No. 30-246) B.26.3 Certificate of Amendment to Certificate of Incorporation of COE Argentina II Corp., dated April 27, 1998. (Exhibit B.27.3, 1997 NU Form U5S, File No. 30-246) B.26.4 By-Laws of COE Argentina II Corp., as amended to January 1, 1997. (Exhibit B.27.4, 1996 NU Form U5S, File No. 30-246) * B.26.5 By-Laws of COE Argentina II Corp., as amended to June 1, 2000. B.27 COE Ave Fenix Corporation B.27.1 Certificate of Incorporation of COE Ave Fenix Corporation dated May 19, 1995. (Exhibit B.28.1, 1995 NU Form U5S, File No. 30-246) B.27.2 Certificate of Amendment to Certificate of Incorporation of COE Ave Fenix Corporation, dated December 26, 1996. (Exhibit B.28.2, 1996 NU Form U5S, File No. 30-246) B.27.3 Certificate of Amendment to Certificate of Incorporation of COE Ave Fenix Corporation, dated April 27, 1998. (Exhibit B.28.3, 1997 NU Form U5S, File No. 30-246) B.27.4 By-Laws of COE Ave Fenix Corporation, as amended to January 1, 1997. (Exhibit B.28.4, 1996 NU Form U5S, File No. 30-246) * B.27.5 By-Laws of COE Ave Fenix Corporation, as amended to June 1, 2000. B.28 New England Hydro-Transmission Corporation B.28.1 Articles of Incorporation, (Exhibit B.8a, 1986 NEES U5S, File No. 30-33); Articles of Amendment of New England Hydro-Transmission Corporation dated January 18, 1989, (Exhibit B.10a, 1988 NEES U5S, File No. 30-33). B.28.2 By-Laws of New England Hydro-Transmission Corporation dated March 17, 1998. (Exhibit B. 16.b, 1998 NEES U5S, File No. 30-33) B.29 New England Hydro-Transmission Electric Company B.29.1 Restated Articles of Organization of New England Hydro- Transmission Electric Company dated January 13, 1989. (Exhibit B.11a, 1988 NEES U5S, File No. 30-33) B.29.2 By-Laws of New England Hydro-Transmission Electric Company dated March 17, 1998. (Exhibit B.17.b, 1998 NEES U5S File No. 30-33) B.30 Amended and Restated Limited Partnership Agreement (CL&P Capital, L.P.) among CL&P, NUSCO, and the persons who became limited partners of CL&P Capital, L.P. in accordance with the provisions thereof dated as of January 23, 1995 (MIPS). (Exhibit A.1, File No. 70-8451) B.31 ERI/HEC EFA-Med, LLC * B.31.1 Certificate of Formation of ERI/HEC EFA-Med, LLC, dated September 15, 2000. * B.31.2 Operating Agreement of ERI/HEC EFA-Med, LLC, dated September 22, 2000. B.32 Mode 1 Communications, Inc. B.32.1 Certificate of Incorporation of Mode 1 Communications, Inc. dated March 26, 1996. (Exhibit B.34.1, 1996 NU Form U5S, File No. 30-246) B.32.2 Certificates of Amendment to Certificate of Incorporation of Mode 1 Communications, Inc., dated December 26, 1996 and February 4, 1997. (Exhibit B.34.2, 1996 NU Form U5S, File No. 30-246) B.32.3 Certificate of Amendment to Certificate of Incorporation of Mode l Communications, Inc., dated April 27, 1998. (Exhibit B.34.3, 1997 NU Form U5S, File No. 30-246) B.32.4 By-Laws of Mode 1 Communications, Inc., as amended to January 1, 1997. (Exhibit B.34.4, 1996 NU Form U5S, File No. 30-246) B.33 Select Energy, Inc. B.33.1 Certificate of Incorporation of Select Energy, Inc. dated September 26, 1996. (Exhibit B.40.1, 1996 NU Form U5S, File No. 30-246) B.33.2 Certificates of Amendment to Certificate of Incorporation of Select Energy, Inc., dated December 26, 1996 and April 25, 1997. (Exhibit B.40.2, 1996 NU Form U5S, File No. 30-246) B.33.3 Certificate of Amendment to Certificate of Incorporation of Select Energy, Inc., dated April 27, 1998. (Exhibit B.40.3, 1997 NU Form U5S, File No. 30-246) B.33.4 By-Laws of Select Energy, Inc., as amended to May 12, 1997. (Exhibit B.40.4, 1997 NU Form U5S, File No. 30-246) * B.33.5 By-Laws of Select Energy, Inc., as amended to June 1, 2000. B.34 Northeast Generation Company B.34.1 Certificate of Incorporation of Northeast Generation Company, dated December 28, 1998. (Exhibit B.34.1, 1999 NU Form U5S, File No. 30-246) B.34.2 By-Laws of Northeast Generation Company, dated January 4, 1999. (Exhibit B.34.2, 1999 NU Form U5S, File No. 30-246) * B.34.3 By-Laws of Northeast Generation Company, as amended to June 1, 2000. B.35 Northeast Generation Services Company B.35.1 Certificate of Incorporation of Northeast Generation Services Company, dated December 28, 1998. (Exhibit B.35.1, 1999 NU Form U5S, File No. 30-246) B.35.2 By-Laws of Northeast Generation Service Company, dated January 4, 1999. (Exhibit B.35.2, 1999 NU Form U5S, File No. 30-246) * B.35.3 By-Laws of Northeast Generation Services Company, as amended to June 1, 2000. B.36 Select Energy Portland Pipeline, Inc. B.36.1 Certificate of Incorporation of Select Energy Portland Pipeline, Inc., dated March 15, 1999. (Exhibit B.36.1, 1999 NU Form U5S, File No. 30-246) B.36.2 By-Laws of Select Energy Portland Pipeline, Inc., dated March 17, 1999. (Exhibit B.36.1, 1999 NU Form U5S, File No. 30-246) * B.36.3 By-Laws of Select Energy Portland Pipeline, Inc., as amended to June 1, 2000. B.37 CL&P Receivables Corporation B.37.1 Certificate of Incorporation of CL&P Receivables Corporation, dated September 5, 1997. (Exhibit B.41.1, 1997 NU Form U5S, File No. 30-246) B.37.2 By-Laws of CL&P Receivables Corporation, dated September 12, 1997. (Exhibit B.41.2, 1997 NU Form U5S, File No. 30-246) B.38 Yankee Energy System, Inc. * B.38.1 Certificate of Incorporation of Yankee Energy System, Inc., F/K/A NU Acquisition Corp., dated February 15, 2000. * B.38.2 Certificate of Merger of Yankee Energy System, Inc. with and Into NU Acquisition Corp., dated March 1, 2000. B.38.2.1 Agreement and Plan of Merger between Yankee Energy System, Inc. and Northeast Utilities, dated as of June 14, 1999. (Exhibit 1 in NU's Current Report on Form 8-K dated June 14, 1999, File No. 1-5324) * B.38.3 By-Laws of Yankee Energy System, Inc., as amended to March 1,2000. B.39 NorConn Properties, Inc. * B.39.1 Certificate of Incorporation of NorConn Properties, Inc., dated May 10, 1988. * B.39.2 By-Laws of NorConn Properties, Inc., as in effect on March, 1, 2000. B.40 R. M. Services, Inc. * B.40.1 Certificate of Incorporation of R. M. Services, Inc. dated November 17, 1994. * B.40.2 By-Laws of R. M. Services, Inc., as in effect on March 1, 2000. B.41 Yankee Energy Financial Services Company * B.41.1 Certificate of Incorporation of Yankee Energy Financial Services Company, dated September 1, 1992. * B.41.2 By-Laws of Yankee Energy Financial Services Company, as in effect on March 1, 2000. B.42 Yankee Energy Services Company * B.42.1 Certificate of Incorporation of Yankee Energy Services Company, dated June 30, 1993. * B.42.2 Certificate of Amendment to Certificate of Incorporation of Yankee Energy Services Company, dated January 20, 1995. * B.42.3 By-Laws of Yankee Energy Services Company, as in effect on March 1, 2000. B.43 Yankee Gas Services Company * B.43.1 Certificate of Incorporation of Yankee Gas Services Company, F/K/A Mohawk Gas Company, (Special Act No. 218, January 1955 session, approved May 26, 1955). * B.43.2 Certificate of Amendment to the Certificate of Incorporation of Yankee Gas Services Company, dated May 26, 1989. * B.43.3 Certificate of Amendment to the Certificate of Incorporation of Yankee Gas Services Company, dated June 27, 1989. * B.43.4 By-Laws of Yankee Gas Services Company, as in effect on March 1, 2000. B.44 Housatonic Corporation * B.44.1 Certificate of Incorporation of Housatonic Corporation, dated October 16, 1987. * B.44.2 Certificate of Amendment to the Certificate of Incorporation of Housatonic Corporation, dated January 10, 1989. * B.44.3 By-Laws of Housatonic Corporation, as in effect on March 1, 2000. B.45 Yankee Energy Marketing Company * B.45.1 Certificate of Incorporation of Yankee Energy Marketing Company, dated October 10, 1995. * B.45.2 By-Laws of Yankee Energy Marketing Company, as in effect on March 1, 2000. C.(a) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES C.1 Northeast Utilities C.1.1 Indenture dated as of December 1, 1991, between Northeast Utilities and IBJ Schroder Bank & Trust Company, with respect to the issuance of Debt Securities. (Exhibit 4.1.1, 1991 NU Form 10-K, File No. 1-5324) C.1.2 First Supplemental Indenture, dated as of December 1, 1991, between Northeast Utilities and IBJ Schroder Bank & Trust Company, with respect to the issuance of Series A Notes. (Exhibit 4.1.2, 1991 NU Form 10-K, File No. 1-5324) C.1.3 Second Supplemental Indenture, dated as of March 1, 1992, between Northeast Utilities and IBJ Schroder Bank & Trust Company, with respect to the issuance of Series B Notes. (Exhibit C.1.3, 1991 NU Form U5S, File No. 30-246) C.1.4 Credit Agreement among NU, CL&P and WMECO and the Co-Agents and Banks named therein, dated as of November 17, 2000, (includes Open End Mortgages). (Exhibit No. 2 or 35-CERT filed November 27, 2000, File No. 70-8875) C.1.5 Term Loan Agreement among NU and the Banks named therein, dated as of March 1, 2000. (Exhibit 4.1.5, 2000 NU Form 10-K, File No. 1-5324) C.1.5.1. First Amendment to the Term Loan Agreement dated as of December 15, 2000. (Exhibit 4.1.5.1, 2000 NU Form 10-K, File No. 1-5324) C.2 The Connecticut Light and Power Company C.2.1 Indenture of Mortgage and Deed of Trust between CL&P and Bankers Trust Company, Trustee, dated as of May 1, 1921. (Composite including all twenty-four amendments to May 1, 1967.) (Exhibit 4.1.1, 1989 NU Form 10-K, File No. 1-5324) Supplemental Indentures to the Composite May 1, 1921 Indenture of Mortgage and Deed of Trust between CL&P and Bankers Trust Company, dated as of: C.2.2 December 1, 1969. (Exhibit 4.20, File No. 2-60806) C.2.3 June 30, 1982. (Exhibit 4.33, File No. 2-79235) C.2.4 December 1, 1989. (Exhibit 4.1.26, 1989 NU Form 10-K, File No. 1-5324) C.2.5 July 1, 1992. (Exhibit 4.31, File No. 33-59430) C.2.6 July 1, 1993. (Exhibit A.10(b), File No. 70-8249) C.2.7 July 1, 1993. (Exhibit A.10(b), File No. 70-8249) C.2.8 December 1, 1993. (Exhibit 4.2.14, 1993 NU Form 10-K, File No. 1-5324) C.2.9 February 1, 1994. (Exhibit 4.2.16, 1993 NU Form 10-K, File No. 1-5324) C.2.10 June 1, 1994. (Exhibit 4.2.15, 1994 NU Form 10-K, File No. 1-5324) C.2.11 October 1, 1994. (Exhibit 4.2.16, 1994 NU Form 10-K, File No. 1-5324) C.2.12 June 1, 1996. (Exhibit 4.2.16, 1996 NU Form 10-K, File No. 1-5324) C.2.13 January 1, 1997. (Exhibit 4.2.17, 1996 NU Form 10-K, File No. 1-5324) C.2.14 May 1, 1997. (Exhibit 4.19, File No. 333-30911) C.2.15 June 1, 1997. (Exhibit 4.20, File No. 333-30911) C.2.16 June 1, 1997. (Exhibit 4.2.17, 1997 NU Form 10-K, File No. 1-5324) C.2.17 May 1, 1998. (Exhibit 4.2.17, 1998 NU Form 10-K File No. 1-5324) C.2.18 May 1, 1998. (Exhibit 4.2.18, 1998 NU Form 10-K, File No. 1-5324) C.2.19 Financing Agreement between Industrial Development Authority of the State of New Hampshire and CL&P (Pollution Control Bonds, 1986 Series) dated as of December 1, 1986. (Exhibit C.1.47, 1986 NU Form U5S, File No. 30-246) C.2.20 Financing Agreement between Industrial Development Authority of the State of New Hampshire and CL&P (Pollution Control Bonds, 1988 Series) dated as of October 1, 1988. (Exhibit C.1.55, 1988 NU Form U5S, File No. 30-246) C.2.21 Financing Agreement between Industrial Development Authority of the State of New Hampshire and CL&P (Pollution Control Bonds) dated as of December 1, 1989. (Exhibit C.1.39, 1989 NU Form U5S, File No. 30-246) C.2.22 Loan and Trust Agreement among Business Finance Authority of the State of New Hampshire and CL&P (Pollution Control Bonds, 1992 Series A) dated as of December 1, 1992. (Exhibit C.2.33, 1992 NU Form U5S, File No. 30-246) C.2.23 Loan Agreement between Connecticut Development Authority and CL&P (Pollution Control Bonds - Series A, Tax Exempt Refunding) dated as of September 1, 1993. (Exhibit 4.2.21, 1993 NU Form 10-K, File No. 1-5324) C.2.24 Loan Agreement between Connecticut Development Authority and CL&P (Pollution Control Bonds - Series B, Tax Exempt Refunding) dated as of September 1, 1993. (Exhibit 4.2.22, 1993 NU Form 10-K, File No. 1-5324) C.2.25 Amended and Restated Loan Agreement between Connecticut Development Authority and CL&P (Pollution Control Revenue Bond - 1996A Series) dated as of May 1, 1996 and Amended and Restated as of January 1, 1997. (Exhibit 4.2.24, 1996 NU Form 10-K, File No. 1-5324) C.2.25.1 Amended and Restated Indenture of Trust between Connecticut Development Authority and the Trustee (CL&P Pollution Control Revenue Bond-1996A Series), dated as of May 1, 1996, and Amended and Restated as of January 1, 1997. (Exhibit 4.2.24.1, 1996 NU Form 10-K, File No. 1-5324) C.2.25.2 Standby Bond Purchase Agreement among CL&P, Bank of New York as Purchasing Agent and the Banks named therein, dated October 24, 2000. (Exhibit 4.2.24.2, 2000 NU Form 10-K, File No. 1-5324) C.2.25.3 AMBAC Municipal Bond Insurance Policy issued by the Connecticut Development Authority (CL&P Pollution Control Revenue Bond-1996 A Series), effective January 23, 1997. (Exhibit 4.2.24.3, 1996 NU Form 10-K, File No. 1-5324) C.2.26 Amended and Restated Limited Partnership Agreement (CL&P Capital, L.P.) among CL&P, NUSCO and the persons who became limited partners of CL&P Capital, L.P. in accordance with the provisions thereof dated as of January 23, 1995 (MIPS). (Exhibit A.1 (Execution Copy), File No. 70-8451) C.2.27 Indenture between CL&P and Bankers Trust Company, Trustee (Series A Subordinated Debentures), dated as of January 1, 1995 (MIPS). (Exhibit B.1 (Execution Copy), File No. 70-8451) C.2.28 Payment and Guaranty Agreement of CL&P dated as of January 23, 1995 (MIPS). (Exhibit B.3 (Execution Copy), File No. 70-8451) C.3 Public Service Company of New Hampshire C.3.1 First Mortgage Indenture dated as of August 15, 1978, between PSNH and First Fidelity Bank, National Association, New Jersey, Trustee. (Composite including all ten amendments to May 16, 1991) (Exhibit 4.4.1, 1992 NU Form 10-K, File No. 1-5324) C.3.1.1 Tenth Supplemental Indenture dated as of May 1, 1991 between PSNH and First Fidelity Bank, National Association. Exhibit 4.1, PSNH Current Report on Form 8-K dated February 10, 1992, File No. 1-6392) C.3.2 Series A (Tax Exempt New Issue) PCRB Loan and Trust Agreement dated as of May 1, 1991. (Exhibit 4.2, PSNH Current Report on Form 8-K dated February 10, 1992, File No. 1-6392) C.3.3 Series B (Tax Exempt Refunding) PCRB Loan and Trust Agreement dated as of May 1, 1991. (Exhibit 4.3, PSNH Current Report on Form 8-K dated February 10, 1992, File No. 1-6392) C.3.4 Series C (Tax Exempt Refunding) PCRB Loan and Trust Agreement dated as of May 1, 1991. (Exhibit 4.4, PSNH Current Report on Form 8-K dated February 10, 1992, File No. 1-6392) C.3.5 Series D (Taxable New Issue) Amended and Restated PCRB Loan and Trust Agreement dated as of April 1, 1999. (Exhibit 4.3.6, 1999 NU Form 10-K, File No. 1-5324) C.3.6 Series E (Taxable New Issue) Amended and Restated PCRB Loan and Trust Agreement dated as of April 1, 1999. (Exhibit 4.3.7, 1999 NU Form 10-K, File No. 1-5324) C.4 Western Massachusetts Electric Company C.4.1 First Mortgage Indenture and Deed of Trust between WMECO and Old Colony Trust Company (now The First National Bank of Boston), Trustee, dated as of August 1, 1954. (Exhibit 4.4.1, 1993 NU Form 10-K, File No. 1-5324) Supplemental Indentures thereto dated as of: C.4.2 October 1, 1954. (Exhibit 4.4.2, 1998 NU Form 10-K, File No. 1-5324) C.4.3 March 1, 1967. (Exhibit 4.4.3, 1997 NU Form 10-K, File No. 1-5324) C.4.4 July 1, 1973. (Exhibit 2.10, File No. 2-68808) C.4.5 December 1, 1992. (Exhibit 4.15, File No. 33-55772) C.4.6 January 1, 1993. (Exhibit 4.5.13, 1992 NU Form 10-K, File No. 1-5324) C.4.7 March 1, 1994. (Exhibit 4.4.12, 1993 NU Form 10-K, File No. 1-5324) C.4.8 May 1, 1997. (Exhibit 4.11, File No. 33-51185) C.4.9 July 1, 1997. (Exhibit 4.4.10, 1997 NU form 10-K, File No. 1-5324) C.4.10 May 1, 1998. (Exhibit 4.4.10, 1998 NU Form 10-K, File No. 1-5324) C.4.11 May 1, 1998. (Exhibit 4.4.11, 1998 NU Form 10-K, File No. 1-5324) C.4.12 Loan Agreement between Connecticut Development Authority and WMECO (Pollution Control Bonds - Series A, Tax Exempt Refunding) dated as of September 1, 1993. (Exhibit 4.4.13, 1993 NU Form 10-K, File No. 1-5324) C.5 North Atlantic Energy Corporation C.5.1 First Mortgage Indenture and Deed of Trust between NAEC and United States Trust Company of New York, Trustee, dated as of June 1, 1992. (Exhibit 4.6.1, 1992 NU Form 10-K, File No. 1-5324) * C.5.2 Term Credit Agreement dated as of November 9, 2000. C.6 Northeast Nuclear Energy Company C.6.1 Millstone Technical Building Note Agreement dated as of December 21, 1993, by and between The Prudential Insurance Company of America and NNECO. (Exhibit 10.28, 1993 NU Form 10-K, File No. 1-5324) C.7 Holyoke Water Power Company C.7.1 Loan Agreement between City of Holyoke, Massachusetts, acting by and through its Industrial Development Financing Authority, and Holyoke Water Power Company, dated as of November 1, 1988 (Pollution Control Bonds). (Exhibit C.4.8, 1989 NU Form U5S, File No. 30-246) C.7.2 Loan and Trust Agreement between Massachusetts Industrial Finance Authority and Holyoke Water Power Company, dated as of December 1, 1992. (Exhibit C.7.2, 1992 NU Form U5S, File No. 30-246) C.7.3 Loan Agreement between Massachusetts Industrial Finance Authority and Holyoke Water Power Company, dated as of December 1, 1990 (Pollution Control Bonds). (Exhibit C.4.3, 1990 NU Form U5S, File No. 30-246) C.8 The Rocky River Realty Company C.8.1 Note Agreement dated as of June 1, 1973, by and between The Rocky River Realty Company (RRR) and the Purchasers named therein (the 7-7/8% Note Agreement), including the Several Guarantee of CL&P, HELCO, and WMECO of RRR's 7-7/8% Note Agreement. (File No. 70-4637) C.8.2 Note Agreement dated April 14, 1992, by and between The Rocky River Realty Company (RRR) and Purchasers named therein (Connecticut General Life Insurance Company, Life Insurance Company of North America, INA Life Insurance Company of New York, Life Insurance Company of Georgia), with respect to RRR's sale of $15 million of guaranteed senior secured notes due 2007 and $28 million of guaranteed senior secured notes due 2017. (Exhibit 10.52, 1992 NU Form 10-K, File No. 1-5324) C.8.3 Amendment to Note Agreement, dated September 26, 1997. (Exhibit 10.3.1, 1997 NU Form 10-K, File No. 1-5324) C.8.4 Note Guaranty dated April 14, 1992 by Northeast Utilities pursuant to Note Agreement dated April 14, 1992, between RRR and Note Purchasers, for the benefit of The Connecticut National Bank as Trustee, the Purchasers and the owners of the notes. (Exhibit 10.52.1, 1992 NU Form 10-K, File No. 1-5324) C.8.5 Extension of Note Guaranty, dated September 26, 1997. (Exhibit 10.31.2.1, 1997 NU Form 10-K, File No. 1-5324) C.8.6 Assignment of Leases, Rents and Profits, Security Agreement and Negative Pledge, dated as of April 14, 1992, among RRR, NUSCO and The Connecticut National Bank as Trustee, securing notes sold by RRR pursuant to April 14, 1992, Note Agreement. (Exhibit 10.52.2, 1992 NU Form 10-K, File No. 1-5324) C.8.7 Modification of and Confirmation of Assignment of Leases, Rents and Profits, Security Agreement and Negative Pledge, dated as of September 26, 1997. (Exhibit 10.31.3.1, 1997 NU Form 10-K, File No. 1- 5324) C.8.8 Purchase and Sale Agreement, dated July 28, 1997, by and between RRR and the Sellers and Purchasers named therein. (Exhibit 10.31.4, 1997 NU Form 10-K, File No. 1-5324) C.8.9 Purchase and Sale Agreement, dated September 26, 1997, by and between RRR and the Purchaser named therein. (Exhibit 10.31.5, 1997 NU Form 10-K, File No. 1-5324) C.9 CL&P Receivables Corporation C.9.1 Receivables Purchase and Sale Agreement (CL&P and CL&P Receivables Corporation), dated as of September 30, 1997. (Exhibit 10.49, 1997 NU Form 10-K, File No. 1-5324) C.9.2 Amendment to Exhibit C.9.1 dated September 29, 1998. (Exhibit 10.49.1, 1998 NU Form 10-K, File No. 1-5324) C.9.3 Amendment to Exhibit C.9.1 dated September 29, 1999. (Exhibit C.10.3, 1999 NU Form U5S, File No. 1-5324) C.9.4 Amendment to Exhibit C.9.1 dated September 27, 2000 (Exhibit 10.51.3, 2000 NU Form 10-K, File No. 1-5324) C.9.5 Purchase and Contribution Agreement (CL&P and CL&P Receivables Corporation), dated as of September 30, 1997. (Exhibit 10.49.1, 1997 NU Form 10-K, File No. 1-5324) C.10 WMECO Receivables Corporation C.10.1 Receivables Purchase Agreement (WMECO and WMECO Receivables Corporation), dated as of May 22, 1997. (Exhibit No. 10.50, 1997 NU Form 10-K, File No. 1-5324) C.10.2 Purchase and Sale Agreement (WMECO and WMECO Receivables Corporation), dated as of May 22, 1997. (Exhibit No. 10.50.1, 1997 NU Form 10-K, File No. 1-5324) C.11 HEC/Tobyhanna Energy Project, Inc. * C.11.1 Trust Indenture & Security Agreement Relating to an Energy Savings Performance Contract Project dated as of September 30, 1999 * C.11.2 Project Loan Agreement with United States Trust Company of New York dated as of September 30, 1999 C.12 HEC Inc. * C.12.1 Assignment and Security Agreement with ABB Energy Capital, LLC dated as of November 30, 1999 C.13 Yankee Gas Services Company C.13.1 Indenture of Mortgage and Deed of Trust dated as of July 1, 1989 between Yankee Gas Services Company (Yankee Gas) and The Connecticut National Bank (Mortgage)(Exhibit No. 4.2, Yankee Gas Form 10 dated April 14, 1989, File No. 0-17605) C.13.2 First Supplemental Indenture, dated as of April 1, 1992, to Mortgage (Exhibit No. 4.11, Yankee Energy Form S-3 filed October 2, 1992, Reg. No. 33-52750) C.13.3 Second Supplemental Indenture, dated as of December 1, 1992, to Mortgage (Exhibit No. 10.2, 1992 Yankee Energy System, Inc. (Yankee Energy) Form 10-K, File No. 0-17605) C.13.4 Third Supplemental Indenture, dated as of June 1, 1995, to Mortgage (Exhibit No. 4.14, 1995 Yankee Energy Form 10-K, File No. 0-10721) C.13.5 Fourth Supplemental Indenture, dated as of April 1, 1997, to Mortgage(Exhibit No. 15, 1997 Yankee Energy Form 10-K, File No. 0-10721) * C.13.6 Fifth Supplemental Indenture, dated as of January 1, 1999, to Mortgage C.13.7 Bond Purchase Agreement dated as of July 1, 1989, relating to $119 million aggregate principal amount of First Mortgage Bonds, Series A (Exhibit 4.3, Yankee Gas Form 10 dated April 14, 1989, File No. 0-17605) * C.13.7.1 First Amendment, dated as of April 10, 1990, to Bond Purchase Agreement C.13.8 Bond Purchase Agreement, dated as of April 1, 1992, relating to $20 million aggregate principal amount of First Mortgage Bonds, Series B (Exhibit No. 4.12, Yankee Energy Form S-3 filed October 2, 1992, Reg. No. 33-52750) C.13.9 Bond Purchase Agreement, dated as of December 1, 1992, relating to $20 million aggregate principal amount of First Mortgage Bonds, Series C (Exhibit No. 10.4, 1992 Yankee Energy Form 10-K, File No. 0-17605) C.13.10 Bond Purchase Agreement, dated as of April 1, 1997, relating to $30 million aggregate principal amount of First Mortgage Bonds, Series E (Exhibit No. 4.16, 1997 Yankee Energy Form 10-K, File No. 0-10721) * C.13.11 Bond Purchase Agreement, dated as of January 1, 1999, relating to $50 million aggregate principal amount of First Mortgage Bonds C.13.12 Amended and Restated Credit Agreement, dated as of February 2, 1995, between Yankee Gas, the Banks named therein and the Bank of New York, as Agent (Exhibit No. 10.23, 1995 Yankee Energy Form 10-K, File No. 0-10721) * C.13.12.1 Fourth Amendment dated as of November 17, 2000 to Amended and Restated Credit Agreement * C.13.12.2 Assignment and Assumption Agreement dated as of September 26, 1997 D. Tax Allocation Agreements D.1 Amended and Restated Tax Allocation Agreement, dated as of January 1, 1990. (Exhibit D, 1994 NU Form U5S, File No. 30-246) D.2 First Amendment, dated as of October 26, 1998, to the Amended and Restated Tax Allocation Agreement, dated as of January 1, 1990. (Exhibit D, Amendment No. 2 to 1997 NU Form U5S, File No. 30-246) D.3 Second Amendment, dated as of March 1, 2000, to the Amendedand Restated Tax Allocation Agreement, dated as of January 1, 1990. ITEM 10. Exhibit H Information included in Item 1, "System Companies and Investments Therein" provides the relationship of all system companies. The following shows the relationship of the foreign utility companies: Northeast Utilities (Parent Company) - - NU Enterprises, Inc. (100% owned by Northeast Utilities) - Northeast Generation Company (100% owned by NU Enterprises, Inc.) - Northeast Generation Services Company (100% owned by NU Enterprises, Inc.) - Mode 1 Communications, Inc. (100% owned by NU Enterprises, Inc.) - Select Energy, Inc. (100% owned by NU Enterprises, Inc.) - Select Energy Portland Pipeline, Inc. (100% owned by NU Enterprises, Inc.) - HEC Inc. (100% owned by NU Enterprises, Inc.) ITEM 10. Exhibit I NORTHEAST GENERATION COMPANY BALANCE SHEETS (AUDITED) - ------------------------------------------------------------------------------- AT DECEMBER 31, 2000 1999 - ------------------------------------------------------------------------------- (Thousands of Dollars) ASSETS Utility Plant, at original cost: Electric............................................. $264,855 $ - Less: Accumulated provision for depreciation...... 147,216 - -------- ------- 117,639 - Construction work in progress.......................... 8,094 5 -------- ------- Total Net Utility Plant............................ 125,733 5 -------- ------- Current Assets: Cash................................................. 37,177 - Accounts receivable from affiliated companies........ 11,419 - Taxes receivable..................................... - 621 Fuel, materials and supplies, at average cost........ 1,935 - Prepayments and other................................ 1,626 - -------- ------- Other Current Assets............................... 52,157 621 -------- ------- Deferred Charges: Accumulated deferred income taxes.................... 278,320 1,530 Unamortized debt expense............................. 4,828 6,384 Other................................................ 23 - -------- ------- Total Deferred Charges............................. 283,171 7,914 -------- ------- Total Assets........................................... $461,061 $ 8,540 ======== ======= The accompanying notes are an integral part of these financial statements. ITEM 10. EXHIBIT I NORTHEAST GENERATION COMPANY BALANCE SHEETS (AUDITED) - ------------------------------------------------------------------------------- AT DECEMBER 31, 2000 1999 - ------------------------------------------------------------------------------- (Thousands of Dollars) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, $1 par value - 100 shares authorized and outstanding in 2000 and 1999........................................... $ - $ - Capital surplus, paid in............................. 24,375 6,510 Retained earnings/(deficit).......................... 23,260 (3,156) -------- ------- Total Capitalization............................... 47,635 3,354 -------- ------- Current Liabilities: Notes payable to banks............................... 402,377 - Accounts payable..................................... 1,771 1,745 Accounts payable to affiliated companies............. 732 1,538 Accrued taxes........................................ 5,840 1,899 Accrued interest..................................... 1,893 - Other................................................ 813 4 -------- ------- Total Current Liabilities.......................... 413,426 5,186 -------- ------- Commitments and Contingencies Total Capitalization and Liabilities................... $461,061 $ 8,540 ======== ======= The accompanying notes are an integral part of these financial statements. ITEM 10. EXHIBIT I NORTHEAST GENERATION COMPANY STATEMENTS OF INCOME (AUDITED) - ------------------------------------------------------------------------------- FOR THE YEARS ENDED DECEMBER 31, 2000 1999 - ------------------------------------------------------------------------------- (Thousands of Dollars) Operating Revenues..................................... $108,473 $ - -------- ------- Operating Expenses: Operation............................................ 11,855 5,229 Maintenance.......................................... 9,092 3 Depreciation......................................... 2,417 - Federal and state income taxes....................... 17,522 (2,151) Taxes other than income taxes........................ 5,690 74 -------- ------- Total operating expenses........................... 46,576 3,155 -------- ------- Operating Income/(Loss)................................ 61,897 (3,155) Other Income, Net...................................... 1,061 - Other Interest......................................... 36,542 1 -------- ------- Net Income/(Loss)...................................... $ 26,416 $(3,156) ======== ======= The accompanying notes are an integral part of these financial statements. ITEM 10. EXHIBIT I NORTHEAST GENERATION COMPANY STATEMENTS OF STOCKHOLDER'S EQUITY (AUDITED)
Capital Retained Common Surplus (Deficit)/ Stock Paid In Earnings Total ------ ------- --------- ----- (Thousands of Dollars) Balance as of January 4, 1999 (a) $ - $ - $ - $ - Net loss for 1999 - - (3,156) (3,156) Capital contribution - 6,500 - 6,500 Premium on common stock - 10 - 10 ---- -------- ------- -------- Balance as of December 31, 1999 - 6,510 (3,156) 3,354 Net income for 2000 - - 26,416 26,416 Capital contribution - 463,000 - 463,000 Excess paid over carrying value of assets transferred - (445,135) - (445,135) ---- -------- ------- -------- Balance as of December 31, 2000 $ - $ 24,375 $23,260 $ 47,635 ==== ======== ======= ========
(a) Northeast Generation Company commenced operations on January 4, 1999. The accompanying notes are an integral part of these financial statements. ITEM 10. EXHIBIT I NORTHEAST GENERATION COMPANY STATEMENTS OF CASH FLOWS (AUDITED) - ------------------------------------------------------------------------------- FOR THE YEARS ENDED DECEMBER 31, 2000 1999 - ------------------------------------------------------------------------------- (Thousands Of Dollars) Operating Activities: Net income/(loss)...................................... $ 26,416 $(3,156) Adjustments to reconcile to net cash flows provided by/(used in) operating activities: Depreciation and amortization...................... 2,417 - Deferred income taxes.............................. 19,245 (1,530) Net other sources/(uses) of cash................... 1,533 (6,379) Changes in working capital: Accounts receivable from affiliated companies........ (11,419) - Fuel, material and supplies.......................... (62) - Accounts payable..................................... (780) 3,283 Accrued taxes........................................ 5,840 1,899 Prepayments and other................................ (1,626) - Other working capital (excludes cash)................ 1,424 (617) -------- ------- Net cash flows provided by/(used in) operating activities................................. 42,988 (6,500) -------- ------- Investing Activities: Investments in plant................................. (1,394) - Net cash payment for transfer of assets.............. (869,794) - -------- ------- Net cash flows used in investing activities............ (871,188) - -------- ------- Financing Activities: Increase in short-term debt.......................... 402,377 - Capital contributions................................ 463,000 6,500 -------- ------- Net cash flows provided by financing activities........ 865,377 6,500 -------- ------- Net increase in cash................................... 37,177 - Cash - beginning of period............................. - - -------- ------- Cash - end of period................................... $ 37,177 $ - ======== ======= Supplemental Cash Flow Information: Cash paid/(refunded) during the year for: Interest, net of amounts capitalized................. $ 29,286 $(1,899) ======== ======= Income taxes......................................... $ (7,725) $ - ======== ======= The accompanying notes are an integral part of these financial statements. EX-99.2BYLAWS 2 b14-5.txt EXHIBIT B.14.5 Exhibit B.14.5 BY-LAWS NORTHEAST NUCLEAR ENERGY COMPANY Amended March 6, 1958 March 29, 1963 October 22, 1965 March 1, 1982 January 1, 1997 February 11, 1998 June 1, 2000 NORTHEAST NUCLEAR ENERGY COMPANY BY-LAWS ARTICLE I MEETINGS OF STOCKHOLDERS Section 1. The Annual Meeting of Stockholders for the election of directors and for the transaction of such other business as may properly be brought before the meeting shall be held in such place and on such day and hour in the months of January, February, March, April, May or June in each year as shall be fixed by the Board of Directors, or failing action by the Board, by the President, and designated in the call or on any subsequent time or day to which such meeting may be adjourned. In the event that no date for the annual meeting is established or said meeting has not been held on the date so fixed or determined, a special meeting in lieu of the annual meeting may be held with all of the force and effect of an annual meeting. Section 2. Special meetings of the Stockholders may be called by the President or by the Directors, and shall be called by the Clerk, or in case of the death, absence, incapacity or refusal of the Clerk, by any other officer, upon written application of any stockholder or stockholders who are entitled to vote and who hold at least ten percent of the capital stock, stating the time, place and purpose of the meeting. Section 3. At all meetings of the stockholders each share entitled to vote, and represented in person or by proxy, shall be entitled to one vote. A majority in interest of all the stockholders of the Company entitled to vote, represented in person or by proxy, shall constitute a quorum at all meetings of the stockholders; but if there be less than a quorum represented at any meeting, a majority in interest of stockholders so represented may adjourn the meeting from time to time. Section 4. Notice of all meetings of stockholders shall be given by delivering or sending by mail written or printed notice thereof, stating the purpose of such meeting, to each stockholder appearing on the books of the Company and entitled to vote at such meeting, at the address given in such books, at least five days before the time of meeting, unless such stockholders shall waive notice or be in attendance at the meeting. Section 5. Any action required or permitted to be taken at any meeting of the stockholders may be taken by written consent, setting forth the action so taken or to be taken without a meeting if all stockholders entitled to vote on the matter consent to the action in writing and the written consents are filed with the records of the meetings of stockholders. Such consents shall have the same force and effect as a vote of shareholders taken at a meeting. ARTICLE II MEETINGS OF DIRECTORS Section 1. A regular meeting of the Board of Directors shall, if a quorum is present, be held without notice immediately after the adjournment of the annual stockholders' meeting or as soon thereafter as convenient. At the first meeting of the Board of Directors held after the annual stockholder's meeting or at any subsequent meeting, the Board shall elect the officers of the Company provided for in Article IV of these by-laws, who shall hold their offices until the next annual meeting and until their successors are chosen and qualified. Section 2. All other regular meetings of the board of Directors may be held at such time and place as the Board may determine and fix by resolution. Section 3. Special meetings of the Board of Directors may be held at any place within or without the State of Connecticut upon call of the President, or, in the event of his absence, refusal or inability to act, upon the call by the Secretary upon demand of a majority of the members of the Board. Section 4. Written or printed notice of all special meetings of directors shall be given to each director personally, or by mail or telegraph, at least three days previous to the time of meeting unless each director shall, in writing or by telegraph, waive such notice or be in attendance at such meeting. ARTICLE III POWERS AND DUTIES OF DIRECTORS Section 1. The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than sixteen Directors. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified. Section 2. One-third of the directorships as fixed in accordance with Section 1 of these By-Laws shall constitute a quorum, except that no quorum shall consist of less than two Directors. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors. Section 3. The Board of Directors of this Company shall have power to fill vacancies that may occur in the Board. or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next annual election and until his successor shall be elected and qualified. ARTICLE IV OFFICERS Section 1. At its annual meeting the Board of Directors shall elect a President and a Secretary, and, if the Board shall so determine, a Treasurer, each of whom shall, subject to the provisions of Article IV, Section 3, hold office until the next annual election of officers and until his successor shall have been elected and qualified. Any two or more offices may be held by the same person except that the offices of the President and Secretary may not be simultaneously held by the same person. The Board shall also elect at such annual meeting, and may elect at any regular or special meeting, such other officers as may be required for the prompt and orderly transaction of the business of the Company, and each such officer shall have such authority and shall perform such duties as may be assigned to him from time to time by the Board of Directors. Any vacancy occurring in any office may be filled at any regular meeting of the Board or at any special meeting of the Board held for that purpose. Section 2. In addition to such powers and duties as these By-Laws may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office. Section 3. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the Board of Directors. ARTICLE V PRESIDENT Section 1. The President shall, when present, preside at all meetings of the Stockholders and Directors. He shall execute all contracts and other instruments in behalf of the Company, except as otherwise provided for by the Board of Directors. Section 2. The President shall also generally have the powers and perform the duties which by law and general usage appertain to the office. Section 3. In the absence or disability of the President, the Vice Presidents shall severally, beginning with the one first named at the time of their election, perform the duties of the President, and shall perform from time to time such other duties as may be delegated to them by the Board of Directors. ARTICLE VI SECRETARY Section 1. The Secretary shall keep the minutes of all meetings of the Stockholders and the Board of Directors. He shall give notice of all meetings of the Stockholders and the Board of Directors. He shall record all votes of the Company. He shall carefully preserve and keep in his custody, in the office of the Company, all letters, contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer; shall attend to such correspondence of the Company as the Board of Directors shall direct, and shall perform such other duties as he may be charged with by the Board of Directors. Section 2. He shall have the custody of the corporate seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these By-Laws. ARTICLE VII TREASURER Section 1. The Treasurer, if such office shall be filled by the Directors, shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign all checks, notes, drafts and similar instruments, except as otherwise provided for the Board of Directors. Section 2. The Treasurer shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the President or by law. Section 3. In the absence of the appointment of a Treasurer by the Board of Directors, the duties of the Treasurer may be performed by the Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE VIII FISCAL YEAR The fiscal year of the Company shall begin on the first day of January and end on the thirty-first day of December of each year. ARTICLE IX CORPORATION SEAL The Corporate Seal of the Company shall be circular in form, with the name of the Company, "Connecticut", and the word "SEAL" inscribed thereon. ARTICLE X COMMITTEES The Board of Directors may appoint such committees as it may deem proper, and may delegate to such committees any of the powers possessed by the Board. A majority of any Committee shall have the power to act. Committees shall keep full records of their proceedings, and shall report the same to each regular meeting of the Board, or when called upon by the Board. ARTICLE XI STOCK CERTIFICATES All stock certificates shall be in such form as the Board of Directors may prescribe and may bear the facsimile signatures of the President and the Secretary or Treasurer and a facsimile seal of the Company, or may be signed by the President of Vice President and the Treasurer or the Secretary and may be sealed by any of the above officers. ARTICLE XII AMENDMENTS These by-laws may be altered, amended, added to or repealed by a majority vote of all the stock entitled to vote, at any annual or special meeting of the Stockholders, called for that purpose, or by a majority of the Directors of the Company at any meeting of said Board of Directors, called for that purpose. I HEREBY CERTIFY that the foregoing copy of "Northeast Nuclear Energy Company By-Laws," is a true and correct copy of said By-Laws in full force and effect as of this day of , . Assistant Secretary EX-99.2BYLAWS 3 b16-3.txt EXHIBIT B.16.3 Exhibit B.16.3 NU ENTERPRISES, INC. BY-LAWS Adopted January 4, 1999 Amended June 1, 2000 NU ENTERPRISES, INC. BY-LAWS ARTICLE I MEETINGS OF SHAREHOLDERS Section 1. Meetings of the shareholders may be held at such place either within or without the State of Connecticut as may be designated by the Board of Directors. Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held in each year on the day and at the hour designated by the Board of Directors. Section 3. Notice of all annual and special meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than sixty days prior to the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice or be in attendance at the meeting. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and no business other than that of which notice has been so given shall be transacted at such meeting. Section 4. At all meetings of shareholders each share of common stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote. Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than seventy days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed. Section 6. Any action which may be taken at a meeting of shareholders may be taken by one or more consents in writing, setting forth the action so taken or to be taken, bearing the date of signature and signed by all of the persons who would be entitled to vote upon such action at a meeting, or by their duly authorized attorneys. ARTICLE II DIRECTORS Section 1. The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than sixteen Directors. Notwithstanding the foregoing, the business, property and affairs of the Company shall be managed by a Board of one Director, if only one Director has been elected and qualified, provided there is only one shareholder of the Company at such time. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified, except that a Director shall cease to be in office upon his death, resignation, lawful removal or court order decreeing that he is no longer a Director in office. Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board, or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting of Shareholders and until his successor shall be elected and qualified. Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company. All the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion. Section 4. The Board of Directors shall have power to fix from time to time the compensation of the Directors and the method of payment thereof. Section 5. Any one or more Directors may be removed from office at any time with or without any showing of cause by affirmative vote of the holders of a majority of the Company's issued and outstanding shares entitled to vote. ARTICLE III MEETINGS OF DIRECTORS Section 1. A regular meeting of the Board of Directors shall be held annually, without notice, directly following the Annual Meeting of Shareholders, for the election of officers and the transaction of other business. Section 2. All other regular meetings of the Board of Directors may be held at such time and place as the Board may from time to time determine and fix by resolution. Special meetings of the Board may be held at any place upon call of the Chairman (if there be one) or the President, or, in the event of the absence or inability of either to act, of a Vice President, or upon call of any three or more directors. Section 3. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally, by telephone, voice mail or other electronic means, or by mail at his last- known post office address, at least twenty-four hours prior to the time of the meeting; provided that any director may waive such notice in writing or by attendance at such meeting. Section 4. One-third of the directorships as fixed in accordance with Article II, Section 1 of these By-Laws shall constitute a quorum, except that no quorum shall consist of less than two Directors. Notwithstanding the foregoing, a quorum shall consist of one Director if only one Director has been elected and qualified, provided there is only one shareholder of the Company at such time. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors. Section 5. Except as otherwise provided by these By-Laws, the act of a majority of the Directors present at a meeting at which a quorum is present at the time of the act shall be the act of the Board of Directors. Section 6. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally or collectively, whose number shall constitute a quorum for such action, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors' written approval thereof, shall be recorded by the Secretary in the minute book of the Company. Section 7. A Director or a member of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of conference telephone or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting. ARTICLE IV OFFICERS Section 1. At its annual meeting the Board of Directors shall elect a President and a Secretary, and, if the Board shall so determine, a Chairman and a Treasurer, each of whom shall, subject to the provisions of Article IV, Section 3, hold office until the next annual election of officers and until his successor shall have been elected and qualified. Any two or more offices may be held by the same person except that the offices of the President and Secretary may not be simultaneously held by the same person. The Board shall also elect at such annual meeting, and may elect at any regular or special meeting, such other officers as may be required for the prompt and orderly transaction of the business of the Company, and each such officer shall have such authority and shall perform such duties as may be assigned to him from time to time by the Board of Directors. Any vacancy occurring in any office may be filled at any regular meeting of the Board or at any special meeting of the Board held for that purpose. Section 2. In addition to such powers and duties as these By-Laws and the Board of Directors may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office. Section 3. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the Board of Directors. ARTICLE V CHAIRMAN Section 1. The Chairman, if such office shall be filled by the Directors, shall, when present, preside at all meetings of said Board and of the shareholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VI PRESIDENT Section 1. The President shall be responsible for the general supervision, direction and control of the business and affairs of the Company. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of the Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VII SECRETARY Section 1. The Secretary shall keep the minutes of all meetings of the shareholders and of the Board of Directors. He shall give notice of all meetings of the shareholders and of said Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer, and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. Section 2. The Secretary shall have the custody of the Corporate Seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these By-Laws. ARTICLE VIII ASSISTANT SECRETARIES Section 1. One or more Assistant Secretaries shall perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. The Assistant Secretaries shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Secretary. ARTICLE IX TREASURER Section 1. The Treasurer, if such office shall be filled by the Directors, shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign all checks, notes, drafts and similar instruments, except as otherwise provided for the Board of Directors. Section 2. The Treasurer shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the President or by law. Section 3. In the absence of the appointment of a Treasurer by the Board of Directors, the duties of the Treasurer may be performed by the Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE X ASSISTANT TREASURERS Section 1. One or more Assistant Treasurers, if such offices shall be filled by the Directors, shall perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. The Assistant Treasurers shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the President or the Treasurer. Section 2. In the absence of the appointment of an Assistant Treasurer by the Board of Directors, the duties of the Assistant Treasurer may be performed by the Assistant Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE XI COMMITTEES Section 1. The Board of Directors may designate two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as shall be provided in such resolution, subject to those powers expressly reserved to the Board of Directors under Connecticut law. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting of such committee, all the rights and obligations of a regular member thereof. Any vacancy on any such committee or among alternate members thereof may be filled by the Board of Directors. ARTICLE XII STOCK CERTIFICATES Section 1. All stock certificates may bear the manual or facsimile signatures of the President or any Vice President and the Treasurer, any Assistant Treasurer, Secretary or any Assistant Secretary and a seal of the Company or its facsimile. ARTICLE XIII CORPORATE SEAL Section 1. The corporate seal of the Company shall be circular in form with the name of the Company inscribed therein. ARTICLE XIV AMENDMENTS Section 1. These by-laws may be altered, amended, added to or repealed from time to time by an affirmative vote of the holders of a majority of the voting power of shares entitled to vote thereon at any meeting of the shareholders called for the purpose or by an affirmative vote of Directors holding a majority of the number of directorships at any meeting of the Board of Directors called for the purpose. EX-99.2BYLAWS 4 b21-3.txt EXHIBIT B.21.3 Exhibit B.21.3 NORTH ATLANTIC ENERGY SERVICE CORPORATION BY-LAWS Adopted June 15, 1992 Amended November 8, 1993 June 1, 2000 NORTH ATLANTIC ENERGY SERVICE CORPORATION BY-LAWS ARTICLE I MEETINGS OF SHAREHOLDERS Section 1. Meetings of the shareholders may be held at such place either within or without the State of New Hampshire as may be designated by the Board of Directors. Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held in March, April, May, June or July in each year on the day and at the hour designated by the Board of Directors. Section 3. Notice of all meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than fifty days before the date of the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice in writing. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and no business other than that of which notice has been so given shall be transacted at such meeting. Section 4. At all meetings of shareholders each share of Common Stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote. Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than fifty days and not less than ten days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed. ARTICLE II DIRECTORS Section 1. The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than sixteen Directors. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified, except that a Director shall cease to be in office upon his death, resignation, lawful removal or court order decreeing that he is no longer a Director in office. Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board, or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting of Shareholders and until his successor shall be elected and qualified. Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company. All the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion. Section 4. The Board of Directors shall have power to fix from time to time the compensation of the Directors and the method of payment thereof. Section 5. Any one or more Directors may be removed from office at a meeting of Shareholders expressly called for that purpose with or without any showing of cause by an affirmative vote of the holders of a majority of the Company's issued and outstanding shares entitled to vote. ARTICLE III MEETINGS OF DIRECTORS Section 1. A regular meeting of the Board of Directors shall be held annually, without notice, directly following the annual meeting of the shareholders, for the election of officers and the transaction of other business. Section 2. All other regular meetings of the Board of Directors may be held at such time and place as the Board may from time to time determine and fix by resolution. Special meetings of the Board may be held at any place upon call of the Chairman (if there be one) or the President, or, in the event of the absence or inability of either to act, of a Vice President, or upon call of any three or more directors. Section 3. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally or by telephone, or by mail or telegraph at his last-known post office address, at least twenty-four hours prior to the time of the meeting, provided that any director may waive such notice in writing or by telegraph or by attendance at such meeting. Section 4. One-third of the number of directors as fixed in accordance with Section 1 of Article II of these By-Laws shall constitute a quorum. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors. Section 5. Except as otherwise provided by these By-Laws, the act of a majority of the Directors present at a meeting at which a quorum is present at the time of the act shall be the act of the Board of Directors. Section 6. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally and collectively, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors' written approval thereof, shall be recorded by the Secretary in the minute book of the Company. Section 7. One or more directors or members of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of conference telephone or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting. ARTICLE IV OFFICERS Section 1. At its annual meeting the Board of Directors shall elect a President and a Secretary, and, if the Board shall so determine, a Chairman and a Treasurer, each of whom shall, subject to the provisions of Article IV, Section 3, hold office until the next annual election of officers and until his successor shall have been elected and qualified. Any two or more offices may be held by the same person except that the offices of the President and Secretary may not be simultaneously held by the same person. The Board shall also elect at such annual meeting, and may elect at any regular or special meeting, such other officers as may be required for the prompt and orderly transaction of the business of the Company, and each such officer shall have such authority and shall perform such duties as may be assigned to him from time to time by the Board of Directors. Any vacancy occurring in any office may be filled at any regular meeting of the Board or at any special meeting of the Board held for that purpose. Section 2. In addition to such powers and duties as these By-Laws and the Board of Directors may describe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office. Section 3. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the Board of Directors. ARTICLE V CHAIRMAN AND PRESIDENT Section 1. The Chairman, if such office shall be filled by the Directors, shall, when present, preside at all meetings of said Board and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. Section 2. The President shall be the chief executive officer of the Company and shall be responsible for the general supervision, direction and control of the business and affairs of the Company. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of the Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VI VICE PRESIDENTS Section 1. The Vice Presidents shall have such powers and duties as may be assigned to them from time to time by the Board of Directors or the President. One of such Vice Presidents may be designated by said Board as Executive Vice President and, if so designated, shall exercise the powers and perform the duties of the President in the absence of the President or if the President is unable to perform the duties of his office. The Board of Directors may also designate one or more of such Vice Presidents as Senior Vice President(s). ARTICLE VII SECRETARY Section 1. The Secretary shall keep the minutes of all meetings of the stockholders and of the Board of Directors. He shall give notice of all meetings of the stockholders and of said Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer, and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. He shall be the registered agent of the Company. Section 2. He shall have the custody of the Corporate Seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these By-Laws. ARTICLE VIII ASSISTANT SECRETARIES Section 1. One or more Assistant Secretaries shall perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. The Assistant Secretaries shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Secretary. ARTICLE IX TREASURER Section 1. The Treasurer, if such office shall be filled by the Directors, shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign all checks, notes, drafts and similar instruments, except as otherwise provided for the Board of Directors. Section 2. The Treasurer shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the President or by law. Section 3. In the absence of the appointment of a Treasurer by the Board of Directors, the duties of the Treasurer may be performed by the Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE X ASSISTANT TREASURERS Section 1. One or more Assistant Treasurers, if such offices shall be filled by the Directors, shall perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. The Assistant Treasurers shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the President or the Treasurer. Section 2. In the absence of the appointment of an Assistant Treasurer by the Board of Directors, the duties of the Assistant Treasurer may be performed by the Assistant Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE XI COMMITTEES Section 1. The Board of Directors may designate, be resolution adopted by a majority of the full Board of Directors, two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as may be delegated to such committees in accordance with laws. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting of such committee, all the rights and obligations of a regular member thereof. Any vacancy on any committee or among alternate members thereof shall be filled by the Board of Directors. ARTICLE XII STOCK CERTIFICATES Section 1. All stock certificates may bear the facsimile signatures of the President or Vice President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer and a facsimile seal of the Company, or may be signed by the President or a Vice President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer and may be sealed by one of such officers. ARTICLE XIII CORPORATE SEAL Section 1. The corporate seal of the Company shall be circular in form with the name of the Company inscribed therein. ARTICLE XIV INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS Section 1. The Company shall, as and to the extent permitted by law, indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or preceding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was director or officer of the Company or is or was serving at the request of the Company as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement, actually and reasonably incurred by him in connection with the defense or settlement of the action, suit or proceeding. Section 2. The Company may, if and when authorized by the Board of Directors, independent legal counsel or shareholders of the Company, in accordance with the provisions of RSA Section 293-A:5, indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was an employee or agent of the Company or is or was serving at the request of the Company as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys fees, judgments, fines and amounts paid in settlement, actually and reasonably incurred by him in connection with the defense or settlement of the action, suit or proceeding. ARTICLE XV AMENDMENTS Section 1. These By-Laws may be altered, amended, added to or repealed from time to time by an affirmative vote of the holders of a majority of the voting powers of shares entitled to vote thereon at any meeting of the shareholders called for the purpose or by an affirmative votes of Directors holding a majority of the number of directorships at any meeting of the Board of Directors called for that purpose. EX-99.2BYLAWS 5 b24-5.txt EXHIBIT B.24.5 Exhibit B.24.5 BY-LAWS CHARTER OAK ENERGY, INC. Adopted September 28, 1988 Amended January 1, 1997 June 1, 2000 CHARTER OAK ENERGY, INC. BY-LAWS ARTICLE I MEETINGS OF SHAREHOLDERS Section 1. Meetings of the shareholders may be held at such place either within or without the State of Connecticut as may be designated by the Board of Directors. Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held in March, April, May, June or July in each year on the day and at the hour designated by the Board of Directors. Section 3. Notice of all meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than fifty days prior to the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice or be in attendance at the meeting. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and no business other than that of which notice has been so given shall be transacted at such meeting. Section 4. At all meetings of shareholders each share of Common Stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote. Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than seventy days and not less than ten days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed. ARTICLE II DIRECTORS Section 1. The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than sixteen Directors. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified, except that a Director shall cease to be in office upon his death, resignation, lawful removal or court order decreeing that he is no longer a Director in office. Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board, or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting of Shareholders and until his successor shall be elected and qualified. Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company. All the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion. Section 4. The Board of Directors shall have power to fix from time to time the compensation of the Directors and the method of payment thereof. Section 5. Any one or more Directors may be removed from office at any time with or without any showing of cause by affirmative vote of the holders of a majority of the Company's issued and outstanding shares entitled to vote. ARTICLE III MEETINGS OF DIRECTORS Section 1. A regular meeting of the Board of Directors shall be held annually, without notice, directly following the annual meeting of the shareholders, for the election of officers and the transaction of other business. Section 2. All other regular meetings of the Board of Directors may be held at such time and place as the Board may from time to time determine and fix by resolution. Special meetings of the Board may be held at any place upon call of the Chairman (if there be one) or the President, or, in the event of the absence or inability of either to act, of a Vice President, or upon call of any three or more directors. Section 3. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally or by telephone, or by mail or telegraph at his last-known post office address, at least twenty-four hours prior to the time of the meeting, provided that any director may waive such notice in writing or by telegraph or by attendance at such meeting. Section 4. One-third of the directorships as fixed in accordance with Section 1 of Article II of these By-Laws shall constitute a quorum, except that (subject to the provisions of Article III, Section 3) no quorum shall consist of less than two Directors. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors. Section 5. Except as otherwise provided by these By-Laws, the act of a majority of the Directors present at a meeting at which a quorum is present at the time of the act shall be the act of the Board of Directors. Section 6. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally or collectively, whose number shall constitute a quorum for such action, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors' written approval thereof, shall be recorded by the Secretary in the minute book of the Company. Section 7. A Director or a member of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of conference telephone or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting. ARTICLE IV OFFICERS Section 1. At its annual meeting the Board of Directors shall elect a President and a Secretary, and, if the Board shall so determine, a Chairman and a Treasurer, each of whom shall, subject to the provisions of Article IV, Section 3, hold office until the next annual election of officers and until his successor shall have been elected and qualified. Any two or more offices may be held by the same person except that the offices of the President and Secretary may not be simultaneously held by the same person. The Board shall also elect at such annual meeting, and may elect at any regular or special meeting, such other officers as may be required for the prompt and orderly transaction of the business of the Company, and each such officer shall have such authority and shall perform such duties as may be assigned to him from time to time by the Board of Directors. Any vacancy occurring in any office may be filled at any regular meeting of the Board or at any special meeting of the Board held for that purpose. Section 2. In addition to such powers and duties as these By-Laws and the Board of Directors may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office. Section 3. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the Board of Directors. ARTICLE V CHAIRMAN AND PRESIDENT Section 1. The Chairman, if such office shall be filled by the Directors, shall, when present, preside at all meetings of said Board and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. Section 2. The President shall be the chief executive officer of the Company and shall be responsible for the general supervision, direction and control of the business and affairs of the Company. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of the Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VI VICE PRESIDENTS Section 1. The Vice Presidents shall have such powers and duties as may be assigned to them from time to time by the Board of Directors or the President. One of such Vice Presidents may be designated by said Board as Executive Vice President and, if so designated, shall exercise the powers and perform the duties of the President in the absence of the President or if the President is unable to perform the duties of his office. The Board of Directors may also designate one or more of such Vice Presidents as Senior Vice Presidents. ARTICLE VII SECRETARY Section 1. The Secretary shall keep the minutes of all meetings of the stockholders and of the Board of Directors. He shall give notice of all meetings of the stockholders and of said Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer, and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. Section 2. He shall have the custody of the Corporate Seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these By-Laws. ARTICLE VIII ASSISTANT SECRETARIES Section 1. One or more Assistant Secretaries shall perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. The Assistant Secretaries shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Secretary. ARTICLE IX TREASURER Section 1. The Treasurer, if such office shall be filled by the Directors, shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign all checks, notes, drafts and similar instruments, except as otherwise provided for the Board of Directors. Section 2. The Treasurer shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the President or by law. Section 3. In the absence of the appointment of a Treasurer by the Board of Directors, the duties of the Treasurer may be performed by the Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE X ASSISTANT TREASURERS Section 1. One or more Assistant Treasurers, if such offices shall be filled by the Directors, shall perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. The Assistant Treasurers shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the President or the Treasurer. Section 2. In the absence of the appointment of an Assistant Treasurer by the Board of Directors, the duties of the Assistant Treasurer may be performed by the Assistant Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE XI COMMITTEES Section 1. The Board of Directors may designate two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as shall be provided in such resolution. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting of such committee, all the rights and obligations of a regular member thereof. Any vacancy on any such committee or among alternate members thereof shall be filled by the Board of Directors. ARTICLE XII STOCK CERTIFICATES Section 1. All stock certificates, Common and Preferred, may bear the facsimile signatures of the President or a Vice President and the Treasurer or an Assistant Treasurer and a facsimile seal of the Company, or may be signed by the President or a Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, and may be sealed by any one of such officers. ARTICLE XIII CORPORATE SEAL Section 1. The corporate seal of the Company shall be circular in form with the name of the Company inscribed therein. ARTICLE XIV AMENDMENTS Section 1. These by-laws may be altered, amended, added to or repealed from time to time by an affirmative vote of the holders of a majority of the voting power of shares entitled to vote thereon at any meeting of the shareholders called for the purpose or by an affirmative vote of Directors holding a majority of the number of directorships at any meeting of the Board of Directors called for the purpose. EX-99.2BYLAWS 6 b25-5.txt EXHIBIT B.25.5 Exhibit B.25.5 COE Development Corporation BY-LAWS Adopted November 19, 1992 Amended January 1, 1997 June 1, 2000 COE Development Corporation BY-LAWS ARTICLE I MEETINGS OF SHAREHOLDERS Section 1. Meetings of the shareholders may be held at such place either within or without the State of Connecticut as may be designated by the Board of Directors. Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held in March, April, May, June or July in each year on the day and at the hour designated by the Board of Directors. Section 3. Notice of all meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than fifty days prior to the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice or be in attendance at the meeting. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and no business other than that of which notice has been so given shall be transacted at such meeting. Section 4. At all meetings of shareholders each share of Common Stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote. Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than seventy days and not less than ten days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed. ARTICLE II DIRECTORS Section 1. The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than sixteen Directors. Notwithstanding the foregoing, the business, property and affairs of the Company shall be managed by a Board of one director, if only one director has been elected and qualified, provided there is only one shareholder of the Company at such time. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified, except that a Director shall cease to be in office upon his death, resignation, lawful removal or court order decreeing that he is no longer a Director in office. Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board, or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting of Shareholders and until his successor shall be elected and qualified. Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company. All the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion. Section 4. The Board of Directors shall have power to fix from time to time the compensation of the Directors and the method of payment thereof. Section 5. Any one or more Directors may be removed from office at any time with or without any showing of cause by affirmative vote of the holders of a majority of the Company's issued and outstanding shares entitled to vote. ARTICLE III MEETINGS OF DIRECTORS Section 1. A regular meeting of the Board of Directors shall be held annually, without notice, directly following the annual meeting of the shareholders, for the election of officers and the transaction of other business. Section 2. All other regular meetings of the Board of Directors may be held at such time and place as the Board may from time to time determine and fix by resolution. Special meetings of the Board may be held at any place upon call of the Chairman (if there be one) or the President, or, in the event of the absence or inability of either to act, of a Vice President, or upon call of any three or more directors. Section 3. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally or by telephone, or by mail or telegraph at his last-known post office address, at least twenty-four hours prior to the time of the meeting, provided that any director may waive such notice in writing or by telegraph or by attendance at such meeting. Section 4. One-third of the directorships as fixed in accordance with Section 1 of Article II of these By-Laws shall constitute a quorum, except that (subject to the provisions of Article III, Section 3) no quorum shall consist of less than two Directors. Notwithstanding the foregoing, a quorum shall consist of one Director if only one Director has been elected and qualified, provided there is only one shareholder of the Company at such time. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors. Section 5. Except as otherwise provided by these By-Laws, the act of a majority of the Directors present at a meeting at which a quorum is present at the time of the act shall be the act of the Board of Directors. Section 6. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally or collectively, whose number shall constitute a quorum for such action, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors' written approval thereof, shall be recorded by the Secretary in the minute book of the Company. Section 7. A Director or a member of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of conference telephone or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting. ARTICLE IV OFFICERS Section 1. At its annual meeting the Board of Directors shall elect a President and a Secretary, and, if the Board shall so determine, a Chairman and a Treasurer, each of whom shall, subject to the provisions of Article IV, Section 3, hold office until the next annual election of officers and until his successor shall have been elected and qualified. Any two or more offices may be held by the same person except that the offices of the President and Secretary may not be simultaneously held by the same person. The Board shall also elect at such annual meeting, and may elect at any regular or special meeting, such other officers as may be required for the prompt and orderly transaction of the business of the Company, and each such officer shall have such authority and shall perform such duties as may be assigned to him from time to time by the Board of Directors. Any vacancy occurring in any office may be filled at any regular meeting of the Board or at any special meeting of the Board held for that purpose. Section 2. In addition to such powers and duties as these By-Laws and the Board of Directors may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office. Section 3. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the Board of Directors. ARTICLE V CHAIRMAN AND PRESIDENT Section 1. The Chairman, if such office shall be filled by the Directors, shall, when present, preside at all meetings of said Board and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. Section 2. The President shall be the chief executive officer of the Company and shall be responsible for the general supervision, direction and control of the business and affairs of the Company. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of the Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VI VICE PRESIDENTS Section 1. The Vice Presidents shall have such powers and duties as may be assigned to them from time to time by the Board of Directors or the President. One of such Vice Presidents may be designated by said Board as Executive Vice President and, if so designated, shall exercise the powers and perform the duties of the President in the absence of the President or if the President is unable to perform the duties of his office. The Board of Directors may also designate one or more of such Vice Presidents as Senior Vice Presidents. ARTICLE VII SECRETARY Section 1. The Secretary shall keep the minutes of all meetings of the stockholders and of the Board of Directors. He shall give notice of all meetings of the stockholders and of said Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer, and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. Section 2. He shall have the custody of the Corporate Seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these By-Laws. ARTICLE VIII ASSISTANT SECRETARIES Section 1. One or more Assistant Secretaries shall perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. The Assistant Secretaries shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Secretary. ARTICLE IX TREASURER Section 1. The Treasurer, if such office shall be filled by the Directors, shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign all checks, notes, drafts and similar instruments, except as otherwise provided for the Board of Directors. Section 2. The Treasurer shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the President or by law. Section 3. In the absence of the appointment of a Treasurer by the Board of Directors, the duties of the Treasurer may be performed by the Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE X ASSISTANT TREASURERS Section 1. One or more Assistant Treasurers, if such offices shall be filled by the Directors, shall perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. The Assistant Treasurers shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the President or the Treasurer. Section 2. In the absence of the appointment of an Assistant Treasurer by the Board of Directors, the duties of the Assistant Treasurer may be performed by the Assistant Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE XI COMMITTEES Section 1. The Board of Directors may designate two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as shall be provided in such resolution. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting of such committee, all the rights and obligations of a regular member thereof. Any vacancy on any such committee or among alternate members thereof shall be filled by the Board of Directors. ARTICLE XII STOCK CERTIFICATES Section 1. All stock certificates, Common and Preferred, may bear the facsimile signatures of the President or a Vice President and the Treasurer or an Assistant Treasurer and a facsimile seal of the Company, or may be signed by the President or a Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, and may be sealed by any one of such officers. ARTICLE XII CORPORATE SEAL Section 1. The corporate seal of the Company shall be circular in form with the name of the Company inscribed therein. ARTICLE XIV AMENDMENTS Section 1. These by-laws may be altered, amended, added to or repealed from time to time by an affirmative vote of the holders of a majority of the voting power of shares entitled to vote thereon at any meeting of the shareholders called for the purpose or by an affirmative vote of Directors holding a majority of the number of directorships at any meeting of the Board of Directors called for the purpose. EX-99.2BYLAWS 7 b26-5.txt EXHIBIT B.261` Exhibit B.26.5 COE ARGENTINA II CORP. BY-LAWS Adopted March 14, 1994 Amended January 1, 1997 June 1, 2000 COE ARGENTINA II CORP. BY-LAWS ARTICLE I MEETINGS OF SHAREHOLDERS Section 1. Meetings of the shareholders may be held at such place either within or without the State of Connecticut as may be designated by the Board of Directors. Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held in March, April, May, June or July in each year on the day and at the hour designated by the Board of Directors. Section 3. Notice of all meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than fifty days prior to the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice or be in attendance at the meeting. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and no business other than that of which notice has been so given shall be transacted at such meeting. Section 4. At all meetings of shareholders each share of common stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote. Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than seventy days and not less than ten days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed. ARTICLE II DIRECTORS Section 1. The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than sixteen Directors. Notwithstanding the foregoing, the business, property and affairs of the Company shall be managed by a Board of one Director, if only one Director has been elected and qualified, provided there is only one shareholder of the Company at such time. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified, except that a Director shall cease to be in office upon his death, resignation, lawful removal or court order decreeing that he is no longer a Director in office. Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board, or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting of Shareholders and until his successor shall be elected and qualified. Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company. All the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion. Section 4. The Board of Directors shall have power to fix from time to time the compensation of the Directors and the method of payment thereof. Section 5. Any one or more Directors may be removed from office at any time with or without any showing of cause by affirmative vote of the holders of a majority of the Company's issued and outstanding shares entitled to vote. ARTICLE III MEETINGS OF DIRECTORS Section 1. A regular meeting of the Board of Directors shall be held annually, without notice, directly following the Annual Meeting of Shareholders, for the election of officers and the transaction of other business. Section 2. All other regular meetings of the Board of Directors may be held at such time and place as the Board may from time to time determine and fix by resolution. Special meetings of the Board may be held at any place upon call of the Chairman (if there be one) or the President, or, in the event of the absence or inability of either to act, of a Vice President, or upon call of any three or more directors. Section 3. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally or by telephone, or by mail or telegraph at his last-known post office address, at least twenty-four hours prior to the time of the meeting; provided that any director may waive such notice in writing or by telegraph or by attendance at such meeting. Section 4. One-third of the directorships as fixed in accordance with Article II, Section 1 of these By-Laws shall constitute a quorum, except (subject to the provisions of Article III, Section 3) that no quorum shall consist of less than two Directors. Notwithstanding the foregoing, a quorum shall consist of one Director if only one Director has been elected and qualified, provided there is only one shareholder of the Company at such time. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors. Section 5. Except as otherwise provided by these By-Laws, the act of a majority of the Directors present at a meeting at which a quorum is present at the time of the act shall be the act of the Board of Directors. Section 6. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally or collectively, whose number shall constitute a quorum for such action, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors' written approval thereof, shall be recorded by the Secretary in the minute book of the Company. Section 7. A Director or a member of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of conference telephone or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting. ARTICLE IV OFFICERS Section 1. At its annual meeting the Board of Directors shall elect a President and a Secretary, and, if the Board shall so determine, a Chairman and a Treasurer, each of whom shall, subject to the provisions of Article IV, Section 3, hold office until the next annual election of officers and until his successor shall have been elected and qualified. Any two or more offices may be held by the same person except that the offices of the President and Secretary may not be simultaneously held by the same person. The Board shall also elect at such annual meeting, and may elect at any regular or special meeting, such other officers as may be required for the prompt and orderly transaction of the business of the Company, and each such officer shall have such authority and shall perform such duties as may be assigned to him from time to time by the Board of Directors. Any vacancy occurring in any office may be filled at any regular meeting of the Board or at any special meeting of the Board held for that purpose. Section 2. In addition to such powers and duties as these By-Laws and the Board of Directors may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office. Section 3. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the Board of Directors. ARTICLE V CHAIRMAN AND PRESIDENT Section 1. The Chairman, if such office shall be filled by the Directors, shall, when present, preside at all meetings of said Board and of the shareholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. Section 2. The President shall be the chief executive officer of the Company and shall be responsible for the general supervision, direction and control of the business and affairs of the Company. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of the Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VI VICE PRESIDENTS Section 1. The Vice Presidents shall have such powers and duties as may be assigned to them from time to time by the Board of Directors or the President. One of such Vice Presidents may be designated by said Board as Executive Vice President and, if so designated, shall exercise the powers and perform the duties of the President in the absence of the President or if the President is unable to perform the duties of his office. The Board of Directors may also designate one or more of such Vice Presidents as Senior Vice Presidents. ARTICLE VII SECRETARY Section 1. The Secretary shall keep the minutes of all meetings of the shareholders and of the Board of Directors. He shall give notice of all meetings of the shareholders and of said Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer, and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by-law. Section 2. He shall have the custody of the Corporate Seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these By-Laws. ARTICLE VIII ASSISTANT SECRETARIES Section 1. One or more Assistant Secretaries shall perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. The Assistant Secretaries shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Secretary. ARTICLE IX TREASURER Section 1. The Treasurer, if such office shall be filled by the Directors, shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign all checks, notes, drafts and similar instruments, except as otherwise provided for the Board of Directors. Section 2. The Treasurer shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the President or by law. Section 3. In the absence of the appointment of a Treasurer by the Board of Directors, the duties of the Treasurer may be performed by the Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE X ASSISTANT TREASURERS Section 1. One or more Assistant Treasurers, if such offices shall be filled by the Directors, shall perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. The Assistant Treasurers shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the President or the Treasurer. Section 2. In the absence of the appointment of an Assistant Treasurer by the Board of Directors, the duties of the Assistant Treasurer may be performed by the Assistant Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE XI COMMITTEES Section 1. The Board of Directors may designate two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as shall be provided in such resolution. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting of such committee, all the rights and obligations of a regular member thereof. Any vacancy on any such committee or among alternate members thereof shall be filled by the Board of Directors. ARTICLE XII STOCK CERTIFICATES Section 1. All stock certificates may bear the facsimile signatures of the President or a Vice President and the Treasurer or an Assistant Treasurer and a facsimile seal of the Company, or may be signed by the President or a Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, and may be sealed by any one of such officers. ARTICLE XIII CORPORATE SEAL Section 1. The corporate seal of the Company shall be circular in form with the name of the Company inscribed therein. ARTICLE XIV AMENDMENTS Section 1. These by-laws may be altered, amended, added to or repealed from time to time by an affirmative vote of the holders of a majority of the voting power of shares entitled to vote thereon at any meeting of the shareholders called for the purpose or by an affirmative vote of Directors holding a majority of the number of directorships at any meeting of the Board of Directors called for the purpose. EX-99.2BYLAWS 8 b27-5.txt Exhibit B.27.5 COE AVE FENIX CORPORATION BY-LAWS Adopted May 19, 1995 Amended January 1, 1997 June 1, 2000 COE AVE FENIX CORPORATION BY-LAWS ARTICLE I MEETINGS OF SHAREHOLDERS Section 1. Meetings of the shareholders may be held at such place either within or without the State of Connecticut as may be designated by the Board of Directors. Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held in March, April, May, June or July in each year on the day and at the hour designated by the Board of Directors. Section 3. Notice of all meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than fifty days prior to the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice or be in attendance at the meeting. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and no business other than that of which notice has been so given shall be transacted at such meeting. Section 4. At all meetings of shareholders each share of common stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote. Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than seventy days and not less than ten days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed. ARTICLE II DIRECTORS Section 1. The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than sixteen Directors. Notwithstanding the foregoing, the business, property and affairs of the Company shall be managed by a Board of one Director, if only one Director has been elected and qualified, provided there is only one shareholder of the Company at such time. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified, except that a Director shall cease to be in office upon his death, resignation, lawful removal or court order decreeing that he is no longer a Director in office. Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board, or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting of Shareholders and until his successor shall be elected and qualified. Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company. All the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion. Section 4. The Board of Directors shall have power to fix from time to time the compensation of the Directors and the method of payment thereof. Section 5. Any one or more Directors may be removed from office at any time with or without any showing of cause by affirmative vote of the holders of a majority of the Company's issued and outstanding shares entitled to vote. ARTICLE III MEETINGS OF DIRECTORS Section 1. A regular meeting of the Board of Directors shall be held annually, without notice, directly following the Annual Meeting of Shareholders, for the election of officers and the transaction of other business. Section 2. All other regular meetings of the Board of Directors may be held at such time and place as the Board may from time to time determine and fix by resolution. Special meetings of the Board may be held at any place upon call of the Chairman (if there be one) or the President, or, in the event of the absence or inability of either to act, of a Vice President, or upon call of any three or more directors. Section 3. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally or by telephone, or by mail or telegraph at his last-known post office address, at least twenty-four hours prior to the time of the meeting; provided that any director may waive such notice in writing or by telegraph or by attendance at such meeting. Section 4. One-third of the directorships as fixed in accordance with Article II, Section 1 of these By-Laws shall constitute a quorum, except (subject to the provisions of Article III, Section 3) that no quorum shall consist of less than two Directors. Notwithstanding the foregoing, a quorum shall consist of one Director if only one Director has been elected and qualified, provided there is only one shareholder of the Company at such time. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors. Section 5. Except as otherwise provided by these By-Laws, the act of a majority of the Directors present at a meeting at which a quorum is present at the time of the act shall be the act of the Board of Directors. Section 6. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally or collectively, whose number shall constitute a quorum for such action, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors' written approval thereof, shall be recorded by the Secretary in the minute book of the Company. Section 7. A Director or a member of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of conference telephone or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting. ARTICLE IV OFFICERS Section 1. At its annual meeting the Board of Directors shall elect a President and a Secretary, and, if the Board shall so determine, a Chairman and a Treasurer, each of whom shall, subject to the provisions of Article IV, Section 3, hold office until the next annual election of officers and until his successor shall have been elected and qualified. Any two or more offices may be held by the same person except that the offices of the President and Secretary may not be simultaneously held by the same person. The Board shall also elect at such annual meeting, and may elect at any regular or special meeting, such other officers as may be required for the prompt and orderly transaction of the business of the Company, and each such officer shall have such authority and shall perform such duties as may be assigned to him from time to time by the Board of Directors. Any vacancy occurring in any office may be filled at any regular meeting of the Board or at any special meeting of the Board held for that purpose. Section 2. In addition to such powers and duties as these By-Laws and the Board of Directors may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office. Section 3. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the Board of Directors. ARTICLE V CHAIRMAN AND PRESIDENT Section 1. The Chairman, if such office shall be filled by the Directors, shall, when present, preside at all meetings of said Board and of the shareholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. Section 2. The President shall be the chief executive officer of the Company and shall be responsible for the general supervision, direction and control of the business and affairs of the Company. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of the Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VI VICE PRESIDENTS Section 1. The Vice Presidents shall have such powers and duties as may be assigned to them from time to time by the Board of Directors or the President. One of such Vice Presidents may be designated by said Board as Executive Vice President and, if so designated, shall exercise the powers and perform the duties of the President in the absence of the President or if the President is unable to perform the duties of his office. The Board of Directors may also designate one or more of such Vice Presidents as Senior Vice Presidents. ARTICLE VII SECRETARY Section 1. The Secretary shall keep the minutes of all meetings of the shareholders and of the Board of Directors. He shall give notice of all meetings of the shareholders and of said Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer, and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by-law. Section 2. He shall have the custody of the Corporate Seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these By-Laws. ARTICLE VIII ASSISTANT SECRETARIES Section 1. One or more Assistant Secretaries shall perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. The Assistant Secretaries shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Secretary. ARTICLE IX TREASURER Section 1. The Treasurer, if such office shall be filled by the Directors, shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign all checks, notes, drafts and similar instruments, except as otherwise provided for the Board of Directors. Section 2. The Treasurer shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the President or by law. Section 3. In the absence of the appointment of a Treasurer by the Board of Directors, the duties of the Treasurer may be performed by the Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE X ASSISTANT TREASURERS Section 1. One or more Assistant Treasurers, if such offices shall be filled by the Directors, shall perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. The Assistant Treasurers shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the President or the Treasurer. Section 2. In the absence of the appointment of an Assistant Treasurer by the Board of Directors, the duties of the Assistant Treasurer may be performed by the Assistant Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE XI COMMITTEES Section 1. The Board of Directors may designate two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as shall be provided in such resolution. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting of such committee, all the rights and obligations of a regular member thereof. Any vacancy on any such committee or among alternate members thereof shall be filled by the Board of Directors. ARTICLE XII STOCK CERTIFICATES Section 1. All stock certificates may bear the facsimile signatures of the President or a Vice President and the Treasurer or an Assistant Treasurer and a facsimile seal of the Company, or may be signed by the President or a Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, and may be sealed by any one of such officers. ARTICLE XIII CORPORATE SEAL Section 1. The corporate seal of the Company shall be circular in form with the name of the Company inscribed therein. representative or successor he is, is finally adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of his duties. ARTICLE XIV AMENDMENTS Section 1. These by-laws may be altered, amended, added to or repealed from time to time by an affirmative vote of the holders of a majority of the voting power of shares entitled to vote thereon at any meeting of the shareholders called for the purpose or by an affirmative vote of Directors holding a majority of the number of directorships at any meeting of the Board of Directors called for the purpose. EX-99.13OTHCONTRCT 9 b31-1.txt Exhibit B.31.1 CERTIFICATE OF FORMATION OF ERI/HEC EFA-Med, LLC 1. The name of the limited liability company is ERI/HEC EFA-Med, LLC. 2. The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. 3. This Certificate of Formtion shall be effective on the date of filing with the Delaware Secretary of State. IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation of ERI/HEC EFA-Med, LLC as of the 15th day of September, 2000. HEC Inc., A Duly Authorized Member By: /S/ Linda A. Jensen Name: Linda A. Jensen Title: Vice President - Finance EX-99.13OTHCONTRCT 10 b31-2.txt Exhibit B.31.2 OPERATING AGREEMENT OF ERI/HEC EFA-Med, LLC OPERATING AGREEMENT OF ERI/HEC EFA-Med, LLC A Limited Liability Company ARTICLE I DEFINITIONS The following terms used in this Operating Agreement shall have the following meanings (unless otherwise expressly provided herein): "Affiliate" shall mean any Person, directly or indirectly, controlling, controlled by, or under common control with another Person. "Agent" shall mean, with respect to any Person, any director, officer, employee, agent, or representative or other Person authorized and acting on its behalf. "Arbitration Panel" shall have the meaning set forth in Section 16.1(b). "Articles of Organization" shall mean the Articles of Organization of ERI/HEC EFA-Med, LLC, as filed with the Secretary of State of Delaware, as the same may be amended from time to time. "Business Day" means any day on which banks are generally open for business in New York, New York, U.S. "Capital Account" shall mean as of any given date the Capital Contribution to the Company by a Member as adjusted up to the date in question pursuant to Article VII. "Capital Contribution" of any Member shall mean the amount of money contributed by such Member to the Company pursuant to this Operating Agreement plus the agreed upon fair market value of property and services contributed by such Member, whenever made, including the Initial Capital Contribution. "Chairman" shall have the meaning set forth in Section 6.1(b). "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, and any subsequent federal law of similar import, and to the extent applicable, the Treasury Regulations. "Company" shall mean ERI/HEC EFA-Med, LLC, whose internal affairs are governed by this Operating Agreement. "Customer" shall mean the United States Navy, acting through the Naval Facilities Engineering Command Contracts Office, 84, BLD 41, NAVFAC ENGCOMDET-SLC, Port Hueneme, CA. "Delaware Act" shall mean the Delaware Limited Liability Company Act, 6 Del. C. Sec. 18-101 et seq.). "Delivering Party " shall mean, with respect to each Delivery Order, the Member (or its Affiliate) that fulfills (or has undertaken to fulfill) such Delivery Order in accordance with the terms hereof. "Delivery Order" shall mean each delivery order from time to time awarded to the Company by the Customer under, and in accordance with, the Prime Contract and the Solicitation. "Economic Interest" shall mean a Member's share from time to time of the Company's net profits, net losses and distributions of the Company's assets pursuant to this Operating Agreement and the Delaware Act, but shall not include any Voting Interests or other right to participate in the management or affairs of the Company. "Entity" shall mean a general partnership, a limited partnership, a limited liability company, a limited liability partnership, a trust, an estate, an association, a corporation or any other legal or commercial entity. "ERI" shall mean ERI Services, Inc., a Delaware corporation, with current offices located at 350 Fairfield Avenue, Bridgeport, Connecticut. "FCPA" shall mean the U.S. Foreign Corrupt Practices Act of 1977, as amended. "Fiscal Year" shall mean the Company's fiscal year. "HEC" shall mean HEC Inc., a Massachusetts corporation, with current offices at 24 Prime Parkway, Natick, Massachusetts. "Indemnifying Party" shall have the meaning set forth in Section 14.4(a). "Indemnitee" shall have the meaning set forth in Section 14.4(a). "Initial Capital Contribution" shall mean the initial contribution to the capital of the Company pursuant to this Operating Agreement as set forth on Exhibit A attached hereto and made a part hereof. "Interest" shall mean a Member's entire interest in the Company, including such Member's Economic Interest, Voting Interest, the right to participate in the management of the business and affairs of the Company, and the obligations as a Member. "Management Committee" shall mean the management committee of the Company formed in accordance with Section 6.1. "Member" shall mean each of the parties who executes a counterpart of this Operating Agreement as a Member and each of the parties who may hereafter become Members as permitted herein. "Non-Delivering Party" shall mean, with respect to each Delivery Order, the Member that is not the Delivering Party for such Delivery Order. "Operating Agreement" shall mean this Operating Agreement, together with any amendments, modification or other changes hereto. "Prime Contract" shall mean the indefinite delivery/indefinite quantity contract No. N47408-00-R-2109 awarded by the Customer to the Company in response to the Solicitation. "Person" shall mean an individual or Entity, and the heirs, executors, administrators, legal representatives, successors, and assigns of such "Person" as applicable, where the context so permits. "Proposal" shall mean, with respect to each Delivery Order, the proposal with respect thereto prepared by the Delivering Party. "Site Assignment" shall mean the selection and assignment of a site for which a Proposal will be prepared. "Solicitation" shall mean Solicitation No. N47408-00-R-2109 Energy Savings Performance Contract for EFA-MED Mediterranean Area issued by the Customer. "Stated Margin" shall mean, with respect to each Delivery Order, the stated Implementation Margin in column D of Schedule H-2 to be received by the Delivering Party as set forth in the final financial schedule in the Proposal for such Delivery Order delivered to the Customer. "Third Party Claims" shall have the meaning set forth in Section 14.4(a). "Transferring Member" shall mean a Member that Transfers, or proposes to Transfer (as the context requires), its Interest. "Transfer" shall mean any sale, gift, assignment, transfer, pledge, encumbrance, exchange or other disposition, with or without consideration. "Transferee" shall mean the Person to whom the Transferring Member Transfers its Interest. "Treasury Regulations" shall include proposed, temporary and final regulations promulgated under the Code. "Unanimous Vote" shall mean the affirmative vote of all of the Members or all of the representatives on the Management Committee, as the context requires. "Vice Chairman" shall have the meaning set forth in Section 6.1(c). "Voting Interest" shall mean the right of each Member to vote on, consent to or otherwise participate in any decisions of Members. ARTICLE II FORMATION OF COMPANY 2.1 - Formation. The Company was formed as a limited liability company under the Delaware Act by the filing of its Articles of Organization with the Secretary of the State of Delaware. Except as provided in this Operating Agreement, all rights, liabilities, and obligations of the Members, both as between themselves and with respect to Persons not parties to this Operating Agreement, shall be as provided in the Delaware Act, and this Agreement shall be construed in accordance with the provisions of the Delaware Act. To the extent that the rights or obligations of any Member are different by reason of any provision of this Operating Agreement from what they would be in the absence of such provision, this Operating Agreement shall, to the extent permitted by the Delaware Act, control. 2.2 - Name. The name of the Company is ERI/HEC EFA-Med, LLC. 2.3 - Principal Place of Business. The principal place of business of the Company shall be 24 Prime Parkway, Natick, MA, 01760. The Company may locate its place of business at any other place or places as the Members may from time to time deem advisable. 2.4 - Term. The term of the Company shall be as set forth in the Articles of Organization, unless the Company is earlier dissolved in accordance with either the provisions of this Operating Agreement or the Delaware Act. 2.5 - Initial Members. The names and addresses, Initial Capital Contribution, initial Economic Interest and initial Voting Interest of each of the initial Members are set forth on Exhibit A. Each Member may change its address by notifying the other Members and the Company of such change in the manner set forth in Section 17.1. 2.6 - Agent for Service of Process. The agent for service of process for the Company shall be CT Corporation, 101 Federal Street, Suite 300, Boston, MA 02110 , or such other as may be designated by the Management Committee. ARTICLE III BUSINESS OF COMPANY 3.1 - Limitation on Business. The Company shall limit its business to the execution, delivery and performance of the Prime Contract, the Solicitation and activities related thereto, including the preparation, submission and fulfillment of Delivery Orders. Delivery Orders will be assigned and fulfilled in accordance with Article 8 hereof. Unless otherwise approved by Unanimous Vote of the Members, the Company shall not conduct any business or activities other than those reasonably related to, or otherwise reasonably necessary in fulfillment of, the Prime Contract, the Solicitation and the Delivery Orders. 3.2 - Powers. In order to carry out its purposes, the Company is empowered and authorized to do any and all acts necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of its purposes, and for the protection and benefit of the Company, including, but not limited to, (a) the incurring of indebtedness, secured or unsecured, for any purpose of the Company, (b) disposing of any or all or substantially all of the assets of the Company, (c) entering into agreements of indemnification as may be necessary, proper, advisable, incidental to or convenient for the furtherance of its purposes, and (d) exercising any other such powers that may be exercised by a limited liability company under the Delaware Act. ARTICLE IV RIGHTS AND OBLIGATIONS OF MEMBERS 4.1 - Limitation of Liability. Each Member's liability shall be limited as set forth in this Operating Agreement, the Delaware Act and other applicable law. 4.2 - List of Members. Any Member shall be entitled to, at any time, a list showing the names, addresses and Interests of all Members. 4.3 - Company Debt Liability. Members shall not be personally liable for debts or losses of the Company beyond their respective Capital Contributions and any obligation of any such Member to make Capital Contributions, or as otherwise required by law. 4.4 - Priority and Return of Capital. Except as expressly provided herein, no Member shall have priority over any other Member, either as to the return of Capital Contributions or as to net profits, net losses or distributions; provided that this Section shall not apply to repayment of any loans (as distinguished from Capital Contributions) which a Member has made to the Company with the approval of the Management Committee. ARTICLE V MEETINGS OF MEMBERS 5.1 - Annual Meeting. The annual meeting of Members shall be held on the first Tuesday after the end of the second fiscal quarter of the Company or at such other time as shall be determined by resolution of the Management Committee for the purpose of the transaction of such business as may come before the meeting. To the extent possible, the annual meeting of the Members shall occur immediately before the annual meeting of the Management Committee. 5.2 - Special Meetings. Special meetings of Members, for any purpose, unless otherwise prescribed by statute, may be called by any Member. No meetings shall be conducted without the presence of a quorum (as described in Section 5.7). In the event that a quorum shall not be present at any meeting, such meeting shall be rescheduled. Each Member shall use its best efforts to ensure that its representatives are present at each properly scheduled meeting. 5.3 - Place of Meetings. Unless otherwise agreed by the Members, the place of each meeting, regular or special, shall alternate between the principal offices of each Member. 5.4 - Notice of Meetings. Except as provided in Section 5.5, written notice stating the place, day and hour of the meeting and the purpose or purposes for which the meeting is called shall be delivered not less than ten (10) nor more than fifty (50) days before the date of the meeting by, or at the direction of, the Member calling the meeting to the other Member. 5.5 - Meeting of all Members. If all Members shall meet at any time and place, and consent to the holding of a meeting at such time and place, such meeting shall be valid without call or notice, and at such meeting lawful action may be taken. Members may participate in meetings through telephonic, video conferencing or similar means. 5.6 - Record Date. For the purpose of determining Members entitled to notice of or to vote at any meeting of members or any adjournment thereof, or Members entitled to receive payment of any distribution, or in order to make a determination of Members for any other purpose, the date on which notice of the meeting is mailed or the date on which the resolution declaring such distribution is adopted, as the case may be, shall be the record date for such determination of Members. When a determination of Members entitled to vote at any meeting of Members has been made as provided in this Section, such determination shall apply to any adjournment thereof. 5.7 - Quorum. The presence of two duly elected officers of each Member, represented in person, by phone or by proxy, shall constitute a quorum at any meeting of Members. 5.8 - Manner of Acting. If a quorum is present, a Unanimous Vote shall be the act of Members. 5.9 - Proxies. At all meetings of Members, a Member may vote in person or by proxy executed in writing by such Member or by a duly authorized attorney-in-fact. Such proxy shall be filed with the Company before or at the time of the meeting. No proxy shall be valid after eleven (11) months from the date of its execution, unless otherwise provided in the proxy. 5.10 - Action by Members Without a Meeting. Action required or permitted to be taken at a meeting of Members may be taken without a meeting if the action is evidenced by one or more written consents describing the action taken, signed by all the Members. Such consent shall be delivered to the Company for inclusion in the minutes or for filing with the Company records. Action taken under this Section is effective when all Members have signed the consent, unless the consent specifies a different effective date. 5.11 - Waiver of Notice. When any notice is required to be given to any Member, a waiver thereof in writing signed by such Member, whether before, at, or after the time stated therein, shall be equivalent to the giving of such notice. ARTICLE VI MANAGEMENT COMMITTEE 6.1 - Management Committee. (a) Unless otherwise approved by a Unanimous Vote of the Members, the Management Committee shall consist of a total of four (4) representatives, two of which shall be appointed by ERI and two of which shall be appointed by HEC. Each Member shall be entitled to remove, at any time by written notice to the other Member, the representative on the Management Committee appointed by such Member. Each Member also shall have the right to designate an alternate representative for each representative who shall serve in the place of the originally-appointed representative if such representative is absent or unable to attend a meeting. If a vacancy exists on the Management Committee or with respect to any alternate, whether due to death, resignation, removal or otherwise, the Member entitled to appoint a representative for such vacant position shall take the action necessary to cause such vacancy to be filled; provided that in the case of a vacancy for a representative, its alternate shall serve until such replacement. (b) The initial Chairman of the Management Committee (the "Chairman") shall be appointed by ERI at the first meeting of the Management Committee and shall serve until his or her successor is appointed. At the first annual meeting of the Management Committee, the successor Chairman shall be appointed by HEC; thereafter, on an annual basis, as determined at the annual meeting of the Management Committee, the Chairman's position shall rotate between ERI and HEC. If a vacancy occurs in the position of Chairman for whatever reason, including removal by the Member appointing the Chairman, the Member that appointed the previous Chairman shall take the action necessary to fill such vacancy until the next annual meeting. (c) The initial Vice Chairman of the Management Committee (the "Vice Chairman") shall be appointed by HEC at the first meeting of the Management Committee and shall serve until his or her successor is appointed. At the first annual meeting of the Management Committee, the successor Vice Chairman shall be appointed by ERI; thereafter, on an annual basis, as determined at the annual meeting of the Management Committee, the Vice Chairman's position shall rotate between ERI and HEC. If a vacancy occurs in the position of Vice Chairman for whatever reason, including removal by the Member appointing the Vice Chairman, the Member that appointed the Vice Chairman shall take the action necessary to fill such vacancy until the next annual meeting. (d) Each Member shall take such action as is necessary to effect the foregoing appointments and constitution of the Management Committee. It is the intent of the parties that at any particular time, the Chairman and the Vice Chairman shall be appointed by different Members. (e) Representatives on the Management Committee shall not receive any compensation whatsoever for their services; provided, however, that the Company shall reimburse the Chairman and Vice Chairman for all costs and expenses reasonably incurred by them in connection with the management of the Company pursuant to this Article VI. No representative shall be prohibited from serving the Company or any of its Affiliates in any other capacity and receiving appropriate compensation for such service. 6.2. - Authority. (a) Subject to the terms of this Operating Agreement and to the fullest extent permitted by applicable law, the Management Committee shall have complete and exclusive power to direct and control the business and affairs of the Company. No Member shall have the right to bind or otherwise act on behalf of the Company absent written authorization from the Management Committee, signed by at least one (1) representative of each Member. (b) The Management Committee shall appoint such committees as it deems appropriate, and may dismiss any of them, with or without cause. 6.3. - Meetings. (a) The Members shall convene the first meeting of the Management Committee within fifteen (15) days after the execution of this Operating Agreement. The Management Committee shall meet at least once in each fiscal quarter of the Company at the principal offices of each Member, on an alternating basis, or at such locations as may be determined by the Management Committee. The annual meeting of the Management Committee shall occur immediately after the annual meeting of the Members. An agenda and full details shall be delivered by the Chairman to each representative at least three (3) days prior to such regular meeting; provided that additional items may be considered beyond those set forth on the agenda and any representative may include items on the agenda by written request to the Chairman after the distribution of such agenda. (b) The Chairman or the Vice Chairman shall be entitled to convene special meetings of the Management Committee at any time on at least five (5) Business Days' advance written notice to the other representatives. The Members anticipate that special meetings will be required to review and act upon Site Assignments and/or Proposals and acknowledge that prompt action upon Site Assignments and Proposals is essential to the procurement of Delivery Orders. Notice of a special meeting shall contain an agenda in full detail (including, if appropriate, a copy or summary of any Proposal to be acted upon) and shall state the purpose or purposes for which such special meeting is being called. Notices of meetings shall include the date, time and location (which, in the absence of agreement, shall alternate between the principal offices of each Member) of such meeting. (c) A quorum for the transaction of any business required to be taken by the Management Committee shall be met if all of representatives (or their respective alternates) are present in person, by phone or by proxy. Representatives may participate in meetings through telephonic, video conferencing or similar means. If a member of the Management Committee cannot be so present at a meeting, and such representative's alternative also is unavailable, then such representative may appoint a proxy to attend in such representative's place. The representatives may waive notice of any meeting. (d) Action required or permitted to be taken at a meeting of the Management Committee may be taken without a meeting if the action is evidenced by one or more written consents describing the action taken, signed by all the representatives of the Management Committee. Such consent shall be delivered to the Company for inclusion in the minutes or for filing with the Company records. Action taken under this Section is effective when all representatives have signed the consent, unless the consent specifies a different effective date. 6.4. - Committee Action. (a) A Unanimous Vote of the Management Committee shall be required for a decision at any meeting in which a quorum exists. (b) Minutes reflecting the actions taken at all meetings of the Management Committee shall be kept and shall be the responsibility of the Member who had designated the then-current Chairman of the Management Committee or, in the case of a Special Meeting, of the Member who called such meeting. The keeper of the minutes need not be a member of the Management Committee. Copies of the minutes shall be maintained at the principal office of the Company and shall be transmitted to each member of the Management Committee or committee thereof taking the action promptly after the meeting in question. ARTICLE VII CONTRIBUTIONS; CAPITAL ACCOUNTS 7.1 - Members' Capital Contributions. Simultaneously with the execution and delivery hereof, each Member shall contribute the amount set forth in Exhibit A for such Member as its share of the Initial Capital Contribution. 7.2 - Additional Contributions. The Management Committee shall determine, by Unanimous Vote, the timing and amount of any additional Capital Contributions required for the administration or conduct of business of the Company. Except for the Initial Capital Contribution, no Member shall be required to make any Capital Contribution. Except as otherwise provided for in this Article VII, no Member has the right to make a voluntary Capital Contribution. In the event that a Member elects not to make a Capital Contribution as called for by the Management Committee, such amount due shall be deducted from the next Special Allocation due such Member pursuant to Section 9.2. The Member shall not receive any Special Allocation pursuant to Section 9.2 until such Member has paid all Capital Contributions called for under this Section 7.2. 7.3 - Capital Accounts. A separate Capital Account will be maintained for each Member in accordance with applicable tax law. At no time during the term of the Company or upon the dissolution and liquidation thereof shall a Member with a negative balance in his Capital Account have any obligation to the Company or the other Members to restore such negative balance. 7.4 - Interest On and Return of Capital Contributions. No Member shall be entitled to interest on its Capital Contribution or any undistributed amounts, or to return of its Capital Contribution. Each Member acknowledges that this is essential to protect the Members' mutual Interests in the Company. 7.5 - Disbursements. The Company shall pay all costs and expenses of the business, including financing costs and related expenses, taxes which are the obligation of the Company and other carrying charges, and all operating expenses. The Company may set aside funds for any items that are proper Company purposes, including operating expenses, debt service, capital improvements, replacements, repairs, other capital requirements, and liabilities, contingent or otherwise, of the Company, in each case as determined by the Chairman. 7.6 Succession to Transferor's Capital Account. In the event all or a portion of a Membership Interest is transferred pursuant to the terms of this Operating Agreement, the transferee shall succeed to the Capital Account (or portion thereof) of the transferor which relates to the transferred interest. ARTICLE VIII DELIVERY ORDERS 8.1 - Intake; Delegation. Delivery Orders shall be assigned to each Member for fulfillment such that after the expiration of the Prime Contract, each Member shall have received the opportunity to earn, in the aggregate, a substantially similar Stated Margin. Upon learning of a potential Site Assignment and the Customer's request for a Proposal for such site, the Member shall notify the Management Committee of such opportunity, including such details as may be available to such Member at such time. The Management Committee, acting by Unanimous Vote , shall have the full power and authority to grant the Site Assignment and delegate responsibility for the preparation of such Proposal and fulfillment of the underlying Delivery Order to either Member consistent with Schedule 8.1 and the provision of quality and timely services to the Customer. If the Management Committee cannot agree on the delegation of the Site Assignment and Proposal and corresponding Delivery Order for whatever reason, such Site Assignment, Proposal and Delivery Order shall be delegated to a Member based on the geographic location set forth in Schedule 8.1 attached hereto, with each Member having the exclusive right to fulfill Delivery Orders in the geographic regions/countries assigned to it in Schedule 8.1. In either case, however, the Management Committee shall be bound by the following: (a) if the Customer from time to time adds or removes any geographic regions/countries, the Members shall, in good faith, negotiate appropriate revisions to Schedule 8.1 consistent with the foregoing principles, with due regard, for maintaining the right of each Member to continue to fulfill Delivery Orders in geographic regions/countries that such Member has previously performed or is performing Delivery Orders; and (b) from and after August 1, 2002 , as part of the Management Committee's review of each proposed Site Assignment, the Management Committee shall review the aggregate Stated Margins under fully executed Delivery Orders assigned to each Member (including the Stated Margins on any pending Site Assignments, Proposals and/or outstanding Delivery Orders, but excluding the Stated Margins on any Site Assignments, Proposals or Delivery Orders for which responsibility has been taken by a Member after such responsibility has been declined by another Member pursuant to Section 8.2). If the aggregate Stated Margins of one Member exceed those of the other Member by more than twenty (20%), the Management Committee shall delegate such Delivery Order to the Member with such deficiency (unless such Member expressly consents to a different arrangement). 8.2 - Declined Assignment. No Member shall be required to accept a Site Assignment, Proposal and/or Delivery Order. If a Member declines a delegation of a Site Assignment, Proposal and/or Delivery Order, the other Member shall have the right, not the obligation, to undertake the obligations pertaining to such Site Assignment, Proposal and/or Delivery Order. In the event that a Member declines to undertake or accept a Site Assignment, Proposal and/or Delivery Order within a geographic region/country assigned to it in Schedule 8.1, and the other Member accepts responsibility for such Site Assignment. Proposal and/or Delivery Order, then the declining Member shall automatically and irrevocably forfeit its right to the special allocation to the Non-Delivering Party applicable to such Delivery Order under Section 9.2, such that the Delivering Party shall be entitled to retain one hundred percent (100%) of the Stated Margin. 8.3 - Proposal Development. After acceptance of responsibility for a Delivery Order, the Delivering Party shall enter into a subcontracting agreement with the Company and shall be solely responsible for the development and preparation of the Proposal, including the site survey(s) required to be conducted under the Prime Contract, for the underlying Delivery Order. The Delivering Party shall keep the Management Committee reasonably informed through quarterly reports given at Management Committee meetings of its efforts with respect to, and the results of, the site survey(s) and other material elements of the Proposal. 8.4 - Documentation; Quality Control. (a) The Management Committee shall develop and establish a uniform set of standards applicable to all documentation, including Proposals submitted or to be submitted to the Customer pursuant to the Prime Contract and any partial novation or subcontracting arrangements contemplated by the Members. To the fullest extent reasonably possible, each Delivering Party shall adhere to such documentation standards. In any event, when submitting a Proposal to the Management Committee in accordance with Section 8.6, the Delivering Party shall specifically identify in writing any and all variances from such standards and a reasonable explanation thereof. (b) The Management Committee shall develop and establish a quality assurance/quality control program applicable to all Proposals. The program will include the technical review of all Proposals by representatives of the Delivering Party and the Non-Delivering Party, in a cooperative effort to ensure the consistency and quality of all work proposed to the Customer. 8.5 - Internal Submission. Prior to the submission of any Proposal to the Customer with respect to a Delivery Order, the Delivering Party shall submit such Proposal to the Management Committee. No Proposal shall be submitted to the Customer unless the Management Committee has authorized such submission by Unanimous Vote. All Proposals shall be submitted by the Company and signed by a member of the Management Committee appointed by each Member. If the Management Committee fails to authorize the submission of any Proposal to the Customer, the Non-Delivering Party shall reimburse the Delivering Party for an amount equal to fifty percent (50%) of the costs and expenses incurred by the Delivering Party in the preparation and submission of such Proposal, as set forth as the "feasibility study" in the Proposal provided that the Proposal was prepared and submitted in good faith consistent with reasonable commercial practices. Such reimbursement shall be paid within fifteen (15) days after the earlier to occur of the Management Committee's failure to authorize such submission, or the passage of the deadline for the submission of the Proposal to the Customer. 8.6 - Submission to Customer. After receiving authorization from the Management Committee, the Delivering Party shall be responsible for submission of the Proposal to the Customer. If the Customer requests any material revisions to the Proposal, the Delivering Party shall resubmit such revised Proposal to the Management Committee in accordance with, and subject to Section 8.5 (including the right of reimbursement for the failure to authorize the submission of such revised Proposal). After acceptance of a Proposal by the Customer, the Delivering Party shall have full discretion and responsibility for fulfillment of the Delivery Order, including the financing thereof. 8.7 - Contract Amendments. The Company shall not authorize, approve or otherwise consent to any amendment, waiver or other modification of the Prime Contract without Unanimous Vote of the Management Committee approving such action (it being recognized, however, that the Customer may have the right to unilaterally change certain terms of the Prime Contract in accordance with the terms thereof). ARTICLE IX ALLOCATIONS; DISTRIBUTIONS 9.1 - Allocations. Subject to Section 9.2 the net profits and net losses of the Company, each as determined consistent with the Company's information tax return filed for Federal income tax purposes, for each Fiscal Year shall be allocated to Members in the manner determined by the Management Committee to reasonably reflect each Member's Interest and in compliance with applicable tax law. 9.2 - Special Allocation. (a) Except as set forth in Section 8.2, for each Delivery Order assigned to a Member pursuant to the terms of Article VIII hereof, the Delivering Party shall pay twenty percent (20%) of the Stated Margin of the Delivery Order to the Company which shall make a Special Allocation equal to that amount to the Non-Delivering Party. Such payment shall be made, by wire transfer of immediately available funds, within fifteen (15) days of receipt of the first payment on account of the Delivery Order , irrespective of the receipt of the full amount due to the Delivering Party on account of the underlying Delivery Order. (b) The Members specifically acknowledge that the payments made by the Delivering Party to the Company and the Special Allocation set forth in Section 9.2(a) shall be determined based on Stated Margin, without regard to the actual profit made, or loss suffered by the Delivering Party. As the party responsible for the fulfillment of the Delivery Order, the Delivering Party shall bear all risks and receive all benefits (other than the payments due to the Company for the Special Allocation to the Non-Delivering Party pursuant to Section 9.2(a)) arising from, or otherwise related to, the underlying Delivery Order; accordingly, after making the payment to the Company on account of the Special Allocation under Section 9.2(a), the Delivering Party shall be entitled to an allocation of all payments made by the Customer on account of any Delivery Order. (c) If the Customer cancels a Proposal or Delivery Order, but allows the Company to recover its costs associated therewith, there shall not be any Special Allocation applicable to such cost reimbursement for such Delivery Order, all of which payments shall be allocated to the Delivering Party; provided, however, that if the Customer pays any portion of the Stated Margin with respect to such Delivery Order, the Delivering Party shall pay twenty percent (20%) of such margin in same manner as the Special Allocation under Section 9.2(a). 9.3 - Distributions. Except as provided in Section 9.2, all distributions of cash or other property authorized by the Management Committee (after the provision of adequate reserves) shall be made to Members pro rata in proportion to their respective Economic Interests on the record date of such distribution. Except as provided in Section 9.2, all distributions shall be made at such time and in such manner as determined by the Management Committee. No Member shall have the right to demand and receive property other than cash. All amounts withheld pursuant to the Code or any provisions of state or local tax law with respect to any payment or distribution to Members from the Company shall be treated as amounts distributed to the relevant Member(s) pursuant to this Section 9.3. 9.4 - Limitation Upon Distributions. No distribution shall be declared and paid unless, after the distribution is made, the assets of the Company are in excess of all liabilities of the Company, except liabilities to Members on account of their Capital Contributions. 9.5 - No Right to Distribution. Notwithstanding anything to the contrary in this Operating Agreement or under applicable law, no Member shall be entitled to receive any distribution of money or other property in excess of $1.00 by reason of such Person ceasing to be a Member until the dissolution of the Company, unless approved by the Management Committee. ARTICLE X ACCOUNTING, REPORTS 10.1 - Accounting Period. The Company's Fiscal Year shall be the calendar year. 10.2 - Company Books. Members shall designate a Person to maintain and preserve all accounts, books, and other relevant Company documents. Upon reasonable request, each Member shall have the right, during ordinary business hours, to inspect and copy such Company documents at the requesting Member's expense. 10.3 - Records, Audits and Reports. The Management Committee shall maintain (or cause the maintenance of) records and accounts of all operations and expenditures of the Company. At a minimum, the Company shall keep at its principal place of business the following records: (a) A current and a past list setting forth in alphabetical order the full name and last known business, residence, or mailing address of each Member, both past and present; (b) A copy of the Articles of Organization and all amendments thereto; (c) Copies of the Company's Federal and state income tax returns and financial statements for the three most recent years; (d) Copies of the Company's current effective written Operating Agreement and all amendments thereto and copies of any written Operating Agreements no longer in effect; (e) A writing setting forth the amount of cash, if any, and a statement of the agreed upon fair market value of other property or services contributed by each Member and the times at which or the events upon the happening of which any additional Capital Contributions are to be made by each Member; and (f) Other writings, if any, prepared pursuant to a requirement in this Operating Agreement. 10.4 - Returns and Other Elections. The Management Committee shall cause the preparation and timely filing of all returns required to be filed by the Company pursuant to the Code and all other tax returns deemed necessary and required in each jurisdiction in which the Company does business. All elections permitted to be made by the Company under Federal and state laws shall be made by the Management Committee. Copies of such returns, or pertinent information therefrom, shall be furnished to Members as soon as practical after the end of the Fiscal Year. 10.5 - Bank Accounts. (a) The Management Committee shall cause the Company to maintain an operating account at a bank having a superior credit rating and adequate capital surplus. All cash receipts of the Company shall be deposited in such bank account. Withdrawals from such operating account shall occur at the joint direction of the Chairman and the Vice Chairman, or their respective designees. There shall not be deposited in the operating account any funds other than those belonging to the Company, and no other funds will in any way be commingled with funds of the Company. (b) If the Customer requires that the Company (as opposed to the Delivering Party) receive payments under any Delivery Order, the Management Committee shall cause the Company to maintain an account at a bank designated by the Delivering Party. All payments under such Delivery Order shall be deposited into such account, and withdrawals from such account shall occur at the sole direction of the Delivering Party or its designees. There shall not be deposited in such account any funds other than those relating to such Delivery Order (unless the Delivering Party directs the deposit thereto of payments on account of other Delivery Order(s) undertaken by such Delivering Party), and no other funds of the Company will in any way be commingled with such account. ARTICLE XI TRANSFERABILITY 11.1 - Free Transferability. (a) Each Member shall have the right to Transfer all (but not less than all) of its Interest without the approval of the other Member and/or the Management Committee. (b) Upon and contemporaneously with any Transfer, the Transferee shall be entitled to exercise all of the rights and powers of the Transferring Member, including, all rights with respect to participation in, and appointment of representatives to, the Management Committee. (c) No transfer of an Interest shall be effective unless and until written notice (including the name and address of the proposed Transferee and the date of such transfer) has been provided to the Company and the non- transferring Member. Any Transfer of an Interest shall be deemed effective as of the date on which the Company receives such notice (unless such notice specifies a different date). 11.2 - Assumption. As a condition to recognizing the effectiveness and binding nature of any Transfer, the remaining Member shall require the Transferring Member and the proposed Transferee to execute, acknowledge and deliver to the Company such instruments of transfer, assignment and assumption and such other certificates, representations and documents, and to perform all such other acts which the remaining Member may reasonably deem necessary or desirable to: (a) constitute such Transferee as a Member; (b) confirm that the Transferee has accepted, assumed and agreed to be subject and bound by all of the terms, obligations and conditions of this Operating Agreement; (c) preserve the Company after the completion of such Transfer under the laws of each jurisdiction in which the Company is qualified, organized or does business; (d) maintain the status of the Company as a limited liability company for Federal and state tax purposes; and (e) assure compliance with any applicable state and Federal laws including securities laws and regulations. 11.3 - Outstanding Delivery Orders. The Transfer of an Interest shall not relieve the Transferring Member from any obligations or other liabilities as the Delivering Party under any pending Proposals and/or outstanding Delivery Orders. The foregoing shall not affect any consent, assignment, novation or other arrangement between the Transferring Member and the Customer with respect to such Proposals and Delivery Orders; provided, however, that, absent the approval of the Management Committee, any such arrangement with the Customer shall not affect the obligations of the Transferring Member under this Operating Agreement with respect to such Proposals and Delivery Orders (including the indemnification obligation set forth in Article 14 hereof). 11.4 - Indemnification. Each Transferring Member hereby agrees to indemnify the Company and the remaining Member against, and hold each of them harmless from any and all loss, damage, cost or expense (including attorneys' fees, tax liabilities and/or loss of tax benefits) arising directly or indirectly as a result of any Transfer or purported Transfer in violation of this Article. ARTICLE XII ADDITIONAL MEMBERS In addition to Persons who become Members as a result of a transfer pursuant to Section 11.1, any Person approved by Unanimous Vote of the Members may become a Member in the Company by the issuance by the Company of additional Interests for consideration determined by Unanimous Vote. Notwithstanding the foregoing, no new Members shall be admitted to the Company if such action would result in a breach of the Prime Contract. No new Member shall be entitled to any retroactive allocation of losses, income or expense deductions incurred by the Company. Members may, at their option, at the time a Member is admitted, close the Company books (as though the Company's tax year had ended) or make pro-rate allocations of loss, income and expense deductions to a new Member for that portion of the Company's tax year in which a Member was admitted in accordance with the provisions of Section 706(d) of the Code and the Treasury Regulations promulgated thereunder. ARTICLE XIII DISSOLUTION AND TERMINATION 13.1 - Withdrawal. Notwithstanding anything to the contrary herein, in the Delaware Act or under any applicable law, no Member shall have the power to voluntarily withdraw or otherwise retire from the Company absent approval of the Management Committee. Any such withdrawal shall not relieve such Member of any obligation theretofore incurred hereunder. 13.2 - Dissolution. (a) The Company shall be dissolved and its affairs shall be wound up upon the happening of any of the first to occur of the following: (i) at the time specified in its Article of Organization; (ii) adoption of a resolution to such effect by Unanimous Vote of the Members or the Management Committee (e.g., a resolution approving the sale, exchange, involuntary conversion or other disposition of all or substantially all of the assets of the Company); (iii) the expiration, cancellation or other termination of the Prime Contract without the possibility of extension or renewal; or (iv) entry of a decree of final dissolution under Section 18-802 of the Delaware Act; (b) As soon as possible following the occurrence of any of the events specified in Section 13.2(a) effecting the dissolution of the Company, the Members shall proceed to wind up the Company's business in accordance with the Delaware Act. 13.3 - Winding Up, Liquidation and Distribution of Assets. (a) Upon the occurrence of an event of dissolution pursuant to Section 13.2(a), an accounting shall be made by the Company's independent accountants of the accounts of the Company and of the Company's assets, liabilities and operations, from the date of the last previous accounting until the date of dissolution, and the Management Committee shall immediately proceed to wind up the affairs of the Company. (b)If the Company is dissolved and its affairs are to be wound up, the Management Committee shall: (i) Sell or otherwise liquidate all of the Company's assets as promptly as practicable (except to the extent the Management Committee may determine to distribute any assets to Members in kind) and distribute all pending Delivery Orders to the appropriate Delivering Party; (ii) Allocate any profit or loss resulting from such sales to the Members' Capital Accounts in accordance with this Operating Agreement; (iii) Discharge all liabilities of the Company, including liabilities to Members who are creditors, to the extent otherwise permitted by law, other than liabilities to Members for distributions, and establish such reserves as may be reasonably necessary to provide for contingent or liabilities of the Company (for purposes of determining the Capital Accounts of Members, the amounts of such reserves shall be deemed to be an expense of the Company); (iv) Distribute the remaining assets in the following order: (1) If any assets of the Company are to be distributed in kind, the net fair market value of such assets as of the date of dissolution shall be determined by independent appraisal or Unanimous Vote. Such assets shall be deemed to have been sold as of the date of dissolution for their fair market value, and the Capital Account of each Member shall be adjusted pursuant to the provisions of this Operating Agreement to reflect such deemed sale; and (2) The positive balance (if any) of each Member's Capital Account (as determined after taking into account all Capital Account adjustments for the Company's taxable year during which the liquidation occurs) shall be distributed to Members, either in cash or in kind, as determined by Members, with any assets distributed in kind being valued for this purpose at their fair market value. Any such distributions to Members in respect of their respective Capital Accounts shall be made in accordance with the Code and applicable Treasury Regulations. (c) Upon completion of the winding up, liquidation and distribution of the assets, the Company shall be deemed terminated. (d) The Management Committee and Members shall comply with the requirements of applicable law pertaining to the winding up of the affairs of the Company and the final distribution of its assets, and the Management Committee shall be authorized to make appropriate filings with governmental agencies and take appropriate actions in connection therewith to effect the dissolution of the Company. 13.4 - Return of Contribution Nonrecourse to Other Members. Except as provided by law or as expressly provided in this Operating Agreement, upon dissolution, each Member shall look solely to the assets of the Company for the return of its positive Capital Account. If the Company's property remaining after the payment or discharge of the debts and liabilities of the Company is insufficient to return the cash contribution of any Member, such Member shall have no recourse against any other Member. 13.5 - Delivery Orders. The dissolution and liquidation of the Company shall not affect in any manner whatsoever the obligations (including warranties to the Customer) and rights of the Delivering Party under the Delivery Orders, all of which shall survive the foregoing dissolution and liquidation. To the extent not yet paid, the Special Allocation of Section 9.2 also shall survive dissolution and liquidation without modification. The Company shall take such action as is reasonably necessary in connection with its dissolution and liquidation to effect the foregoing. ARTICLE XIV INDEMNIFICATION 14.1 - Liability of Members. No Member (in its capacity as such, as opposed to the Delivering Party) shall be liable, responsible or accountable in damages or otherwise to any of other Members or the Company with respect to any and all claims arising out of the performance or non-performance of obligations by it in good faith on behalf of the Company and in a manner reasonably believed by it to be within the scope of the authority granted to it by this Operating Agreement and in the best interests of the Company, whether such claim is based on contract, tort, or otherwise, except for breach of fiduciary duty, gross negligence or willful misconduct. For purposes of this Section 14.1, any action or inaction by any Member taken or omitted to be taken following receipt of approval by the Management Committee shall not constitute breach of fiduciary duty, gross negligence or willful misconduct. 14.2 - Indemnification by Company. The Company agrees to indemnify each Member against, and hold each of them harmless from, any loss, cost, expense (including reasonable attorneys' fees), liability or damage suffered or incurred by reason of any action, inaction or decision performed or made by them in good faith in connection with the business of the Company, except for breach of fiduciary duty, gross negligence or willful misconduct, provided that (i) such actions, inaction or decisions could reasonably be believed to be within the scope of its authority under this Operating Agreement and in the best interests of the Company; or (ii) were undertaken, not undertaken, or made following approval by the Management Committee; and provided further that the foregoing indemnity shall not extend to the Delivering Party for any claim or liability relating to any Delivery Order undertaken by it. This indemnification shall include the payment of all reasonable attorneys' fees and other expenses incurred by any Member in connection with the defense of any such claim made against it, including any claim asserted by any Member individually, with other Members and/or with the Company, as a class action or as a derivative action. Any indemnity payable under this Section 14.2 shall be satisfied solely from Company assets and no Member shall have any obligation with respect to such indemnity. 14.3 - Indemnification by Members. Each Member agrees to indemnify the other Member and the Company against, and hold each of them harmless from, any loss, cost, expense (including reasonable attorneys' fees), liability or damage suffered or incurred by reason of, arising out of, or in any way related to any breach or failure to perform by such Member of any covenant, agreement, representations or warranties of such Member contained in this Operating Agreement or any unauthorized act taken by such Member in the name of the Company or any other Member. 14.4 - Defense of Claims. (a) If any Member receives notice of the assertion of any claim with respect to which indemnification is to be sought under this Operating Agreement, the Member seeking indemnification (the "Indemnitee") shall notify the party from whom the Indemnitee is seeking indemnification (the "Indemnifying Party") within ten (10) days after the Indemnitee's receipt of notice of such claim. Such notice shall describe the nature of the claim in reasonable detail and shall indicate the estimated amount, if practicable, of the potential loss that has been or may be sustained by the Indemnitee. If the claim involves the Customer or any Person that is not a Member or an Affiliate of a Member (a "Third Party Claim"), the Indemnifying Party will have the right to participate in or, by giving written notice to the Indemnitee, to elect to assume the defense of such Third Party Claim at such Indemnifying Party's expense and by such Indemnifying Party's own counsel, provided that the counsel for the Indemnifying Party who shall conduct the defense of such Third Party Claim shall be reasonably satisfactory to the Indemnitee. The Indemnitee shall cooperate in good faith in such defense of Third Party Claims at such Indemnitee's own expense. If an Indemnifying Party elects not to assume the defense of any Third Party Claim, the Indemnitee may compromise or settle such Third Party Claim over the objection of the Indemnifying Party, which settlement or compromise shall conclusively establish the Indemnifying Party's liability pursuant to this Agreement. (b) If, within thirty (30) days after an Indemnitee provides written notice to the Indemnifying Party of any Third Party Claims, the Indemnitee receives written notice from the Indemnifying Party that such Indemnifying Party has elected to assume the defense of such Third Party Claim as provided in Section 14.4(a), the Indemnifying Party will not be liable for any legal expenses subsequently incurred by the Indemnitee in connection with the defense thereof; provided, however, that if the Indemnifying Party shall fail to take reasonable steps necessary to diligently defend such Third Party Claim within thirty (30) days after receiving notice from the Indemnitee that the Indemnitee believes the Indemnifying Party has failed to take such steps, the Indemnitee may assume its own defense and the Indemnifying Party shall be liable for all reasonable expenses thereof. (c) Without the prior written consent of the Indemnitee, the Indemnifying Party shall not enter into any settlement of any Third Party Claim which would lead to liability or create any financial, operating or other obligation on the part of the Indemnitee for which the Indemnitee is not entitled to indemnification hereunder. If a firm offer is made to settle a Third Party Claim without leading to liability or the creation of a financial, operating or other obligation on the part of the Indemnitee for which the Indemnitee is not entitled to indemnification hereunder, and the Indemnifying Party desires to accept and agree to such offer, then the Indemnifying Party shall give written notice to the Indemnitee to that effect, together with assurances reasonably satisfactory to the Indemnitee of the Indemnifying Party's ability to pay or perform such settlement. If the Indemnitee fails to consent to such firm offer within fifteen (15) days after its receipt of such notice and assurance, the Indemnifying Party shall be relieved of its obligations to defend such Third Party Claim and the Indemnitee may contest or defend such Third Party Claim. In such event, the maximum liability of the Indemnifying Party as to such Third Party Claim will be the amount of such settlement offer plus reasonable costs and expenses paid or incurred by Indemnitee up to the date of said notice. (d) If the amount of any indemnified loss, at any time after the making of an indemnity payment in respect thereof, is reduced by recovery, settlement or otherwise under or pursuant to any insurance coverage, or pursuant to any claim, recovery, settlement or payment by, from or against any other entity, the amount of such reduction (up to the amount of the prior indemnity payment), less any costs, expenses or premiums incurred in connection therewith (together with interest thereon from the date of payment of such recovery at the publicly announced prime rate then in effect of Citibank, N.A. or its successor) shall promptly be repaid by the Indemnitee to the Indemnifying Party. (e) A failure to give timely notice as provided in this Section 14.4 shall not affect the rights or obligations of any Member hereunder except if, and only to the extent that, as a result of such failure, the Member which was entitled to receive such notice was actually prejudiced as a result of such failure. 14.5 - Late Charge. Without prejudice to any other rights of the aggrieved Member hereunder or under applicable law, each Member shall pay to the other Member a late charge equal to one and one half percent (_1.5_%) of any payment of any payment due hereunder (including payment due under Section 9.2) which is not paid within fifteen (15) days after the due date thereof. Such late charge shall be made on a monthly basis and for each month or part thereof such payment is delinquent. Such late charge relates to costs and expenses of the aggrieved Member resulting from such overdue payment. 14.6 Survival. The provisions of this Section shall survive the withdrawal of any Member from the Company and the dissolution of the Company. ARTICLE XV REPRESENTATIONS, WARRANTIES AND COVENANTS 15.1 - Representations. Each Member hereby represents, warrants to, and covenants with, the Company and to each other as follows: (a) It is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and has all requisite power and authority to execute, deliver and perform this Operating Agreement and to own or hold under lease its property and assets and to transact the business in which it is engaged or presently proposes to engage. (b) It is duly qualified, licensed or registered to transact its business and is in good standing in each jurisdiction in which it owns or leases real property or in which the nature of its business or any Delivery Order requires (or will require) it to be so qualified. (c) It has the full power and authority to execute and deliver this Operating Agreement and to perform all its obligations hereunder. (d) The execution, delivery and performance of this Operating Agreement and the performance of its obligations hereunder (i) have been duly authorized by all requisite action on its part; (ii) will not violate or contravene (1) any provision of any law, rule or regulation or any judgment or order of any governmental authority known to it, in effect as of the date hereof and to which it or any of its assets may be bound and which, if violated or contravened, would materially adversely affect its ability to perform its obligations under this Operating Agreement, or (2) any provision of its governing documents; and (iii) will not violate, be in conflict with, result in a breach of or constitute a default (with or without the giving of notice or the passage of time or both) under any instrument, indenture, agreement or other obligation to which it is a party or by which it or any of its assets may be bound. (e) It has duly executed and delivered this Operating Agreement, and this Operating Agreement constitute its legal, valid and binding obligation, enforceable against it in accordance with its terms. (f) There are no actions, suits or proceedings before any governmental authority pending (and which has been served upon it or of which it otherwise has received written notice), or, to the best of its knowledge threatened, against or affecting it or any of its assets, which could have a material effect on it or its business. (g) No consent, approval or authorization of, or registration or filing with, any person, including any governmental authority or regulatory agency, is required in connection with the execution and delivery of this Operating Agreement or its performance of its obligations hereunder or any Delivery Order undertaken by it, other than those previously obtained and those that such Member will obtain to fulfill Delivery Orders assigned to it. (h) It has performed its own independent investigation, with due diligence, of the investment represented by participation in the Company and the Prime Contract, and has formed its own independent assessments of the risks and potential returns of the Prime Contract, and is not relying on any representation or warranty of any other Member or any Affiliate thereof in connection with its decision to participate in the Prime Contract, other than the representations and warranties contained in this Article 15. (i) It is acquiring its Interest in the Company for investment purposes and not with a view to, or for resale in connection with, a distribution or public offering thereof within the meaning of applicable securities laws. (j) It has no agreement, understanding or arrangement with any person or entity, and has no present intention of entering into any such agreement, understanding or arrangement, to Transfer its Interest. 15.2. - General Covenants. (a) Each Member shall furnish to the Company all information regarding such Member or its Affiliates required for inclusion in any documents to be prepared or filed in connection with the business of the Company, and all such information will be true and correct in all material respects and will not omit to state any material fact necessary to be stated therein in order that such information not be misleading. (b) Each Member shall comply with: (i) all applicable governmental laws and regulations, and all required governmental and other approvals applicable to or required for the Prime Contract; and (ii) all material conditions and requirements of the Prime Contract. (c) Each Member shall forward, not later than three (3) Business Days following the receipt thereof, to the Company and the Members a copy of any notice received by the Company or such Member of any default under the Prime Contract or any other adverse claim asserted by the Customer. (d) Each Member shall use commercially reasonable efforts to prepare Proposals and obtain Delivery Orders in accordance with the Prime Contract. 15.3. - FCPA. (a) Each Member represents to the other that in connection with its activities involving the Company and the Prime Contract (i) it and its Agents have not taken any action or failed to take any action which could violate the FCPA; and (ii) none of its Agents is an employee or official of a government or an active member of the armed forces of any government, nor do any of its Agents hold any official positions with a government. (b) Each Member shall not, and cause its owners and Agents not to, take any action or fail to take any action involving the Company and the Prime Contract which could violate the FCPA. (c) The Members shall cause the Company to adopt resolutions that prohibit: (i) any action or omission by the Company or on its behalf which violates the FCPA; (ii) any expenditure for other than lawful purposes by the Company or by others on its behalf; and (iii) any payments to government officials or to the Customer representatives by the Company or by any Agent of a Delivering Party, except those required by law and made to such officials and their representatives and not in their individual capacities. (d) Each Delivering Party shall retain only Agents that have undertaken the following: (i) to comply with the FCPA and the laws of the country in which the Agent performs services; (ii) to make no expenditures for other than lawful purposes; (iii) to make no payments to governmental officials or to customer representatives, except those required by law and made to such officials and their representatives and not in their individual capacities and to furnish, if requested to do so, a written representation that such official or representative has no interest in the business or profits of the Agent; (iv) to certify in writing on request as to Agent's compliance with these principles; (v) to consent to the disclosure of the Agent's agreement at the discretion of the Company; and (vi) failure to abide by these undertakings by an Agent shall constitute cause for termination of the Agent under the terms of each Agent's agreement. (e) Each Member agrees to indemnify the Company, the other Member, its Affiliates, and their respective Agents from and hold each of them harmless against any and any loss, cost, expense (including reasonable attorneys' fees), liability or damage suffered or incurred by each of them in connection with or arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, in which such indemnified Person may be involved, or threatened to be involved, as a party or otherwise, by reason of such indemnifying Member's breach or alleged breach of this Section 15.3. A Person shall be entitled to the benefits of the foregoing indemnification so long as such Person would have qualified therefor at the time of such breach or alleged breach, notwithstanding any subsequent change in its relationship to the indemnified Member. The right to indemnification in this Section 15.3(e) shall be in addition to any other rights which any Person may have or hereafter acquire under any law, agreement or otherwise. 15.4 - Confidentiality. (a) Each Member shall treat in a confidential manner Site Assignments, all non-public information it receives about the Company, the Prime Contract (including any Proposal(s) and Delivery Order(s)) and the other Member, in each case which is designated by the disclosing party as confidential and which has not become generally known to the public other than as a result of such Member's acts or omissions to act, and shall not disclose such information to any Person except as provided in Section 15.4(b). The obligations of the Members under this Section 15.4 shall terminate two (2) years from the date of receipt of such information regardless of the earlier termination of this Operating Agreement or the dissolution of the Company. (b) Notwithstanding anything in Section 15.4(a) to the contrary, a Member may disclose any such non-public information to: (i) its Affiliates, accountants, attorneys or Agents and their respective directors, officers and agents, and then only to the extent such disclosure, in the good faith determination of such Member, is necessary for the performance of the duties or responsibilities of such Persons; (ii) in connection with any action, litigation or proceeding arising out of or in connection with this Operating Agreement or the other documents delivered hereunder or the enforcement hereof or thereof; (iii) as may be required by law or judicial order or decree or as requested by a governmental agency or authority, in which case such Member, to the extent permitted by law, shall promptly notify the other Member of such disclosure; and (iv) any proposed Transferee in connection with a Transfer of its Interest if such proposed Transferee agrees in writing to maintain the confidentiality of such information. (c) The Company and the Members shall coordinate any publicity regarding the Prime Contract and this Operating Agreement, including relations with the Customer. ARTICLE XVI ARBITRATION 16.1. Arbitration. (a) If a dispute arises between any Members regarding any matter arising under, or relating to, this Operating Agreement and/or the Prime Contract (including any Proposal or Delivery Order), then the aggrieved Member shall promptly notify the other Member of the dispute within ten (10) days after such dispute arises. In such event, each Member shall, within five (5) days thereafter, nominate a senior officer of its management to meet at the principal office of the Company, or at any other mutually agreed location, to resolve the dispute. If the Members do not resolve the dispute within twenty (20) days after such nomination, each Member shall have the right to submit the matter to arbitration pursuant to the procedures set forth in this Section 16.1. (b) If any dispute is not resolved within the time period set forth in Section 16.1(a), such dispute shall be finally and conclusively determined by the decision of a board of arbitration consisting of three (3) members (the "Arbitration Panel") and selected as hereinafter provided. Each Member shall select one (1) member, and the third member shall be selected by mutual agreement of the other members (or, in the absence of such agreement, the American Arbitration Association shall appoint a duly qualified third member). Any Member may replace the member selected solely by such Member before the first meeting of the full Arbitration Panel. (c) The arbitration proceeding shall be governed by the commercial arbitration rules of the American Arbitration Association, to the extent not inconsistent with the terms hereof. The Arbitration Panel shall meet in Hartford, Connecticut (or such other place within Connecticut as the majority of the Arbitration Panel shall determine) and apply the substantive law set forth in Section 17.2. The Arbitration Panel shall render a written decision (concurred in by a majority of the members of the Arbitration Panel), to the extent practical, within thirty (30) days after the commencement of the proceedings. (d) The decision of the Arbitration Panel shall be subject to review in accordance with, and subject to, the limitations of, applicable laws, and may be enforced in the same manner as if it was a final judicial judgment and any monetary award shall be paid within thirty (30) days after the decision. The arbitration set forth herein shall be to the exclusion of any other form of settlement or judicial process, except insofar as said arbitration proceeding or the enforcement of any award may ultimately be frustrated by any Member or by any authority, in which case the injured Member may not be restricted from access to any judicial or extrajudicial forum. If an action is instituted to enforce such arbitration proceeding or decision, the Member prevailing in such action shall be entitled to recover from the other Member reasonable attorneys' fees and costs of such suit as part of the judgment. (e) Each Member shall bear its own expenses in any arbitration. Arbitration fees shall be borne by the Parties in inverse proportion to the proportion that the arbitration award bears to the amount claimed by the Member submitting the matter to arbitration, unless otherwise determined by the Arbitration Panel. 16.2 - Continued Performance. Pending final resolution of any dispute, this Operating Agreement shall continue in full force and effect, and the Members shall continue to fulfill their respective obligations hereunder, including with respect to the payment of any funds due and payable under Section 9.2. 16.3 - Exceptions. Notwithstanding anything to the contrary in the foregoing in this Article 16: (a) any dispute seeking equitable relief for the alleged breach of the confidentiality undertakings in Section 15.4(a) or of the non-compete undertakings in Section 15.5 shall not be subject to mandatory arbitration, and all of the parties' respective rights and remedies in such event, whether established hereby, under applicable law or elsewhere, including specific performance, shall be cumulative and exercised singularly or concurrently. If an action is instituted as a result of such dispute, the party prevailing in such action shall be entitled to recover from the other party reasonable attorneys' fees and costs of such suit as part of the judgment; and (b) the Members may refer any dispute involving financial or accounting matters, including any dispute under Section 9.2, to an Arbitration Panel consisting of one (1) partner of an internationally recognized accounting firm with offices in Connecticut and mutually acceptable to the Members. ARTICLE XVII MISCELLANEOUS PROVISIONS 17.1 - Notices. Any notice, demand, or communication required or permitted to be given by any provision of this Operating Agreement shall be deemed to have been sufficiently given or served for all purposes if in writing and delivered by (a) hand against receipt, (b) certified or registered mail, postage pre-paid, return receipt requested, (c) a courier who guarantees next business day delivery to such party and (d) telecopy, at its address set forth on Exhibit A or on the books and records of the Company; provided that any Member may notify the Company and the other Members of another address. Except as otherwise provided herein, any such notice shall be deemed to be received when delivered. 17.2 - Governing Law. This Operating Agreement, and the application of interpretation hereof, shall be governed exclusively by its terms and by the laws of the State of Delaware. 17.3 - Integration; Amendments. This Operating Agreement sets forth the entire agreement of the parties with respect to the subject matter herein and takes precedence over all prior understandings, including the Teaming Agreement dated April 14, 2000. This Operating Agreement may not be amended except by the unanimous written agreement of all Members. 17.4 - Execution of Additional Instruments. Each Member hereby agrees to execute such other and further statements of interest and holdings, designations, powers of attorney and other instruments necessary to comply with any laws, rules or regulations. 17.5 - Interpretation. In this Operating Agreement, the singular includes the plural and the plural the singular; the words "including," "includes" and "include" shall be deemed to be followed by the words "without limitation"; references to Sections, Schedules or Exhibits are to those of this Operating Agreement unless otherwise indicated; references to laws and regulations, unless otherwise specified, shall be deemed to include all corresponding provisions of subsequent or superseding laws and regulations affecting the same; references to agreements and other contractual instruments, unless otherwise specified, shall be deemed to include all subsequent amendments and other modifications to such instruments in accordance with the terms thereof; the phrase "and/or" shall be deemed to mean the words both preceding and following such phrase, or either of them; and "days" refers to calendar days unless otherwise indicated. 17.6 - Headings. The headings in this Operating Agreement are inserted for convenience only and are in no way intended to describe, interpret, define, or limit the scope, extent or intent of this Operating Agreement or any provision hereof. 17.7 - Waivers; Remedies. The failure of any party to seek redress for violation of or to insist upon the strict performance of any covenant or condition of this Operating Agreement shall not prevent a subsequent act, which would have originally constituted a violation, from having the effect of an original violation. Other than as set forth herein, the rights and remedies provided by this Operating Agreement are cumulative and the use of any one right or remedy by any party shall not preclude or waive the right to use any or all other remedies. Said rights and remedies are given in addition to any other rights the parties may have by law, statute, ordinance or otherwise. No party shall be liable to any other party for any consequential, special or other indirect damages as a result of any breach hereof. 17.8 - Severability. If any provision of this Operating Agreement or the application thereof to any Person or circumstance shall be invalid, illegal or unenforceable to any extent, the remainder of this Operating Agreement and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by law; provided, however, that if the invalidity, illegality or unenforceability of any such provision results in a material alteration of the terms of this Operating Agreement, the remaining provisions of this Operating Agreement shall be adjusted equitably so that as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the fullest extent possible. 17.9 - Successors and Assigns. Each and all of the covenants, terms, provisions and agreements herein contained shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 17.10 - No Third Party Beneficiaries. None of the provisions of this Operating Agreement shall be for the benefit of or enforceable by any creditors of the Company or any other Person who is not a Member or a party hereto. 17.11 - Counterparts. This Operating Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument, and in pleading or proving any provision of this Operating Agreement, it shall not be necessary to produce more than one complete set of such counterparts. 17.12 - No Registration. THE INTERESTS REPRESENTED BY THIS OPERATING AGREEMENT HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR ANY AGENCY OF ANY STATE. ACCORDINGLY, THE TRANSFER OF ANY SUCH INTEREST IS RESTRICTED AND MAY NOT BE ACCOMPLISHED EXCEPT IN ACCORDANCE WITH THIS OPERATING AGREEMENT AND APPLICABLE LAW. IF REQUESTED BY THE COMPANY, THE TRANSFERRING MEMBER SHALL PROVIDE AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH TRANSFER COMPLIES WITH APPLICABLE LAW. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] IN WITNESS WHEREOF, the undersigned Members have hereunto set their hands or caused this instrument to be executed as of the ___ day of __________, 2000. ERI SERVICES, INC. HEC INC. By: ________________________ By: __________________________ Name: Neil Petchers Name: James B. Redden Title:Senior Vice Chairman Title: Executive Vice President and and General Manager Chief Operating Officer EXHIBIT A INITIAL MEMBERS OF ERI/HEC EFA-Med, LLC Member Initial Capital Interest Voting Contribution Percentage ERI Services, Inc. $500.00 50% 50% 350 Fairfield Avenue Bridgeport, CT _______ HEC Inc. $500.00 50% 50% 24 Prime Parkway Natick, MA 01760 TOTAL: $1,000.00 100% 100% Schedule 8.1 GEOGRAPHIC ALLOCATION ERI: Spain England Turkey HEC: Italy Greece Egypt Bahrain EX-99.2BYLAWS 11 b33-5.txt Exhibit B.33.5 SELECT ENERGY, INC. BY-LAWS Adopted October 7, 1996 Amended January 1, 1997 May 12, 1997 June 1, 2000 SELECT ENERGY,INC. BY-LAWS ARTICLE I MEETINGS OF SHAREHOLDERS Section 1. Meetings of the shareholders may be held at such place either within or without the State of Connecticut as may be designated by the Board of Directors. Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held in March, April, May, June or July in each year on the day and at the hour designated by the Board of Directors. Section 3. Notice of all meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than fifty days prior to the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice or be in attendance at the meeting. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and no business other than that of which notice has been so given shall be transacted at such meeting. Section 4. At all meetings of shareholders each share of common stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote. Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than seventy days and not less than ten days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed. ARTICLE II DIRECTORS Section 1. The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than sixteen Directors. Notwithstanding the foregoing, the business, property and affairs of the Company shall be managed by a Board of one Director, if only one Director has been elected and qualified, provided there is only one shareholder of the Company at such time. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified, except that a Director shall cease to be in office upon his death, resignation, lawful removal or court order decreeing that he is no longer a Director in office. Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board, or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting of Shareholders and until his successor shall be elected and qualified. Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company. All the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion. Section 4. The Board of Directors shall have power to fix from time to time the compensation of the Directors and the method of payment thereof. Section 5. Any one or more Directors may be removed from office at any time with or without any showing of cause by affirmative vote of the holders of a majority of the Company's issued and outstanding shares entitled to vote. ARTICLE III MEETINGS OF DIRECTORS Section 1. A regular meeting of the Board of Directors shall be held annually, without notice, directly following the Annual Meeting of Shareholders, for the election of officers and the transaction of other business. Section 2. All other regular meetings of the Board of Directors may be held at such time and place as the Board may from time to time determine and fix by resolution. Special meetings of the Board may be held at any place upon call of the Chairman (if there be one) or the President, or, in the event of the absence or inability of either to act, of a Vice President, or upon call of any three or more directors. Section 3. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally or by telephone, or by mail or telegraph at his last-known post office address, at least twenty-four hours prior to the time of the meeting; provided that any director may waive such notice in writing or by telegraph or by attendance at such meeting. Section 4. One-third of the directorships as fixed in accordance with Article II, Section 1 of these By-Laws shall constitute a quorum, except (subject to the provisions of Article III, Section 3) that no quorum shall consist of less than two Directors. Notwithstanding the foregoing, a quorum shall consist of one Director if only one Director has been elected and qualified, provided there is only one shareholder of the Company at such time. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors. Section 5. Except as otherwise provided by these By-Laws, the act of a majority of the Directors present at a meeting at which a quorum is present at the time of the act shall be the act of the Board of Directors. Section 6. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally or collectively, whose number shall constitute a quorum for such action, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors' written approval thereof, shall be recorded by the Secretary in the minute book of the Company. Section 7. A Director or a member of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of conference telephone or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting. ARTICLE IV OFFICERS Section 1. At its annual meeting the Board of Directors shall elect a President and a Secretary, and, if the Board shall so determine, a Chairman and a Treasurer, each of whom shall, subject to the provisions of Article IV, Section 3, hold office until the next annual election of officers and until his successor shall have been elected and qualified. Any two or more offices may be held by the same person except that the offices of the President and Secretary may not be simultaneously held by the same person. The Board shall also elect at such annual meeting, and may elect at any regular or special meeting, such other officers as may be required for the prompt and orderly transaction of the business of the Company, and each such officer shall have such authority and shall perform such duties as may be assigned to him from time to time by the Board of Directors. Any vacancy occurring in any office may be filled at any regular meeting of the Board or at any special meeting of the Board held for that purpose. Section 2. In addition to such powers and duties as these By-Laws and the Board of Directors may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office. Section 3. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the Board of Directors. ARTICLE V CHAIRMAN Section 1. The Chairman, if such office shall be filled by the Directors, shall, when present, preside at all meetings of said Board and of the shareholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VI PRESIDENT Section 1. The President shall be the chief executive officer of the Company and shall be responsible for the general supervision, direction and control of the business and affairs of the Company. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of the Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VII SECRETARY Section 1. The Secretary shall keep the minutes of all meetings of the shareholders and of the Board of Directors. He shall give notice of all meetings of the shareholders and of said Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer, and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. Section 2. The Secretary shall have the custody of the Corporate Seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these By-Laws. ARTICLE VIII ASSISTANT SECRETARIES Section 1. One or more Assistant Secretaries shall perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. The Assistant Secretaries shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Secretary. ARTICLE IX TREASURER Section 1. The Treasurer, if such office shall be filled by the Directors, shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign all checks, notes, drafts and similar instruments, except as otherwise provided for the Board of Directors. Section 2. The Treasurer shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the President or by law. Section 3. In the absence of the appointment of a Treasurer by the Board of Directors, the duties of the Treasurer may be performed by the Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE X ASSISTANT TREASURERS Section 1. One or more Assistant Treasurers, if such offices shall be filled by the Directors, shall perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. The Assistant Treasurers shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the President or the Treasurer. Section 2. In the absence of the appointment of an Assistant Treasurer by the Board of Directors, the duties of the Assistant Treasurer may be performed by the Assistant Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE XI COMMITTEES Section 1. The Board of Directors may designate two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as shall be provided in such resolution. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting of such committee, all the rights and obligations of a regular member thereof. Any vacancy on any such committee or among alternate members thereof may be filled by the Board of Directors. ARTICLE XII STOCK CERTIFICATES Section 1. All stock certificates may bear the facsimile signatures of the President or any Vice President and the Treasurer or any Assistant Treasurer and a facsimile seal of the Company, or may be signed by the President or any Vice President and the Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary, and may be sealed by any one of such officers. ARTICLE XIII CORPORATE SEAL Section 1. The corporate seal of the Company shall be circular in form with the name of the Company inscribed therein. ARTICLE XIV AMENDMENTS Section 1. These by-laws may be altered, amended, added to or repealed from time to time by an affirmative vote of the holders of a majority of the voting power of shares entitled to vote thereon at any meeting of the shareholders called for the purpose or by an affirmative vote of Directors holding a majority of the number of directorships at any meeting of the Board of Directors called for the purpose. EX-99.2BYLAWS 12 b34-3.txt Exhibit B.34.3 NORTHEAST GENERATION COMPANY BY-LAWS Adopted January 4, 1999 Amended June 1, 2000 NORTHEAST GENERATION COMPANY BY-LAWS ARTICLE I MEETINGS OF SHAREHOLDERS Section 1. Meetings of the shareholders may be held at such place either within or without the State of Connecticut as may be designated by the Board of Directors. Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held in each year on the day and at the hour designated by the Board of Directors. Section 3. Notice of all annual and special meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than sixty days prior to the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice or be in attendance at the meeting. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and no business other than that of which notice has been so given shall be transacted at such meeting. Section 4. At all meetings of shareholders each share of common stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote. Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than seventy days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed. Section 6. Any action which may be taken at a meeting of shareholders may be taken by one or more consents in writing, setting forth the action so taken or to be taken, bearing the date of signature and signed by all of the persons who would be entitled to vote upon such action at a meeting, or by their duly authorized attorneys. ARTICLE II DIRECTORS Section 1. The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than sixteen Directors. Notwithstanding the foregoing, the business, property and affairs of the Company shall be managed by a Board of one Director, if only one Director has been elected and qualified, provided there is only one shareholder of the Company at such time. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified, except that a Director shall cease to be in office upon his death, resignation, lawful removal or court order decreeing that he is no longer a Director in office. Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board, or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting of Shareholders and until his successor shall be elected and qualified. Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company. All the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion. Section 4. The Board of Directors shall have power to fix from time to time the compensation of the Directors and the method of payment thereof. Section 5. Any one or more Directors may be removed from office at any time with or without any showing of cause by affirmative vote of the holders of a majority of the Company's issued and outstanding shares entitled to vote. ARTICLE III MEETINGS OF DIRECTORS Section 1. A regular meeting of the Board of Directors shall be held annually, without notice, directly following the Annual Meeting of Shareholders, for the election of officers and the transaction of other business. Section 2. All other regular meetings of the Board of Directors may be held at such time and place as the Board may from time to time determine and fix by resolution. Special meetings of the Board may be held at any place upon call of the Chairman (if there be one) or the President, or, in the event of the absence or inability of either to act, of a Vice President, or upon call of any three or more directors. Section 3. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally, by telephone, voice mail or other electronic means, or by mail at his last- known post office address, at least twenty-four hours prior to the time of the meeting; provided that any director may waive such notice in writing or by attendance at such meeting. Section 4. One-third of the directorships as fixed in accordance with Article II, Section 1 of these By-Laws shall constitute a quorum, except that no quorum shall consist of less than two Directors. Notwithstanding the foregoing, a quorum shall consist of one Director if only one Director has been elected and qualified, provided there is only one shareholder of the Company at such time. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors. Section 5. Except as otherwise provided by these By-Laws, the act of a majority of the Directors present at a meeting at which a quorum is present at the time of the act shall be the act of the Board of Directors. Section 6. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally or collectively, whose number shall constitute a quorum for such action, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors' written approval thereof, shall be recorded by the Secretary in the minute book of the Company. Section 7. A Director or a member of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of conference telephone or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting. ARTICLE IV OFFICERS Section 1. At its annual meeting the Board of Directors shall elect a President and a Secretary, and, if the Board shall so determine, a Chairman and a Treasurer, each of whom shall, subject to the provisions of Article IV, Section 3, hold office until the next annual election of officers and until his successor shall have been elected and qualified. Any two or more offices may be held by the same person except that the offices of the President and Secretary may not be simultaneously held by the same person. The Board shall also elect at such annual meeting, and may elect at any regular or special meeting, such other officers as may be required for the prompt and orderly transaction of the business of the Company, and each such officer shall have such authority and shall perform such duties as may be assigned to him from time to time by the Board of Directors. Any vacancy occurring in any office may be filled at any regular meeting of the Board or at any special meeting of the Board held for that purpose. Section 2. In addition to such powers and duties as these By-Laws and the Board of Directors may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office. Section 3. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the Board of Directors. ARTICLE V CHAIRMAN Section 1. The Chairman, if such office shall be filled by the Directors, shall, when present, preside at all meetings of said Board and of the shareholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VI PRESIDENT Section 1. The President shall be responsible for the general supervision, direction and control of the business and affairs of the Company. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of the Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VII SECRETARY Section 1. The Secretary shall keep the minutes of all meetings of the shareholders and of the Board of Directors. He shall give notice of all meetings of the shareholders and of said Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer, and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. Section 2. The Secretary shall have the custody of the Corporate Seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these By-Laws. ARTICLE VIII ASSISTANT SECRETARIES Section 1. One or more Assistant Secretaries shall perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. The Assistant Secretaries shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Secretary. ARTICLE IX TREASURER Section 1. The Treasurer, if such office shall be filled by the Directors, shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign all checks, notes, drafts and similar instruments, except as otherwise provided for the Board of Directors. Section 2. The Treasurer shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the President or by law. Section 3. In the absence of the appointment of a Treasurer by the Board of Directors, the duties of the Treasurer may be performed by the Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE X ASSISTANT TREASURERS Section 1. One or more Assistant Treasurers, if such offices shall be filled by the Directors, shall perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. The Assistant Treasurers shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the President or the Treasurer. Section 2. In the absence of the appointment of an Assistant Treasurer by the Board of Directors, the duties of the Assistant Treasurer may be performed by the Assistant Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE XI COMMITTEES Section 1. The Board of Directors may designate two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as shall be provided in such resolution, subject to those powers expressly reserved to the Board of Directors under Connecticut law. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting of such committee, all the rights and obligations of a regular member thereof. Any vacancy on any such committee or among alternate members thereof may be filled by the Board of Directors. ARTICLE XII STOCK CERTIFICATES Section 1. All stock certificates may bear the manual or facsimile signatures of the President or any Vice President and the Treasurer, any Assistant Treasurer, Secretary or any Assistant Secretary and a seal of the Company or its facsimile. ARTICLE XIII CORPORATE SEAL Section 1. The corporate seal of the Company shall be circular in form with the name of the Company inscribed therein. ARTICLE XIV AMENDMENTS Section 1. These by-laws may be altered, amended, added to or repealed from time to time by an affirmative vote of the holders of a majority of the voting power of shares entitled to vote thereon at any meeting of the shareholders called for the purpose or by an affirmative vote of Directors holding a majority of the number of directorships at any meeting of the Board of Directors called for the purpose. EX-99.2BYLAWS 13 b35-3.txt Exhibit B.35.3 NORTHEAST GENERATION SERVICES COMPANY BY-LAWS Adopted January 4, 1999 Amended June 1, 2000 NORTHEAST GENERATION SERVICES COMPANY BY-LAWS ARTICLE I MEETINGS OF SHAREHOLDERS Section 1. Meetings of the shareholders may be held at such place either within or without the State of Connecticut as may be designated by the Board of Directors. Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held in each year on the day and at the hour designated by the Board of Directors. Section 3. Notice of all annual and special meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than sixty days prior to the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice or be in attendance at the meeting. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and no business other than that of which notice has been so given shall be transacted at such meeting. Section 4. At all meetings of shareholders each share of common stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote. Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than seventy days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed. Section 6. Any action which may be taken at a meeting of shareholders may be taken by one or more consents in writing, setting forth the action so taken or to be taken, bearing the date of signature and signed by all of the persons who would be entitled to vote upon such action at a meeting, or by their duly authorized attorneys. ARTICLE II DIRECTORS Section 1. The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than sixteen Directors. Notwithstanding the foregoing, the business, property and affairs of the Company shall be managed by a Board of one Director, if only one Director has been elected and qualified, provided there is only one shareholder of the Company at such time. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified, except that a Director shall cease to be in office upon his death, resignation, lawful removal or court order decreeing that he is no longer a Director in office. Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board, or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting of Shareholders and until his successor shall be elected and qualified. Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company. All the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion. Section 4. The Board of Directors shall have power to fix from time to time the compensation of the Directors and the method of payment thereof. Section 5. Any one or more Directors may be removed from office at any time with or without any showing of cause by affirmative vote of the holders of a majority of the Company's issued and outstanding shares entitled to vote. ARTICLE III MEETINGS OF DIRECTORS Section 1. A regular meeting of the Board of Directors shall be held annually, without notice, directly following the Annual Meeting of Shareholders, for the election of officers and the transaction of other business. Section 2. All other regular meetings of the Board of Directors may be held at such time and place as the Board may from time to time determine and fix by resolution. Special meetings of the Board may be held at any place upon call of the Chairman (if there be one) or the President, or, in the event of the absence or inability of either to act, of a Vice President, or upon call of any three or more directors. Section 3. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally, by telephone, voice mail or other electronic means, or by mail at his last- known post office address, at least twenty-four hours prior to the time of the meeting; provided that any director may waive such notice in writing or by attendance at such meeting. Section 4. One-third of the directorships as fixed in accordance with Article II, Section 1 of these By-Laws shall constitute a quorum, except that no quorum shall consist of less than two Directors. Notwithstanding the foregoing, a quorum shall consist of one Director if only one Director has been elected and qualified, provided there is only one shareholder of the Company at such time. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors. Section 5. Except as otherwise provided by these By-Laws, the act of a majority of the Directors present at a meeting at which a quorum is present at the time of the act shall be the act of the Board of Directors. Section 6. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally or collectively, whose number shall constitute a quorum for such action, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors' written approval thereof, shall be recorded by the Secretary in the minute book of the Company. Section 7. A Director or a member of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of conference telephone or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting. ARTICLE IV OFFICERS Section 1. At its annual meeting the Board of Directors shall elect a President and a Secretary, and, if the Board shall so determine, a Chairman and a Treasurer, each of whom shall, subject to the provisions of Article IV, Section 3, hold office until the next annual election of officers and until his successor shall have been elected and qualified. Any two or more offices may be held by the same person except that the offices of the President and Secretary may not be simultaneously held by the same person. The Board shall also elect at such annual meeting, and may elect at any regular or special meeting, such other officers as may be required for the prompt and orderly transaction of the business of the Company, and each such officer shall have such authority and shall perform such duties as may be assigned to him from time to time by the Board of Directors. Any vacancy occurring in any office may be filled at any regular meeting of the Board or at any special meeting of the Board held for that purpose. Section 2. In addition to such powers and duties as these By-Laws and the Board of Directors may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office. Section 3. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the Board of Directors. ARTICLE V CHAIRMAN Section 1. The Chairman, if such office shall be filled by the Directors, shall, when present, preside at all meetings of said Board and of the shareholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VI PRESIDENT Section 1. The President shall be responsible for the general supervision, direction and control of the business and affairs of the Company. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of the Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VII SECRETARY Section 1. The Secretary shall keep the minutes of all meetings of the shareholders and of the Board of Directors. He shall give notice of all meetings of the shareholders and of said Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer, and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. Section 2. The Secretary shall have the custody of the Corporate Seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these By-Laws. ARTICLE VIII ASSISTANT SECRETARIES Section 1. One or more Assistant Secretaries shall perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. The Assistant Secretaries shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Secretary. ARTICLE IX TREASURER Section 1. The Treasurer, if such office shall be filled by the Directors, shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign all checks, notes, drafts and similar instruments, except as otherwise provided for the Board of Directors. Section 2. The Treasurer shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the President or by law. Section 3. In the absence of the appointment of a Treasurer by the Board of Directors, the duties of the Treasurer may be performed by the Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE X ASSISTANT TREASURERS Section 1. One or more Assistant Treasurers, if such offices shall be filled by the Directors, shall perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. The Assistant Treasurers shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the President or the Treasurer. Section 2. In the absence of the appointment of an Assistant Treasurer by the Board of Directors, the duties of the Assistant Treasurer may be performed by the Assistant Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE XI COMMITTEES Section 1. The Board of Directors may designate two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as shall be provided in such resolution, subject to those powers expressly reserved to the Board of Directors under Connecticut law. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting of such committee, all the rights and obligations of a regular member thereof. Any vacancy on any such committee or among alternate members thereof may be filled by the Board of Directors. ARTICLE XII STOCK CERTIFICATES Section 1. All stock certificates may bear the manual or facsimile signatures of the President or any Vice President and the Treasurer, any Assistant Treasurer, Secretary or any Assistant Secretary and a seal of the Company or its facsimile. ARTICLE XIII CORPORATE SEAL Section 1. The corporate seal of the Company shall be circular in form with the name of the Company inscribed therein. ARTICLE XIV AMENDMENTS Section 1. These by-laws may be altered, amended, added to or repealed from time to time by an affirmative vote of the holders of a majority of the voting power of shares entitled to vote thereon at any meeting of the shareholders called for the purpose or by an affirmative vote of Directors holding a majority of the number of directorships at any meeting of the Board of Directors called for the purpose. EX-99.2BYLAWS 14 b36-3.txt Exhibit B.36.3 SELECT ENERGY PORTLAND PIPELINE, INC. BY-LAWS Adopted March 17, 1999 Amended June 1, 2000 SELECT ENERGY PORTLAND PIPELINE, INC. BY-LAWS ARTICLE I MEETINGS OF SHAREHOLDERS Section 1. Meetings of the shareholders may be held at such place either within or without the State of Connecticut as may be designated by the Board of Directors. Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held in each year on the day and at the hour designated by the Board of Directors. Section 3. Notice of all annual and special meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than sixty days prior to the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice or be in attendance at the meeting. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and no business other than that of which notice has been so given shall be transacted at such meeting. Section 4. At all meetings of shareholders each share of common stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote. Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than seventy days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed. Section 6. Any action which may be taken at a meeting of shareholders may be taken by one or more consents in writing, setting forth the action so taken or to be taken, bearing the date of signature and signed by all of the persons who would be entitled to vote upon such action at a meeting, or by their duly authorized attorneys. ARTICLE II DIRECTORS Section 1. The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than sixteen Directors. Notwithstanding the foregoing, the business, property and affairs of the Company shall be managed by a Board of one Director, if only one Director has been elected and qualified, provided there is only one shareholder of the Company at such time. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified, except that a Director shall cease to be in office upon his death, resignation, lawful removal or court order decreeing that he is no longer a Director in office. Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board, or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting of Shareholders and until his successor shall be elected and qualified. Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company. All the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion. Section 4. The Board of Directors shall have power to fix from time to time the compensation of the Directors and the method of payment thereof. Section 5. Any one or more Directors may be removed from office at any time with or without any showing of cause by affirmative vote of the holders of a majority of the Company's issued and outstanding shares entitled to vote. ARTICLE III MEETINGS OF DIRECTORS Section 1. A regular meeting of the Board of Directors shall be held annually, without notice, directly following the Annual Meeting of Shareholders, for the election of officers and the transaction of other business. Section 2. All other regular meetings of the Board of Directors may be held at such time and place as the Board may from time to time determine and fix by resolution. Special meetings of the Board may be held at any place upon call of the Chairman (if there be one) or the President, or, in the event of the absence or inability of either to act, of a Vice President, or upon call of any three or more directors. Section 3. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally, by telephone, voice mail or other electronic means, or by mail at his last- known post office address, at least twenty-four hours prior to the time of the meeting; provided that any director may waive such notice in writing or by attendance at such meeting. Section 4. One-third of the directorships as fixed in accordance with Article II, Section 1 of these By-Laws shall constitute a quorum, except that no quorum shall consist of less than two Directors. Notwithstanding the foregoing, a quorum shall consist of one Director if only one Director has been elected and qualified, provided there is only one shareholder of the Company at such time. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors. Section 5. Except as otherwise provided by these By-Laws, the act of a majority of the Directors present at a meeting at which a quorum is present at the time of the act shall be the act of the Board of Directors. Section 6. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally or collectively, whose number shall constitute a quorum for such action, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors' written approval thereof, shall be recorded by the Secretary in the minute book of the Company. Section 7. A Director or a member of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of conference telephone or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting. ARTICLE IV OFFICERS Section 1. At its annual meeting the Board of Directors shall elect a President and a Secretary, and, if the Board shall so determine, a Chairman and a Treasurer, each of whom shall, subject to the provisions of Article IV, Section 3, hold office until the next annual election of officers and until his successor shall have been elected and qualified. Any two or more offices may be held by the same person except that the offices of the President and Secretary may not be simultaneously held by the same person. The Board shall also elect at such annual meeting, and may elect at any regular or special meeting, such other officers as may be required for the prompt and orderly transaction of the business of the Company, and each such officer shall have such authority and shall perform such duties as may be assigned to him from time to time by the Board of Directors. Any vacancy occurring in any office may be filled at any regular meeting of the Board or at any special meeting of the Board held for that purpose. Section 2. In addition to such powers and duties as these By-Laws and the Board of Directors may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office. Section 3. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the Board of Directors. ARTICLE V CHAIRMAN Section 1. The Chairman, if such office shall be provided for and filled by the Directors, shall, when present, preside at all meetings of said Board and of the shareholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VI PRESIDENT Section 1. The President shall be responsible for the general supervision, direction and control of the business and affairs of the Company. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of the Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VII SECRETARY Section 1. The Secretary shall keep the minutes of all meetings of the shareholders and of the Board of Directors. He shall give notice of all meetings of the shareholders and of said Board. He shall record all votes taken at such meetings. He shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. Section 2. The Secretary shall have the custody of the Corporate Seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these By-Laws. ARTICLE VIII ASSISTANT SECRETARIES Section 1. One or more Assistant Secretaries, if such office shall be provided for and filled by the Directors, shall perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. The Assistant Secretaries shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Secretary. ARTICLE IX TREASURER Section 1. The Treasurer, if such office shall be filled by the Directors, shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign all checks, notes, drafts and similar instruments, except as otherwise provided for the Board of Directors. Section 2. The Treasurer shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the President or by law. Section 3. In the absence of the appointment of a Treasurer by the Board of Directors, the duties of the Treasurer may be performed by the Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE X ASSISTANT TREASURERS Section 1. One or more Assistant Treasurers, if such offices shall be filled by the Directors, shall perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. The Assistant Treasurers shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the President or the Treasurer. Section 2. In the absence of the appointment of an Assistant Treasurer by the Board of Directors, the duties of the Assistant Treasurer may be performed by the Assistant Treasurer of Northeast Utilities Service Company, as agent for the Company. ARTICLE XI COMMITTEES Section 1. The Board of Directors may designate two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as shall be provided in such resolution, subject to those powers expressly reserved to the Board of Directors under Connecticut law. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting of such committee, all the rights and obligations of a regular member thereof. Any vacancy on any such committee or among alternate members thereof may be filled by the Board of Directors. ARTICLE XII STOCK CERTIFICATES Section 1. All stock certificates may bear the manual or facsimile signatures of the President or any Vice President and the Treasurer, any Assistant Treasurer, Secretary or any Assistant Secretary and a seal of the Company or its facsimile. ARTICLE XIII CORPORATE SEAL Section 1. The corporate seal of the Company shall be circular in form with the name of the Company inscribed therein. ARTICLE XIV AMENDMENTS Section 1. These by-laws may be altered, amended, added to or repealed from time to time by an affirmative vote of the holders of a majority of the voting power of shares entitled to vote thereon at any meeting of the shareholders called for the purpose or by an affirmative vote of Directors holding a majority of the number of directorships at any meeting of the Board of Directors called for the purpose. EX-99.13OTHCONTRCT 15 b38-1.txt Exhibit B.38.1 Certificate of Incorporation Stock Corporation State of Connecticut Secretary of the State 1. The name of the corporation is Yankee Energy Production Services, Inc. 2. The nature of the business to be transacted, or the purposes to be promoted or carried out by the corporation, are as follows: To engage in the financing and investment of natural gas cogeneration projects. To engage in any lawful act or activity for which corporations may be formed under the stock corporation Act of the State of Connecticut, including, without limitation, such other business and the purposes of the corporation as described above. The enumeration of specific powers shall not be taken to limit or abridge the general powers of the corporation. 3. The designation of each class of shares, the authorized number of shares of each such class, and the par value (if any) of each share thereof are as follows: There shall be one class of capital stock, designated "Common Stock" and having no par value, of which 10,000 shares will be authorized. 4. The terms, limitations and relative rights and preferences of each class of shares and series thereof (if any), or an express grant of authority to the board of directors pursuant to Section 33-341, 1959 Supp. Conn G.S. are as follows: There is only one class of shares authorized above. 5. The minimum amount of stated capital with which the corporation shall commence business is $1,000. 6. Any action which, under any provision of Ch. 599, Title 33, of the Connecticut General Statutes, Revision of 1958, as amended, may be taken at a meeting of shareholders may also be taken without a meeting, by consent, in writing, setting forth the action to be taken, signed by persons holding not less than a majority of the voting power of shares, or of the shares of any particular class entitled to vote thereon or to take such action, or their duly authorized attorneys, all in accordance with Section 33-330 of the Connecticut General Statutes. Dated this 30th day of June, 1993. Name of incorporator: Philip T. Ashton /S/ Philip T. Ashton Appointment of Statutory Agent For Service Domestic Corporation Secretary of the State 30 Trinity Street Hartford, CT 06106 Name of Corporation: Yankee Energy Production Services, Inc. The above corporation appoints as its statutory agent for service, one of the following: Name of Natural Person Who is Resident of Connecticut: Mary J. Healey Business Address 599 Research Parkway, Meriden, CT 06450 Residence Address 99 Laurel Road, New Britain, CT 06052 Authorization: Name of Incorporator: Philip T. Ashton /S/ Philip T. Ashton 6/30/93 Charles E. Gooley, Vice President /S/ Charles E. Gooley 6/30/93 Acceptance: Mary J. Healey /S/ Mary J. Healey EX-99.13OTHCONTRCT 16 b38-2.txt Exhibit B.38.2 CERTIFICATE OF MERGER OF YANKEE ENERGY SYSTEM, INC. (A Connecticut Corporation) WITH AND INTO NU ACQUISITION CORP. (A Connecticut Corporation) To the Secretary of the State State of Connecticut Pursuant to the provisions of the Connecticut Business Corporation Act, the Connecticut business corporations named below do hereby adopt the following Certificate of Merger. 1. The Agreement and Plan of Merger between Yankee Energy System, Inc. ("Yankee") and Northeast Utilities ("NU") dated as of June 14, 1999, a copy of which is attached as Appendix A hereto and made a part hereof, constitutes the Plan of Merger. The Plan of Merger provides for the merger (the "Merger") of Yankee with and into NU Acquisition Corp. ("NewCo"), with NewCo as the surviving corporation changing its name to Yankee Energy System, Inc. NewCo is sometimes referred to herein as the "Surviving Corporation." Each of Yankee and NewCo is referred to herein as a "Merging Corporation" and Yankee and NewCo are referred to herein, collectively, as the "Merging Corporations." 2. The Plan of Merger was approved by vote of the respective Boards of Directors and recommended to the respective shareholders of: (i) NewCo; and (ii) Yankee. 3. The Plan of Merger requires the approval of the holders of not less than: (i) a majority of the outstanding common stock of NewCo; and (ii) two- thirds of the outstanding common stock of Yankee. 4. NewCo had 100 shares of common stock outstanding, each of which shares was entitled to one vote; and As of August 6, 1999, the record date for determination of beneficial ownership of Yankee shares entitled to vote on the Plan of Merger, Yankee had 10,633,666 shares of common stock outstanding, each of which shares was entitled to one vote. 5. The Plan of Merger was approved by the following shareholder votes: (i) By a vote of the holders of the common stock of NewCo of 100 FOR and 0 AGAINST; and (ii) By a vote of the holders of the common stock of Yankee of 7,406,109 FOR and 2,469,871 AGAINST. 6. The merger herein provided for shall become effective at 5:00 p.m. Hartford, Connecticut time on March 1, 2000 (the "Effective Time"). 7. At the Effective Time, the Surviving Corporation shall continue in existence and, without other transfer, shall succeed to and possess all of the rights, privileges, immunities and franchises, both public and private in nature, of each Merging Corporation; and all property, real, personal and mixed, and all debt and liabilities due on whatever account, and all other choses in action, and all and every other interest of or belonging to or due to each Merging Corporation shall be taken and transferred to, assumed by and vested in the Surviving Corporation without further act or deed; and the title to any real estate, or any interest therein, vested in any of the Merging Corporations shall not revert to any person or be in any way impaired by reason of the Merger. Any devise, bequest, gift or grant contained in any will or in any other instrument made before or after the Effective Time to or for the benefit of either Merging Corporation shall inure to the benefit of the Surviving Corporation. So far as is necessary for that purpose, the existence of each Merging Corporation shall be deemed to continue in and through the Surviving Corporation. The Surviving Corporation shall thenceforth be responsible and liable for all of the liabilities, obligations, and penalties of each Merging Corporation; and any claim existing or action or proceeding, civil or criminal, pending by or against any such Merging Corporation may be prosecuted as if the Merger had not taken place, or the Surviving Corporation may be substituted in the place of such Merging Corporation; and any judgment rendered against either Merging Corporation may be enforced against the Surviving Corporation. Neither the rights of creditors nor any liens upon the property of either Merging Corporation shall be impaired by the Merger. If at any time the Surviving Corporation shall consider or be advised that any further assignments, conveyances or assurances in law are necessary or desirable to vest, perfect or confirm of record in the Surviving Corporation the title to any property or rights of the Merging Corporations, or otherwise to carry out the provisions hereof and of the Plan of Merger, the proper officers and directors of the Merging Corporations as of the Effective Time shall execute and deliver any and all proper deeds, assignments and assurances in law, and do all things necessary or proper to vest, perfect or confirm title to such property or rights in the Surviving Corporation and otherwise to carry out the provisions hereof. 8. At the Effective Time, all of the cash and NU common shares into which shares of Yankee common stock shall have been converted pursuant to the Plan of Merger shall be deemed to have been issued in full satisfaction of all rights pertaining to such converted shares. 9. At the Effective Time, the holders of Yankee common stock outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such stock (except such rights, if any, as they may have pursuant to Sections 33-855 to 33-872, inclusive, of the Connecticut Business Corporation Act) and (except as aforesaid) their sole rights shall be with respect to the cash and/or NU common shares into which their shares of Yankee common stock shall have been converted pursuant to the Plan of Merger. Dated as of March 1, 2000, at Meriden, Connecticut. We hereby declare, under the penalties of false statement, that the statements made herein, insofar as they pertain to NewCo, are true. NU Acquisition Corp. By: /s/ Charles E. Gooley Name: Charles E. Gooley Title: President and Chief Executive Officer We hereby declare, under the penalties of false statement, that the statements made herein, insofar as they pertain to Yankee, are true. Yankee Energy System, Inc. By: /s/ Charles E. Gooley Name: Charles E. Gooley Title: President and Chief Executive Officer EX-99.2BYLAWS 17 b38-3.txt Exhibit B.38.3 YANKEE ENERGY SYSTEM, INC. BY-LAWS Adopted February 15, 2000 Amended March 1, 2000 YANKEE ENERGY SYSTEM, INC. BY-LAWS ARTICLE I MEETINGS OF SHAREHOLDERS Section 1. Meetings of the shareholders may be held at such place either within or without the State of Connecticut as may be designated by the Board of Directors. Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held in each year on the day and at the hour designated by the Board of Directors. Section 3. Notice of all annual and special meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than sixty days prior to the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice or be in attendance at the meeting. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and, unless all shareholders waive such notice, no business other than that of which notice has been so given shall be transacted at such meeting. Section 4. At all meetings of shareholders each share of common stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote. Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than seventy days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed. Section 6. Any action which may be taken at a meeting of shareholders may be taken by one or more consents in writing, setting forth the action so taken or to be taken, bearing the date of signature and signed by all of the persons who would be entitled to vote upon such action at a meeting, or by their duly authorized attorneys. ARTICLE II DIRECTORS Section 1. The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than sixteen Directors. Notwithstanding the foregoing, the business, property and affairs of the Company shall be managed by a Board of one Director, if only one Director has been elected and qualified, provided there is only one shareholder of the Company at such time. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified, except that a Director shall cease to be in office upon his death, resignation, lawful removal or court order decreeing that he is no longer a Director in office. Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board, or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting of Shareholders and until his successor shall be elected and qualified. Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company. All the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion. Section 4. The Board of Directors shall have power to fix from time to time the compensation of the Directors and the method of payment thereof. Section 5. Any one or more Directors may be removed from office at any time with or without any showing of cause by affirmative vote of the holders of a majority of the Company's issued and outstanding shares entitled to vote. ARTICLE III MEETINGS OF DIRECTORS Section 1. A regular meeting of the Board of Directors shall be held annually, without notice, directly following the Annual Meeting of Shareholders, for the election of officers and the transaction of other business. Section 2. All other regular meetings of the Board of Directors may be held at such time and place as the Board may from time to time determine and fix by resolution. Special meetings of the Board may be held at any place upon call of the Chairman (if there be one) or the President, or, in the event of the absence or inability of either to act, of a Vice President, or upon call of any three or more directors. Section 3. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally, by telephone, voice mail or other electronic means, or by mail at his last- known post office address, at least twenty-four hours prior to the time of the meeting; provided that any director may waive such notice in writing or by attendance at such meeting. Section 4. One-third of the directorships as fixed in accordance with Article II, Section 1 of these By-Laws shall constitute a quorum, except that no quorum shall consist of less than two Directors. Notwithstanding the foregoing, a quorum shall consist of one Director if only one Director has been elected and qualified, provided there is only one shareholder of the Company at such time. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors. Section 5. Except as otherwise provided by these By-Laws, the act of a majority of the Directors present at a meeting at which a quorum is present at the time of the act shall be the act of the Board of Directors. Section 6. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally or collectively, whose number shall constitute a quorum for such action, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors' written approval thereof, shall be recorded by the Secretary in the minute book of the Company. Section 7. A Director or a member of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of conference telephone or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting. ARTICLE IV OFFICERS Section 1. At its annual meeting the Board of Directors shall elect a President, a Secretary, a Treasurer and, if the Board shall so determine, a Chairman, each of whom shall, subject to the provisions of Article IV, Section 3, hold office until the next annual election of officers and until his successor shall have been elected and qualified. Any two or more offices may be held by the same person except that the offices of the President and Secretary may not be simultaneously held by the same person. The Board shall also elect at such annual meeting, and may elect at any regular or special meeting, such other officers as may be required for the prompt and orderly transaction of the business of the Company, and each such officer shall have such authority and shall perform such duties as may be assigned to him from time to time by the Board of Directors. Any vacancy occurring in any office may be filled at any regular meeting of the Board or at any special meeting of the Board held for that purpose. Section 2. In addition to such powers and duties as these By-Laws and the Board of Directors may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office. Section 3. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the Board of Directors. ARTICLE V CHAIRMAN Section 1. The Chairman, if such office shall be filled by the Directors, shall, when present, preside at all meetings of said Board and of the shareholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VI PRESIDENT Section 1. The President shall be responsible for the general supervision, direction and control of the business and affairs of the Company. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of the Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VII SECRETARY Section 1. The Secretary shall keep the minutes of all meetings of the shareholders and of the Board of Directors. He shall give notice of all meetings of the shareholders and of said Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer, and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. Section 2. The Secretary shall have the custody of the Corporate Seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these By-Laws. ARTICLE VIII ASSISTANT SECRETARIES Section 1. One or more Assistant Secretaries shall perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. The Assistant Secretaries shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Secretary. ARTICLE IX TREASURER Section 1. The Treasurer shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign all checks, notes, drafts and similar instruments, except as otherwise provided by the Board of Directors. Section 2. The Treasurer shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. ARTICLE X ASSISTANT TREASURERS Section 1. One or more Assistant Treasurers shall perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. The Assistant Treasurers shall perform such additional duties as may assigned to them form time to time by the Board of Directors, the Chairman, the President or the Treasurer. ARTICLE XI COMMITTEES Section 1. The Board of Directors may designate two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as shall be provided in such resolution, subject to those powers expressly reserved to the Board of Directors under Connecticut law. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting of such committee, all the rights and obligations of a regular member thereof. Any vacancy on any such committee or among alternate members thereof may be filled by the Board of Directors. ARTICLE XII STOCK CERTIFICATES Section 1. All stock certificates may bear the manual or facsimile signatures of the President or any Vice President and the Treasurer, any Assistant Treasurer, Secretary or any Assistant Secretary and a seal of the Company or its facsimile. ARTICLE XIII CORPORATE SEAL Section 1. The corporate seal of the Company shall be circular in form with the name of the Company inscribed therein. ARTICLE XIV AMENDMENTS Section 1. These by-laws may be altered, amended, added to or repealed from time to time by an affirmative vote of the holders of a majority of the voting power of shares entitled to vote thereon at any meeting of the shareholders called for the purpose or by an affirmative vote of Directors holding a majority of the number of directorships at any meeting of the Board of Directors called for the purpose. EX-99.13OTHCONTRCT 18 b39-1.txt Exhibit B.39.1 CERTIFICATE OF INCORPORATION Stock Corporation STATE OF CONNECTICUT Secretary of the State The undersigned incorporator hereby forms a corporation under the Stock Corporation Act of the State of Connecticut: 1. The name of the corporation is NorConn Properties, Inc. 2. The nature of the business to be transacted, or the purposes to be promoted or carried out by-the corporation, are as follows: To engage in any lawful act or activity for which corporations may be formed under said Act. 3. The designation of each class of shares, the authorized number of shares of each such class, and the par value (if any) of each share thereof, are as follows: The corporation has one class of 5,000 authorized shares of common stock, no par value. 4. The terms, limitations and relative rights and preferences of each class of shares and series thereof (if any), or an express grant of authority to the board of directors pursuant to Section 33-341, Conn. Gen. Stat., are as follows: No shareholder shall be entitled as of right to purchase or subscribe for any unissued shares of the corporation whether now or hereafter authorized or whether of a class now existing or of a class hereafter created, or to purchase or subscribe for any bonds, certificates of indebtedness, debentures, or other obligations convertible into shares of the corporation. 5. The minimum amount of stated capital with which the corporation shall commence business is $1,000. 6. Other provisions: Any action that may be taken by shareholders at a meeting of shareholders may be taken without a meeting of shareholders by consent, in writing, setting forth the action to be taken, signed by persons (or their authorized attorneys) holding shares representing at least that portion of the voting power of shares entitled to vote on such action as would be required to approve such action at a meeting at which all share- holders entitled to vote thereon were present; provided, however, that the approval of such action by consent is not prohibited by, and such consent is obtained in accordance with, the general corporate law of Connecticut in effect at the time such consent is sought. Dated at Hartford, Connecticut this 10th day of May, 1988. I hereby declare, under the penalties of false statement, that the statements made in the foregoing certificate are true. /S/Thomas F. Tresselt, Incorporator Thomas F. Tresselt, Incorporator APPOINTMENT OF STATUTORY AGENT FOR SERVICE Domestic Corporation TO: The Secretary of the State of Connecticut Name of Corporation: NORCONN PROPERTIES, INC. The above corporation appoints as its statutory agent for service one of the following: Name of natural person who is resident of Connecticut: Business Address Scott L. Murphy 799 Main Street, Hartford, CT 06103 Residence Address 29 Eastern Drive, Wethersfield, CT 06109 Authorization Name of incorporator: Thomas F. Tresselt /S/ Thomas F. Tresselt May 10, 1988 Acceptance Scott L. Murphy /S/ Scott L. Murphy EX-99.2BYLAWS 19 b39-2.txt Exhibit B.39.2 NORCONN PROPERTIES, INC. BY-LAWS As in effect on March 1, 2000 NORCONN PROPERTIES, INC. BY-LAWS ARTICLE I MEETINGS OF SHAREHOLDERS Section 1. Meetings of the shareholders may be held at any place in the State of Connecticut fixed by the Board of Directors. Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held within six months after the end of each fiscal year of the Company on the day and at the hour designated by the Board of Directors. Section 3. Notice of all meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than fifty days prior to the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice or be in attendance at the meeting. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and no business other than that of which notice has been given shall be transacted at such meeting. Section 4. At all meetings of shareholders each share of Common Stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote. Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than seventy days and not less than ten days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed. ARTICLE II DIRECTORS Section 1. The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than nine Directors. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified, except that a Director shall cease to be in office upon his death, resignation, lawful removal or court order decreeing that he is no longer a Director in office. Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting of Shareholders and until his successor shall be elected and qualified. Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company. All the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion. Section 4. The Board of Directors shall have power to fix from time to time the compensation of the Directors and the method of payment thereof. Section 5. Any one or more Directors may be removed from office at any time with or without any showing of cause by affirmative vote of the holders of a majority of the Company's issued and outstanding shares entitled to vote. ARTICLE III MEETINGS OF DIRECTORS Section 1. A regular meeting of the Board of Directors shall be held annually, without notice, directly following the annual meeting of shareholders, for the election of officers and the transaction of other business. Section 2. All other regular meetings of the Board of Directors may be held at such time and place as the Board may from time to time determine and fix by resolution. Special meetings of the Board may be held at any place upon call of the Chairman (if there be one) or the President, or, in the absence or inability of either to act, of a Vice President, or upon call of any three or more directors. Section 3. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally or by telephone, or by mail or telegraph at his last-known post office address, at least twenty-four hours prior to the time of the meeting, provided that any director may waive such notice in writing or by telegraph or by attendance at such meeting. Section 4. One-third of the directorships as fixed in accordance with Section 1 of Article II of these By-Laws shall constitute a quorum, except that (subject to the provisions of Article III, Section 3) no quorum shall consist of less than two Directors. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors. Section 5. Except as otherwise provided by these By-Laws, the act of a majority of the Directors present at a meeting at which a quorum is present at the time of the act shall be the act of the Board of Directors. Section 6. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally or collectively, whose number shall constitute a quorum for such action, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors' written approval thereof, shall be recorded by the Secretary in the minute book of the Company. Section 7. A Director or a member of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of a conference telephone call or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting. ARTICLE IV OFFICERS Section 1. At its annual meeting the Board of Directors shall elect a President, one or more Vice Presidents, a Secretary, a Treasurer and, if the Board shall so determine, a Chairman, each of whom shall, subject to the provisions of Article IV, Section 3, hereof, hold office until the next annual election of officers and until his successor shall have been elected and qualified. Any two or more offices may be held by the same person except that the offices of the President and Secretary may not be simultaneously held by the same person. The Board shall also elect at such annual meeting, and may elect at any regular or special meeting, such other officers as may be required for the prompt and orderly transaction of the business of the Company. Any vacancy occurring in any office may be filled at any regular meeting of the Board or at any special meeting of the Board held for that purpose. Section 2. In addition to such powers and duties as these By-Laws and the Board of Directors may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office. Section 3. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the board of Directors. ARTICLE V CHAIRMAN AND PRESIDENT Section 1. The Chairman, if such office shall be filled by the Directors, shall, when present, preside at all meetings of said Board and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. Section 2. The President shall be the chief executive officer of the Company and shall be responsible for the general supervision, direction and control of the business and affairs of the Company. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of the Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VI VICE PRESIDENTS Section 1. The Vice Presidents shall have such powers and duties as may be assigned to them from time to time by the Board of Directors or the President. One of such Vice Presidents may be designated by said Board as Executive Vice President and, if so designated, shall exercise the powers and perform the duties of the President in the absence of the President or if the President is unable to perform the duties of his office. The Board of Directors may also designate one or more of such Vice Presidents as Senior Vice Presidents. ARTICLE VII SECRETARY Section 1. The Secretary shall keep the minutes of all meetings of all the stockholders and of the Board of Directors. He shall give notice of all meetings of the stockholders and of said Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer, and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. Section 2. He shall have the custody of the Corporate Seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these By-Laws. ARTICLE VIII ASSISTANT SECRETARIES Section 1. One or more Assistant Secretaries may be elected to perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. The Assistant Secretaries shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Secretary. ARTICLE IX TREASURER Section 1. The Treasurer shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign or authorize a facsimile signature as appropriate on all checks, notes, drafts and similar instruments, except as otherwise provided for by the Board of Directors. Section 2. He shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. ARTICLE X ASSISTANT TREASURERS Section 1. One or more Assistant Treasurers may be elected to perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. The Assistant Treasurers shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Treasurer. ARTICLE XI COMMITTEES Section 1. The Board of Directors may designate two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as shall be provided by an appropriate resolution. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting of such committee, all the rights and obligations of such regular member thereof. Any vacancy on any such committee or among alternate members thereof shall be filled by the Board of Directors. ARTICLE XII STOCK CERTIFICATES Section 1. All stock certificates may bear the facsimile signatures of the President or a Vice President and the Treasurer or an Assistant Treasurer and a facsimile seal of the Company, or may be signed by the President or a Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, and may be sealed by any one of such officers. ARTICLE XIII CORPORATE SEAL Section 1. The corporate seal of the Company shall be circular in form with the name of the Company inscribed therein. ARTICLE XIV INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND INDEPENDENT CONTRACTORS Section 1. The Board of Directors shall, as and to the extent permitted by law, indemnify and reimburse any person made a party to any action, suit or proceeding by reason of the fact that he, or a person whose legal representative or successor he is, is or was a director, officer, employee or independent contractor of the Company for expenses, including attorney's fees, and such amount of any judgment, money decree, fine, penalty or settlement for which he may become liable as the Board of Directors deems reasonable, actually incurred by him in connection with the defense or reasonable settlement of any such action, suit or proceeding, or any appeal therein, except in relation to matters as to which he, or such person whose legal representative or successor he is, is finally adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of his duties. ARTICLE XV AMENDMENTS Section 1. These Bylaws may be altered, amended, added to or repealed from time to time by an affirmative vote of the holders of a majority of the voting power of shares entitled to vote thereon at any meeting of the shareholders called for the purpose or by an affirmative vote of Directors holding a majority of the number of directorships at any meeting of the Board of Directors called for the purpose. EX-99.13OTHCONTRCT 20 b40-1.txt Exhibit B.40.1 State of Connecticut Secretary of the State 1. The name of the corporation is R.M. Services, Inc 2. The nature of the business to be transacted, or the purposes to be promoted or carried out by the corporation, are as follows: To engage in the business of collecting or receiving for payment for others of any account, bill or other indebtedness from a consumer debtor. To engage in any lawful act or activity for which corporations may be formed under the Stock Corporation Act of the State of Connecticut, including, without limitation, such other business and the purposes of the corporation as described above. The enumeration of specific powers shall not be taken to limit or abridge the general powers of the corporation. 3. There shall be one class of capital stock, designated "Common Stock" and having no par value, of which 10,000 shares will be authorized. 4. There is only one class of shares authorized above. 5. The minimum amount of stated capital with which the corporation shall commence business is $1,000. 6. Any action which, under any provision of Ch. 599, Title 33, of the Connecticut General Satutes, Revision of 1958, as amended, may be taken at a meeting of shareholders may also be taken without a meeting, by consent, in writing, setting forth the action to be taken, signed by persons holding not less than a majority of the voting power of shares, or of the shares of any particular class entitled to vote thereon or to take such action, or their duly authorized attorneys, all in accordance with Section 33-330 of the Connecticut General Statutes. Dated this 17th day of November 1994. Name of Incorporator: Phillip T. Ashton /S/ Phillip T. Ashton Appointment of Statutory Agent For Service Domestic Corporation Name of corporation: R. M. Services, Inc. Name of natural person who is resident of Connecticut: Mary J. Healey Business Address 599 Research Pkwy, Meriden, CT 06450 Residence Address 99 Laurel Road, New Britain, CT 06052 Authorization Name of Incorporator: Philip T. Ashton /S/ Philip T. Ashton 11/17/94 Acceptance Mary J. Healey /S/ Mary J. Healey EX-99.2BYLAWS 21 b40-2.txt Exhibit B.40.2 R.M. SERVICES, INC. BY-LAWS As in effect on March 1, 2000 R.M. SERVICES, INC. AMENDED AND RESTATED BY-LAWS ARTICLE I MEETINGS OF SHAREHOLDERS Section 1. Meeting of the shareholders may be held at any place in the State of Connecticut fixed by the Board of Directors. Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held within six months after the end of each fiscal year of the Company on the day and at the hour designated by the Board of Directors. Section 3. Notice of all meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than fifty days prior to the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice or be in attendance at the meeting. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and no business other than that of which notice has been given shall be transacted at such meeting. Section 4. At all meetings of shareholders each share of Common Stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote. Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than seventy days and not less than ten days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed. ARTICLE II DIRECTORS Section 1. The business, property and affairs of the Company shall be managed by a Board of at least one nor more than nine Directors. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified, except that a Director shall cease to be in office upon his death, resignation, lawful removal or court order decreeing that he is no longer a Director in office. Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting of Shareholders and until his successor shall be elected and qualified. Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company. All the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion. Section 4. The Board of Directors shall have power to fix from time to time the compensation of the Directors and the method of payment thereof. Section 5. Any one or more Director may be removed from office at any time with or without any showing of cause by affirmative vote of the holders of a majority of the Company's issued and outstanding shares entitled to vote. ARTICLE III MEETINGS OF DIRECTORS Section 1. A regular meeting of the Board of Directors shall be held annually, without notice, directly following the annual meeting of shareholders, for the election of officers and the transaction of other business. Section 2. All other regular meetings of the Board of Directors may be held at such time and place as the Board may from time to time determine and fix by resolution. Special meetings of the Board may be held at any place upon call of the Chairman (if there be one) or the President, or, in the absence or inability of either to act, of a Vice President, or upon call of any one or more director. Section 3. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally or by telephone, or by mail or telegraph at his last-known post office address, at least twenty-four hours prior to the time of the meeting, provided that any director may waive such notice in writing or by telegraph or by attendance at such meeting. Section 4. One-third of the directorships as fixed in accordance with Section 1 of Article II of these Amended and Restated By-Laws shall constitute a quorum, except that (subject to the provisions of Article III, Section 3) no quorum shall consist of less than one Director. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, a notice of the adjourned meeting shall be given to all Directors. Section 5. Except as otherwise provided by these Amended and Restated By-Laws, the act of a majority of the Directors present at a meeting at which a quorum is present at the time of the act shall be the act of the Board of Directors. Section 6. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally or collectively, whose number shall constitute a quorum for such action, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors' written approval thereof, shall be recorded by the Secretary in the minute book of the Company. Section 7. A Director or a member of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of a conference telephone call or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting. ARTICLE IV OFFICERS Section 1. At its annual meeting the Board of Directors shall elect a President, one or more Vice Presidents, a Secretary, a Treasurer and, if the Board shall so determine, a Chairman, each of whom shall, subject to the provisions of Article IV, Section 3, hereof, hold office until the next annual election of officers and until his successor shall have been elected and qualified. Any two or more offices may be held by the same person except that the offices of the President and Secretary may not be simultaneously held by the same person. The Board shall also elect at such annual meeting, and may elect at any regular or special meeting, such other officers as may be required for the prompt and orderly transaction of the business of the Company. Any vacancy occurring in any office may be filled at any regular meeting of the Board or at any special meeting of the Board held for that purpose. Section 2. In addition to such powers and duties as these Amended and Restated By-Laws and the Board of Directors may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office. Section 3. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the board of Directors. ARTICLE V CHAIRMAN AND PRESIDENT Section 1. The Chairman, if such office shall be filled by the Directors, shall, when present, preside at all meetings of said Board and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. Section 2. The President shall be the chief executive officer of the Company and shall be responsible for the general supervision, direction and control of the business and affairs of the Company. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of the Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VI VICE PRESIDENTS Section 1. The Vice Presidents shall have such powers and duties as may be assigned to them from time to time by the Board of Directors or the President. One of such Vice Presidents may be designated by said Board as Executive Vice President and, if so designated, shall exercise the powers and perform the duties of the President in the absence of the President or if the President is unable to perform the duties of his office. The Board of Directors may also designate one or more of such Vice Presidents as Senior Vice Presidents. ARTICLE VII SECRETARY Section 1. The Secretary shall keep the minutes of all meetings of all the stockholders and of the Board of Directors. He shall give notice of all meetings of the stockholders and of said Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer, and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. Section 2. He shall have the custody of the Corporate Seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these Amended & Restated By-Laws. ARTICLE VIII ASSISTANT SECRETARIES Section 1. One or more Assistant Secretaries may be elected to perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. The Assistant Secretaries shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Secretary. ARTICLE IX TREASURER Section 1. The Treasurer shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign or authorize a facsimile signature as appropriate on all checks, notes, drafts and similar instruments, except as otherwise provided for by the Board of Directors. Section 2. He shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. ARTICLE X ASSISTANT TREASURERS Section 1. One or more Assistant Treasurers may be elected to perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. The Assistant Treasurers shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Treasurer. ARTICLE XI COMMITTEES Section 1. The Board of Directors may designate two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as shall be provided by an appropriate resolution. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting of such committee, all the rights and obligations of such regular member thereof. Any vacancy on any such committee or among alternate members thereof shall be filled by the Board of Directors. ARTICLE XII STOCK CERTIFICATES Section 1. All stock certificates may bear the facsimile signatures of the President or a Vice President and the Treasurer or an Assistant Treasurer and a facsimile seal of the Company, or may be signed by the President or a Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, and may be sealed by any one of such officers. ARTICLE XIII CORPORATE SEAL Section 1. The corporate seal of the Company shall be circular in form with the name of the Company inscribed therein. ARTICLE XIV INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND INDEPENDENT CONTRACTORS Section 1. The Board of Directors shall, as and to the extent permitted by law, indemnify and reimburse any person made a party to any action, suit or proceeding by reason of the fact that he, or a person whose legal representative or successor he is, is or was a director, officer, employee or independent contractor of the Company for expenses, including attorney's fees, and such amount of any judgment, money decree, fine, penalty or settlement for which he may become liable as the Board of Directors deems reasonable, actually incurred by him in connection with the defense or reasonable settlement of any such action, suit or proceeding, or any appeal therein, except in relation to matters as to which he, or such person whose legal representative or successor he is, is finally adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of his duties. ARTICLE XV AMENDMENTS Section 1. These Amended and Restated Bylaws may be altered, amended, added to or repealed from time to time by an affirmative vote of the holders of a majority of the voting power of shares entitled to vote thereon at any meeting of the shareholders called for the purpose or by an affirmative vote of Directors holding a majority of the number of directorships at any meeting of the Board of Directors called for the purpose. EX-99.13OTHCONTRCT 22 b41-1.txt Exhibit B.41.1 CERTIFICATE OF INCORPORATION Stock Corporation STATE OF CONNECTICUT Secretary of the State The undersigned incorporator hereby forms a corporation under the Stock Corporation Act of the State of Connecticut: 1. The name of the corporation is Yankee Energy Financial Services Company. 2. The nature of the business to be transacted, or the purposes to be promoted or carried out by the corporation, are as follows: To engage in financing activities especially for natural gas related projects. To engage in any lawful act or activity for which corporations may be formed under the Stock Corporation Act of the State of Connecticut, including, without limitation, such other business and the purposes of the corporation as described above. The enumeration of specific powers shall not be taken to limit or abridge the general powers of the corporation. 3. The designation of each class of shares, the authorized number of shares of each such class, and the par value (if any) of each share thereof, are as follows: The corporation has one class of 10,000 authorized shares of common stock, no par value. 4. The terms, limitations and relative rights and preferences of each class of shares and series thereof (if any), or an express grant of authority to the Board of Directors pursuant to Section 33-341, Conn. Gen. Stat., are as follows: No shareholder shall be entitled as of right to purchase or subscribe for any unissued shares of the corporation whether now or hereafter authorized or whether of a class now existing or of a class hereafter created, or to purchase or subscribe for any bonds, certificates of indebtedness, debentures or other obligations convertible into shares of the corporation. 5. The minimum amount of stated capital with which the corporation shall commence business is $1,000. 6. Other provisions, are as follows: a) No director of the corporation shall be personally liable to the corporation or any of its shareholders for monetary damages for breach of duty as a director in an amount greater than the compensation received by such director for serving the corporation during the year of the violation if such breach did not (i) involve a knowing and culpable violation of law by such director; (ii) enable such director, or an Associate (as such term is defined in Section 33-347d(3) of the Stock Corporation Act of the State of Connecticut) of such director, to receive an improper personal economic gain; (iii) show a lack of good faith and a conscious disregard for the duty of such director to the corporation under circumstances in which such director was aware that his conduct or omission created an unjustifiable risk of serious injury to the corporation; (iv) constitute a sustained and unexcused pattern of inattention that amounted to an abdication of such director's duty to the corporation, or (v) create liability under Section 33-321 of the Stock Corporation Act of the State of Connecticut. b) Any action that may be taken by shareholders at a meeting of shareholders may be taken without a meeting of shareholders by consent, in writing, setting forth the action to be taken, signed by persons (or their authorized attorneys) holding shares representing at least that portion of the voting power of shares entitled to vote on such action as would be required to approve such action at a meeting at which all shareholders entitled to vote thereon were present; provided, however, that the approval of such action by consent is not prohibited by, and such consent is obtained in accordance with, the general corporate law of Connecticut in effect at the time such consent is sought. Dated at Meriden, Connecticut this 1st day of September, 1992, the undersigned officer of Yankee Energy System, Inc., the incorporator, being so authorized, hereby declares on behalf of said incorporator, under the penalties of false statement, that the statements made in the foregoing certificate are true. Yankee Energy System, Inc., Incorporator By. /S/ Philip T. Ashton Philo T/Ashton Its President and Chief Executive Officer Appointment of Statutory Agent for Service Domestic Corporation Secretary of the State 30 Trinity Street Hartford, CT 06106 Name of Corporation: YANKEE ENERGY FINANCIAL SERVICES COMPANY The above corporation appoints as its statutory agent for service, one of the following: Name of Natural Person Who is Resident of Connecticut: MARY J. HEALEY Business Address 599 RESEARCH PARKWAY, MERIDEN 06450 Residence Address 99 LAUREL ROAD, NEW BRITAIN 06052 AUTHORIZATION Name of Incorporator (Print or Type) YANKEE ENERGY SYSTEM, INC. Signed (Incorporator)Date /S/ Philip T. Ashton September 1, 1992 By Philip T. Ashton Acceptance: Name of Statutory Agent for Service MARY J. HEALEY /S/ Mary J. Healey EX-99.2BYLAWS 23 b41-2.txt Exhibit B.41.2 YANKEE ENERGY FINANCIAL SERVICES COMPANY BY-LAWS As in effect on March 1, 2000 YANKEE ENERGY FINANCIAL SERVICES COMPANY BY-LAWS ARTICLE I MEETINGS OF SHAREHOLDERS Section 1. Meetings of the shareholders may be held at any place in the State of Connecticut fixed by the Board of Directors. Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held within six months after the end of each fiscal year of the Company on the day and at the hour designated by the Board of Directors. Section 3. Notice of all meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than fifty days prior to the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice or be in attendance at the meeting. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and no business other than that of which notice has been given shall be transacted at such meeting. Section 4. At all meetings of shareholders each share of Common Stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote. Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than seventy days and not less than ten days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed. ARTICLE II DIRECTORS Section 1. The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than nine Directors. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified, except that a Director shall cease to be in office upon his death, resignation, lawful removal or court order decreeing that he is no longer a Director in office. Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting of Shareholders and until his successor shall be elected and qualified. Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company. All the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion. Section 4. The Board of Directors shall have power to fix from time to time the compensation of the Directors and the method of payment thereof. Section 5. Any one or more Directors may be removed from office at any time with or without any showing of cause by affirmative vote of the holders of a majority of the Company's issued and outstanding shares entitled to vote. ARTICLE III MEETINGS OF DIRECTORS Section 1. A regular meeting of the Board of Directors shall be held annually, without notice, directly following the annual meeting of shareholders, for the election of officers and the transaction of other business. Section 2. All other regular meetings of the Board of Directors may be held at such time and place as the Board may from time to time determine and fix by resolution. Special meetings of the Board may be held at any place upon call of the Chairman (if there be one) or the President, or, in the absence or inability of either to act, of a Vice President, or upon call of any three or more directors. Section 3. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally or by telephone, or by mail or telegraph at his last-known post office address, at least twenty- four hours prior to the time of the meeting, provided that any director may waive such notice in writing or by telegraph or by attendance at such meeting. Section 4. One-third of the directorships as fixed in accordance with Section 1 of Article II of these By-Laws shall constitute a quorum, except that (subject to the provisions of Article III, Section 3) no quorum shall consist of less than two Directors. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors. Section 5. Except as otherwise provided by these By- Laws, the act of a majority of the Directors present at a meeting at which a quorum is present at the time of the act shall be the act of the Board of Directors. Section 6. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally or collectively, whose number shall constitute a quorum for such action, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors' written approval thereof, shall be recorded by the Secretary in the minute book of the Company. Section 7. A Director or a member of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of a conference telephone call or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting. ARTICLE IV OFFICERS Section 1. At its annual meeting the Board of Directors shall elect a President, one or more Vice Presidents, a Secretary, a Treasurer and, if the Board shall so determine, a Chairman, each of whom shall, subject to the provisions of Article IV, Section 3, hereof, hold office until the next annual election of officers and until his successor shall have been elected and qualified. Any two or more offices may be held by the same person except that the offices of the President and Secretary may not be simultaneously held by the same person. The Board shall also elect at such annual meeting, and may elect at any regular or special meeting, such other officers as may be required for the prompt and orderly transaction of the business of the Company. Any vacancy occurring in any office may be filled at any regular meeting of the Board or at any special meeting of the Board held for that purpose. Section 2. In addition to such powers and duties as these By-Laws and the Board of Directors may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office. Section 3. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the board of Directors. ARTICLE V CHAIRMAN AND PRESIDENT Section 1. The Chairman, if such office shall be filled by the Directors, shall, when present, preside at all meetings of said Board and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. Section 2. The President shall be the chief executive officer of the Company and shall be responsible for the general supervision, direction and control of the business and affairs of the Company. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of the Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VI VICE PRESIDENTS Section 1. The Vice Presidents shall have such powers and duties as may be assigned to them from time to time by the Board of Directors or the President. One of such Vice Presidents may be designated by said Board as Executive Vice President and, if so designated, shall exercise the powers and perform the duties of the President in the absence of the President or if the President is unable to perform the duties of his office. The Board of Directors may also designate one or more of such Vice Presidents as Senior Vice Presidents. ARTICLE VII SECRETARY Section 1. The Secretary shall keep the minutes of all meetings of all the stockholders and of the Board of Directors. He shall give notice of all meetings of the stockholders and of said Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer, and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. Section 2. He shall have the custody of the Corporate Seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these By-Laws. ARTICLE VIII ASSISTANT SECRETARIES Section 1. One or more Assistant Secretaries may be elected to perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. The Assistant Secretaries shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Secretary. ARTICLE IX TREASURER Section 1. The Treasurer shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign or authorize a facsimile signature as appropriate on all checks, notes, drafts and similar instruments, except as otherwise provided for by the Board of Directors. Section 2. He shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. ARTICLE X ASSISTANT TREASURERS Section 1. One or more Assistant Treasurers may be elected to perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. The Assistant Treasurers shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Treasurer. ARTICLE XI COMMITTEES Section 1. The Board of Directors may designate two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as shall be provided by an appropriate resolution. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting of such committee, all the rights and obligations of such regular member thereof. Any vacancy on any such committee or among alternate members thereof shall be filled by the Board of Directors. ARTICLE XII STOCK CERTIFICATES Section 1. All stock certificates may bear the facsimile signatures of the President or a Vice President and the Treasurer or an Assistant Treasurer and a facsimile seal of the Company, or may be signed by the President or a Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, and may be sealed by any one of such officers. ARTICLE XIII CORPORATE SEAL Section 1. The corporate seal of the Company shall be circular in form with the name of the Company inscribed therein. ARTICLE XIV INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND INDEPENDENT CONTRACTORS Section 1. The Board of Directors shall, as and to the extent permitted by law, indemnify and reimburse any person made a party to any action, suit or proceeding by reason of the fact that he, or a person whose legal representative or successor he is, is or was a director, officer, employee or independent contractor of the Company for expenses, including attorney's fees, and such amount of any judgment, money decree, fine, penalty or settlement for which he may become liable as the Board of Directors deems reasonable, actually incurred by him in connection with the defense or reasonable settlement of any such action, suit or proceeding, or any appeal therein, except in relation to matters as to which he, or such person whose legal representative or successor he is, is finally adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of his duties. ARTICLE XV AMENDMENTS Section 1. These Bylaws may be altered, amended, added to or repealed from time to time by an affirmative vote of the holders of a majority of the voting power of shares entitled to vote thereon at any meeting of the shareholders called for the purpose or by an affirmative vote of Directors holding a majority of the number of directorships at any meeting of the Board of Directors called for the purpose. EX-99.13OTHCONTRCT 24 b42-1.txt Exhibit B.42.1 Certificate of Incorporation Stock Corporation State of Connecticut Secretary of the State 1. The name of the corporation is Yankee Energy Production Services, Inc. 2. The nature of the business to be transacted, or the purposes to be promoted or carried out by the corporation, are as follows: To engage in the financing and investment of natural gas cogeneration projects. To engage in any lawful act or activity for which corporations may be formed under the stock corporation Act of the State of Connecticut, including, without limitation, such other business and the purposes of the corporation as described above. The enumeration of specific powers shall not be taken to limit or abridge the general powers of the corporation. 3. The designation of each class of shares, the authorized number of shares of each such class, and the par value (if any) of each share thereof are as follows: There shall be one class of capital stock, designated "Common Stock" and having no par value, of which 10,000 shares will be authorized. 4. The terms, limitations and relative rights and preferences of each class of shares and series thereof (if any), or an express grant of authority to the board of directors pursuant to Section 33-341, 1959 Supp. Conn G.S. are as follows: There is only one class of shares authorized above. 5. The minimum amount of stated capital with which the corporation shall commence business is $1,000. 6. Any action which, under any provision of Ch. 599, Title 33, of the Connecticut General Statutes, Revision of 1958, as amended, may be taken at a meeting of shareholders may also be taken without a meeting, by consent, in writing, setting forth the action to be taken, signed by persons holding not less than a majority of the voting power of shares, or of the shares of any particular class entitled to vote thereon or to take such action, or their duly authorized attorneys, all in accordance with Section 33-330 of the Connecticut General Statutes. Dated this 30th day of June, 1993. Name of incorporator: Philip T. Ashton /S/ Philip T. Ashton Appointment of Statutory Agent For Service Domestic Corporation Secretary of the State 30 Trinity Street Hartford, CT 06106 Name of Corporation: Yankee Energy Production Services, Inc. The above corporation appoints as its statutory agent for service, one of the following: Name of Natural Person Who is Resident of Connecticut: Mary J. Healey Business Address 599 Research Parkway, Meriden, CT 06450 Residence Address 99 Laurel Road, New Britain, CT 06052 Authorization: Name of Incorporator: Philip T. Ashton /S/ Philip T. Ashton 6/30/93 Charles E. Gooley, Vice President /S/ Charles E. Gooley 6/30/93 Acceptance: Mary J. Healey /S/ Mary J. Healey EX-99.13OTHCONTRCT 25 b42-2.txt Exhibit B.42.2 Certificate Amending or Restating Certificate of Incorporation State of Connecticut Secretary of the State 30 Trinity Street Hartford, CT 06106 1. Name of Corporation Yankee Energy Production Services, Inc. 2. The Certificate of Incorporation is: A. Amended only, pursuant to Conn. Gen. Stat. Sec. 33-360. Set forth here the resolution of amendment and/or restatement. 3. N/A 4. N/A 5. The manner of adopting the resolution was as follows: B. By the board of directors acting alone, pursuant to Conn. Gen. Stat. Sec. 33-360(b)(2) or 33-362(a). The number of affirmative votes required to adopt such resolution is: 5 The number of directors' votes in favor of the resolution was: 5 We declare, under the penalties of false statement, that the statements made in the foregoing certificate are true: Branko Terzic /S/ Branko Terzic Mary J. Healey /S/ Mary J. Healey President Secretary Dated at Meriden this 20th day of January, 1995. Maritza M. Agosto Yankee Gas Services Company 599 Research Pkwy Meriden, CT 06450 EX-99.2BYLAWS 26 b42-3.txt Exhibit B.42.3 YANKEE ENGERGY SERVICES COMPANY BY-LAWS As in effect on March 1, 2000 YANKEE ENERGY SERVICES COMPANY BY-LAWS ARTICLE I MEETINGS OF SHAREHOLDERS Section 1. Meetings of the shareholders may be held at any place in the State of Connecticut fixed by the Board of Directors. Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held within six months after the end of each fiscal year of the Company on the day and at the hour designated by the Board of Directors. Section 3. Notice of all meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than fifty days prior to the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice or be in attendance at the meeting. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and no business other than that of which notice has been given shall be transacted at such meeting. Section 4. At all meetings of shareholders each share of Common Stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote. Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than seventy days and not less than ten days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed. ARTICLE II DIRECTORS Section 1. The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than nine Directors. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified, except that a Director shall cease to be in office upon his death, resignation, lawful removal or court order decreeing that he is no longer a Director in office. Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting of Shareholders and until his successor shall be elected and qualified. Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company. All the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion. Section 4. The Board of Directors shall have power to fix from time to time the compensation of the Directors and the method of payment thereof. Section 5. Any one or more Directors may be removed from office at any time with or without any showing of cause by affirmative vote of the holders of a majority of the Company's issued and outstanding shares entitled to vote. ARTICLE III MEETINGS OF DIRECTORS Section 1. A regular meeting of the Board of Directors shall be held annually, without notice, directly following the annual meeting of shareholders, for the election of officers and the transaction of other business. Section 2. All other regular meetings of the Board of Directors may be held at such time and place as the Board may from time to time determine and fix by resolution. Special meetings of the Board may be held at any place upon call of the Chairman (if there be one) or the President, or, in the absence or inability of either to act, of a Vice President, or upon call of any three or more directors. Section 3. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally or by telephone, or by mail or telegraph at his last-known post office address, at least twenty-four hours prior to the time of the meeting, provided that any director may waive such notice in writing or by telegraph or by attendance at such meeting. Section 4. One-third of the directorships as fixed in accordance with Section 1 of Article II of these By-Laws shall constitute a quorum, except that (subject to the provisions of Article III, Section 3) no quorum shall consist of less than two Directors. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors. Section 5. Except as otherwise provided by these By-Laws, the act of a majority of the Directors present at a meeting at which a quorum is present at the time of the act shall be the act of the Board of Directors. Section 6. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally or collectively, whose number shall constitute a quorum for such action, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors' written approval thereof, shall be recorded by the Secretary in the minute book of the Company. Section 7. A Director or a member of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of a conference telephone call or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting. ARTICLE IV OFFICERS Section 1. At its annual meeting the Board of Directors shall elect a President, one or more Vice Presidents, a Secretary, a Treasurer and, if the Board shall so determine, a Chairman, each of whom shall, subject to the provisions of Article IV, Section 3, hereof, hold office until the next annual election of officers and until his successor shall have been elected and qualified. Any two or more offices may be held by the same person except that the offices of the President and Secretary may not be simultaneously held by the same person. The Board shall also elect at such annual meeting, and may elect at any regular or special meeting, such other officers as may be required for the prompt and orderly transaction of the business of the Company. Any vacancy occurring in any office may be filled at any regular meeting of the Board or at any special meeting of the Board held for that purpose. Section 2. In addition to such powers and duties as these By-Laws and the Board of Directors may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office. Section 3. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the board of Directors. ARTICLE V CHAIRMAN AND PRESIDENT Section 1. The Chairman, if such office shall be filled by the Directors, shall, when present, preside at all meetings of said Board and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. Section 2. The President shall be the chief executive officer of the Company and shall be responsible for the general supervision, direction and control of the business and affairs of the Company. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of the Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VI VICE PRESIDENTS Section 1. The Vice Presidents shall have such powers and duties as may be assigned to them from time to time by the Board of Directors or the President. One of such Vice Presidents may be designated by said Board as Executive Vice President and, if so designated, shall exercise the powers and perform the duties of the President in the absence of the President or if the President is unable to perform the duties of his office. The Board of Directors may also designate one or more of such Vice Presidents as Senior Vice Presidents. ARTICLE VII SECRETARY Section 1. The Secretary shall keep the minutes of all meetings of all the stockholders and of the Board of Directors. He shall give notice of all meetings of the stockholders and of said Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer, and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. Section 2. He shall have the custody of the Corporate Seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these By-Laws. ARTICLE VIII ASSISTANT SECRETARIES Section 1. One or more Assistant Secretaries may be elected to perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. The Assistant Secretaries shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Secretary. ARTICLE IX TREASURER Section 1. The Treasurer shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign or authorize a facsimile signature as appropriate on all checks, notes, drafts and similar instruments, except as otherwise provided for by the Board of Directors. Section 2. He shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. ARTICLE X ASSISTANT TREASURERS Section 1. One or more Assistant Treasurers may be elected to perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. The Assistant Treasurers shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Treasurer. ARTICLE XI COMMITTEES Section 1. The Board of Directors may designate two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as shall be provided by an appropriate resolution. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting of such committee, all the rights and obligations of such regular member thereof. Any vacancy on any such committee or among alternate members thereof shall be filled by the Board of Directors. ARTICLE XII STOCK CERTIFICATES Section 1. All stock certificates may bear the facsimile signatures of the President or a Vice President and the Treasurer or an Assistant Treasurer and a facsimile seal of the Company, or may be signed by the President or a Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, and may be sealed by any one of such officers. ARTICLE XIII CORPORATE SEAL Section 1. The corporate seal of the Company shall be circular in form with the name of the Company inscribed therein. ARTICLE XIV INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND INDEPENDENT CONTRACTORS Section 1. The Board of Directors shall, as and to the extent permitted by law, indemnify and reimburse any person made a party to any action, suit or proceeding by reason of the fact that he, or a person whose legal representative or successor he is, is or was a director, officer, employee or independent contractor of the Company for expenses, including attorney's fees, and such amount of any judgment, money decree, fine, penalty or settlement for which he may become liable as the Board of Directors deems reasonable, actually incurred by him in connection with the defense or reasonable settlement of any such action, suit or proceeding, or any appeal therein, except in relation to matters as to which he, or such person whose legal representative or successor he is, is finally adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of his duties. ARTICLE XV AMENDMENTS Section 1. These Bylaws may be altered, amended, added to or repealed from time to time by an affirmative vote of the holders of a majority of the voting power of shares entitled to vote thereon at any meeting of the shareholders called for the purpose or by an affirmative vote of Directors holding a majority of the number of directorships at any meeting of the Board of Directors called for the purpose. EX-99.13OTHCONTRCT 27 b43-1.txt Exhibit B.43.1 STATE OF CONNECTICUT OFFICE OF THE SECRETARY OF THE STATE I, the Connecticut Secretary of the State, and keeper of the seal thereof, and of the original record of the Acts and Resolutions of the General Assembly of said State, DO HEREBY CERTIFY, that I have compared the annexed copy of AN ACT CONCERNING THE MOHAWK GAS COMPANY with the original record of the same now remaining in this office, and have found said copy to be a correct and complete transcript thereof. And I further Certify, that said original is a public record of the State of Connecticut, now remaining in this office. In Testimony Whereof, I have hereunto set my hand and affixed the Great Seal of the State of Connecticut, at Hartford, this 19th day of March, 2001. /S/ Susan Bysiewicz Secretary of the State [House Bill No. 728.] AN ACT INCORPORATING THE MOHAWK GAS COMPANY. [218.] Section 1. Olcott D. Smith, Allan K. Smith and Cyril Coleman, and such other persons as may be associated with them, their successors and assigns, are constituted a body politic and corporate by the name of The Mohawk Gas Company, to be located in the town of Hartford, with power under that name to exercise, in addition to all other powers herein specifically granted, all the powers and privileges granted by the general statutes to gas companies and to corporations organized under the general statutes and the power to manufacture, sell, furnish, transmit, distribute and deliver natural, manufactured and mixed gas in the manner and subject to the limitations hereinafter stated. Sec. 2. Said corporation is vested with the power, subject to the limitations hereinafter stated: (a) To build, acquire by lease, purchase or otherwise, own and operate one or more pipelines and related facilities, including compressors, pumping stations, tanks, storage facilities, mains, appliances and other pertinent equipment for the gathering, mixing, transmission and distribution of natural, manufactured and mixed gas and the by-products thereof; (b) to buy, manufacture, produce, sell, furnish, transport, store, distribute, dispose of and otherwise deal in natural, manufactured and mixed gas and the by-products thereof; provided, within the franchise area of any person, firm, corporation or municipality which is chartered or authorized by the state of Connecticut to transmit or sell gas within said franchise area, this corporation shall not exercise the authority granted by this section to sell natural, manufactured or mixed gas to any person, firm, corporation or municipality except a person, firm, corporation or municipality authorized to transmit or sell gas within such franchise area, unless such sale is consented to by such person, firm, corporation or municipality so authorized to transmit or sell gas within such franchise area; (c) to install, operate and maintain, subject to any requisite approval of public authority, pipelines, mains and related appliances necessary for the transmission, storage and distribution of gas, either overhead or underground, over or under streams, and in, over, under and upon the public highways, streets, avenues and public parks or grounds in any town, city and borough within this state; (d) to acquire by merger consolidation, lease, purchase or otherwise, upon such terms and conditions as may be agreed upon, and in the manner and subject to the terms and conditions provided by the general statutes, in the case of the merger or consolidation or other acquisition, of corporations organized under the general statutes, and to hold, own, use, exercise, enjoy and dispose of the whole or any part of the gas property, rights, privileges, properties, securities, contracts, powers and franchises now or hereafter owned or possessed by any gas company chartered by the general assembly of the state of Connecticut for the purchase, manufacture, production, transmission, distribution and sale of natural, manufactured and mixed gas and matters incidental thereto. SEC. 3. Said corporation shall only exercise any right, power or franchise acquired by it to lay or maintain mains and pipes in or across the streets and highways of any town or city or to make any excavations in such streets or highways upon obtaining the necessary consent of the town or city council or other governmental body having jurisdiction. SEC. 4. Said corporation shall have a capital stock of fifty thousand dollars divided into such classes of shares either with or without par value as may be determined by the stockholders. Said corporation is authorized to increase, reduce or alter its capital stock from time to time to any amount in the manner provided in the general statutes pertaining to increases, reductions or alterations of capital stock by specially chartered corporations or corporations organized under the general law, and to issue, subject to approval of the public utilities commission, additional shares of capital stock to any amount with or without par value and with such preferences, voting powers, restrictions and qualifications, if any, as shall be determined in the vote authorizing such issue, provided no shares having a par value shall be issued for less than par in cash or in property at the actual value thereof. Said corporation is authorized to issue, subject to the approval of the public utilities commission, bonds, debentures and other certificates of indebtedness to any amount and may secure the same by mortgage or other lien on all or part of its property and franchises. SEC. 5. The government and direction of the affairs of said corporation shall be vested in a board of directors, of not less than three in number, who shall be chosen by the stockholders in the manner provided in the by-laws of said corporation. SEC. 6. The principal office of the corporation shall be in the town of Hartford or at such other place as may, from time to time, be fixed by the by-laws of the corporation, provided, whenever it is voted to change the location of the principal office, notice therof shall be filed in the office of the secretary of the state. SEC. 7. Any corporation authorized to engage in or to carry on the business of manufacturing, selling or distributing natural, manufactured or mixed gas, or the by-products thereof, shall be authorized to consolidate or merge with said corporation and to sell, lease or otherwise dispose of the whole or any part of its rights, privileges, franchises, properties, securities and assets to said corporation. SEC. 8. Said corporation, as a public service corporation, shall be subject to control and regulation by the public utilities commission under the provisions of the general statutes to the same extent as a gas company as defined in section 5390 of the general statutes, as amended. Approved May 26, 1955. EX-99.13OTHCONTRCT 28 b43-2.txt Exhibit B.43.2 STATE OF CONNECTICUT SECRETARY OF THE STATE Amending or Restating Certificate By Action of Board of Directors and of Incorporation Shareholders 1. Name of Corporation: The Mohawk Gas Company May 26, 1989 2. The Certificate of Incorporation is amended only by the following resolution: RESOLVED: That in accordance with Sections 33-360 and 33-392(b) of the Stock Corporation Act of the State of Connecticut and Section 16-45 of the Connecticut General Statutes, the following amendments to the corporation's certificate of incorporation being that special charter granted under Special Act No. 218 of the General Assembly of the State of Connecticut at the January Session, 1955, are hereby approved and adopted: (See Exhibit A attached to and made part hereof). 3. N/A 4. N/A 5. The above resolution was adopted by the board of directors and by shareholders. Number of Shares Total Voting Power Vote Required Vote Favoring Entitled to Vote for Adoption Adoption 40 40 27 40 We herby declare, under the penalties of false statement that the statements made in the foregoing certificate are true. Philip T. Ashton, President Mary J. Healey, Secretary /S/ Philip T. Ashton /S/ Mary J. Healey Exhibit A AMENDMENT TO CERTIFICATE OF INCORPORATION OF THE MOHAWK GAS COMPANY In accordance with Sections 33-360 and 33-392(b) of the Stock Corporation Act of the State of Connecticut and Section 16-45 of the Connecticut General Statutes, the certificate of incorporation (the "Certificate of Incorporation") of The Mohawk Gas Company, a specially chartered Connecticut corporation, being that special charter granted under Special Act No. 218 of the General Assembly of the State of Connecticut at the January Session, 1955, is amended as follows: 1. Section 1 of the Certificate of Incorporation is amended to change the name of said corporation from The Mohawk Gas Company to Yankee Gas Services Company, and to change its location as therein set forth from the town of Hartford to the town in which is located its principal office as determined from time to time in accordance with Section 6 of the Certificate of Incorporation. 2. Section 4 of the Certificate of Incorporation is hereby denominated Section 4(a), and the first sentence thereof is hereby deleted and the following substituted therefor: The total number of shares of capital stock which the corporation shall have authority to issue is 5,001,000 shares, consisting of 1,000 shares of Common Stock having a par value of $5.00 per share (hereinafter called the "Common Stock") and 5,000,000 shares of Preferred Stock having a par value of $25.00 per share (hereinafter called the "Preferred Stock"). 3. The following new subsections are hereby added to Section 4 of the Certificate of Incorporation: (b) To the maximum extent permitted by law and not otherwise expressly limited by this certificate of incorporation, the board of directors of the corporation is authorized to fix and determine the terms, limitations and relative rights and preferences of the Preferred Stock, to divide the Preferred Stock into and to issue the same in series, to fix and determine the variations among series and the consideration for the shares of each such series, and, within the limits from time to time of the authorized but unissued Common Stock, to provide that Preferred Stock, or any series thereof, may be convertible into the same or a different number of shares of Common Stock. (c) Subject to the rights of holders of any series of Preferred Stock then outstanding, the holders of the Common Stock of the corporation shall have and possess all rights appertaining to captial stock under applicable law except as expressly limited in this certificate of incorporation. (d) To the maximum extent permitted by law and not otherwise expressly limited by this certificate of incorporation, authorized shares of Common Stock may be issued and disposed of from time to time in such amounts, on such terms and for such consideration as may be fixed and determined by the board of directors. (e) Except as may be provided with respect to any series of Preferred Stock, or as provided by law, the holders of Preferred Stock shall have no voting power or right to notice of any meetings of shareholders. (f) Shareholders, whether of Common Stock or Preferred Stock, shall have no premptive rights with respect to any of the Common Stock or the Preferred Stock. Upon conversion of Preferred Stock into Common Stock, the shares of Preferred STock surrendered in such conversion shall be retired unless cancelled by action of the board of directors. (g) The mimimum stated capital with which the corporation shall commence business is one thousand dollars ($1000). (h) Subject to the rights of holders of any series of Preferred Stock then outstanding, the board of directors of the corporation may from time to time declare, and said corporation may, to the extent of its capital surplus, make, distributions of cash or property to its shareholders with respect to its outstanding Common Stock or Preferred Stock or any thereof. 4. Section 5 of the Certificate of Incorporation is amended to read in its entirety as follows: The government and direction of the affairs of the corporation shall be vested in a board of directors, of not less than three in number. Subject to any right of the holders of any series of Preferred Stock to elect directors by a separate vote, the number of positions on the board of directors shall be determined in accordance with, and the election and removal of directors shall be governed by, the by-laws of the corporation. 5. Except as expressly amended hereby, the Certificate of Incorporation shall remain in full force and effect. EX-99.13OTHCONTRCT 29 b43-3.txt Exhibit B.43.3 Amending or Restating Certificate of Incorporation State of Connecticut Secretary of The State Action by board of Directors 1. Name of Corporation: Yankee Gas Services Company June 27, 1989 2. This Certificate of Incorporation is Amended Only by the following resolution. RESOLVED that in accordance with Section 33-341 of the Connecticut Stock Corporation Act and Section 4(b) of the Company's Certificate of Incorporation, as amended, the Board of Directors does hereby amend the Company's Certificate of Incorporation to add to Section 4 thereof a new subsection (i) in the form of Exhibit A hereto, consisting of the provisions entitled "I. General Provisions of Preferred Stock" and "II. 9-1/8% Redeemable Preferred Stock". 3. N/A 4. The above resolution was adopted by the board of dirctors actiong alone. 5. The number of affirmative votes required to adopt such resolution is 3. 6. _____The number of directors' votes in favor of the resolution was 5. We hereby declare, under the penalties of false statement, that the statements made in the foregoing certificate are true. Philip T. Ashton, President Mary J. Healey, Secretary /S/ Philip T. Ashton /S/ Mary J. Healey Exhibit A AMENDMENT TO CERTIFICATE OF INCORPORATION OF YANKEE GAS SERVICES COMPANY The following new subsection (i) is hereby added to Section 4 of the Certificate of Incorporation: (i) I. General Provisions of Preferred Stock The following provisions shall apply to all of the Preferred Stock irrespective of series: (A) The holders of the Preferred Stock of each series shall be entitled to receive dividends, payable when and as declared by the board of directors, on such dates and at such rates as shall be determined for the respective series, from the first day of the current dividend period within which such stock shall have been originally issued, before any dividends shall be declared or paid upon or set apart for the Common Stock or any other class of stock of the corporation not having preference over the Preferred Stock as to payment of dividends. Such dividends shall be cumulative, whether or not earned or declared, so that if for any dividend period or periods dividends shall not have been paid or declared and set apart for payment upon all outstanding Preferred Stock at the rates determined for the respective series, the deficiency shall be fully paid, or declared and set apart for payment, before any dividends shall be declared or paid upon the Common Stock or any other class of stock of the corporation not having preference over the Preferred Stock as to payment of dividends and before any other distribution be made on any Common Stock or any other class of stock of the corporation not having preference over the Preferred Stock as to payment of dividends, nor shall any money be paid to or set aside for the redemption, purchase or other acquisition of any shares of Common Stock or any other class of stock not having preference over the Preferred Stock as to the payment of dividends, whether pursuant to a sinking fund or otherwise, unless on or before the date of such dividend payment, other distribution, redemption, purchase or other acquisition all unpaid dividends upon all outstanding Preferred Stock at the rates determined for the respective series shall have been fully paid or declared and set apart for payment. Any dividends paid on the Preferred Stock in an amount less than full cumulative dividends in arrears upon all Preferred Stock outstanding shall, if more than one series be outstanding, be divided between the different series in proportion to the aggregate amounts which would be distributable to the Preferred Stock of each series if full cumulative dividends were simultaneously declared and paid thereon without regard to the applicable dividend payment dates. (B) When full cumulative dividends as aforesaid upon the Preferred Stock of all series then outstanding for all past dividend periods and for the current dividend periods shall have been paid or daclared and set apart for payment, and all redemptions, purchases or other acquisitions of shares of Preferred Stock required to be made on or prior to the date of such declaration by this certificate of incorporation shall have been made, or funds shall have been set apart for such purpose, the Board of Directors may declare dividends on the Common Stock or any other class of stock over which the Preferred Stock has preference as to payment of dividends, and no holders of any series of the Preferred Stock as such shall be entitled to share therein. (C) Upon any dissolution, liquidation or winding up of the corporation, whether voluntary or involuntary, the holders of Preferred Stock of each series, without any preference of the shares of any series of Preferred Stock over the shares of any other series of Preferred Stock, shall be entitled to receive out of the assets of the corporation, whether capital, surplus or other, before any distribution of the assets to be distributed shall be made to the holders of Common Stock or of any other class of stock not having preference as to assets over the Preferred Stock, the amount determined to be payable on the shares of such series in the event of voluntary or involuntary liquidation, as the case may be. In case the assets shall not be sufficient to pay in full the amounts determined to be payable on all the shares of Preferred Stock in the event of voluntary or involuntary liquidation, as the case may be, then the assets available for such payment shall be distributed to the extent available as follows: first, to the payment, pro rata, of an amount per share on each share of Preferred Stock outstanding irrespective of series equal to the par value thereof; second, to the payment of the unpaid dividends accrued on such shares to the date of payment, such payment to be made pro rata in accordance with the amount of accrued dividends on each such share; and, third, to the payment of any amounts in excess of the par value per share plus accrued unpaid dividends which shall have been determined to be payable on the shares of any series of Preferred Stock in the event of voluntary or involuntary liquidation, as the case may be, such payment also to be made pro rata in accordance with the amount, if any, so payable on each such share. After payment to the holders of the Preferred Stock of the full preferential amounts hereinabove provided for, the holders of the Preferred Stock as such shall have no right or claim to any of the remaining assets of the corporation, either upon any distribution of such assets or upon dissolution, liquidation or winding up, and the remaining assets, to be distributed, if any, upon a distribution of such assets or upon dissolution, liquidation or winding up, may be distributed among the holders of the Common Stock or of any other class of stock over which the Preferred Stock has preference as to assets. Without limiting the right of the corporation to distribute its assets or to dissolve, liquidate or wind up in connection with any sale, merger, or consolidation, the sale of all or substantially all of the property of the corporation to, or the merger or consolidation of the corporation with or into, any other corporation shall not be deemed to be a distribution of assets or a dissolution, liquidation, or winding up for the purposes of this paragraph. (D) At the option of the board of directors of the corporation, the corporation may redeem any series of Preferred Stock determined to be redeemable, or any part of any series, at any time at the redemption price determined for such series; provided, however, that not less than thirty nor more than sixty days previous to the date fixed for redemption a notice of the time and place thereof shall be given to the holders of record of the Preferred Stock so to be redeemed, by mail or publication, in such manner as may be prescribed by resolution of the board of directors; and, provided, further, that, in every case of redemption of less than all of the outstanding shares of any one series of Preferred Stock, the shares of such series to be redeemed shall be chosen by lot, pro rata or in such other manner as may be prescribed by the provisions applicable with respect to any series. At any time after notice of redemption has been given in the manner prescribed by resolution of the board of directors to the holders of stock so to be redeemed, the corporation may deposit the aggregate redemption price with some bank or trust company in the City of Hartford, Connecticut, or the Borough of Manhattan, City of New York, New York, named in such notice (the "Depository"), payable on the date fixed for redemption as aforesaid and in the amounts aforesaid to the respective orders of the holders of the shares so to be redeemed, upon endorsement to the corporation, or otherwise, as may be required, and upon surrender of the certificates for such shares. Upon the deposit of said money as aforesaid, or, if no such deposit is made, upon said redemption date (unless the corporation defaults on making payment of the redemption price as set forth in such notice), such holders shall cease to be shareholders with respect to said shares, and from and after the making of said deposit or, if no such deposit is made, after the redemption date (the corporation not having defaulted in making payment of the redemption price an set forth in such notice), the said holders shall have no interest in or claim against the corporation with respect to said shares, but from and after the date fixed for redemption as aforesaid shall be entitled only to receive said moneys from the Depository, or if no such deposit is made, or such deposit has been made and thereafter paid over to the corporation as hereinafter provided, from the corporation, without interest thereon, upon endorsement, if required, and surrender of the certificates as aforesaid. In case the holder of any such Preferred Stock shall not, with two years after said deposit, claim the amount deposited as above stated for the redemption thereof, the Depositary shall upon demand pay over to the corporation such amounts so deposited and the Depositary, but not the corporation, shall thereupon be relieved from all responsibility to the holder thereof. Nothing herein contained shall limit any legal right of the corporation to purchase any shares of the Preferred Stock. Any shares of Preferred Stock redeemed, purchased or otherwise acquired shall not be reissued but shall be retired unless cancelled by the board of directors. (E) So long as any shares of the Preferred Stock are outstanding, the corporation shall not (a) without the affirmative vote in favor thereof of the holders of at least 66-2/3% of the total number of shares of Preferred Stock at the time outstanding, voting as a single class, adopt an amendment of the certificate of incorporation which would either create or authorize any shares of any class preferred as to dividends or assets over the Preferred Stock, or (ii) change any of the rights and preferences of the then outstanding Preferred Stock in any manner prejudicial to the holders thereof; provided, however, that nothing in this paragraph contained shall authorize the adoption of any amendment of the certificate of incorporation by the vote of the holders of a smaller number of shares of Preferred Stock, or of any other class of stock, or of all classes of stock, than is required for adoption of such amendment by the provisions of the Connecticut Stock Corporation Act at the time applicable thereto; (b) sell, lease, exchange, or otherwise dispose of all or substantially all its property or merge or consolidate with or into any other corporation or corporations, without the affirmative vote in favor of such sale, lease, exchange, disposition, merger or consolidation of the holders of at least a majority of the total number of shares of Preferred Stock at the time outstanding, voting as a single class; provided, however, that nothing in this paragraph contained shall authorize any such sale, lease, exchange, disposition, merger or consolidation by the vote of the holders of a smaller number of shares of the Preferred Stock, or of any other class of stock, or of all classes of stock, than is required for such sale, lease, exchange, disposition, merger or consolidation by the provisions of the Connecticut Stock Corporation Act at the time applicable thereto; and provided, further, that the provisions of this paragraph shall not apply to a merger in which the corporation is the surviving corporation and in which no stock of the corporation of any class or series shall be converted into or shall become exchangeable for securities, rights or property of any description, cash, or any combination thereof, or to a purchase or other acquisition by the corporation of franchises or assets of another corporation in any manner which does not involve a merger or consolidation; (c) issue, sell or otherwise dispose of any shares of Preferred Stock of any series, or issue, sell or otherwise dispose of any class of stock ranking pari passu with or senior to the Preferred Stock as to the payment of dividends or as to liquidation, unless the Income before Interest Charges of the corporation available for the payment of interest for a period of twelve consecutive calendar months within the fifteen calendar months immediately preceding the issuance, sale or disposition of such stock (including, in any case in which such stock is to be issued, sold or otherwise disposed of in connection with the acquisition of property, the Income before Interest Charges of the property to be so acquired, computed on the same basis as the Income before Interest Charges of the corporation available for the payment of interest) is at least equal to one and one-half (1-1/2) times the aggregate of the annual interest requirements (adjusted by provision for amortization of debt discount and expense or of premium on debt, as the case may be) on all outstanding funded indebtedness of the corporation and the annual dividend requirements (adjusted by provision for amortization of Preferred Stock premium and expense) on all shares of Preferred Stock and of all classes of stock over which the Preferred Stock does not have preference as to the payment of dividends and as to liquidation, including the shares proposed to be issued, to be outstanding immediately following such issuance, sale or disposition. (F) The term "outstanding", whenever used herein with respect to shares of Preferred Stock or of any other class of stock which are by their terms redeemable, or with respect to bonds or other evidences of indebtedness, shall not include any such shares or bonds or evidences of indebtedness which have been called for redemption in accordance with the provisions applicable thereto, of which call for redemption notice shall have been given, as required by such provisions, and for the redemption of which a sum of money sufficient to pay the amount payable on such redemption shall have been deposited with a bank or trust company, in trust for such purpose, or any bonds or other evidences of indebtedness for the payment of which at maturity provision has been made in a similar manner. "Income before Interest Charges of the corporation available for the payment of interest", as that term is used herein, shall be determined in accordance with the uniform systems of accounts then prescribed for the corporation by the Department of Public Utility Control of the State of Connecticut (or by such other official body as may then have authority to prescribe such systems of accounts), but in any event after deducting taxes (other than Federal income and excess profits taxes or other taxes howsoever denominated and by whomsoever imposed which are imposed in income after the deduction of interest charges) and the amount charged by the corporation on its books to depreciation expense. "Funded indebtedness" of the corporation shall include, at any date, indebtedness of the corporation which would, in accordance with generally accepted accounting principles, be classified as funded indebtedness, and all indebtedness of the corporation, whether secured or unsecured, having a final maturity (or which, pursuant to the terms of a revolving credit agreement or otherwise, is renewable or extendable at the option of the corporation for a period ending) one year or more after the date of the creation thereof, notwithstanding that payments in respect thereof (whether installment, serial maturity or sinking fund payments or otherwise) are required to be made by the corporation less than one year after the date of the creation thereof. (G) Whenever dividends on any share of the Preferred Stock are in arrears in an amount equal to or exceeding six quarterly dividend payments, or whenever there shall have occurred any other default in the observance of any of the provisions of the certificate of incorporation relating to the Preferred Stock, then the holders of the Preferred Stock shall be given notice of all shareholders' meetings and shall have the right to elect, voting together as a class, two (2) directors. When all dividend arrearages have been paid and other defaults have terminated, the right of the holders of the Preferred Stock to receive such notice and to vote shall cease, subject to being again revived upon any subsequent such arrearage in the payment of dividends in the amount set forth above or subsequent occurrence of such default. Whenever the right of the holders of the Preferred Stock to elect directors accrues, such election of a new board of directors shall take place at the next regular annual meeting of shareholders. When such right ceases, the corporation may cause a special meeting of the shareholders to be held for the purpose of electing a new board of directors. Forthwith upon the election and qualification of the new board of directors in either case, the terms of office of the existing directors shall terminate. During any period that the holders of the Preferred Stock have the right to elect directors hereunder, the number of positions on the board of directors shall be no greater than five (5). II. 9-1/8% Redeemable Preferred Stock The initial series of Preferred Stock shall be known and designated as 9-1/8% Redeemable Preferred Stock, the terms, limitations and relative rights and preferences of which, in addition to those applicable to all Preferred Stock as a class, shall be as follows: 1. Number of Shares. The number of shares constituting the 9-1/8% Redeemable Preferred stock shall be 600,000. 2. Fixed Dividend Rate. The annual dividend rate on the 9-1/8% Redeemable Preferred Stock shall be 9-1/8 percent of the par value per share in cash, and such dividends shall be cumulative, whether or not earned or declared, from July 1, 1989, the initial date of issuance thereof, with the first dividend payable October 1, 1989,and quarterly dividend payment dates being, January 1, April 1, July 1, and October 1 in each year. 3. Fixed Liquidation Price. The amount payable to the holders of the 9-1/8% Redeemable Preferred Stock upon voluntary or involuntary dissolution, liquidation or winding up of the corporation shall be at the rate of $25 per share in cash, plus an amount per share equal to all unpaid dividends accrued thereon to the date of payment and plus such additional amount, if any, as may be payable with respect to such share pursuant to the written agreement providing for the purchase of the shares of such series. 4. Redemption (a) So long as any shares of the 9-1/8% Redeemable Preferred Stock shall be outstanding, the corporation shall, from funds legally available therefor, on July 1, 1995 and on each July 1 thereafter, retire through redemption at $25 per share, plus an amount per share equal to all unpaid dividends accrued thereon to the date designated for such redemption and plus such additional amount, if any, as may be payable with respect to such share pursuant to the written agreement providing for the purchase of the shares of such series, 60,000 shares of the 9-1/8% Redeemable Preferred Stock (or all of the shares of the 9-1/8% Redeemable Preferred Stock outstanding on any such July 1 if the number then outstanding is less than 60,000). The number of shares required to be retired in each year pursuant to this subparagraph (a) shall be subject to reduction by application of a credit as provided in paragraph (c) of this section 4. (b) On each date designated for the redemption of shares of 9-1/8% Redeemable Preferred Stock pursuant to paragraph (a) of this section 4, the corporation may at its option and in addition to the shares of such series required to be retired pursuant thereto, retire through redemption additional shares of the 9-1/8% Redeemable Preferred Stock at $25 per share plus the amount of any dividends accrued thereon to such date; provided, however, that no shares of such series may be retired pursuant to this paragraph (b) when there exists any deficiency in the retirement of shares pursuant to paragraph (a) of this section 4, and provided, further, that the right to retire additional shares of the 9-1/8% Redeemable Preferred Stock pursuant to this paragraph (b) shall be limited to a cumulative total of 60,000 shares over the period during which any shares of 9-1/8% Redeemable Preferred Stock shall be outstanding. (c) There shall be allowed to the corporation as a credit against the number of shares of 9-1/8% Redeemable Preferred Stock required to be retired pursuant to paragraph (a) of this section 4 for any year or years shares of such series that the corporation has at any time theretofore redeemed (otherwise than pursuant to paragraphs (a) and (b) of this section 4), purchased or otherwise acquired for value and retired or cancelled and that have not theretofore been used for the purpose of any that have not theretofore been used for the purpose of any credit under this paragraph (c) such credit to be allocated among the record holders of shares of such series in propertion, as nearly as practicable, to the total number of shares of such series then held by them of record. (d) The obligation of the corporation to retire shares of 9-1/8% Redeemable Preferred Stock pursuant to paragraph (a) of this section 4 shall be cumulative, so that, if in any year the corporation shall not retire the number of shares so required to be retired after the application of the credit provided for in paragraph (c) of this section 4, the obligation to retire such shares shall continue and funds legally available therefor shall be applied for such purpose until such obligation is discharged. (e) So long as any shares of the 9-1/8% Redeemable Preferred Stock shall be outstanding, in no event shall any dividends whatsoever, whether in cash, stock or otherwise, be paid or declared, or any other distribution be made on any Common Stock or any other class of stock of the corporation not having preference over the Preferred Stock as to payment of dividends, nor shall any shares of Common Stock or any other class of stock not having preference over the Preferred Stock as to the payment of dividends be redeemed, purchased, or otherwise acquired for value by the corporation, nor shall any money be paid to or set aside for a sinking fund for the redemption, purchase or other acquisition of any shares of Common Stock or any other class of stock not having preferences over the Preferred Stock as to the payment of dividends unless on or before the preceding date designated for the redemption of shares of 9-1/8% Redeemable Preferred Stock the corporation shall have retired the aggregate number of shares of such series required to have been retired by such date pursuant to paragraph (a) of this section 4. (f) If funds legally available to retire shares of Preferred Stock are insufficient on any date designated for the redemption of shares of 9-1/8% Redeemable Preferred Stock pursuant to paragraph (a) of this section 4 to retire in full the number of shares required to be retired on such a date for all series of Preferred Stock for which retirement by redemption is required, the amount of such legally available funds to be applied to retired shares of 9-1/8% Redeemable Preferred Stock on such date shall be that amount of such legally available funds that is equal to the ratio that the fixed liquidation value of the shares of 9-1/8% Redeemable Preferred Stock required to be retired on such date bears to the fixed liquidation value of all the shares of all series of Preferred Stock required to be retired by redemption on such date. (g) The 9-1/8% Redeemable Preferred Stock may not be called for redemption at the option of the corporation prior to July 1, 1994. All or part or the 9-1/8% Redeemable Preferred Stock at any time outstanding may be called by vote of the board of directors of the corporation for redemption at any time on or after July 1, 1994, and when redeemed during any period set forth in the following table, at the redemption price (stated as a percentage of par value) set opposite such period in the table (plus in each case the amount of any dividends accrued or in arrears thereon to such date): Period During which Redeemed Redemption Price July 1, 1994 through June 30, 1995 105.866% July 1, 1995 through June 30, 1996 105.214% July 1, 1996 through June 30, 1997 104.563% July 1, 1997 through June 30, 1998 103.911% July 10 1998 through June 30, 1999 103.259% July 1, 1999 through June 30, 2000 102.607% July 1, 2000 through June 30, 2001 101.955% July 1, 2001 through June 30, 2002 101.304% July 1, 2002 through June 30, 2003 100.652% July 1, 2003 through June 30, 2004 100.000% So long as any dividends are in arrears on any outstanding shares of 9-1/8% Redeemable Preferred Stock, the corporation may not redeem under this paragraph (g) less than the whole amount of the outstanding 9-1/8% Redeemable Preferred Stock. (h) In case of the redemption of only a part of the outstanding shares of 9-1/8% Redeemable Preferred Stock pursuant to any of the foregoing paragraphs of this section 4, among the recordholders of shares of such series in proportion, as nearly as practicable, to the total number of shares of such series then held by them of record. (i) Notwithstanding any contrary provisions of this section 4, the corporation shall also have the right to repurchase shares of 9-1/8% Redeemable Preferred Stock from the holders thereof in the circumstances and at the price set forth in the written agreement providing for the original purchase of the shares of such series. 6. Waiver. The corporation may take action herein prohibited or omit to perform any act herein required to be performed by the corporation, but only with the approval by the vote or written consent or written waiver of the record holders of at least 66-2/3% of the outstanding shares of the 9-1/8% Redeemable Preferred Stock; provided, however, that any such change in the provisions of this section 6 shall require the vote, written consent or written waiver of the record holders of all of the outstanding shares of the 9-1/8% Redeemable Preferred Stock. EX-99.2BYLAWS 30 b43-4.txt Exhibit B.43.4 YANKEE GAS SERVICES COMPANY BY-LAWS As in effect on March 1, 2000 YANKEE GAS SERVICES COMPANY BY-LAWS ARTICLE I PRINCIPAL OFFICE Section 1. The principal office of the Company shall be in the Town of Rocky Hill, Connecticut. ARTICLE II MEETINGS OF SHAREHOLDERS Section 1. Meetings of the shareholders may be held at any place in the State of Connecticut fixed by the Board of Directors. Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held within 6 months after the end of each fiscal year of the Company on the day and at the hour designated by the Board of Directors. Section 3. Notice of all meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than fifty days prior to the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice or be in attendance at the meeting. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and no business other than that of which notice has been given shall be transacted at such meeting. Section 4. At all meetings of shareholders each share of Common Stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote. Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than seventy days and not less than ten days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed. ARTICLE III DIRECTORS Section 1. The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than sixteen Directors. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. Until the first fixing of such number pursuant hereto, such number shall be five. The Directors so elected shall continue in office until their successors have been elected and qualified, except that a Director shall cease to be in office upon his death, resignation, lawful removal or court order decreeing that he is no longer a Director in office. Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting of Shareholders and until his successor shall be elected and qualified. Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion. Section 4. The Board of Directors shall have power to fix from time to time the compensation of the Directors and the method of payment thereof. Section 5. Any one or more Directors may be removed from office at any time with or without any showing of cause by affirmative vote of the holders of a majority of the Company's issued and outstanding shares entitled to vote. Section 6. The provisions of this Article III shall be subject to any right of the holders of the preferred stock to elect directors by a separate vote. ARTICLE IV MEETINGS OF DIRECTORS Section 1. A regular meeting of the Board of Directors shall be held annually, without notice, directly following the annual meeting of shareholders, for the election of officers and the transaction of other business. Section 2. All other regular meetings of the Board of Directors may be held at such time and place as the Board may from time to time determine and fix by resolution. Special meetings of the Board may be held at any place upon call of the Chairman (if there be one) or the President, or, in the event of the absence or inability of either to act, of a Vice President, or upon call of any three or more directors. Section 3. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally or by telephone, or by mail or telegraph at his last-known post office address, at least twenty-four hours, or shorter time as may be practicable in the circumstances, prior to the time of the meeting, provided that any director may waive such notice in writing or by telegraph or by attendance at such meeting. Section 4. One-third of the directorships as fixed in accordance with Section 1 of Article III of these By-Laws shall constitute a quorum, except that no quorum shall consist of less than two Directors. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors. Section 5. Except as otherwise provided by these By-Laws, the act of a majority of the Directors present at a meeting at which a quorum is present at the time of the act shall be the act of the Board of Directors. Section 6. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally or collectively, whose number shall constitute a quorum for such action, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors' written approval thereof, shall be recorded by the Secretary in the minute book of the Company. Section 7. A Director or a member of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of a conference telephone or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting. ARTICLE V OFFICERS Section 1. At its annual meeting the Board of Directors shall elect a Chairman of the Board, President, one or more Vice Presidents, a Secretary, a Treasurer and, if the Board shall so determine, a Vice Chairman of the Board, each of whom shall hold office until the next annual meeting of the board and until his successor shall have been elected and qualified or until his earlier resignation or removal. Any two or more offices may be held by the same person except that the offices of President and Secretary may not be held simultaneously by the same person. The Board may also elect at such annual meeting or at any other regular meeting or at any special meeting of the Board called for that purpose, such other officers as may be required for the proper transaction of business by the Company. A vacancy in any office may be filled at any regular meeting of the Board or at any special meeting of the Board called for that purpose. Section 2. The Board of Directors shall designate either the Chairman of the Board or the President as the Chief Executive Officer. The Chief Executive Officer shall be the principal executive officer of the Company and shall generally supervise and control all of the business and affairs of the Company, subject to the direction and control of the Board of Directors. He or another person appointed by him as his substitute shall, unless otherwise directed by the Board of Directors, attend in person or execute on behalf of the Company written instruments appointing a proxy or proxies to represent the Company at all meetings of the securityholders of any corporation in which the Company shall hold any voting securities. At all such meetings and otherwise, the Chief Executive Officer, in person or by substitute or proxy, may vote such securities so held by the Company and may execute written consents and other instruments with respect to such securities and may exercise on behalf of the Company any and all rights and powers incident to the ownership thereof, subject to any instructions of the Board of Directors. He shall have such other powers and duties as may be prescribed by the Board of Directors from time to time. Section 3. The chairman of the Board shall preside at all meetings of the Board and of the shareholders at which he is present, unless the Board shall determine otherwise, and shall have such other authority and shall perform such duties as from time to time may be assigned to him by the Board of Directors. Section 4. If the Chairman of the Board has been designated Chief Executive Officer, the President shall, in the absence of the Chairman of the Board, perform the duties of the Chief Executive Officer and when so acting shall have all the powers of the Chief Executive Officer. The President shall have such other powers and duties as may be assigned to him by the Chief Executive Officer or the Board of Directors. Section 5. The Vice Presidents shall have such powers and duties as may be assigned to them from time to time by the Chief Executive Officer, the President or the Board of Directors. One of the Vice Presidents may be designated by the Board as the Executive Vice President and, if so designated, shall exercise the powers and perform the duties of the President and, if the President has been designated Chief Executive Officer, the duties of the Chief Executive Officer, if the President is absent or unable to perform the duties of his office. The Board of Directors may also designate one or more of such Vice Presidents as Senior Vice Presidents. Section 6. The Secretary shall keep the minutes of all meetings of the shareholders and of the Board of Directors. He shall give notice of all meetings of the shareholders and of the Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly in custody of the Treasurer, and shall have such additional powers and duties as may be assigned to him from time to time by the Chief Executive Officer, the President or the Board of Directors. He shall have custody of the corporate seal of the Company and shall affix the same to all instruments requiring a seal. Section 7. The Treasurer shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign all checks, notes and drafts and similar instruments, except as otherwise provided by the Board of Directors. He shall have such additional powers and duties as may be assigned to him from time to time by the Chief Executive Officer, the President or the Board of Directors. Section 8. Any other officer shall have such powers and duties as may be prescribed by the Board of Directors of by another officer pursuant to Board authorization. Section 9. In addition to such powers and duties as these Bylaws and the Board of Directors may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage relate to his office. The Board of Directors may from time to time modify the powers and duties of any officer or delegate the powers or duties of any officer to any other officer or agent, notwithstanding any other provision of these Bylaws. Section 10. Any officer of the Company may be removed at any time, with or without cause, by the Board of Directors. ARTICLE VI INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS Section 1. The Company shall, to the full extent now or hereafter permitted by law, indemnify any person made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he, or the person whose legal representative he is, is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against judgments, fines, penalties, amounts paid in settlement and reasonable expenses actually incurred by him and the person whose legal representative he is in connection with such proceeding (whether the same shall be by or in the right of the Company or such other corporation, partnership, joint venture, trust or other enterprise, or otherwise). Section 2. If the determination of whether indemnification is proper in the circumstances is to be made by the Board of Directors, the Board may rely upon the written opinion of legal counsel as to whether such indemnification is permitted by law. Any person referred to in Section 1 of this Article VI who has been refused indemnification by the Company shall nevertheless be indemnified by it if a court of competent jurisdiction determines that such indemnification is permitted by law. Section 3. Expenses incurred in connection with any threatened, pending or completed action, suit or proceeding referred to in Section 1 of this Article VI may be advanced by the Company to the full extent now or hereafter permitted by law. Section 4. The intention of this Article VI is to provide indemnification with the broadest and most inclusive coverage permitted by law at the time of (a) the act or omission to be indemnified against or (b) such indemnification, whichever may be broader or more inclusive. If the indemnification permitted by law at the time this Article VI becomes effective, or at any future time, shall be broader or more inclusive than the other provisions of this Article VI, then indemnification shall nevertheless be the broadest and most inclusive permitted by law at any time and this Article VI shall be deemed to have been amended accordingly. If any provision or potion of this Article VI shall be invalid or ineffective, the validity and effect of the remaining provisions of these Bylaws shall not be affected. Section 5. The indemnification and advancement of expenses provided by or granted pursuant to the other provisions of this Article VI shall not be deemed exclusive of any other rights to which a person obtaining or seeking indemnification or advancement of expenses may be entitled under any law, agreement, vote of shareholders or the Board, or otherwise. ARTICLE VII COMMITTEES Section 1. The Board of Directors may designate two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as shall be provided in such resolution. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting of such committee, all the rights and obligations of a regular member thereof. Any vacancy on any such committee or among alternate members thereof shall be filled by the Board of Directors. ARTICLE VIII STOCK CERTIFICATES Section 1. All stock certificates, Common and Preferred, may bear the facsimile signatures of the President or a Vice President and the Treasurer or an Assistant Treasurer and a facsimile seal of the Company, or may be signed by the President or a Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, and may be sealed by any one of such officers. ARTICLE IX CORPORATE SEAL Section 1. The corporate seal of the Company shall be circular in form with the name of the Company inscribed therein. ARTICLE X AMENDMENTS Section 1. These By-Laws may be altered, amended, added to or repealed from time to time by an affirmative vote of the holders of a majority of the voting power of shares entitled to vote thereon at any meeting of the shareholders called for the purpose or by an affirmative vote of Directors holding a majority of the number of directorships then fixed in accordance with Section 1 of Article III of these By-Laws at any meeting of the Board of Directors called for the purpose. EX-99.13OTHCONTRCT 31 b44-1.txt Exhibit B.44.1 Certificate of Incorporation Stock Corporation State of Connecticut Secretary of the State 1. The name of the corporation is Housatonic Corporation. 2. The nature of the business to be transacted, or the purposes to be promoted or carried out by the corporation, are as follows: To acqurie, own, hold and manage an undivided general partnership interest in Iroquois Gas Transmission System, a general partnership to be organized under the laws of the State of New York. To engage in any lawful act or activity for which corporations may be formed under the Stock Corporation Act of the State of Connecticut, including, without limitation, such other business as may be necessary, appropriate or incidental to the nature of the business and the puposes of the corporation as described above. The enumeration of specific powers shall not be taken to limit or abridge the general powers of the corporation. 3. There shall be one class of capital stock, designeated "Common Stock" and having a par value of $100 per share, of which 50,000 shares shall be authorized. 4. There is only one class of shares authorized as above. 5. The minimum amount of stated capital with which the corporation shall commence business is One Million ($1,000,000). 6. Any action which, under any provision of Ch. 599, Title 33, of The Connecticut General Statutes, Revision of 1958, as amended, may be taken at a meeting of shareholders may also be taken without a meeting, by consent, in writing, setting forth the action to be taken, signed by persons holding not less than a majority of the voting power of shares, or of the shares of any particular class entitled to vote thereon or to take such action, or their duly authorized attorneys, all in accordance with the terms and subject to the limitations imposed by Sectin 33-330 of the Connecticut General Statutes. Dated at Berlin, Connecticut this 16th day of October 1987. I hereby declare, under the penalties of false statement, that the statements made in the foregoing certificate are true. /S/ Cheryl W. Grise, Incorporator Cheryl W. Grise Appointment of Statutory Agent For Service Domestic Corporation TO: The Secretary of the State of Connecticut Name of corporation: Housantonic Corporation The above corporation appoints as its statutory agent for service: Name of natural person who is resident of Connecticut: Business Address Cheryl W. Grise 107 Selden Street, Berlin, CT 06037 Residence Address 24 Stratford Road, West Hartford, CT 06117 Name of incorporator Cheryl W. Grise /S/ Cheryl W. Grise October 16, 1987 Acceptance: Name of statutory agent for service Accepted: Cheryl W. Grise /S/ Cheryl W. Grise EX-99.13OTHCONTRCT 32 b44-2.txt Exhibit B.44.2 Certificate Amending or Restating Certificate of Incorporation By Action of Board of Directors State of Connecticut Secretary of the State 1. Name of Corporation: Date: January 10, 1989 Housatonic Corporation 2. This Certificate of Incorporation is amended only by the following resolution: Resolved, that Article 5 of the Certificate of Incorporation of the Corporation be amended to read as follows: "5. The minimum amount of stated capital with which the corporation shall commence business is One Thousand ($1,000) Dollars." 3. N/A 4. The above resolution was adopted by the board of directors acting alone, there being no shareholders or subscribers. 5. The number of affirmative votes required to adopt such resolution is 11. 6. The number of director votes in favor of this resolution was 11. Philip T. Ashton, Vice President Walter F. Torrance Jr., Secretary /S/ Philip T. Ashton /S/ Walter F. Torrance Jr. EX-99.2BYLAWS 33 b44-3.txt Exhibit B.44.3 HOUSATONIC CORPORATION BY-LAWS As in effect on March 1, 2000 HOUSANTONIC CORPORATION BY-LAWS ARTICLE I MEETINGS OF SHAREHOLDERS Section 1. Meetings of the shareholders may be held at any place in the State of Connecticut fixed by the Board of Directors. Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held within six months after the end of each fiscal year of the Company on the day and at the hour designated by the Board of Directors. Section 3. Notice of all meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than fifty days prior to the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice or be in attendance at the meeting. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and no business other than that of which notice has been given shall be transacted at such meeting. Section 4. At all meetings of shareholders each share of Common Stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote. Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than seventy days and not less than ten days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed. ARTICLE II DIRECTORS Section 1. The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than nine Directors. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified, except that a Director shall cease to be in office upon his death, resignation, lawful removal or court order decreeing that he is no longer a Director in office. Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting of Shareholders and until his successor shall be elected and qualified. Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company. All the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion. Section 4. The Board of Directors shall have power to fix from time to time the compensation of the Directors and the method of payment thereof. Section 5. Any one or more Directors may be removed from office at any time with or without any showing of cause by affirmative vote of the holders of a majority of the Company's issued and outstanding shares entitled to vote. ARTICLE III MEETINGS OF DIRECTORS Section 1. A regular meeting of the Board of Directors shall be held annually, without notice, directly following the annual meeting of shareholders, for the election of officers and the transaction of other business. Section 2. All other regular meetings of the Board of Directors may be held at such time and place as the Board may from time to time determine and fix by resolution. Special meetings of the Board may be held at any place upon call of the Chairman (if there be one) or the President, or, in the absence or inability of either to act, of a Vice President, or upon call of any three or more directors. Section 3. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally or by telephone, or by mail or telegraph at his last-known post office address, at least twenty-four hours prior to the time of the meeting, provided that any director may waive such notice in writing or by telegraph or by attendance at such meeting. Section 4. One-third of the directorships as fixed in accordance with Section 1 of Article II of these By-Laws shall constitute a quorum, except that (subject to the provisions of Article III, Section 3) no quorum shall consist of less than two Directors. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors. Section 5. Except as otherwise provided by these By-Laws, the act of a majority of the Directors present at a meeting at which a quorum is present at the time of the act shall be the act of the Board of Directors. Section 6. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally or collectively, whose number shall constitute a quorum for such action, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors' written approval thereof, shall be recorded by the Secretary in the minute book of the Company. Section 7. A Director or a member of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of a conference telephone call or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting. ARTICLE IV OFFICERS Section 1. At its annual meeting the Board of Directors shall elect a President, one or more Vice Presidents, a Secretary, a Treasurer and, if the Board shall so determine, a Chairman, each of whom shall, subject to the provisions of Article IV, Section 3, hereof, hold office until the next annual election of officers and until his successor shall have been elected and qualified. Any two or more offices may be held by the same person except that the offices of the President and Secretary may not be simultaneously held by the same person. The Board shall also elect at such annual meeting, and may elect at any regular or special meeting, such other officers as may be required for the prompt and orderly transaction of the business of the Company. Any vacancy occurring in any office may be filled at any regular meeting of the Board or at any special meeting of the Board held for that purpose. Section 2. In addition to such powers and duties as these By-Laws and the Board of Directors may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office. Section 3. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the board of Directors. ARTICLE V CHAIRMAN AND PRESIDENT Section 1. The Chairman, if such office shall be filled by the Directors, shall, when present, preside at all meetings of said Board and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. Section 2. The President shall be the chief executive officer of the Company and shall be responsible for the general supervision, direction and control of the business and affairs of the Company. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of the Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VI VICE PRESIDENTS Section 1. The Vice Presidents shall have such powers and duties as may be assigned to them from time to time by the Board of Directors or the President. One of such Vice Presidents may be designated by said Board as Executive Vice President and, if so designated, shall exercise the powers and perform the duties of the President in the absence of the President or if the President is unable to perform the duties of his office. The Board of Directors may also designate one or more of such Vice Presidents as Senior Vice Presidents. ARTICLE VII SECRETARY Section 1. The Secretary shall keep the minutes of all meetings of all the stockholders and of the Board of Directors. He shall give notice of all meetings of the stockholders and of said Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer, and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. Section 2. He shall have the custody of the Corporate Seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these By-Laws. ARTICLE VIII ASSISTANT SECRETARIES Section 1. One or more Assistant Secretaries may be elected to perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. The Assistant Secretaries shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Secretary. ARTICLE IX TREASURER Section 1. The Treasurer shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign or authorize a facsimile signature as appropriate on all checks, notes, drafts and similar instruments, except as otherwise provided for by the Board of Directors. Section 2. He shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. ARTICLE X ASSISTANT TREASURERS Section 1. One or more Assistant Treasurers may be elected to perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. The Assistant Treasurers shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Treasurer. ARTICLE XI COMMITTEES Section 1. The Board of Directors may designate two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as shall be provided by an appropriate resolution. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting of such committee, all the rights and obligations of such regular member thereof. Any vacancy on any such committee or among alternate members thereof shall be filled by the Board of Directors. ARTICLE XII STOCK CERTIFICATES Section 1. All stock certificates may bear the facsimile signatures of the President or a Vice President and the Treasurer or an Assistant Treasurer and a facsimile seal of the Company, or may be signed by the President or a Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, and may be sealed by any one of such officers. ARTICLE XIII CORPORATE SEAL Section 1. The corporate seal of the Company shall be circular in form with the name of the Company inscribed therein. ARTICLE XIV INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND INDEPENDENT CONTRACTORS Section 1. The Board of Directors shall, as and to the extent permitted by law, indemnify and reimburse any person made a party to any action, suit or proceeding by reason of the fact that he, or a person whose legal representative or successor he is, is or was a director, officer, employee or independent contractor of the Company for expenses, including attorney's fees, and such amount of any judgment, money decree, fine, penalty or settlement for which he may become liable as the Board of Directors deems reasonable, actually incurred by him in connection with the defense or reasonable settlement of any such action, suit or proceeding, or any appeal therein, except in relation to matters as to which he, or such person whose legal representative or successor he is, is finally adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of his duties. ARTICLE XV AMENDMENTS Section 1. These Bylaws may be altered, amended, added to or repealed from time to time by an affirmative vote of the holders of a majority of the voting power of shares entitled to vote thereon at any meeting of the shareholders called for the purpose or by an affirmative vote of Directors holding a majority of the number of directorships at any meeting of the Board of Directors called for the purpose. EX-99.13OTHCONTRCT 34 b45-1.txt Exhibit B.45.1 Certificate of Incorporation Stock Corporation STATE OF CONNECTICUT SECRETARY OF THE STATE 1. The name of the corporation is: Yankee Energy Marketing Company 2. The nature of the business to be transacted, or the purposes to be promoted or carried out by the corporation are as follows: To engage in power marketingand energy consultation services for energy users. To engage in any lawful act or activity for which corporations may be formed under the Stock Corporation Act of the State of Connecticut including, without limitation, such other business and the purposes of the corporation as described above. The enmeration of specific powers shall not be taken to limit or abridge the general powers of the corporation. 3. There shall be one class of capital stock, designeated "Common Stock" and having no par value, of which 10,000 shares will be authorized. 4. There is only one class of shares authorized above. 5. The minimum amount of stated capital with which the corporation shall commence business is One thousand ($1,000)dollars. 6. Any action which, under any provision of Ch. 599, Title 33, of the Connecticut General Statutes, Revision of 1958, as amended, may be taken at a meeting of shareholders may also be taken without a meeting, by consent, in writing, setting forth the action to be taken, signed by persons holding not less than a majority of the voting power of shares, or of the shares of any particular class entitled to vote thereon or to take such action, or their duly authorized attorneys, all in accordance with Section 33-330 of the Connecticut General Statutes. Dated this 10th day of October 1995 Branko Terzic, Incorporator /S/ Branko Terzic Appointment of Statutory Agent for Service, Domestic Corporation Name of Corporation: Yankee Energy Marketing Company The above corporation appoints as its statutory agent for service: Name of natural person who is resident of Connecticut: Business Address: Mary J. Healey 599 Research Parkway Meriden, CT 06450 Residence Address: 99 Laurel Road, New Britain, CT 06052 Authorization Branko Terzic, Incorporator /S/ Branko Terzic Oct 10, 1995 Acceptance: Mary J. Healey /S/ Mary J. Healey EX-99.2BYLAWS 35 b45-2.txt Exhibit B.45.2 YANKEE ENERGY MARKETING COMPANY BY-LAWS As in effect on March 1, 2000 YANKEE ENERGY MARKETING COMPANY BY-LAWS ARTICLE I MEETINGS OF SHAREHOLDERS Section 1. Meetings of the shareholders may be held at any place in the State of Connecticut fixed by the Board of Directors. Section 2. The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held within six months after the end of each fiscal year of the Company on the day and at the hour designated by the Board of Directors. Section 3. Notice of all meetings of shareholders, stating the day, hour and place thereof, shall be given by a written or printed notice, delivered or sent by mail, at least ten days but not more than fifty days prior to the meeting, to each shareholder of record on the books of the Company and entitled to vote at such meeting, at the address appearing on such books, unless such shareholder shall waive notice or be in attendance at the meeting. Notice of a special meeting of shareholders shall state also the general purpose or purposes of such meeting and no business other than that of which notice has been given shall be transacted at such meeting. Section 4. At all meetings of shareholders each share of Common Stock entitled to vote, and represented in person or by proxy, shall be entitled to one vote. Section 5. The Board of Directors may fix a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at any meeting of shareholders or any adjournment thereof, such date in any case to be not earlier than the date such action is taken by the Board of Directors and not more than seventy days and not less than ten days immediately preceding the date of such meeting. In such case only such shareholders or their legal representatives as shall be shareholders on the record date so fixed shall be entitled to such notice and to vote at such meeting or any adjournment thereof, notwithstanding the transfer of any shares of stock on the books of the Company after any such record date so fixed. ARTICLE II DIRECTORS Section 1. The business, property and affairs of the Company shall be managed by a Board of not less than three nor more than nine Directors. Within these limits, the number of positions on the Board of Directors for any year shall be the number fixed by resolution of the shareholders or of the Board of Directors, or, in the absence of such a resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The Directors so elected shall continue in office until their successors have been elected and qualified, except that a Director shall cease to be in office upon his death, resignation, lawful removal or court order decreeing that he is no longer a Director in office. Section 2. The Board of Directors shall have power to fill vacancies that may occur in the Board or any other office, by death, resignation or otherwise, by a majority vote of the remaining members of the Board, and the person so chosen shall hold the office until the next Annual Meeting of Shareholders and until his successor shall be elected and qualified. Section 3. The Board of Directors shall have power to employ such and so many agents and factors or employees as the interests of the Company may require, and to fix the compensation and define the duties of all of the officers, agents, factors and employees of the Company. All the officers, agents, factors and employees of the Company shall be subject to the order of said Board, shall hold their offices at the pleasure of said Board, and may be removed at any time by said Board at its discretion. Section 4. The Board of Directors shall have power to fix from time to time the compensation of the Directors and the method of payment thereof. Section 5. Any one or more Directors may be removed from office at any time with or without any showing of cause by affirmative vote of the holders of a majority of the Company's issued and outstanding shares entitled to vote. ARTICLE III MEETINGS OF DIRECTORS Section 1. A regular meeting of the Board of Directors shall be held annually, without notice, directly following the annual meeting of shareholders, for the election of officers and the transaction of other business. Section 2. All other regular meetings of the Board of Directors may be held at such time and place as the Board may from time to time determine and fix by resolution. Special meetings of the Board may be held at any place upon call of the Chairman (if there be one) or the President, or, in the absence or inability of either to act, of a Vice President, or upon call of any three or more directors. Section 3. Oral or written notice of the time and place of each special meeting of the Board of Directors shall be given to each director personally or by telephone, or by mail or telegraph at his last-known post office address, at least twenty- four hours prior to the time of the meeting, provided that any director may waive such notice in writing or by telegraph or by attendance at such meeting. Section 4. One-third of the directorships as fixed in accordance with Section 1 of Article II of these By-Laws shall constitute a quorum, except that (subject to the provisions of Article III, Section 3) no quorum shall consist of less than two Directors. A number less than a quorum may adjourn from time to time until a quorum is present. In the event of such an adjournment, notice of the adjourned meeting shall be given to all Directors. Section 5. Except as otherwise provided by these By- Laws, the act of a majority of the Directors present at a meeting at which a quorum is present at the time of the act shall be the act of the Board of Directors. Section 6. Any resolution in writing concerning action to be taken by the Company, which resolution is approved and signed by all of the Directors, severally or collectively, whose number shall constitute a quorum for such action, shall have the same force and effect as if such action were authorized at a meeting of the Board of Directors duly called and held for that purpose, and such resolution, together with the Directors' written approval thereof, shall be recorded by the Secretary in the minute book of the Company. Section 7. A Director or a member of a committee of the Board of Directors may participate in a meeting of the Board of Directors or of such committee by means of a conference telephone call or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting in such manner shall constitute presence in person at such meeting. ARTICLE IV OFFICERS Section 1. At its annual meeting the Board of Directors shall elect a President, one or more Vice Presidents, a Secretary, a Treasurer and, if the Board shall so determine, a Chairman, each of whom shall, subject to the provisions of Article IV, Section 3, hereof, hold office until the next annual election of officers and until his successor shall have been elected and qualified. Any two or more offices may be held by the same person except that the offices of the President and Secretary may not be simultaneously held by the same person. The Board shall also elect at such annual meeting, and may elect at any regular or special meeting, such other officers as may be required for the prompt and orderly transaction of the business of the Company. Any vacancy occurring in any office may be filled at any regular meeting of the Board or at any special meeting of the Board held for that purpose. Section 2. In addition to such powers and duties as these By-Laws and the Board of Directors may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office. Section 3. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the board of Directors. ARTICLE V CHAIRMAN AND PRESIDENT Section 1. The Chairman, if such office shall be filled by the Directors, shall, when present, preside at all meetings of said Board and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. Section 2. The President shall be the chief executive officer of the Company and shall be responsible for the general supervision, direction and control of the business and affairs of the Company. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of the Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the stockholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. ARTICLE VI VICE PRESIDENTS Section 1. The Vice Presidents shall have such powers and duties as may be assigned to them from time to time by the Board of Directors or the President. One of such Vice Presidents may be designated by said Board as Executive Vice President and, if so designated, shall exercise the powers and perform the duties of the President in the absence of the President or if the President is unable to perform the duties of his office. The Board of Directors may also designate one or more of such Vice Presidents as Senior Vice Presidents. ARTICLE VII SECRETARY Section 1. The Secretary shall keep the minutes of all meetings of all the stockholders and of the Board of Directors. He shall give notice of all meetings of the stockholders and of said Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer, and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. Section 2. He shall have the custody of the Corporate Seal of the Company and shall affix the same to all instruments requiring a seal except as otherwise provided in these By-Laws. ARTICLE VIII ASSISTANT SECRETARIES Section 1. One or more Assistant Secretaries may be elected to perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. The Assistant Secretaries shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Secretary. ARTICLE IX TREASURER Section 1. The Treasurer shall have charge of all receipts and disbursements of the Company, and shall be the custodian of the Company's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Company from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign or authorize a facsimile signature as appropriate on all checks, notes, drafts and similar instruments, except as otherwise provided for by the Board of Directors. Section 2. He shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. ARTICLE X ASSISTANT TREASURERS Section 1. One or more Assistant Treasurers may be elected to perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. The Assistant Treasurers shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Treasurer. ARTICLE XI COMMITTEES Section 1. The Board of Directors may designate two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as shall be provided by an appropriate resolution. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting of such committee, all the rights and obligations of such regular member thereof. Any vacancy on any such committee or among alternate members thereof shall be filled by the Board of Directors. ARTICLE XII STOCK CERTIFICATES Section 1. All stock certificates may bear the facsimile signatures of the President or a Vice President and the Treasurer or an Assistant Treasurer and a facsimile seal of the Company, or may be signed by the President or a Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, and may be sealed by any one of such officers. ARTICLE XIII CORPORATE SEAL Section 1. The corporate seal of the Company shall be circular in form with the name of the Company inscribed therein. ARTICLE XIV INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND INDEPENDENT CONTRACTORS Section 1. The Board of Directors shall, as and to the extent permitted by law, indemnify and reimburse any person made a party to any action, suit or proceeding by reason of the fact that he, or a person whose legal representative or successor he is, is or was a director, officer, employee or independent contractor of the Company for expenses, including attorney's fees, and such amount of any judgment, money decree, fine, penalty or settlement for which he may become liable as the Board of Directors deems reasonable, actually incurred by him in connection with the defense or reasonable settlement of any such action, suit or proceeding, or any appeal therein, except in relation to matters as to which he, or such person whose legal representative or successor he is, is finally adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of his duties. ARTICLE XV AMENDMENTS Section 1. These Bylaws may be altered, amended, added to or repealed from time to time by an affirmative vote of the holders of a majority of the voting power of shares entitled to vote thereon at any meeting of the shareholders called for the purpose or by an affirmative vote of Directors holding a majority of the number of directorships at any meeting of the Board of Directors called for the purpose. EX-99.13OTHCONTRCT 36 c5-2.txt Exhibit C.5.2 U.S. $200,000,000 TERM CREDIT AGREEMENT Dated as of November 9, 2000 Among NORTH ATLANTIC ENERGY CORPORATION as Borrower THE BANKS NAMED HEREIN as Banks BANK ONE, N.A. as Administrative Agent TABLE OF CONTENTS Article I DEFINITIONS AND ACCOUNTING TERMS Section 1.01. Certain Defined Terms. Section 1.02. Computation of Time Periods. Section 1.03. Accounting Terms. Section 1.04. Computations of Outstandings. Article II COMMITMENTS Section 2.01. The Commitments. Section 2.02. Fees. Section 2.03. Termination of the Commitments. Article III AMOUNTS AND TERMS OF THE ADVANCES Section 3.01. Initial Funding. Section 3.02. Conversion of Advances. Section 3.03. Other Terms Relating to the Making and Conversion of Advances. Section 3.04. Repayment of Advances. Section 3.05. Interest. Article IV PAYMENTS Section 4.01. Payments and Computations. Section 4.02. Prepayments. Section 4.03. Yield Protection. Section 4.04. Sharing of Payments, Etc. Section 4.05. Taxes. Article V CONDITIONS PRECEDENT Section 5.01. Conditions Precedent to the Closing Date. Section 5.02. Reliance on Certificates. Article VI REPRESENTATIONS AND WARRANTIES Section 6.01. Representations and Warranties of the Borrower. Article VII COVENANTS OF THE BORROWER Section 7.01. Affirmative Covenants. Section 7.02. Negative Covenants. Section 7.03. Reporting Obligations. Article VIII DEFAULTS Section 8.01. Events of Default. Section 8.02. Remedies Upon Events of Default. Article IX THE ADMINISTRATIVE AGENT Section 9.01. Authorization and Action. Section 9.02. Administrative Agent's Reliance, Etc. Section 9.03. Bank One and Affiliates. Section 9.04. Lender Credit Decision. Section 9.05. Indemnification. Section 9.06. Successor Administrative Agent. Article X MISCELLANEOUS Section 10.01. Amendments, Etc. Section 10.02. Notices, Etc. Section 10.03. No Waiver of Remedies. Section 10.04. Costs, Expenses and Indemnification. Section 10.05. Right of Set-off. Section 10.06. Binding Effect. Section 10.07. Assignments and Participation. Section 10.08. Confidentiality. Section 10.09. Waiver of Jury Trial. Section 10.10. Governing Law. Section 10.11. Relation of the Parties; No Beneficiary. Section 10.12. Execution in Counterparts. SCHEDULES Schedule I Applicable Lending Offices Schedule II Governmental Approvals Schedule III Investments Schedule IV Commitments EXHIBITS Exhibit 1.01A Form of Note Exhibit 3.01A Form of Notice of Borrowing Exhibit 3.02A Form of Notice of Conversion Exhibit 5.01A Form of Opinion of C.E. Shively, Esq. Exhibit 5.01B Form of Opinion of Jeffrey C. Miller, Esq. Exhibit 5.01C Form of Opinion of Robert A. Bersak, Esq. Exhibit 10.07 Form of Lender Assignment TERM CREDIT AGREEMENT Dated as of November 9, 2000 THIS TERM CREDIT AGREEMENT (the "Agreement") is made by and among: (i) NORTH ATLANTIC ENERGY CORPORATION, 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; (iii) BANK ONE, N.A. (main office Chicago) ("Bank One") as administrative agent (the "Administrative Agent") for the Lenders hereunder. PRELIMINARY STATEMENT The Borrower wishes to refinance the indebtedness outstanding under its Term Credit Agreement, dated as of November 9, 1995 (the "Existing Debt"). Subject to the conditions and upon the terms of this Agreement and the Notes referred to herein, the Borrower wishes to borrow, and the Banks have agreed, severally and not jointly, to lend, an aggregate amount of up to $200,000,000 for such purpose. Based upon the foregoing and subject to the conditions and upon the terms set forth in this Agreement, the parties agree as follows: Article I DEFINITIONS AND ACCOUNTING TERMS Section 1.01. 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): "Adjusted Net Income" of the Borrower, for any period, means the Borrower's net income for such period, determined in accordance with generally accepted accounting principles on a basis consistent with the standards referred to in Section 1.03 hereof, and: (i) increased by the amount of current and deferred federal and state income taxes for such period (calculated on a basis consistent with footnote 5 to the Borrower's financial statements included in its 1999 Annual Report); (ii) decreased by the amount of Income Taxes-credit (as included under "Other Income") for such period; and (iii) increased by the Borrower's Interest Expense for such period. "Advance" means an Advance by a Lender to the Borrower pursuant to Section 3.01 hereof, and refers to a Base Rate Advance or a Eurodollar Rate Advance (each of which shall be a "Type" of Advance). The Type of an Advance may change from time to time as and when such Advance is Converted. For purposes of this Agreement, all Advances of a Lender (or portions thereof) made of, or Converted into, the same Type and Interest Period on the same day shall be deemed to be a single Advance by such Lender until repaid or next Converted. "Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling (including, but not limited to all directors and officers of such Person), controlled by, or under direct or indirect common control with such Person. A Person shall be deemed to control another entity if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting securities, by contract or otherwise. "Alternate Base Rate" means, for any Interest Period or any other period, a fluctuating interest rate per annum equal at all times to the highest from time to time of: (a) the rate of interest announced publicly by Bank One, Chicago, Illinois, from time to time, as Bank One's corporate base rate; and (b) 1/2 of one percent per annum above the Federal Funds Rate from time to time. Each change in the Alternate Base Rate shall take effect concurrently with any change in such base rate or Federal Funds Rate. "Applicable Lending Office" means, with respect to each Lender, (i)(A) such Lender's "Domestic Lending Office" in the case of a Base Rate Advance, and (B) such Lender's "Eurodollar Lending Office" in the case of a Eurodollar Rate Advance, in each case as specified opposite such Lender's name on Schedule I hereto or in the Lender Assignment pursuant to which it became a Lender, or (ii) such other office or affiliate of such Lender as such Lender may from time to time specify to the Borrower and the Administrative Agent. "Applicable Margin" means, on any date for any Eurodollar Rate Advance, the applicable percentage per annum set forth below, based on the then Applicable Rating Level. Level 1 Level 2 Level 3 1.25% 1.50% 2.00% Any change in the Applicable Margin caused by a change in the Applicable Rating Level shall take effect immediately upon such change in the Applicable Rating Level. "Applicable Rate" means: (i) in the case of each Base Rate Advance, a rate per annum equal at all times to the Alternate Base Rate in effect from time to time; and (ii) 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 Margin in effect from time to time during such Interest Period. "Applicable Rating Level" on any date for any Eurodollar Rate Advance, shall be determined in accordance with the following table on the basis of the ratings of Moody's and S&P, respectively, then applicable to the senior secured debt of PSNH: Level 1 Level 2 Level 3 Baa2/BBB Ba1/BB+ Below Bal or or higher or higher Below BB+ In the event of a "split" rating, the Applicable Rating Level shall be determined on the basis of the lower of the two ratings (and, if applicable, the higher Applicable Rating Level and Applicable Margin). The Applicable Rating Level shall be redetermined as and when any change in the ratings used in the determination thereof shall be announced by either Moody's or S&P. "Arranger" means Banc One Capital Markets, Inc. "Base Rate Advance" means an Advance in respect of which the Borrower has selected in accordance with Article III hereof, or this Agreement otherwise provides for, interest to be computed on the basis of the Alternate Base Rate. "Borrowing" means a borrowing consisting of Advances of the same Type and Interest Period made on the same day by the Lenders, ratably in accordance with their respective Commitments. For purposes of this Agreement: (i) each Borrowing shall be deemed to be of the same "Type" as the Advances comprising such Borrowing, and (ii) all Advances made of, or Converted into, the same Type and Interest Period on the same day shall be deemed a single Borrowing hereunder until repaid or next Converted. "Business Day" means a day of the year on which banks are not required or authorized to close in New York City, or Chicago, Illinois and, if the applicable Business Day relates to any Eurodollar Rate Advance, on which dealings are carried on in the London interbank market. "Closing Date" 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 to occur on the Closing Date shall take place on or prior to November 9, 2000, at the offices of King & Spalding, 1185 Avenue of the Americas, 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. "Commitment" means, for each Lender, the amount set forth opposite such Lender's name on Schedule IV hereto, 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. "Common Equity" 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 aggregate of the par value of, or (ii) 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. "Common Equity Ratio" means, as of any day, the ratio of (i) Common Equity as of such day to (ii) Total Capitalization as of such day. "Confidential Information" has the meaning assigned to that term in Section 10.08. "Conversion", "Convert" or "Converted" each refers to a conversion of 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 or any conversion of an Advance as described in Section 3.02(c). "Debt" means, for any Person, without duplication (including, for example, Debt evidenced by notes or securities that are supported by letters of credit and reimbursement obligations in respect of such letters of credit), (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, (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 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 (vi), above, and (viii) liabilities in respect of unfunded vested benefits under ERISA Plans. "Disclosure Documents" means the Borrower's 1999 Annual Report, the Borrower's Annual Report on Form 10-K for the year ended December 31, 1999, the Borrower's Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 2000, any Current Report on Form 8-K of the Borrower filed by the Borrower with the Securities and Exchange Commission after June 30, 2000 and furnished to the Banks prior to October 1, 2000. "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 an 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 termination of, or the appointment of a trustee to administer, any ERISA Plan or ERISA Multiemployer Plan. "Eurocurrency Liabilities" has the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time. "Eurodollar Rate" means, for 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 1/100 of 1% per annum) of the rate per annum at which deposits in U.S. Dollars are offered by the principal office of each of the Reference Banks in London, England in the amount of such Reference Bank's Eurodollar Rate Advance 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 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 the applicable rates (averaged as set forth above) furnished to and received by the Administrative Agent from the Reference Banks two Business Days before the first day of such Interest Period, subject, however, to the provisions of Sections 3.05(d) and 4.03(g). "Eurodollar Rate Advance" means an 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. "Event of Default" has the meaning specified in Section 8.01. "Existing Debt" has the meaning assigned to that term in the Preliminary Statement. "Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published on the next succeeding Business Day the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it. "Final Settlement" means an agreement on, satisfaction of all conditions precedent to (including enactment of necessary legislation), and implementation of a settlement of all matters relating to the restructuring of the electricity industry in New Hampshire, as applicable to the Borrower and PSNH, on substantially the terms of the Settlement Agreement, and the NHPUC Settlement Order, as consented to by the Lenders hereunder. "First Mortgage Bonds" means first mortgage bonds of the Borrower issued or to be issued pursuant to that certain First Mortgage Indenture and Deed of Trust, dated as of June 1, 1992, between the Borrower and United States Trust Company of New York, as trustee (together with any successor, the "First Mortgage Trustee"), as the same may be amended, modified and supplemented from time to time (the "First Mortgage Indenture"). "Governmental Approval" means any authorization, consent, approval, license, permit, certificate, exemption of, or filing or registration with, any governmental authority or other legal or regulatory body, including any renewal thereof. For purposes of this Agreement, Chapter 362-C of the Revised Statutes Annotated of New Hampshire, in effect on the date hereof, shall be deemed to be a Governmental Approval. "Hazardous Substance" means any waste, substance or material identified as hazardous or toxic by any office, agency, department, commission, board, bureau or instrumentality of the United States of America or of the State or locality in which the same is located having or exercising jurisdiction over such waste, substance or material. "Indemnified Person" has the meaning assigned to that term in Section 10.04(b) hereof. "Interest Coverage Ratio" means, for any period, the ratio of (i) Adjusted Net Income for such period to (ii) Interest Expense for such period. "Interest Expense" means, for any period, the aggregate interest expense of the Borrower for such period, determined in accordance with generally accepted accounting principles on a basis consistent with the standards referred to in Section 1.03 hereof. "Interest Period" has the meaning assigned to that term in Section 3.05(a) hereof. "Joint Ownership Agreement" means the Agreement for Joint Ownership, Construction and Operation of New Hampshire Nuclear Units, among PSNH 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(a). "Lien" has the meaning assigned to that term in Section 7.02(a) hereof. "Loan Documents" means this Agreement and the Notes. "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 or (ii) if no Advances are then outstanding, represent at least 66-2/3% of the Commitments. 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. "Moody's" means Moody's Investors Service, Inc., or any successor thereto. "NHPUC Settlement Order" means Order 23,549 dated September 8, 2000 of the New Hampshire Public Utilities Commission issued in Docket DE 99-099. "1999 Annual Report" means the 1999 Annual Report of the Borrower included in the Borrower's Annual Report on Form 10-K for the year ended December 31, 1999. "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 aggregate indebtedness of the Borrower to such Lender resulting from the Advances made by such Lender. "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. "NU System Money Pool" means the money pool described in the application/declaration, as amended, of NU and certain of its Subsidiaries, filed with the Securities and Exchange Commission in File No. 70-8875, 70-9711 and 70- 9755, as amended from time to time. "PBGC" means the Pension Benefit Guaranty Corporation (or any successor entity) established under ERISA. "Permitted Investments" means each and any of the following; provided that no such Permitted Investment shall have a final maturity not later than 12 months from the date of investment therein. (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 S&P or Aa3 or better by Moody's (or an equivalent rating by another nationally recognized credit rating agency of similar standing if neither of such corporations is then in the business of rating unsecured bank indebtedness); (iii) obligations with any Lender, 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 Lender 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 S&P or Moody's, respectively (or an equivalent rating by another nationally recognized credit rating agency of similar standing if neither of such corporations is then in the business of rating commercial paper). (v) deposits with or loans to the NU System Money Pool on the terms and conditions from time to time applicable to other participants therein, but in no event on terms less favorable to the Borrower than are applicable to such other participants. (vi) investments in securities of industrial and other nonutility local enterprises described in Rule 40(a)(5) under PUHCA; provided, however, that the total amount invested shall not exceed (i) $1,000,000 in any calendar year and (ii) $5,000,000 at any one time outstanding. (vii) United States Securities and Exchange Commission registered money market mutual funds conforming to Rule 2a-7 of the Investment Company Act of 1940 in effect in the United States, that invest primarily in direct obligations issued by the United States Treasury and repurchase obligations backed by those obligations, and rated in the highest category by S&P and Moody's. "Permitted Liens" has the meaning ascribed to that term in Section 7.02(a). "Person" means an individual, partnership, corporation (including a business trust), joint stock company, trust, estate, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof. "PSNH" means Public Service Company of New Hampshire, a corporation organized under the laws of the State of New Hampshire. "PUHCA" means the Public Utility Holding Company Act of 1935, as amended. "Rate Agreement" means the Agreement dated as of November 22, 1989, as amended by the First Amendatory Agreement dated as of December 5, 1989, the Second Amendatory Agreement dated as of December 12, 1989, the Third Amendment to Rate Agreement dated as of December 28, 1993, the Fourth Amendment to Rate Agreement dated as of September 21, 1994 and the Fifth Amendment to Rate Agreement dated as of September 9, 1994, among NUSCO, the Governor and Attorney General of the State of New Hampshire and adopted by PSNH as of July 10, 1990 (but excluding the Unit Contract appended as Exhibit A thereto). "Recipient" has the meaning assigned to that term in Section 10.08 hereof. "Reference Banks" means, initially, Bank One, Barclays, Fleet and Union, and shall include any other or different Lender(s) as may from time to time agree to act as Reference Banks hereunder with the consent of the Borrower. "Register" has the meaning specified in Section 10.07(c). "S&P" means Standard & Poor's Rating Group or any successor thereto. "Seabrook" means the nuclear-fueled, steam-electric generating plant at a site located in Seabrook, New Hampshire, and all real property interests, fixtures, and other assets related thereto. "Seabrook Interests" means all of the Borrower's right, title and interest in and to Seabrook, presently constituting 35.98201% of Seabrook. "Settlement Agreement" means the Agreement to Settle PSNH Restructuring, dated August 2, 1999, among inter alia, the Governor of the State of New Hampshire, PSNH and NU, as revised and conformed in compliance with the NHPUC Settlement Order. "Significant Contracts" means the Unit Contract and the Tax Allocation Agreement. "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, including the Borrower, as amended and as the same may be further amended, modified or supplemented in accordance with the terms hereof and thereof. "Termination Date" means the earliest to occur of (i) November 8, 2001, (ii) the date of termination in whole of the Commitments pursuant to Section 8.02 or (iii) 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 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 and (iii) the surplus of the Borrower, paid-in, earned and other, if any, on such day. "Type" 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. "Unit Contract" means the Unit Contract, dated as of June 1, 1992, between the Borrower and PSNH, as the same may from time to time be amended, modified or supplemented in accordance with the terms hereof and thereof. "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 financial statements included in the Borrower's 1999 Annual Report, except for such changes, if any, as are consistent with generally accepted accounting principles and are disclosed to the Lenders. Any such change that would affect the calculation of any figure or ratio contained in any covenant or agreement herein to be performed or observed by the Borrower shall be disregarded for such purpose unless and until the Borrower and the Majority Lenders shall have agreed upon a replacement figure or ratio that, after giving effect to such change, reflects the original intent of the parties. The parties agree to negotiate in good faith to reach any such agreement. 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, after giving effect to all Advances to be made on such date and the application of the proceeds thereof. Article II COMMITMENTS Section 2.01. The Commitments. Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make Advances to the Borrower on the Closing Date in an aggregate amount not to exceed such Lender's Commitment. In no event may any Advance repaid or prepaid hereunder be reborrowed. Section 2.02. Fees. The Borrower agrees to pay to the Arranger and the Administrative Agent, for their respective accounts, such other fees in such amounts and payable at such times, as agreed among them from time to time in writing. Section 2.03. Termination of the Commitments. (a) The Commitment of each Lender shall automatically terminate upon the first to occur of (i) the making of the Advances and (ii) 5:00 P.M. (New York City time) on November 9, 2000. Article III AMOUNTS AND TERMS OF THE ADVANCES Section 3.01. Initial Funding. (a) All Borrowings (other than Borrowings resulting solely from Conversions) shall be made simultaneously on the Closing Date and shall consist of Advances of the same Type and Interest Period made on such day by the Lenders ratably according to their respective Commitments. The Borrower may request that more than one Borrowing, but no more than six Borrowings, be made on the Closing Date, within the limits of the Commitments. All such Borrowings shall be made on notice, given not later than 10:00 A.M. (New York City time) three Business Days prior to the date of the proposed Closing Date, 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 Borrowing (a "Notice of Borrowing") shall be in substantially the form of Exhibit 3.01A hereto, specifying therein the requested (i) Closing Date, (ii) Type of Advances comprising such Borrowing and (iii) Interest Period for each such Advance. Each requested Borrowing shall be subject to the provisions of Sections 3.03, 4.03 and 5.02 hereof. (b) Each Lender shall, before 12:00 noon (New York City time) on the Closing Date, 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 ratable portion of each Borrowing to be made on such date. After the Administrative Agent's receipt of such funds and upon fulfillment of the applicable conditions set forth in Section 5.02, the Administrative Agent will make such funds available to the Borrower at the Administrative Agent's aforesaid address. (c) Unless the Administrative Agent shall have received notice from a Lender prior to the Closing Date that such Lender will not make available to the Administrative Agent such Lender's ratable portion of all or any Borrowings to be made on such date, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on such date in accordance with subsection (b) of this Section 3.01 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 (but without duplication) 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. (d) 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 as a part 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. Section 3.02. Conversion of Advances. So long as no Event of Default shall have occurred and be continuing, the Borrower may from time to time after the Closing Date elect to Convert any one or more Advances of any Type to one or more 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 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, the initial Interest Period to be applicable to the Advances resulting from such Conversion and (v) aggregate amount of Advances proposed to be Converted. No Conversion may be requested by the Borrower hereunder (and no Notice of Conversion shall be effective) 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) during the continuance of an Unmatured Default or an Event of 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, the Administrative Agent shall treat such absence of notice as a deemed Notice of Conversion providing for each such Advance to be Converted to a Base Rate Advance on the last day of the Interest Period then in effect for such Advance. Section 3.03. Other Terms Relating to the Making and Conversion of Advances. (a) Notwithstanding anything in Section 3.01 or 3.02 above to the contrary: (i) at no time shall more than six different Borrowings be outstanding hereunder; (ii) each Borrowing hereunder which is to be comprised of Base Rate Advances shall be in an aggregate principal amount of no less than $1,000,000. (iii) each Borrowing hereunder which is to be comprised of Eurodollar Rate Advances shall be in the aggregate principal amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof. (b) Each Notice of Borrowing and Notice of Conversion shall be irrevocable and binding on the Borrower. Section 3.04. Repayment of Advances. The Borrower shall repay the entire principal amount of all Advances together with all accrued and unpaid interest thereon on the Termination Date. Section 3.05. 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. The initial Interest Period for each 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 Advances comprising part of the same Borrowing shall have the same Interest Period, as selected by the Borrower in accordance with this Section 3.05(a). The duration of each Interest Period shall be (i) in the case of any Base Rate Advance, until the earlier of repayment of such Advance in full or the Termination Date, and (ii) in the case of any Eurodollar Rate Advance, 1, 2, 3, or 6 months, in each case as the Borrower may, upon notice received by the Administrative Agent in accordance with Sections 3.01(a) and 3.02, select; provided, however, that the Borrower may not select any Interest Period which ends 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) Base Rate Advances. If such Advance is a Base Rate Advance, interest thereon shall be payable quarterly in arrears on the last day of March, June, September and December in each year, commencing December, 2000, on the date such Base Rate Advance shall be paid in full and on the Termination Date; provided that during the continuation of any Event of Default, each Base Rate Advance shall bear interest at a rate per annum equal to 2% per annum above the Applicable Rate in effect from time to time for Base Rate Advances. (ii) Eurodollar Rate Advances. If such Advance is a Eurodollar Rate Advance, interest thereon shall be payable on the last day of each Interest Period thereof 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 during the continuation of an Event of Default, each Eurodollar Rate Advance shall bear interest at a rate per annum equal to the greater of (A) 2% per annum above the Applicable Rate for such Advance and (B) 2% per annum above the Alternate Base Rate. (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 Alternate Base Rate, payable on demand. (d) Interest Rate Determinations. The Administrative Agent shall give prompt notice to the Borrower and the Lenders of the Applicable Rate determined from time to time by the Administrative Agent for each Advance. Each Reference Bank agrees to furnish to the Administrative Agent timely information for the purpose of determining the Eurodollar Rate for any Interest Period. If any one Reference Bank shall not furnish such timely information, the Administrative Agent shall determine such interest rate on the basis of the timely information furnished by the remaining Reference Banks. Article IV PAYMENTS Section 4.01. Payments and Computations. (a) The Borrower shall make each payment hereunder and under the other Loan Documents not later than 1:00 P.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 and other amounts pursuant to Section 4.03 shall be made by the Lender claiming such interest or amount, on the basis of a year of 360 days. All other computations of interest and fees hereunder 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, fees or other amounts 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 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 to be made, or the last day of an Interest Period for a Eurodollar Rate Advance to occur, in the next following calendar month, such payment shall be made on the next preceding Business Day and such reduction of time shall in such case be included in the computation of payment of interest hereunder. (e) Unless the 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, each 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 4.02. Prepayments. (a) Generally. The Borrower shall have no right to prepay any principal amount of any Advances except in accordance with subsections (b) and (c) below. (b) Optional. The Borrower may, upon at least three 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 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 and all other amounts, if any, payable in connection therewith pursuant to Section 4.03(d); provided, however, that each partial prepayment shall be in an aggregate principal amount not less than $10,000,000. (c) Mandatory. (i) Within two Business Days of the "buydown" of the Seabrook Interest to $100,000,000 as contemplated by Section VIII(K) of the Settlement Agreement and the NHPUC Order, the Borrower shall prepay fifty percent (50%) of the aggregate outstanding principal amount of Advances, together with accrued interest to the date of such prepayment on the principal amount prepaid and all other amounts, if any, payable in connection therewith pursuant to Section 4.03(d). (ii) Within two Business Days of the sale of the Seabrook Interest or any earlier termination of the Unit Contract as contemplated by the Final Settlement, the Borrower shall prepay one hundred percent (100%) of the aggregate outstanding principal amount of Advances, together with all accrued and unpaid interest to the date of such prepayment and all other amounts, if any, payable in connection therewith pursuant to Section 4.03(d). (iii) To assist the Borrower in minimizing amounts payable pursuant to Section 4.03(d) in connection with the foregoing prepayments, the Borrower may, during the 30-day period preceding the anticipated closing date of the transaction giving rise to such prepayment and for up to 30 days thereafter, elect Interest Periods of one day, one week or other periods of less than one month in respect of the principal amount of Eurodollar Rate Advances to be prepaid, so long as dollar deposits of a maturity corresponding to such Interest Period are available to the Lenders in the interbank markets. If any such closing date shall be postponed for more than 30 days, the Borrower may re-invoke this clause (iii) in respect of any closing date subsequently established. Section 4.03. Yield Protection. (a) Change in Circumstances. Notwithstanding any other provision herein, if after the date hereof, the adoption of or any change in applicable law or regulation or in the interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof (whether or not having the force of law) shall (i) change the basis of taxation of payments to any Lender of the principal of or interest on any Eurodollar Rate 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 commitments or assets of, deposits with or for the account of, or credit extended by, such Lender, or (iii) shall impose on such Lender or the London interbank market any other condition affecting this Agreement or Eurodollar Rate 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 any change after the date hereof in 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 other 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 may sustain or incur as a consequence of (i) 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, (ii) any payment, prepayment or Conversion of a Eurodollar Rate Advance required or permitted by any other provision of this Agreement or otherwise made or deemed made on a date other than the last day of the Interest Period applicable thereto, (iii) 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 (iv) the occurrence of any Event of Default, including, in each such case, any loss or reasonable expense sustained or incurred or to be sustained or incurred in liquidating or employing deposits from third parties acquired to effect or maintain such Advance or any part thereof as a Eurodollar Rate Advance. Such loss, cost or reasonable expense shall include an amount equal to the excess, if any, as reasonably determined by such Lender, of (A) its cost of obtaining the funds for the Advance being paid, prepaid, Converted or not borrowed (based on the Eurodollar Rate) for the period from the date of such payment, prepayment, Conversion or failure to borrow to the last day of the Interest Period for such Advance (or, in the case of a failure to borrow, the Interest Period for such Advance which would have commenced on the date of such failure) over (B) the amount of interest (as reasonably determined by such 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 in writing 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 three years following such Lender's incurrence or sufferance thereof or more than one year following such Lender's actual knowledge of the event giving rise to such Lender's rights pursuant to such subsections. Each Lender shall use reasonable efforts to ensure the accuracy and validity of any claim made by it hereunder, but the foregoing shall not obligate any Lender to assert any possible 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 to give effect to its obligations as contemplated hereby with respect to any Eurodollar Rate Advance, then, by written notice to the Borrower and the Administrative Agent, such Lender may: (i) declare that Eurodollar Rate 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 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 made by it be Converted to Base Rate Advances, in which event all such Eurodollar Rate 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 on the last day of the Interest Period currently applicable to such Eurodollar Rate Advance; provided that if such notice shall state that the maintenance of such Advance until such last day would be unlawful, such notice shall be effective on the date of receipt by the Borrower and the Administrative Agent. (g) Market Rate Disruptions. If (i) less than two Reference Banks furnish timely information to the Administrative Agent for determining the Eurodollar Rate for Eurodollar Rate Advances in connection with any proposed Borrowing or Conversion or (ii) if the Majority Lenders shall notify the Administrative Agent that the Eurodollar Rate will not adequately reflect the cost to such Majority Lenders of making, funding or maintaining their respective Eurodollar Rate Advances, the right of the Borrower to select or receive such Eurodollar Rate Advances for any Borrowing or Conversion shall be forthwith suspended until the Administrative Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist, and until such notification from the Administrative Agent each requested Borrowing or Conversion into Eurodollar Rate Advances hereunder shall be deemed to be a request for Base Rate Advances. Section 4.04. 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 participations 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 4.05. 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. (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. Any Lender's claim for such indemnification shall be set forth in a certificate of such Lender setting forth in reasonable detail the amount necessary to indemnify such Lender pursuant to this subsection (c) and 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 30 days after its receipt of the same. 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. Each Lender will use good faith efforts to apprise the Borrower as promptly as practicable of any impending change in its tax status that would give rise to an obligation by the Borrower to pay any additional amounts pursuant to this Section 4.05. 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. (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 5.01. Conditions Precedent to the Closing Date. 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 (except for the Notes) in sufficient copies for each Lender: (i) Counterparts of this Agreement, duly executed by each party hereto. (ii) The Notes to the order of the respective Lenders, duly executed by the Borrower. (iii) True and complete photocopies of the Significant Contracts in effect on the Closing Date and all amendments, modifications and supplements thereto, in each case duly executed by the respective parties thereto. (iv) A certificate of an Assistant Secretary of the Borrower certifying (A) the names and true signatures of the officers of the Borrower authorized to sign this Agreement and the Notes 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 and (C) that attached thereto are true and correct copies of the resolutions of the Board of Directors of the Borrower approving this Agreement and the Notes 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 Notes. (v) A certificate of a duly authorized officer of the Borrower certifying that, except as set forth in the Disclosure Documents, 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: (A) purport to affect the legality, validity or enforceability of the Existing Debt, any Loan Document or any Significant Contract or (B) materially adversely affect the financial condition, properties, prospects or operations of the Borrower as a whole. (vi) 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 Closing Date before and after giving effect to the initial Advances and the application of the proceeds thereof, as though made on and as of such date and (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. (vii) 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 since June 30, 2000, except as disclosed in the Disclosure Documents. (viii) Copies, certified by the Borrower, of all Governmental Approvals listed in Schedule II hereof. (ix) Favorable opinions of: (A)C.E. Shively, Esq., Senior Counsel of NUSCO, in substantially the form of Exhibit 5.01A hereto; (B) Jeffrey C. Miller, Esq., Assistant General Counsel of NUSCO, in substantially the form of Exhibit 5.01B hereto; and (C) Robert A. Bersak, Assistant General Counsel of PSNH, in substantially the form of Exhibit 5.01C hereto; (x) A certificate of PSNH, signed by a duly authorized officer of PSNH, certifying as to the absence of any material adverse change in the financial condition, operations, properties or prospects of PSNH since June 30, 2000, except as disclosed in the disclosure documents referred to in such certificate. (xi) 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 Notes. (b) There shall exist no injunction or temporary restraining order which, in the judgment of the Administrative Agent or the Arranger would prohibit the making of the Advances or the repayment of the Existing Debt; except as set forth in the Disclosure Documents, there shall be 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: (i) purport to affect the legality, validity or enforceability of the Existing Debt, any Loan Document or any Significant Contract or (ii) materially adversely affect the financial condition, properties, prospects or operations of the Borrower as a whole. (c) All other legal and regulatory matters relating to this Agreement, the Notes, the Advances and the repayment of the Existing Debt shall be satisfactory to the Arranger and the Lenders. (d) No Unmatured Default or Event of Default shall have occurred and be continuing. (e) The Borrower shall have paid all fees under or referenced in Section 2.02 hereof, to the extent then due and payable. (f) The Closing Date shall have occurred on or prior to November 9, 2000. Section 5.02. 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 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 6.01. Representations and Warranties of the Borrower. The Borrower represents and warrants as follows: (a) The Borrower is 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 each Loan Document 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) 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 upon or with respect to any of its properties. Each Significant Contract was duly authorized, executed and delivered by the Borrower and is in full force and effect. (c) No Governmental Approval is required for the execution, delivery or performance by the Borrower of the Loan Documents, except for those Governmental Approvals set forth on Schedule II, each of which has been duly obtained or made and is in full force and effect and in respect of which all applicable periods of time for review, rehearing or appeal have expired. No Governmental Approval is required (i) for the performance by the Borrower of the Significant Contracts or (ii) in connection with the nature of the Borrower's business, except in each case for such as have been duly obtained or made and are in full force and effect and in respect of which all applicable periods of time for review, rehearing or appeal have expired, or, in the case of Governmental Approvals referred to in clause (ii), such as can reasonably be expected to be obtained in the ordinary course of the Borrower's business without undue burden or expense. (d) This Agreement, the Notes and each Significant Contract are legal, 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 of December 31, 1999, and the related statements of the Borrower setting forth the results of operations and cash flows of the Borrower for the fiscal year then ended, and the unaudited balance sheet of the Borrower as of June 30, 2000, and the related statements of the Borrower setting forth the results of operations and cash flows of the Borrower for the fiscal quarter then ended, copies of which have been furnished to each Bank, fairly present in all material respects the financial condition, results of operations and cash flows of the Borrower at and for the periods ended on such dates, and have been prepared in accordance with generally accepted accounting principles consistently applied. Except as reflected in such financial statements and in the Disclosure Documents, the Borrower has no material non-contingent liabilities, and all contingent liabilities have been appropriately reserved. The financial projections provided previously to the Arranger and the Lenders were prepared in good faith and on the basis of reasonable assumptions, and, as of the date of this Agreement, nothing has come to the attention of the Borrower's senior management to indicate that such assumptions are no longer reasonable. Since June 30, 2000, there has been no material adverse change in the Borrower's financial condition, operations, properties or prospects, except as disclosed in the Disclosure Documents. (f) Except as set forth in the Disclosure Documents, 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: (i) purport to affect the legality, validity or enforceability of the Existing Debt, any Loan Document or any Significant Contract or (ii) materially adversely affect the financial condition, properties, prospects or operations of the Borrower as a whole. (g) The Borrower has title to its assets sufficient for the operation of its business, subject only to Permitted Liens. All insurance required by Section 7.01(c) hereof is in full force and effect. (h) No ERISA Plan Termination Event has occurred nor is reasonably expected to occur with respect to any ERISA Plan which would materially adversely affect the financial condition, properties, prospects or operations of the 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" (other than such as may be exempted under Section 408 of ERISA and applicable regulations thereunder) has occurred with respect thereto, except as described in the Disclosure Documents. 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 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. (j) No exhibit, schedule, report or other written information provided by the Borrower or its agents to the Arranger or the Lenders in connection with the negotiation, execution and closing of this Agreement 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. (k) No event has occurred and is continuing which constitutes a material default under the Rate Agreement or any Significant Contract. (l) All proceeds of the Advances will be applied to the repayment of the Existing Debt. (m) No proceeds of any Advance will be used (A) to acquire any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934 or (B) 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 and (ii) is not engaged in the business of extending credit for the purpose of buying or carrying margin stock. (n) The Borrower is in compliance 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 and without limiting the foregoing all "financial protection" and other requirements of the Price-Anderson Act, as amended from time to time and all other laws relating to nuclear plant owners and operators, except to the extent (i) that the Borrower is contesting the same in good faith by appropriate proceedings or (ii) that any such non-compliance, and the enforcement or correction thereof, would not materially adversely affect the financial condition, properties, prospects or operations of the Borrower as a whole or (iii) disclosed in the Disclosure Documents. (o) No Unmatured Default or Event of Default has occurred and is continuing. (p) No "Default" or "Event of Default" (as those terms are defined in the First Mortgage Indenture) has occurred and is continuing. As of the date of this Agreement, the aggregate principal amount of all First Mortgage Bonds outstanding is $135,000,000. Article VII COVENANTS OF THE BORROWER Section 7.01. Affirmative Covenants. 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(l) 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. Such insurance shall in any event include all "financial protection" required by the Price-Anderson Act, as amended from time to time. (d) Preservation of Existence, Etc. Preserve and maintain its corporate existence, material rights (statutory and otherwise) and franchises. (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 and without limiting the foregoing all "financial protection" and other requirements of the Price-Anderson Act, as amended from time to time and all other laws relating to nuclear plant owners and operators, except to the extent (i) that the Borrower is contesting the same in good faith by appropriate proceedings or (ii) that any such non-compliance, and the enforcement or correction thereof, would not materially adversely affect the financial condition, properties, prospects or operations of the Borrower as a whole. (f) Inspection Rights. At any time and from time to time upon reasonable notice and subject to reasonable coordination measures agreed upon by the Administrative Agent and the Borrower, permit the Lenders and their respective 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 with 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. Perform and observe all material terms and provisions of each Significant Contract and take all reasonable steps to enforce each Significant Contract substantially in accordance with its 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. (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) Common Equity Ratio. Maintain at all times a Common Equity Ratio of not less than 0.25:1.00. (ii) Interest Coverage Ratio. Maintain at all times an Interest Coverage Ratio of not less than the 1.50:1.00. (k) Maintenance of Properties, Etc. 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 required (i) for the execution, delivery and performance by the Borrower of the Loan Documents, (ii) for the performance by the Borrower of the Significant Contracts and (iii) in connection with the nature of the Borrower's business, except, in the case of clause (iii) only, those the absence of which would not materially adversely affect the financial condition, properties, prospects or operations of the Borrower as a whole. Section 7.02. Negative Covenants. 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 following, whether now existing or hereafter created or perfected ("Permitted Liens"): (i) Liens for taxes, assessments or governmental charges or levies thereon if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings and for which adequate reserves in accordance with generally accepted accounting principles shall have been set aside on the Borrower's books. (ii) Liens imposed by law (other than ERISA), such as carriers; warehousemen's and mechanics' liens and other similar liens arising in the ordinary course of business which secure payment of obligations not more than 60 days past due. (iii) Liens arising out of pledges or deposits under worker's compensation laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation (other than ERISA). (iv) Utility easements, building restrictions and such other encumbrances or charges against real property as are of a nature generally existing with respect to properties of a similar character and which do not in any material way affect the marketability of the same or interfere with the use thereof in the business of the Borrower. (v) Liens in existence on the Closing Date none of which materially adversely affects or will affect the ongoing conduct of the Borrower's business and none of which (except as described in clause (vi) below) extends to the Unit Contract. (vi) The Lien of the First Mortgage Indenture to the extent of the First Mortgage Bonds outstanding on the Closing Date. (vii) attachment, judgment and other similar Liens arising in connection with court proceedings, provided, the execution or other enforcement thereof is effectively stayed, the claims secured thereby are being contested at the time in good faith and no Event of Default shall have occurred and be continuing; (viii) any rights of the Nuclear Regulatory Commission with respect to Seabrook; and (ix) Liens against the interest of some other Person (other than the Borrower) with respect to obligations which have not been assumed or guaranteed by the Borrower and on which the Borrower does not customarily pay interest charges, existing on Seabrook or other property which the Borrower jointly holds with such other Person (or such Person and others) or upon property in which the Borrower is a tenant in common with such other Person (or such Person and others). (b) Debt. Create, incur, assume or suffer to exist any Debt, except for: (i) First Mortgage Bonds presently outstanding; (ii) Debt arising under the Loan Documents; (iii) Debt in respect of interest rate swaps, caps and similar arrangements entered into for purposes of hedging interest rate risk arising under the Loan Documents; (iv) Debt consisting of maintenance and similar obligations arising under the Joint Ownership Agreement; and (v) Debt in the form of unsecured borrowings not to exceed $60,000,000 at any time outstanding; and then only to the extent that the creation, incurrence, assumption or existence of such Debt would not result in a violation of Section 7.01(j). (c) [Reserved] (d) Mergers, Etc. Merge with or into or consolidate with or into, or acquire all or substantially all of the assets of, any Person. (e) Sales, Etc., of Assets. Sell, lease, transfer or otherwise dispose of all or any part of its assets other than (i) subject to compliance with Section 4.02(c), the "buydown" of the Seabrook Interest to $100,000,000 as contemplated by Section VIII(K) of the Settlement Agreement and the NHPUC Order, (ii) subject to compliance with Section 4.02(c), the sale of the Seabrook Interest as contemplated by the Final Settlement, and (iii) dispositions of assets no longer required in the ordinary course of the Borrower's business. Without limitation of the foregoing, the Borrower shall not (x) sell, lease, transfer or otherwise dispose of any of its receivables to any unaffiliated third party, except for collection in the ordinary course of the Borrower's business of delinquent accounts, or (y) enter into any sale-leaseback transaction. (f) 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. (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), other than a Reportable Event not subject to the provision for 30-day notice to the PBGC under applicable regulations, 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) Significant Contracts. (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 any Significant Contract, except any amendment, modification or supplement to any Significant Contract that would not reduce the rights or entitlements of the Borrower thereunder in any material way and except, in the case of the Tax Allocation Agreement, for such amendments and modifications as may be required by applicable law or appropriate to add affiliates Consolidated Edison, Inc. in connection with the acquisition of NU by Consolidated Edison, Inc. (ii) Termination. Cancel or terminate (or consent to any cancellation or termination of) any Significant Contract prior to the expiration of its stated term. (i) Change in Nature of Business. Engage in any material business activity other than the generation and sale of electricity. (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. (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 cause (a) the Borrower to acquire any additional ownership interest in Seabrook 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 subsidiaries. Section 7.03. 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 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, in each such case, delivered together with a certificate of said officer (X) stating that no Event of Default or Unmatured Default has occurred and is continuing or, if an Event of Default or Unmatured Default has occurred and is continuing, a statement as to the nature thereof and the action which the Borrower proposes to take with respect thereto and (Y) demonstrating compliance with Section 7.01(j) for and as of the end of such fiscal quarter and compliance with Section 7.02(b) as of the dates on which any Debt was created, issued, 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") during such quarter and as of the end of such fiscal quarter, 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) in any case, a copy of the annual report for such year for the Borrower including therein an audited balance sheet of the Borrower as of the end of such fiscal year and audited 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 and delivered with a certificate of the Chief Financial Officer, Treasurer or Assistant Treasurer (X) stating that no Event of Default or Unmatured Default has occurred and is continuing, or if an Event of Default or Unmatured Default has occurred and is continuing, a statement as to the nature thereof and the action which the Borrower proposes to take with respect thereto and (Y) demonstrating compliance with Section 7.01(j) for and as of the end of such fiscal year and compliance with Sections 7.02(b) as of the dates on which any Debt was created, issued, incurred or assumed (using the Borrower's most recent annual actuarial determinations in the computation of Debt referred to in clause (viii) of the definition of "Debt") during the last fiscal quarter of such fiscal year and as of the end of such fiscal year, 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 60 days prior to March 31 of each fiscal year, 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 possible and in any event (A) within 30 days after the Borrower knows or has reason to know that any ERISA Plan Termination Event described in clause (i) of the definition of ERISA Plan Termination Event with respect to any ERISA Plan or ERISA Multiemployer Plan has occurred and (B) within 10 days after the 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; (vi) 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; (vii) 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 of the Borrower (Form 5500 Series) with respect to each ERISA Plan (if any) to which the Borrower is a contributing employer; (viii) 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; (ix) 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; (x) 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, if any, which the Borrower files with, the Securities and Exchange Commission or any governmental authority which may be substituted therefor, or with any national securities exchange; (xi) promptly after the sending or filing thereof, copies of all such proxy statements, financial statements, and reports which PSNH sends to its public security holders (if any) or files with, and copies of all regular, periodic and special reports and all registration statements, if any, which PSNH files with, the Securities and Exchange Commission or any governmental authority which may be substituted therefor, or with any national securities exchange; (xii) promptly after receipt thereof, any assertion of the character described in Section 8.01(i) hereof and the action the Borrower proposes to take with respect thereto; (xiii) promptly after knowledge of any material default under any Significant Contract or the Rate Agreement, 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 any Significant Contract or the Rate Agreement or to any Governmental Approval affecting any Significant Contract or the Rate Agreement, notice of such amendment, modification or other change; and (xv) promptly after requested, such other information respecting the financial condition, operations, properties, prospects or otherwise, of the Borrower or PSNH as the Administrative Agent or Majority Lenders may from time to time reasonably request in writing. Article VIII DEFAULTS Section 8.01. Events of Default. The following events shall each constitute an "Event of Default" if the same shall occur and be continuing after the grace period and notice requirement (if any) applicable thereto: (a) The Borrower shall fail to pay any principal of any Note when due or shall fail to pay any interest on any Note or any other amount due hereunder within two days after the same becomes due; (b) Any representation or warranty made by the Borrower (or any of its 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 (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) 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) 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) PSNH shall fail to pay any of its Debt when due (including any interest or premium thereon but excluding Debt aggregating less 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 PSNH'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 PSNH so that such circumstance is no longer continuing; or (g) The Borrower or PSNH 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 or PSNH 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 or PSNH, as the case may be, the Borrower or PSNH, as the case may be, 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 PSNH, as the case may be, or the appointment of a receiver, trustee, custodian or other similar official for the Borrower or PSNH, as the case may be, or any of their respective properties) shall occur; or the Borrower or PSNH shall take any corporate or other action to authorize any of the actions set forth above in this subsection (g); or (h) Any judgment or order for the payment of money in excess of $10,000,000 shall be rendered against the Borrower or its properties, or any judgment or order for the payment of money in excess of $10,000,000 shall be rendered against PSNH or its properties, and, in either case, 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 (i) Any material provision of any Loan Document, the Rate Agreement or any Significant Contract shall for any reason other than the express terms thereof or the exercise of any right or option expressly contained therein cease to be valid and binding on any party thereto except as otherwise expressly permitted by the exception contained in Section 7.02(h)(i) 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 any Significant Contract (or PSNH in the case of the Rate Agreement), 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 (or PSNH, in the case of the Rate Agreement) 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 (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 Unit Contract and shall not have been effectively cured within the time period specified therein for such cure (or, if no such time period is specified therein, 10 days); or a default by any party shall have occurred under any Significant Contract or by PSNH shall have occurred under the Rate Agreement 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 Unit Contract or 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 Unit Contract or of PSNH under the Rate Agreement shall occur, and in any such case such amendment, modification, supplement, action or change may have, in the opinion of the Majority Lenders, a material adverse effect upon the financial condition, operations, properties or prospects of the Borrower as a whole; or (m) NU shall cease to own all of the outstanding common stock of the Borrower and PSNH, in each case free and clear of any Liens. Section 8.02. Remedies Upon Events of Default. Upon the occurrence and during the continuance of any Event of Default, then, and in any such event, the 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, whereupon the same shall forthwith terminate, and (ii) declare the Notes, all interest thereon and all other amounts payable under this Agreement to be forthwith due and payable, 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; 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 9.01. 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 the Arranger, in its capacity as such, 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 each notice given to it by the Borrower pursuant to the terms of this Agreement. Section 9.02. 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 (nor shall the Arranger be) responsible to any Lender for any 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 9.03. Bank One and Affiliates. With respect to its Commitment and the Note issued to it, Bank One 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, and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated, include Bank One in its individual capacity. Bank One and its 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 Bank One were not the Administrative Agent, and without any duty to account therefor to the Lenders. Section 9.04. Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent, the Arranger or any Lender and based on the 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. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent 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. Section 9.05. Indemnification. The Lenders agree to indemnify the Arranger and the Administrative Agent, in their respective capacities as such and to the extent not reimbursed by the Borrower, ratably according to the respective principal amounts of the Notes then held by each such Lender (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 Arranger or the Administrative Agent in their respective capacities as such in any way relating to or arising out of this Agreement or any action taken or omitted by the Arranger or the Administrative Agent in their respective capacities as such 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 Arranger's or the Administrative Agent's gross negligence or willful misconduct. Without limitation of the foregoing, each Lender agrees to reimburse the Administrative Agent and the Arranger promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel fees) incurred by the Administrative Agent and the Arranger 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 Arranger are entitled to reimbursement for such expenses pursuant to Section 10.04 but are not reimbursed for such expenses by the Borrower. Section 9.06. 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 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 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 without cause, concurrently with the appointment by the Majority Lenders of a 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(c) 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 10.01. Amendments, Etc. No amendment or waiver of any provision of this Agreement or any Note, 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 (other than Section 5.02(c)(i), (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 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(c) 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 or any Note in a manner intended to prefer one or more Lenders over any other Lender or (g) amend this Section 10.01; 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 10.02. Notices, Etc. All notices and other communications provided for hereunder and under the other Loan Documents shall be in writing (including telegraphic, telex, telecopy or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered, (i) if to the Borrower, at its address at 1000 Elm Street, P.O. Box 330, 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. 860.665.5457), 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 1 Bank One Plaza, Suite IL1-0363, Chicago, Illinois 60670, Attention: Electric, Gas and Telecommunications Department; 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. Section 10.03. 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 10.04. 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 the Arranger in connection with the preparation, negotiation, execution and delivery of the Loan Documents, the administration of the Loan Documents, and any proposed modification, amendment, or consent relating thereto; and (ii) the Administrative Agent, the Arranger and each Lender in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement or the Notes. (b) The Borrower hereby agrees to indemnify and hold each Lender, the Arranger, 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; (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 Arranger 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 10.05. Right of Set-off. (a) Upon the occurrence and during the continuance of any Event of Default, 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 10.06. 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 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 10.07. 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(s) to be held by such assignee (after giving effect to such assignment and any other assignments being made concurrently therewith to the same assignee by one or more other Lenders) shall in no event be less than $5,000,000, unless such assignment is of the entire amount of the assigning Lender's Commitment, 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 $2,500. 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 Administrative Agent, the Arranger, such assigning Lender 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 and the Notes; (v) such assignee appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the Notes as are delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto; and (vi) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement and the Notes are required to be performed by it as a Lender. (c) The Administrative Agent shall maintain at its address referred to in Section 10.02 a copy of each Lender Assignment delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitment of, and principal amount of the Advances owing to, each Lender from time to time (the "Register"). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice. (d) Upon its receipt of a Lender Assignment executed by an assigning Lender and an assignee, together with any Note or Notes subject to such assignment and any consent required by Section 10.07(a), the Administrative Agent shall, if such Lender Assignment has been completed and is in substantially the form of Exhibit 10.07 hereto, (i) accept such Lender Assignment, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the Borrower. Within five Business Days after its receipt of such notice, the Borrower, at its own expense, shall execute and deliver to the Administrative Agent in exchange for the surrendered Note or Notes a new Note to the order of such assignee in an amount equal to the Commitment assumed by it pursuant to such Lender Assignment and, if the assigning Lender has retained a Commitment hereunder, a new Note to the order of the assigning Lender in an amount equal to the Commitment retained by it hereunder. Such new Note or Notes shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered Note or Notes, shall be dated the effective date of such Lender Assignment and shall otherwise be in substantially the form of Exhibit 1.01A hereto. (e) Each Lender may sell participations to one or more banks or other entities in or to all or a portion of its rights and obligations under the Loan Documents (including, without limitation, all or a portion of its Commitment, the Advances owing to it and the Note or Notes held by it); provided, however, that (i) such Lender's obligations under this Agreement (including, without limitation, its Commitment to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender shall remain the holder of any such Note for all purposes of this Agreement, (iv) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement, and (v) unless the Borrower shall have previously consented to the sale of such participation, the holder of any such participation, other than an Affiliate of such Lender, shall not be entitled to require such Lender to take or omit to take any action hereunder, except action (A) extending the time for payment of interest on, or the maturity of the principal amount of, the Notes or (B) reducing the principal amount of or the rate or amount of interest payable on the Notes. (f) Any Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 10.07, disclose to the assignee or participant or proposed assignee or participant, any information relating to the Borrower furnished to such Lender by or on behalf of the Borrower; provided that, prior to any such disclosure, the assignee or participant or proposed assignee or participant shall agree, in accordance with the terms of Section 10.08, to preserve the confidentiality of any Confidential Information received by it from such Lender. (g) If any Lender shall have delivered a notice to the Administrative Agent described in Section 4.03 (a), (b), (c) or (f) hereof, or shall become a non-performing Lender under Section 3.01(c) hereof, and if and so long as such Lender shall not have withdrawn such notice or corrected such non-performance in accordance with Section 3.01(c), the Borrower or the Administrative Agent may demand that such Lender assign in accordance with Section 10.07 hereof, to one or more assignees designated by either the Borrower or the Administrative Agent (and reasonably acceptable to the other), all (but not less than all) of such Lender's Commitment, Advances, participation and other rights and obligations hereunder; provided that any such demand by the Borrower during the continuance of an Event of Default or an Unmatured Default shall be ineffective without the consent of the Majority Lenders. If, within 30 days following any such demand by the Administrative Agent or the Borrower, any such assignee so designated shall fail to tender such assignment on terms reasonably satisfactory to the Lender, or the Borrower and the Administrative Agent shall have failed to designate any such assignee, then such demand by the Borrower or the Administrative Agent shall become ineffective, it being understood for purposes of this provision that such assignment shall be conclusively deemed to be on terms reasonably satisfactory to such Lender, and such Lender shall be compelled to tender such assignment forthwith, if such assignee (1) shall agree to such assignment in substantially the form of the Lender Assignment and (2) shall tender payment to such Lender in an amount equal to the full outstanding dollar amount accrued in favor of such Lender hereunder (as computed in accordance with the records of the Administrative Agent.) (h) Anything in this Section 10.07 to the contrary notwithstanding, any Lender may assign and pledge all or any portion of its Commitment and the Advances owing to it to any Federal Reserve Bank (and its transferees) as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank. No such assignment shall release the assigning Lender from its obligations hereunder. Section 10.08. Confidentiality. In connection with the negotiation and administration of this Agreement and the other Loan Documents, the Borrower has furnished and will from time to time furnish to the Administrative Agent and the Lenders (each, a "Recipient") written information which is identified to the Recipient when delivered as confidential (such information, other than any such information which (i) was publicly available, or otherwise known to the Recipient, at the time of disclosure, (ii) subsequently becomes publicly available other than through any act or omission by the Recipient or (iii) otherwise subsequently becomes known to the Recipient other than through a Person whom the Recipient knows to be acting in violation of his or its obligations to the Borrower, being hereinafter referred to as "Confidential Information"). The Recipient will not knowingly disclose any such Confidential Information to any third party (other than to those persons who have a confidential relationship with the Recipient), and will take all reasonable steps to restrict access to such information in a manner designed to maintain the confidential nature of such information, in each case until such time as the same ceases to be Confidential Information or as the Borrower may otherwise instruct. It is understood, however, that the foregoing will not restrict the Recipient's ability to freely exchange such Confidential Information with prospective participants in or assignees of the Recipient's position herein, but the Recipient's ability to so exchange Confidential Information shall be conditioned upon any such prospective participant's entering into an understanding as to confidentiality similar to this provision. It is further understood that the foregoing will not prohibit the disclosure of any or all Confidential Information if and to the extent that such disclosure may be required (iv) by a regulatory agency or otherwise in connection with an examination of the Recipient's records by appropriate authorities, (v) pursuant to court order, subpoena or other legal process or (vi) otherwise, as required by law; in the event of any required disclosure under clause (ii) or (iii), above, the Recipient agrees to use reasonable efforts to inform the Borrower as promptly as practicable. Section 10.09. Waiver of Jury Trial. The Borrower, the Administrative Agent, and the Lenders each hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim arising out of or relating to this Agreement or any other Loan Document, or any other instrument or document delivered hereunder or thereunder. Section 10.10. Governing Law. This Agreement and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York. The Borrower, the Lenders and the Administrative Agent each (i) irrevocably submits to the jurisdiction of any New York State Court or Federal court sitting in New York City in any action arising out of any Loan Document, (ii) agrees that all claims in such action may be decided in such court, (iii) waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum and (iv) consents to the service of process by mail. A final judgment in any such action shall be conclusive and may be enforced in other jurisdictions. Nothing herein shall affect the right of any party to serve legal process in any manner permitted by law or affect its right to bring any action in any other court. Section 10.11. Relation of the Parties; No Beneficiary. No term, provision or requirement, whether express or implied, of any Loan Document, or actions taken or to be taken by any party thereunder, shall be construed to create a partnership, association, or joint venture between such parties or any of them. No term or provision of the Loan Documents shall be construed to confer a benefit upon, or grant a right or privilege to, any Person other than the parties hereto. Section 10.12. Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. NORTH ATLANTIC ENERGY CORPORATION By: Name Title: BANK ONE, N.A. (main office, Chicago), as Administrative Agent and as Bank By: Name Title: BARCLAYS BANK PLC, as Bank By: Name Title FLEET NATIONAL BANK, as Bank By: Name: Title UNION BANK OF CALIFORNIA, N.A., as Bank By: Name Title SCHEDULE I NORTH ATLANTIC ENERGY COMPANY U.S. $200,000,000 TERM CREDIT AGREEMENT APPLICABLE LENDING OFFICES Name of Bank Domestic Lending Office Eurodollar Lending Office Barclays Bank PL C75 Wall Street Nassau Branch New York, NY 10265 c/o Barclays Bank Attn: 75 Wall Street Customer Service New York, NY 10265 Team I Attn: Customer Service Team 1 Telephone: 212-412-5028 Telecopy: 212-412-5002 with a copy to: 222 Broadway, 12th Same as Domestic Floor Lending Office New York, NY 10038 Attn: Customer Service Team 1 Telephone: 212-412- 5028 Telecopy: 212-412- 5002 Fleet National Commercial Loan Services Same as Domestic Bank 100 Federal Street 01-08-02 Lending Office Boston, MA 02110 Attn: Debora Williams Telephone: 617-434-9623 Telecopy: 617-434-9820 with a copy to: One Federal Street Boston, MA 02211 M/C: MADE 10008A Attn: Francia Castillo Telephone: 617-434-5092 Telecopy: 617-434-0201 Bank One, N.A. (of Chicago) 1 Bank One Plaza Same as Domestic Suite 14-0634 Lending Office Chicago, IL 60670 Attn: Mattie Reed Telephone: 312-732-5219 Telecopy: 312-732-4840 Union Bank of 455 S. Figueroa Street Same as Domestic California, N.A. 15th Floor Lending Office Los Angeles, CA 90071 Attn: Robert Olson Telephone: 213-236-7407 Telecopy: 213-236-4096 SCHEDULE II GOVERNMENTAL APPROVALS 1. Order No. 23,566 of the New Hampshire Public Utilities Commission, dated October 6, 2000 in Docket DE 00-176. SCHEDULE III INVESTMENTS None iii SCHEDULE IV COMMITMENTS Bank Commitment Bank One, N.A. (of Chicago) $50,000,000 Barclays Bank PLC $50,000,000 Fleet National Bank $50,000,000 Union Bank of California, N.A. $50,000,000 EX-99.13OTHCONTRCT 37 c11-1.txt Exhibit C.11.1 TRUST INDENTURE AND SECURITY AGREEMENT RELATING TO AN ENERGY SAVINGS PERFORMANCE CONTRACT PROJECT By and Between HEC/TOBYHANNA ENERGY PROJECT, INC. and UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee Dated as of September 30, 1999 UNITED STATES ARMY TOBYHANNA ARMY DEPOT TOBYHANNA, PENNSYLVANIA ENERGY SAVINGS PERFORMANCE CONTRACT PROJECT TABLE OF CONTENTS RECITALS GRANTING CLAUSE ARTICLE I: DEFINITIONS AND RULES OF CONSTRUCTION Section 1.1 Definitions Section 1.2 Rules of Construction ARTICLE II: CERTIFICATES, TERMS AND PROVISIONS Section 2.1 Preparation of Certificates Section 2.2 Form of Certificates; Denominations; Global Certificates Section 2.3 Date of Certificates Section 2.4 Payment of Principal and Interest with Respect to Certificates Section 2.5 Execution Section 2.6 Certificate Register Section 2.7 Transfer of Certificates Section 2.8 Exchange of Certificates Section 2.9 Temporary Certificates Section 2.10 Certificates Mutilated, Lost, Destroyed or Stolen Section 2.11 Place of Payment Section 2.12 Evidence of Signatures of Certificate Holders and Ownership of Certificates Section 2.13 Transfer Fee Section 2.14 Book Entry Section 2.15 Issuance of Additional Certificates Section 2.16 Termination of Trust ARTICLE III: ESTABLISHMENT AND ADMINISTRATION OF TRUST FUND AND ACCOUNTS Section 3.1 Trust Fund Section 3.2 Establishment and Application of Construction Account. Section 3.3 Establishment and Application of Gate Station Reserve Account. Section 3.4 Establishment and Application of Capitalized Interest Account. Section 3.6 Establishment and Application of ESPC Contract Payment Account. Section 3.7 Establishment and Application of Certificate Payment Account Section 3.8 Establishment and Application of Capital Repair and Replacement Account Section 3.9 Establishment and Application of Capital Proceeds Account. Section 3.10 Establishment and Application of Company Account Section 3.11 Deposit and Investment of Moneys in Trust Fund; Certain Transfers and Distributions Section 3.12 Termination Of Trust Fund ARTICLE IV: DEFAULT; REMEDIES Section 4.1 Events of Default Section 4.2 Acceleration; Remedies on Event of Default Section 4.3 Notice of Default Section 4.4 Notice of Acceleration or Redemption Section 4.5 Trustee's Power of Sale; Power to Bring Suit Section 4.6 Incidents of Sale of Pledged Property Section 4.7 Judicial Proceedings Instituted by Trustee Section 4.8 Certificate Holders May Demand Enforcement of Rights by Trustee Section 4.9 Control by Certificate Holders Section 4.10 Waiver of Past Defaults Section 4.11 Application of Moneys Collected by Trustee Section 4.12 Rights and Remedies of Certificate Holders Section 4.13 Termination of Proceedings Section 4.14 Remedies Cumulative; Delay or Omission Not a Waiver ARTICLE V: REDEMPTION Section 5.1 Events of Default Section 5.2 Extraordinary Redemption in Whole Section 5.3 Mandatory Redemption Section 5.4 Partial Redemption Procedure Section 5.5 Notice of Redemption Section 5.6 Certificates Payable on Redemption Date Section 5.7 Certificates Redeemed in Part ARTICLE VI: THE TRUSTEE Section 6.1 Employment of Trustee Section 6.2 Acceptance Of Appointment Section 6.3 Duties Section 6.4 Removal and Resignation. Section 6.5 Property Held in Trust; Limitation on Authority. Section 6.6 Evidence on which Trustee may Act. Section 6.7 Co-Trustee Section 6.8 Merger or Consolidation of Trustee. Section 6.9 Compensation of Trustee Section 6.10 Release and Indemnification Covenants ARTICLE VII: REPRESENTATIONS AND COVENANTS OF THE COMPANY Section 7.1 Authority to Contract Section 7.2 Adequacy of ESPC Contract Task Order Payments Section 7.3 Construction, Maintenance and Operation of the ESPC Project Section 7.4 Governmental Approvals Section 7.5 Further Assurances Section 7.6 Maintenance of Existence; Provisions of Charter Documents Section 7.7 Limitation on Nature of Business Section 7.8 Additional Agreements Section 7.9 Additional Indebtedness Section 7.10 Liens Section 7.11 Guaranties Section 7.12 Prohibition on Disposition of Assets; Prohibition on Leases Section 7.13 Prohibition on Fundamental Changes Section 7.14 Employee Plans Section 7.15 Transactions with Affiliates Section 7.16 Taxes; Other Governmental Charges Section 7.17 Insurance Section 7.18 Compliance with Laws Section 7.19 Reporting Requirements Section 7.20 Casualty or Condemnation Events Section 7.21 Security Agreement ARTICLE VIII: ACTION BY THE CERTIFICATE HOLDERS Section 8.1 General Section 8.2 Meetings Convened by the Trustee Section 8.3 Meetings Convened by the Holders Section 8.4 Persons Entitled to Vote Section 8.5 Other Procedures Section 8.6 Voting Section 8.7 Special Committee of Holders Section 8.8 No Right to Delay ARTICLE IX: AMENDMENT; ADMINISTRATIVE PROVISIONS Section 9.1 Amendment Section 9.2 Trustee to Keep Records; Reports Section 9.3 Notice Section 9.4 Governing Law Section 9.5 Severability Section 9.6 Assignment Section 9.7 Binding on Successors Section 9.8 Limitation on Liability Section 9.9 Headings; Construction Section 9.10 Execution in Counterparts SCHEDULE 7.4 GOVERNMENTAL APPROVAL EXCEPTIONS EXHIBIT 2.1 FORM OF REQUEST FOR EXECUTION AND DELIVERY OF CERTIFICATES EXHIBIT 2.2A FORM OF CERTIFICATE OF PARTICIPATION EXHIBIT 2.2B FORM OF GLOBAL CERTIFICATE OF PARTICIPATION EXHIBIT 3.8 FORM OF REQUISITION FOR DISBURSEMENT FROM CAPITAL REPAIR AND REPLACEMENT ACCOUNT TRUST INDENTURE AND SECURITY AGREEMENT RELATING TO AN ENERGY SAVINGS PERFORMANCE CONTRACT PROJECT THIS TRUST INDENTURE AND SECURITY AGREEMENT RELATING TO AN ENERGY SAVINGS PERFORMANCE CONTRACT PROJECT (the "Trust Agreement"), is made as of September 1 ,1999, by and between HEC/Tobyhanna Energy Project, Inc., a Massachusetts corporation (the "Company") and United States Trust Company of New York, a NewYork banking corporation, as trustee (the "Trustee"). Certain initially-capitalized terms used herein are used with the meanings set forth in Article I hereof. RECITALS WHEREAS, the Contractor and the Government have entered into the ESPC Task Order whereby the Contractor has agreed to construct, install, own, test, operate, monitor and maintain, for the benefit of the Government, the ESPC Project at the Department of the Army's Tobyhanna Army Depot in Pennsylvania, and the Government has agreed to use and pay for the energy and capital cost savings benefits of the ESPC Project. WHEREAS, the ESPC Task Order has been assigned by the Contractor to, and assumed by, the Company, a wholly-owned subsidiary of the Contractor, with the approval of the Government, as evidenced by the Novation Agreement. WHEREAS, the ESPC Project will be owned by the Company, and will be implemented and administered by the Contractor under the Project Management Services Agreement by and between the Company and the Contractor, and will be utilized and paid for by the Government in accordance with the terms and specifications of the ESPC Task Order. WHEREAS, under the ESPC Task Order the Government is obligated to make ESPC Task Order Payments to the Company , commencing upon Acceptance of the Project by the Government. The ESPC Task Order Payments, together with a portion of the Proceeds deposited in the Capitalized Debt Service Account, shall be applied first, to pay the amounts due on the Certificates to be issued hereunder, and then, to such other purposes as are permitted hereunder. WHEREAS, the Proceeds of the Certificates shall be delivered to the Trustee and shall be applied in accordance with the terms of the Project Loan Agreement, the Project Note and this Trust Agreement, including application in connection with the acquisition, development, construction, installation and financing of the ESPC Project. WHEREAS, in connection with the Project Financing contemplated hereby, the Company has assigned to the Trustee for the benefit of the Certificate Holders, as more fully recited in the Assignment Agreement, all of its right, title and interest in and to the ESPC Task Order and the ESPC Task Order Payments, but none of its responsibilities or obligations under the ESPC Task Order, and notice of such assignment will be delivered to the Government by the Trustee on the Closing Date pursuant to the Notice of Assignment. WHEREAS, the Trustee is authorized and directed, pursuant to and in accordance with this Trust Agreement, to collect ESPC Task Order Payments and to transfer and disburse such funds as provided herein. WHEREAS, the Trustee hereby agrees, subject to and in accordance with this Trust Agreement, to hold the funds in the Trust Fund established pursuant to Article III hereof in trust for the Certificate Holders, subject to application and disbursement as provided herein. WHEREAS, the Trust Fund is intended to qualify as a fixed investment trust within the meaning of Treasury Regulation Sec 301.7701-4(c), and it is neither the purpose nor the intent of the parties hereto to create a partnership, joint venture, or association taxable as a corporation between or among any or all of the parties hereto. The sole purpose of the trust created hereby shall be for the protection and conservation of the trust corpus for the benefit of the Certificate Holders. Accordingly, and notwithstanding anything to the contrary contained herein, the trust created hereby shall be prohibited from engaging in any trade or business or from varying the investment of the Certificate Holders. WHEREAS, each party represents that all acts, conditions and things required by law to exist, happen and be performed precedent to and in connection with its execution and entering into of this Trust Agreement have happened and have been performed in regular and due time, form and manner required by law, and that such party is now fully empowered to execute and enter into this Trust Agreement. GRANTING CLAUSE NOW, THEREFORE, THIS TRUST INDENTURE AND SECURITY AGREEMENT WITNESSETH, that, for and in consideration of the premises and the mutual undertakings, provisionsand agreements herein contained, and of the purchase and acceptance of the Certificates by the Holders, and the acceptance by the Trustee of the trusts hereby created, and for other good and valuable consideration, the receipt of which is hereby acknowledged, and in order to provide for the payment of the Principal and Interest with respect to the Certificates according to their true intent and meaning, and to provide for the performance and observance of all covenants and conditions therein, herein and in the Project Loan Agreement and Project Note contained, and to fix and declare the terms and conditions upon which the Certificates are to be executed, delivered, secured and enforced, the Company, for the benefit of the Certificate Holders, hereby confirms the assignment of the ESPC Task Order Payments to the Trustee pursuant to the Assignment Agreement and hereby pledges, transfers and assigns to the Trustee, and grants a security interest and lien to the Trustee in, the following described property, rights and interests (collectively, the "Pledged Property"): (a) all revenues and other income, charges and monies realized from the ESPC Task Order and from the sale or other disposition of the ESPC Project (including casualty insurance, condemnation proceeds and any termination payments payable by the Government under the ESPC Task Order) and all monies and investments in the Trust Fund; (b) all monies deposited with the Trustee pursuant to the Assignment Agreement and all investment earnings thereon; (c) all other monies deposited in the Trust Fund and investment earnings thereon; (d) the ESPC Task Order, and all amendments, extensions and renewals thereto or thereof, together with the present and continuing right to make claim for, collect, receive and receipt for any of the payments and revenues payable or receivable thereunder, to bring actions and proceedings thereunder or for the enforcement thereof, and to do any and all things which the Company is or may become entitled to do under the ESPC Task Order; (e) the Collateral and any additional property that may from time to time, by delivery or by writing of any kind, be transferred to the Trustee; (f) all easements, pipeline easements, rights-of-way, revocable permits, access agreements and licenses held by, assigned to or exercisable by the Company under the ESPC Task Order or in connection with the ESPC Project; (g) all UGI Pipeline Agreements; (h) all Governmental Approvals, to the extent assignable; (i) the Project Management Services Agreement, and all amendments, extensions and renewals thereto or thereof, together with the present and continuing right to bring actions and proceedings thereunder or for the enforcement thereof, and to do any and all things which the Company is or may become entitled to do under the Project Management Services Agreement; (j) all payment and performance bonds and sureties posted by the Contractor, to the extent of the Company's interest as a beneficiary or obligee thereunder; (k) the HEC Contribution Agreement; and (l) the NU Undertaking. TO HAVE AND TO HOLD all of the above to the Trustee and its successors in said trust and to its and their assigns forever, for the equal and proportionate benefit, security and protection of all present and future Holders of the Certificates executed and delivered hereunder and Outstanding, without preference, priority or distinction of any one Certificate over any other, upon the trusts and subject to the covenants and conditions hereinafter set forth. ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION Section 1.1 Definitions The terms defined below shall have the meanings given to them for purposes of this Trust Agreement and all Exhibits hereto unless otherwise specifically defined in such Exhibits (such definitions to be applicable equally to both singular and plural forms of the terms defined). Acceptance means the date on which the Government has issued a certificate of acceptance, or amended the Task Order, or delivered other evidence indicating the Government's acceptance of the ESPC Project, except for the Gate Station Work. Additional Certificates has the meaning given such term in Section 2.15 hereof. Affiliate with respect to any Person, means any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such Person. For purposes of this definition, the term "control" (including the correlative meanings of the terms "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of such Person, whether through the ownership of voting securities or by contract or otherwise. No individual shall be deemed to be an affiliate of a Person solely by reason of his or her being a director, committee member, officer or employee of such Person. Assignment Agreement means that certain Certificate of Assignment of Task Order Payments dated as of September 30, 1999, by and between the Company and the Trustee relating to the assignment of certain rights and interests in the ESPC Task Order. Assignment and Assumption Agreement means that certain Assignment and Assumption Agreement dated as of September 30, 1999, by and between the Contractor and the Company, pursuant to which the Contractor assigns, transfers and conveys to the Company all of the Contractor's right, title and interest in, to and under (i) the ESPC Task Order, (ii) all Governmental Approvals, (iii) the Collateral, in existence as of the date thereof and/or to be acquired or created prior to the Closing Date and (iv) the UGI Pipeline Agreements. TRUST INDENTURE AND SECURITY AGREEMENT RELATING TO AN ENERGY SAVINGS PERFORMANCE CONTRACT PROJECT THIS TRUST INDENTURE AND SECURITY AGREEMENT RELATING TO AN ENERGY SAVINGS PERFORMANCE CONTRACT PROJECT (the "Trust Agreement"), is made as of September 1, 1999, by and between HEC/Tobyhanna Energy Project, Inc., a Massachusetts corporation (the "Company") and United States Trust Company of New York, a New York banking corporation, as trustee (the "Trustee"). Certain initially-capitalized terms used herein are used with the meanings set forth in Article I hereof. RECITALS tc "RECITALS" \f # \l 1 WHEREAS, the Contractor and the Government have entered into the ESPC Task Order whereby the Contractor has agreed to construct, install, own, test, operate, monitor and maintain, for the benefit of the Government, the ESPC Project at the Department of the Army's Tobyhanna Army Depot in Pennsylvania, and the Government has agreed to use and pay for the energy and capital cost savings benefits of the ESPC Project. WHEREAS, the ESPC Task Order has been assigned by the Contractor to, and assumed by, the Company, a wholly-owned subsidiary of the Contractor, with the approval of the Government, as evidenced by the Novation Agreement. WHEREAS, the ESPC Project will be owned by the Company, and will be implemented and administered by the Contractor under the Project Management Services Agreement by and between the Company and the Contractor, and will be utilized and paid for by the Government in accordance with the terms and specifications of the ESPC Task Order. WHEREAS, under the ESPC Task Order the Government is obligated to make ESPC Task Order Payments to the Company , commencing upon Acceptance of the Project by the Government. The ESPC Task Order Payments, together with a portion of the Proceeds deposited in the Capitalized Debt Service Account, shall be applied first, to pay the amounts due on the Certificates to be issued hereunder, and then, to such other purposes as are permitted hereunder. WHEREAS, the Proceeds of the Certificates shall be delivered to the Trustee and shall be applied in accordance with the terms of the Project Loan Agreement, the Project Note and this Trust Agreement, including application in connection with the acquisition, development, construction, installation and financing of the ESPC Project. WHEREAS, in connection with the Project Financing contemplated hereby, the Company has assigned to the Trustee for the benefit of the Certificate Holders, as more fully recited in the Assignment Agreement, all of its right, title and interest in and to the ESPC Task Order and the ESPC Task Order Payments, but none of its responsibilities or obligations under the ESPC Task Order, and notice of such assignment will be delivered to the Government by the Trustee on the Closing Date pursuant to the Notice of Assignment. WHEREAS, the Trustee is authorized and directed, pursuant to and in accordance with this Trust Agreement, to collect ESPC Task Order Payments and to transfer and disburse such funds as provided herein. WHEREAS, the Trustee hereby agrees, subject to and in accordance with this Trust Agreement, to hold the funds in the Trust Fund established pursuant to Article III hereof in trust for the Certificate Holders, subject to application and disbursement as provided herein. WHEREAS, the Trust Fund is intended to qualify as a fixed investment trust within the meaning of Treasury Regulation Section 301.7701-4(c), and it is neither the purpose nor the intent of the parties hereto to create a partnership, joint venture, or association taxable as a corporation between or among any or all of the parties hereto. The sole purpose of the trust created hereby shall be for the protection and conservation of the trust corpus for the benefit of the Certificate Holders. Accordingly, and notwithstanding anything to the contrary contained herein, the trust created hereby shall be prohibited from engaging in any trade or business or from varying the investment of the Certificate Holders. WHEREAS, each party represents that all acts, conditions and things required by law to exist, happen and be performed precedent to and in connection with its execution and entering into of this Trust Agreement have happened and have been performed in regular and due time, form and manner required by law, and that such party is now fully empowered to execute and enter into this Trust Agreement. GRANTING CLAUSE tc "GRANTING CLAUSE" \f # \l 1 NOW, THEREFORE, THIS TRUST INDENTURE AND SECURITY AGREEMENT WITNESSETH, that, for and in consideration of the premises and the mutual undertakings, provisions and agreements herein contained, and of the purchase and acceptance of the Certificates by the Holders, and the acceptance by the Trustee of the trusts hereby created, and for other good and valuable consideration, the receipt of which is hereby acknowledged, and in order to provide for the payment of the Principal and Interest with respect to the Certificates according to their true intent and meaning, and to provide for the performance and observance of all covenants and conditions therein, herein and in the Project Loan Agreement and Project Note contained, and to fix and declare the terms and conditions upon which the Certificates are to be executed, delivered, secured and enforced, the Company, for the benefit of the Certificate Holders, hereby confirms the assignment of the ESPC Task Order Payments to the Trustee pursuant to the Assignment Agreement and hereby pledges, transfers and assigns to the Trustee, and grants a security interest and lien to the Trustee in, the following described property, rights and interests (collectively, the "Pledged Property"): (a) all revenues and other income, charges and monies realized from the ESPC Task Order and from the sale or other disposition of the ESPC Project (including casualty insurance, condemnation proceeds and any termination payments payable by the Government under the ESPC Task Order) and all monies and investments in the Trust Fund; (b) all monies deposited with the Trustee pursuant to the Assignment Agreement and all investment earnings thereon; (c) all other monies deposited in the Trust Fund and investment earnings thereon; (d) the ESPC Task Order, and all amendments, extensions and renewals thereto or thereof, together with the present and continuing right to make claim for, collect, receive and receipt for any of the payments and revenues payable or receivable thereunder, to bring actions and proceedings thereunder or for the enforcement thereof, and to do any and all things which the Company is or may become entitled to do under the ESPC Task Order; (e) the Collateral and any additional property that may from time to time, by delivery or by writing of any kind, be transferred to the Trustee; (f) all easements, pipeline easements, rights-of-way, revocable permits, access agreements and licenses held by, assigned to or exercisable by the Company under the ESPC Task Order or in connection with the ESPC Project; (g) all UGI Pipeline Agreements; (h) all Governmental Approvals, to the extent assignable; (i) the Project Management Services Agreement, and all amendments, extensions and renewals thereto or thereof, together with the present and continuing right to bring actions and proceedings thereunder or for the enforcement thereof, and to do any and all things which the Company is or may become entitled to do under the Project Management Services Agreement; (j) all payment and performance bonds and sureties posted by the Contractor, to the extent of the Company's interest as a beneficiary or obligee thereunder; (k) the HEC Contribution Agreement; and (l) the NU Undertaking. TO HAVE AND TO HOLD all of the above to the Trustee and its successors in said trust and to its and their assigns forever, for the equal and proportionate benefit, security and protection of all present and future Holders of the Certificates executed and delivered hereunder and Outstanding, without preference, priority or distinction of any one Certificate over any other, upon the trusts and subject to the covenants and conditions hereinafter set forth. ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION tc "ARTICLE I: DEFINITIONS AND RULES OF CONSTRUCTION" \f # \l 1 Section 1.1 Definitions tc "Section 1.1 Definitions" \f # \l 2 . The terms defined below shall have the meanings given to them for purposes of this Trust Agreement and all Exhibits hereto unless otherwise specifically defined in such Exhibits (such definitions to be applicable equally to both singular and plural forms of the terms defined). Acceptance means the date on which the Government has issued a certificate of acceptance, or amended the Task Order, or delivered other evidence indicating the Government's acceptance of the ESPC Project, except for the Gate Station Work. Additional Certificates has the meaning given such term in Section 2.15 hereof. Affiliate with respect to any Person, means any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such Person. For purposes of this definition, the term "control" (including the correlative meanings of the terms "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of such Person, whether through the ownership of voting securities or by contract or otherwise. No individual shall be deemed to be an affiliate of a Person solely by reason of his or her being a director, committee member, officer or employee of such Person. Assignment Agreement means that certain Certificate of Assignment of Task Order Payments dated as of September 30, 1999, by and between the Company and the Trustee relating to the assignment of certain rights and interests in the ESPC Task Order. Assignment and Assumption Agreement means that certain Assignment and Assumption Agreement dated as of September 30, 1999, by and between the Contractor and the Company, pursuant to which the Contractor assigns, transfers and conveys to the Company all of the Contractor's right, title and interest in, to and under (i) the ESPC Task Order, (ii) all Governmental Approvals, (iii) the Collateral, in existence as of the date thereof and/or to be acquired or created prior to the Closing Date and (iv) the UGI Pipeline Agreements. Authorized Officer, when used with respect to the Company, the Contractor or the Trustee, means the President, any Vice President, Secretary, Assistant Secretary or Treasurer of the Company, the Contractor or the Trustee, respectively, any Assistant Vice President or Trust Officer of the Trustee, or any other officer of the Company, the Contractor or the Trustee, respectively, designated in writing by the Boards of Directors of the Company, the Contractor or the Trustee, respectively, as an Authorized Officer for purposes of the ESPC Task Order, the Trust Agreement, the Project Loan Agreement or the Project Management Services Agreement, or any document or certificate delivered pursuant thereto. Business Day means any day other than (i) a Saturday or Sunday, or (ii) a day on which banks are required or authorized to close (a) in the city in which the Trustee maintains its Principal Office or (b) in Boston, Massachusetts. Capitalized Debt Service Account means the account established by the Trustee within the Trust Fund pursuant to Section 3.4 hereof. Capitalized Interest Subaccount means the subaccount established by the Trustee within the Capitalized Debt Service Account pursuant to Section 3.4 hereof. Capitalized Principal Subaccount means the subaccount established by the Trustee within the Capitalized Debt Service Account pursuant to Section 3.4 hereof. Capital Proceeds Account means the account established by Trustee within the Trust Fund pursuant to Section 3.9 hereof. Capital Repair and Replacement Account means the account established by Trustee within the Trust Fund pursuant to Section 3.8 hereof. Certificate means the 7.625% Certificates of Participation to be delivered pursuant to this Trust Agreement in an original aggregate Principal amount of $26,477,000, and in substantially the form of Exhibit 2.2A or 2.2B hereto, and shall also include any Additional Certificates issued hereunder in compliance with the requirements of Section 2.15 hereof. Certificate Holder or Holder, in the case of any Certificate, means the person in whose name such Certificate is registered in the Certificate Register maintained by the Trustee. Certificate Payment Account means the account established by the Trustee within the Trust Fund pursuant to Section 3.7 hereof. Certificate Purchase Agreement means the Certificate Purchase Agreement dated September 30, 1999 by and between the Company and first Union Capital Markets Corp. Certificate Rate means the per annum rate payable on the Certificates as of the Closing Date. Certificate Register means the register the Trustee is required to maintain pursuant to Section 2.6 hereof. Closing means the consummation of the transactions contemplated in the Closing Memorandum. Closing Date means September 30, 1999 or such other date as the parties hereto may agree. Closing Memorandum means the closing memorandum provided for in Section 3.1 hereof. Collateral means (i) all goods, equipment, machinery, structures, fixtures or other tangible property (including building materials and supplies, and all gas pipelines, mains, meters, valves, fixtures, fittings and appurtenances thereto), wherever located or installed, whether now owned or hereafter acquired, which are or are to be installed as part of, or are or are to be used in connection with the installation and the operation of, the ESPC Project at any time, all attachments or accessions thereto, and all substitutions and replacements thereof, (ii) all books, records, warranties and other general intangibles at any time relating to any of the foregoing and (iii) all proceeds, including insurance proceeds, of any of the foregoing. Company Account means the account established by the Trustee within the Trust Fund pursuant to Section 3.10 hereof. Construction Account means the account established by the Trustee within the Trust Fund pursuant to Section 3.2 hereof. Contractor means HEC Inc., a Massachusetts corporation, together with any successor thereto approved by the Trustee, the Government, and, provided no Event of Default hereunder has occurred and is continuing, the Company. Coverage Amount has the meaning given such term in Section 3.6(c)(i)(C) hereof. Debt Service Reserve Account means the account established by the Trustee within the Trust Fund pursuant to Section 3.5 hereof. Debt Service Reserve Requirement has the meaning set forth in Section 3.5(b) hereof. Defaulted Payment has the meaning given such term in Section 2.4(c) hereof. Default Rate means the rate per annum equal to the lower of (i) two percent (2%) plus the Certificate Rate, or (ii) the maximum interest rate permitted by law. Depositary means with respect to any Global Certificates, DTC or any successor depositary appointed by the Company as a successor to DTC in the event DTC is unwilling or unable to continue to serve in such capacity, such successor to be a clearing agency registered under the Securities Exchange Act of 1934, as amended. DTC means The Depository Trust Company. Engineer's Report means a report from the Independent Enginee. ESPC Contract means, that certain Energy Savings Performance Contract No. DACA87-97-D-0068, effective August 11, 1997, by and between the Government and the Contractor, as amended by amendments dated December 19, 1997, August 14, 1998 and April 12, 1999. ESPC Task Order Payments means the amount of each monthly payment required to be made by the Government, as set forth in the ESPC Task Order, commencing upon Acceptance of the ESPC Project. ESPC Project means the design, development, acquisition, construction, installation, testing, ownership, operation, monitoring and maintenance by the Company, pursuant to the ESPC Task Order, of three (3) energy cost savings measures ("ECSM"), located at or serving the Tobyhanna Army Depot in Tobyhanna, Pennsylvania. ECSM1 consists of a new high-efficiency, decentralized, gas-fired heating system, including the construction in the public right-of-way of a gas pipeline to transport natural gas from a nearby interstate natural gas pipeline; ECSM2 consists of a lighting modifications program to upgrade lighting systems to high-efficiency equipment; ECSM3 consists of an energy management and control system to monitor and optimize the operations of the HVAC systems and equipment. ESPC Task Order Payment Account means the account established by the Trustee within the Trust Fund pursuant to Section 3.6 hereof. ESPC Task Order Payment Date means any date on which an ESPC Task Order Payment is due in accordance with the terms of the ESPC Task Order. ESPC Task Order means that certain Task Order No. 0001 dated January 7, 1999, as amended by Modification 1 effective June 25, 1999, together with all scope of work documents, HEC Proposal No. 1 dated September 25, 1998, HEC Proposal No. 1-Phase 2 dated May 14, 1999, the Operation and Maintenance Plan dated May 14, 1999, the Site Safety and Health Plan and Quality Control Plan dated May 14, 1999, including all provisions of the ESPC Contract incorporated by reference therein and all other documents incorporated by the Task Order, as such Task Order has been assigned to, and assumed by, the Company pursuant to the Assignment and Assumption Agreement, and as such Task Order may be further amended, modified or supplemented from time to time by the Government and the Company, with the consent of the Contractor and the Trustee. Event of Default means an event of default described in Section 4.1 hereof. Financing Statements means Uniform Commercial Code Financing Statements naming the Company as debtor and the Trustee as secured party to be filed with filing offices in Massachusetts and Pennsylvania to perfect the Trustee's lien and security interest in the Pledged Property. Gate Station Reserve Account means the account established by the Trustee within the Trust Fund pursuant to Section 3.3 hereof. Gate Station Work means that portion of the ESPC Project that involves the construction and installation of an upgraded gate station on the Transco interstate natural gas pipeline. Global Certificate means a Certificate issued to the Depositary or its nominee, and registered in the name of such Depositary or nominee for the purpose of permitting the book-entry system of transfer for the Certificates, and in substantially the form of Exhibit 3.2B hereto. Government means the Government of the United States of America, acting by and through the Department of the Army. Governmental Approvals means any authorization, consent, approval, license, franchise, lease, ruling, permit, tariff, rate, certification, exemption, filing or registration by or with any Governmental Authority (including, without limitation, zoning variances, special exceptions and non- conforming uses) relating to the construction, ownership, operation or maintenance of the ESPC Project, or to the execution, delivery or performance of any Project Financing Document, meaning and intending to exclude, however, any approval from the Department of the Army relating to Acceptance of the ESPC Project under the Task Order. Governmental Authority means the federal government, any state or other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any other governmental entity with authority over any aspect of construction, ownership or operation of the ESPC Project. Government Termination Redemption Premium means an amount equal to five percent (5.0%) of the outstanding Principal amount of Certificates to be redeemed pursuant to Section 5.3(a) hereof. Guaranty by any Person shall mean any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing in any manner any debt or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such debt or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, bonds, or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for the purpose of assuring in any other manner the obligee of such debt or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part), provided, that the term "Guaranty" shall not include (x) endorsements for collection or deposit in the ordinary course of business, or (y) indemnity or hold harmless provisions included in contracts entered into in the ordinary course of business. The term "Guaranty" or "Guaranteed" used as a verb has a correlative meaning. HEC Contribution Agreement means the Contribution Agreement dated as of September 30, 1999 by and between the Contractor and the Company, and assigned to the Trustee, pursuant to which the Contractor agrees, in the event that the Government has not commenced to make monthly ESPC Task Order Payments on or prior to the date on which all funds in the Capitalized Debt Service Account have been applied by the Trustee to make payments of Interest and Principal on the Certificates, to pay to the Trustee an amount sufficient to permit the Trustee to pay in full the amount of any payment of Interest and Principal due and payable on the Certificates prior to December 31, 2000, or accruing with respect to the Certificates through December 31, 2000. Independent Engineer means initially, Concord Partners LLC, and any successor thereto that is a nationally-recognized engineering firm of similar standing that is mutually acceptable to the Trustee, the Company and the Contractor. Interest, with respect to any Certificate, means the amounts denominated as such in the Payment Schedule set forth in such Certificate, as such amounts may be affected by any redemptions or acceleration of the Certificates. Make-Whole Premium has the meaning given such term in Section 5.1 hereof. Notice of Assignment of Claims means those certain Notice(s) of Assignment of Claims dated September 30, 1999 from the Trustee to the Government and to the surety company furnishing payment and performance bonds in connection with the ESPC Project, relating to the assignment by the Company to the Trustee of the ESPC Task Order Payments. Novation Agreement means that certain Novation Agreement dated as of September 30, 1999, by and among the Contractor and the Company, and approved by the Government, relating to the ESPC Task Order. NU Undertaking means that certain letter dated as of September 30, 1999 from Northeast Utilities concerning the existence and ownership of the Contractor. Opinion of Counsel means a written opinion of counsel, either expressly referred to herein or otherwise reasonably satisfactory to the Trustee, which may include, without limitation, counsel for the Company or the Contractor, whether or not such counsel is an employee of any of them or any Affiliate thereof. Outstanding, when used with reference to the Certificates as of any particular date, means all Certificates theretofore issued and delivered by the Trustee, excluding: (i) Certificates which have been exchanged or replaced; (ii) Certificates which have been paid in full; (iii) Certificates which have become due and for the payment of which monies have been duly provided; and (iv) Certificates for the payment of which monies, equal to the Principal amount thereof, with Interest to the date of maturity, shall be held in trust under the provisions of Section 3.12(a)(ii) hereof and set aside for such payment (whether at or prior to the maturity date thereof). The term "Outstanding", when used in reference to the Project Note means the original principal amount of such Project Note as reduced by the applicable portion of payments of Principal of the Certificates which have been paid or provided for. Payment Date, with respect to the Certificates, means February 15 and August 15 of each year commencing February 15, 2000, and terminating on August 15, 2022 or earlier repayment thereof, or, in case of any acceleration or redemption, such other date or dates as established in accordance herewith. Permitted Investments means any of the following: (i) Bonds, notes or obligations of the United States or debentures, notes or other obligations for which the full faith and credit of the United States are pledged for the payment of principal and interest issued or guaranteed by any of the following: the Federal National Mortgage Association, the Federal Financing Bank, the Federal Home Loan Mortgage Association, the Federal Housing Administration, the Farmers Home Administration and the Government National Mortgage Association, which mature on or before the date on which the proceeds of such bonds, notes or obligations are expected to be required for the purposes set forth herein; (ii) Bonds, notes or obligations that are rated AA (or better) by any Rating Agency (or are otherwise acceptable thereto), are fully guaranteed as to principal and interest by a federal agency of the United States and mature on or before the date on which the proceeds of such bonds, notes or obligations are expected to be required for purposes set forth herein; (iii) Certificates of deposit issued by a bank (as defined in Section 3(a)(2) of the Securities Act) (which may include the Trustee, a successor thereto or any of its affiliates), the par amount of which is insured by the Federal Deposit Insurance Company; (iv) Repurchase agreements providing for the transfer of securities from a dealer bank or securities firm (seller/borrower) to the Trustee (buyer/lender), and the transfer of cash from the Trustee to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the Trustee in exchange for the securities at a specified date. Repurchase agreements must satisfy the following criteria: (A) Repurchase agreements must be between the Trustee and a dealer bank or securities firm of the type listed below: (1) Primary dealers on the Federal Reserve reporting dealer list which fall under the jurisdiction of the Securities Investors Protectors Company ("SIPC"); or (2) Banks rated AA or above by any Rating Agency. (B) The written repurchase agreement contract must include the following provisions: (1) A limitation on securities which are acceptable for transfer to direct United States government obligations; (2) The term of the repurchase agreement may not exceed one year; (3) Delivery of the collateral to the Trustee or third party acting as agent for the Trustee (if the Trustee is supplying the collateral) must occur before/simultaneous with payment (perfection by possession or certificated securities); (4) Delivery of an Opinion of Counsel that the Trustee has a perfected first priority security interest in the collateral; (5) That the collateral will be free and clear of third party liens and in the case of a SIPC broker was not acquired pursuant to a repurchase agreement or reverse repurchase agreement; (6) That a failure to maintain the requisite percentage of collateral will require the Trustee to liquidate the collateral; (7) That the collateral will be valued weekly by the dealer bank or securities firm, market-to-market at current market price plus accrued interest; and (8)That the value of collateral will be equal to 104% if maturing in one year or less, or 112% if maturing in more than one year but no more than five years, of the amount of cash transferred by the Trustee to the dealer bank or security firm under the repurchase agreement plus accrued interest. If the value of securities held as collateral slips below 104% if maturing in one year or less, or 112% if maturing in more than one year but no more than five years, of the value of the cash transferred by the Trustee, then additional cash and/or acceptable securities must be transferred; (v) Investment agreements with an insurance company (as defined in Section 2(13) of the Securities Act), a bank (as defined in Section 3(a)(2) of the Securities Act), or a financial institution guaranteed by an insurance company approved by any Rating Agency, which agreements have been approved by any Rating Agency; and (vi) Any account of a money market fund rated AA or better by any Rating Agency that invests primarily in direct obligations issued by the United States Treasury, including one for which the Trustee (or an affiliate of the Trustee) acts as an adviser, restricted to obligations with maturates of one year or less and rated in the highest rating category by any Rating Agency. Person means any individual, sole proprietorship, corporation, partnership, joint venture, limited liability company, trust, unincorporated association, institution, Governmental Authority or any other entity. Pledged Property shall have the meaning set forth in the Granting Clause hereof. Principal, with respect to any Certificate, means the amounts denominated as such in the Payment Schedule set forth in such Certificate, as reduced from time to time by payments or redemptions thereof. Principal Office, with respect to the Trustee, means the principal office of the Trustee situated in New York, New York, at which the Trustee conducts its corporate trust business. Proceeds means the total proceeds, after reduction for original issue discount, from the issuance and sale of the Certificates. Project Financing means the advances to the Company made pursuant to the Project Loan Agreement and the Project Note by the Trustee in the aggregate principal amount of $26,477,000, utilizing the Proceeds of the Certificates deposited for the account of the Company in the Trust Fund, including amounts deposited by the Trustee pursuant to the Closing Memorandum in the accounts established pursuant to Article III hereof and amounts disbursed directly to the Company, the Contractor or third-parties on the Closing Date pursuant to the Closing Memorandum. Project Financing Documents means, collectively, the ESPC Task Order, the Assignment and Assumption Agreement, the Novation Agreement, this Trust Agreement, the Certificates, the Certificate Purchase Agreement, the Project Loan Agreement, the Project Note, the Financing Statements, the Assignment Agreement, the Notice of Assignment of Claims, the HEC Contribution Agreement, the NU Undertaking and the Project Management Services Agreement. Project Loan Agreement means that certain Project Loan Agreement dated as of September 1 30, 1999, by and between the Company and the Trustee relating to the Project Financing, as amended from time to time in accordance with the provisions thereof and hereof.\ Project Management Services Agreement means that certain Project Management Services Agreement dated as of September 30, 1999, by and between the Company and the Contractor, as may be amended from time to time with the consent of the Trustee. Project Note means the promissory note dated as of the Closing Date issued by the Company, and payable to the Trustee in the aggregate principal amount of the Project Financing. Rating Agency means either Standard & Poor's Rating Services or Moody's Investors Service, Inc. Reconstruction Contractor has the meaning set forth in Section 7.20(d) hereof. Reconstruction Period has the meaning set forth in Section 7.20(d) hereof. Reconstruction Work has the meaning set forth in Section 7.20(e) hereof. Record Date with respect to any Payment Date, means the date which is 15 days (or if such date is not a Business Day, the preceding Business Day) before such Payment Date or such other special Record Date as established by the Trustee in accordance herewith. Redemption Date when used with respect to any Certificate to be redeemed means the date fixed for such redemption by or pursuant to this Trust Agreement. Redemption Price when used with respect to any Certificate to be redeemed means the price (inclusive of accrued Interest and premium, if any) at which it is to be redeemed pursuant to this Trust Agreement and the terms of such Certificate. Requisition means a requisition for an advance pursuant to the Project Loan Agreement, in the form attached as an exhibit to the Project Loan Agreement. Securities Act means the Securities Act of 1933, as amended. Task Order shall have the meaning set forth in the definition of "ESPC Task Order" herein. Termination Payment Subaccount means the subaccount established by the Trustee within the Certificate Payment Account pursuant to Section 3.7 hereof. Trustee means United States Trust Company of New York, a New York banking corporation, in its capacity as trustee for the Certificate Holders pursuant hereto, or any substitute or successor pursuant to the terms hereof. Trust Fund means the trust fund established pursuant to Article III hereof. UGI Pipeline Agreements means that certain Pipeline Operations and Maintenance Agreement dated August 30, 1999 and the Engineering Agreement dated March 26, 1999, each by and between UGI Utilities, Inc. and the Contractor, as assigned by the Contractor to the Company pursuant to the Assignment and Assumption Agreement. Section 1.2 Rules of Construction Words of the masculine and feminine genders shall be deemed and construed to include the neuter gender. Unless the context otherwise indicates, the singularnumber shall include the plural number and vice versa, and words importing persons shall include Companies and associations, including public bodies, as well as natural persons. The terms "hereby", "hereof", "hereto", "herein", "hereunder" and any similar terms, as used in this Trust Agreement, refer to this Trust Agreement. ARTICLE II CERTIFICATES; TERMS AND PROVISIONS Section 2.1 Section 2.1 Preparation of Certificates. (a) The Trustee is hereby authorized, upon receipt of a written request from the Company for execution and delivery of Certificates in the form attached hereto as Exhibit 2.1, to execute and deliver Certificates in an aggregate original Principal amount of $26,477,000. Such Certificates shall be prepared by the Company and delivered to the Trustee for execution thereby. (b) The Trustee shall not, at any time while the Certificates are Outstanding, execute additional certificates payable from ESPC Task Order Payments or otherwise entitled to the benefits hereof, except as set forth in Sections 2.7 to 2.10 hereof, inclusive, and Section 2.15 hereof. Section 2.2 Form of Certificates; Denominations; Global Certificates. (a) The Certificates shall be delivered in the form of fully registered Certificates or a single Global Certificate for each maturity. The Certificates shall be delivered in denominations of $100,000 and any $1,000 multiples in excess thereof, and shall be substantially in the form set forth in Exhibit 2.2A hereto in the case of a fully registered Certificate and in the form set forth in Exhibit 2.2B hereto in the case of a Global Certificate. (b) Each Certificate, including each Global Certificate, shall bear a legend substantially to the following effect: "This Certificate has not been registered under the Securities Act of 1933, as amended, and may not be sold or transferred unless the registration provisions of said Act and any applicable state securities laws have been satisfied or unless in the Opinion of Counsel satisfactory to the Trustee and the Company compliance with such provisions is not required." (c) If Certificates are requested to be issued pursuant to Section 2.1 hereof in the form of one Global Certificate for each maturity, the Company shall prepare and deliver to the Trustee for execution thereby, one or more Global Certificates that shall represent and shall be denominated in an amount equal to the aggregate Principal amount of all Certificates to be issued, shall be registered in the name of the Depositary (or its nominee), shall be delivered by the Trustee to the Depositary or pursuant to its instructions and shall bear a legend substantially to the following effect: "Unless and until it is exchanged in whole or in part for Certificates in definitive registered form, this Global Certificate may not be transferred except as a whole by the Depositary to the nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary." Section 2.3 Date of Certificates All Certificates originally issued pursuant hereto shall be dated as of the Closing Date. Certificates issued upon transfer of originally issued Certificates shall be dated the date on which such Certificates are executed by the Trustee. Section 2.4 Payment of Principal and Interest with Respect to Certificates. Each Certificate shall bear Interest from the Closing Date, and shall mature on August 15, 2022. Interest with respect to the Certificates shall be payable semiannually on each Payment Date commencing February 15, 2000, until maturity or redemption of the Certificates, whichever is earlier, with respect to Interest accrued from the preceding Payment Date (or from the Closing Date with respect to the first Payment Date) through the day preceding such Payment Date. The Principal amount of the Certificates shall be payable semiannually on each Payment Date commencing February 15, 2001. The final payment of Principal and Interest with respect to the Certificates shall be on August 15, 2022. The aggregate payments due with respect to the Certificates on each Payment Date are as follows: Payment Interest Principal Total Date Payment Payment Payment February 15, 2000 $757,076.72 $ 0 $757,076.72 August 15, 2000 1,009,435.63 $ 0 1,009,435.63 February 15, 2001 1,009,435.63 31,000.00 1,040,435.63 August 15, 2001 1,008,253.75 467,000.00 1,475,253.75 February 15, 2002 990,449.38 485,000.00 1,475,449.38 August 15, 2002 971,958.75 503,000.00 1,474,958.75 February 15, 2003 952,781.88 523,000.00 1,475,781.88 August 15, 2003 932,842.50 519,000.00 1,451,842.50 February 15, 2004 913,055.63 283,000.00 1,196,055.63 August 15, 2004 902,266.25 294,000.00 1,196,266.25 February 15, 2005 891,057.50 305,000.00 1,196,057.50 August 15, 2005 879,429.38 316,000.00 1,195,429.38 February 15, 2006 867,381.88 328,000.00 1,195,381.88 August 15, 2006 854,876.88 341,000.00 1,195,876.88 February 15, 2007 841,876.25 354,000.00 1,195,876.25 August 15, 2007 828,380.00 367,000.00 1,195,380.00 February 15, 2008 814,388.13 381,000.00 1,195,388.13 August 15, 2008 799,862.50 396,000.00 1,195,862.50 February 15, 2009 784,765.00 411,000.00 1,195,765.00 August 15, 2009 769,095.63 427,000.00 1,196,095.63 February 15, 2010 752,816.25 443,000.00 1,195,816.25 August 15, 2010 735,926.88 460,000.00 1,195,926.88 February 15, 2011 718,389.38 477,000.00 1,195,389.38 August 15, 2011 700,203.75 496,000.00 1,196,203.75 February 15, 2012 681,293.75 514,000.00 1,195,293.75 August 15, 2012 661,697.50 534,000.00 1,195,697.50 February 15, 2013 641,338.75 554,000.00 1,195,338.75 August 15, 2013 620,217.50 576,000.00 1,196,217.50 February 15, 2014 598,257.50 598,000.00 1,196,257.50 August 15, 2014 575,458.75 620,000.00 1,195,458.75 February 15, 2015 551,821.25 644,000.00 1,195,821.25 August 15, 2015 527,268.75 669,000.00 1,196,268.75 February 15, 2016 501,763.13 694,000.00 1,195,763.13 August 15, 2016 475,304.38 721,000.00 1,196,304.38 February 15, 2017 447,816.25 748,000.00 1,195,816.25 August 15, 2017 419,298.75 776,000.00 1,195,298.75 February 15, 2018 389,713.75 806,000.00 1,195,713.75 August 15, 2018 358,985.00 837,000.00 1,195,985.00 February 15, 2019 327,074.38 869,000.00 1,196,074.38 August 15, 2019 293,943.75 902,000.00 1,195,943.75 February 15, 2020 259,555.00 936,000.00 1,195,555.00 August 15, 2020 223,870.00 972,000.00 1,195,870.00 February 15, 2021 186,812.50 1,009,000.00 1,195,812.50 August 15, 2021 148,344.38 1,047,000.00 1,195,344.38 February 15, 2022 108,427.50 1,087,000.00 1,195,427.50 August 15, 2022 66,985.63 1,757,000.00 1,823,985.63 TOTAL: $29,751,253.59 $26,477,000 $56,228,253.59 If at any time more than one Certificate is issued and Outstanding, then, the aggregate Principal and Interest payment amounts set forth in the preceding table shall be apportioned between each Certificate on a pro rata basis, reflecting for each Certificate the ratio of the Principal amount of such Certificate divided by the total Principal amount of all Certificates Outstanding. (b) Interest payments and payments of Principal that are part of periodic payments of Interest and Principal on any Certificate that are payable on any regular Payment Date and that are punctually paid or provided for shall be made to the person at the last address appearing on the Certificate Register as the Holder thereof as of the close of business on the applicable Record Date. The final payment with respect to any Certificate shall be made only upon surrender of such Certificate to the Trustee at its Principal Office. (c) Interest payments and payments of Principal that are part of periodic payments of Interest and Principal on the Certificates that are payable on any regular Payment Date but that are not punctually paid or duly provided for (a "Defaulted Payment") shall cease forthwith to be payable to the Certificate Holders on the relevant regular Record Date solely by virtue of such Holders having been Holders on such regular Record Date. The Trustee shall make payment of any Defaulted Payment on the Certificates, together with interest on the portion thereof equal to Principal (and, to the extent permitted by applicable law, the portion thereof equal to Interest), from the date due until the date paid, at the rate per annum equal to the Default Rate, to the Holders thereof as of the close of business on a special Record Date for the payment of such Defaulted Payment fixed in the following manner. The Company shall notify the Trustee in writing of the amount of a Defaulted Payment proposed to be paid on each Certificate and the date of the proposed payment (which date shall be such as will enable the Trustee to comply with the next sentence hereof), and at the same time the Company shall deposit or cause to be deposited with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Payment or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the persons entitled to such Defaulted Payment as provided in this Section 2.4(c). Thereupon the Trustee shall fix a special Record Date for the payment of such Defaulted Payment which shall be not more than 15 nor less than 10 days prior to the date of the proposed Payment Date and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such special Record Date and, in the name and at the expense of the Company (such expense to be paid solely from amounts held hereunder), shall cause notice of the proposed payment of such Defaulted Payment and the special Record Date therefor to be mailed, first-class postage prepaid, to each Certificate Holder at the address thereof as it appears in the Certificate Register not less than 30 nor more than 60 days prior to such special Payment Date. The Trustee may, in its discretion, in the name and at the expense of the Company (such expense to be paid solely from amounts held hereunder), cause a similar notice to be published at least once in a financial journal distributed in the Borough of Manhattan, New York City, but such publication shall not be a condition precedent to the establishment of such special Record Date. Notice of the proposed payment of such Defaulted Payment and the special Payment Date therefor having been mailed as aforesaid, such Defaulted Payment shall be paid to the persons in whose names the Certificates are registered on the related special Record Date. (d) Future payments of Principal and Interest on each Certificate which has been partially redeemed pursuant to Section 5.3 of this Trust Agreement shall be reduced by the percentage determined by dividing (i) the amount of Principal redeemed on such Certificate by (ii) the amount of Principal Outstanding on such Certificate immediately prior to such redemption. Section 2.5 Execution The Certificates shall be executed by the Trustee, under this Trust Agreement, by the manual signature of an Authorized Officer or authorized signatory of the Trustee. Section 2.6 Certificate Register The Trustee shall maintain a Certificate Register of the name and address of each Certificate Holder, or, if a Certificate is transferred pursuant to the terms of this Trust Agreement, of the successor holder of such Certificate. The Trustee shall deem and treat the person in whose name any Outstanding Certificate shall be registered upon the Certificate Register as the absolute holder of such Certificate, whether such Certificate shall be overdue or not, for the purpose of receiving payments of, or on account of, the Principal and Interest payments with respect to such Certificate and for all other purposes, and all such payments so made to any such Holder or upon his or her order shall be valid and effectual to satisfy and discharge the liability upon such Certificate to the extent of the sum or sums, so paid, and the Trustee shall not be affected by any notice to the contrary. Section 2.7 Transfer of Certificates. A Certificate may be transferred only by recording the transfer thereof on the Certificate Register, upon the surrender of such Certificate for cancellation, accompanied by a written instrument of transfer in a form approved by the Trustee and with a guarantee of signature, duly executed by the Certificate Holder or his or her duly authorized attorney-in-fact. Upon surrender of a Certificate and registration of the transfer, the Trustee shall cancel the surrendered Certificate, and shall execute and deliver in the name of the transferee a new Certificate or Certificates, for a like aggregate amount and maturity and bearing a number not contemporaneously outstanding. The Trustee shall not make any transfer of Certificates between the date of mailing of a notice of redemption pursuant to Section 4.4 hereof and the Redemption Date with respect to which such notice was sent. Section 2.8 Exchange of Certificates. Certificates may be exchanged at the Principal Office of the Trustee for Certificates of like Outstanding aggregate amount and the same maturity and having a minimum denomination of $100,000 and any $1,000 multiples in excess thereof. Any Certificate surrendered in an exchange shall be canceled. The Trustee shall require payment by the Certificate Holder requesting such exchange of the cost of printing new Certificates and of any tax, fee or other governmental charge required to be paid with respect to such exchange. Section 2.9 Temporary Certificates. Pending preparation of the definitive Certificates, any Certificates delivered under this Trust Agreement may be initially delivered in temporary form exchangeable for definitive Certificates when ready for delivery. The temporary Certificate may be printed, lithographed or typewritten and may contain such reference to any of the provisions of this Trust Agreement as may be appropriate. Every temporary Certificate shall be executed and delivered by the Trustee upon the same conditions and in substantially the same manner as the definitive Certificates. If the Trustee delivers temporary Certificates, it shall execute and furnish definitive Certificates without delay. Thereupon, the temporary Certificates shall be surrendered for cancellation at the Principal Office of the Trustee, and the Trustee shall deliver in exchange for such temporary Certificates an equal aggregate Principal amount of definitive Certificates of the same maturity. Until so exchanged, the temporary Certificates shall be entitled to the same benefits under this Trust Agreement as definitive Certificates delivered pursuant thereto. Section 2.10 Certificates Mutilated, Lost, Destroyed or Stolen. If any Certificate shall become mutilated, at the written request and expense of the Holder of said Certificate, the Trustee shall execute and deliver to such Holder a new Certificate of like tenor and number, in exchange and substitution for the Certificate so mutilated, but only upon surrender to the Trustee of the Certificate so mutilated. Every mutilated Certificate so surrendered to the Trustee shall be canceled by it and destroyed. If any Certificate shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted by the Certificate Holder or his, her or its duly authorized agent to the Trustee, and, if such evidence is satisfactory to the Trustee and if an indemnity satisfactory to the Trustee and the Company shall be given, at the expense of the Certificate Holder, the Trustee shall execute and deliver to the Certificate Holder a new Certificate of like tenor and numbered as the Trustee shall determine in lieu of and in substitution for the Certificate so lost, destroyed or stolen. In addition to the transfer fee provided for by Section 2.13 hereof, the Trustee may require payment of a sum not exceeding the actual cost of preparing and executing each new Certificate issued under this Section and of the expenses incurred by the Company and the Trustee hereunder. Any Certificate issued under the provisions of this Section 2.10 in lieu of any Certificate alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the benefit of this Trust Agreement. The Trustee shall not treat both the original Certificate and any replacement Certificate as being Outstanding for the purpose of determining the amount of Certificates which may be issued hereunder or for the purpose of determining any percentage of Certificates Outstanding hereunder, but both the original and replacement Certificate shall be treated as one and the same. Section 2.11 Place of Payment. The Trustee is hereby appointed paying agent for the Certificates. Principal and Interest with respect to the Certificates, except for the final payment, shall be payable when due by check or draft of the Trustee mailed to the Holder of record of such Certificate, as of the Record Date at the address shown on the Certificate Register. Upon the written request of any Holder of Certificates having an aggregate Principal value of $1,000,000 or more, payments of Principal and Interest with respect to the Certificates shall be wire transferred to an account designated by such Holder, provided that the Trustee shall have received written instructions regarding such wire transfer on or before the ESPC Task Order Payment Date next preceding the date of payment of such Principal and Interest. The final payment with respect to each Certificate shall be payable at the Principal Office of the Trustee upon surrender of the Certificate. Section 2.12 Evidence of Signatures of Certificate Holders and Ownership of Certificates. Any request, direction, consent, revocation of consent, or other instrument in writing required or permitted by this Trust Agreement to be signed or executed by Certificate Holders may be in any number of concurrent instruments of similar tenor, and may be signed or executed by such Certificate Holders in person or by their attorney-in-fact or agents duly appointed by an instrument in writing for that purpose. Proof of the execution of any such instrument, or of any instrument appointing any such attorney or agent, and of the ownership of Certificates shall be sufficient for any purpose of this Trust Agreement if made in the following manner: (a) The fact and date of execution by any Certificate Holder or such Holder's attorney or agent of any such instrument and of any instrument appointing any such attorney or agent, may be proved by a certificate, which need not be acknowledged or verified, of an officer of any bank or trust company located within the United States of America, or of any notary public, or other officer authorized to take acknowledgments of deeds to be recorded in such jurisdictions that the person signing such instrument acknowledged before him or her the execution thereof. Where any such instrument is executed by an officer on behalf of such corporation or partnership, such certificate shall also constitute sufficient proof of such person's authority. (b) The ownership of Certificates shall be proved in accordance with the Certificate Register maintained by the Trustee pursuant to Section 2.6 hereof. Nothing contained in this Section 2.12 shall be construed as limiting the Trustee to such proof, it being intended that the Trustee may accept any other evidence of the matters herein stated which may seem sufficient to the Trustee. Any request or consent of the Holder of any Certificate shall bind every future Certificate Holder of the same Certificate in respect of anything done or suffered to be done by the Company or the Trustee in pursuance of such request or consent. Section 2.13 Transfer Fee. The Trustee may charge a reasonable fee in accordance with its usual fee schedule for each Certificate delivered on the transfer or exchange of Certificates or in replacement of a Certificate mutilated, lost, destroyed or stolen. Section 2.14 Book Entry. (a) If requested by the original beneficial owners of the Certificates, except as provided in Section 2.14(c) hereof, all the Outstanding Certificates shall be represented by a single Global Certificate to permit the book-entry transfer of the Certificates. The registered Holder of such Global Certificate shall be the Depositary (or its nominee). Payment of Interest and/or Principal for such Global Certificate registered in the name of the Depositary (or its nominee) shall be made to the account of the Depositary (or its nominee) on the Payment Date for the Certificates at the address indicated for the Depositary (or its nominee) in the Certificate Register. The "Certificates" referred to in this Section 2.14(a) shall refer to such book-entry Certificates. (b) If an election under Section 2.14(a) is made, the Certificates shall be initially issued in the form of a single, authenticated, fully- registered Global Certificate. Upon initial issuance, the ownership of such Global Certificate shall be registered in the Certificate Register in the name of the Depositary (or its nominee). The Trustee and the Company may treat the Depositary (or its nominee) as the sole and exclusive owner of the Certificates registered in its name for the purposes of payment of the Principal or Redemption Price of or Interest on the Certificates, selecting the Certificates or portions thereof to be redeemed, giving any notice permitted or required to be given to Certificate Holders hereunder, registering the transfer of Certificates, obtaining any consent or other action to be taken by Certificate Holders and for all other purposes whatsoever; and neither the Trustee nor the Company shall have any responsibility or obligation to any beneficial owner or any other person claiming a beneficial ownership interest in the Certificates under or through the Depositary, or any other person which is not shown on the Certificate Register as being a Certificate Holder, with respect to the accuracy of any records maintained by the Depositary; the payment to the Depositary of any amount in respect of the Principal or Redemption Price of or Interest on the Certificates; any notice which is permitted or required to be given to Certificate Holders hereunder; the selection by the Depositary of any person to receive payment in the event of a partial redemption of the Certificates; or any consent given or other action taken by the Depositary as Certificate Holder. The Trustee shall pay all Principal and Redemption Price of, and Interest on, the Certificates only to or "upon the order of" the Depositary (as that term is used in the Uniform Commercial Code as adopted in the State of New York), and all such payments shall be valid and effective to fully satisfy and discharge the Trustee's obligations with respect to the Principal or Redemption Price of, and Interest on, the Certificates to the extent of the sum or sums so paid. Except as provided in Section 2.14(c) hereof, no person other than the Depositary shall receive an authenticated Certificate evidencing the obligation of the Company to make payments of Principal or Redemption Price and Interest pursuant to this Trust Agreement. Upon delivery by the Depositary to the Trustee of written notice to the effect that the Depositary has determined to substitute a new nominee in place of the Depositary or its original nominee, the Global Certificate will be transferable to such new nominee in accordance with Section 2.14(f) hereof. (c) In the event the Company determines that it is in the best Interest of the Company not to continue the book-entry system of transfer or that the Interest of the beneficial owners of the Certificates might be adversely affected if the book-entry system of transfer is continued, the Company may notify the Depositary and the Trustee, whereupon the Depositary will notify the beneficial owners of the availability through the Depositary of registered Certificates evidencing such beneficial owners' respective ownership of the Certificates. In such event, the Trustee shall issue, transfer and exchange Certificates evidencing the Certificates as requested by the Depositary and any beneficial owner in appropriate amounts in accordance with Section 2.14(f) hereof. The Depositary may determine to discontinue providing its services with respect to the Certificates at any time by giving notice to the Company and the Trustee and discharging its responsibilities with respect thereto under applicable law, or the Company may determine that the Depositary is incapable of discharging its responsibilities and may so advise the Depositary. In either such event, the Company shall either establish its own book-entry system or use reasonable efforts to locate a successor Depositary. Under such circumstances (if there is no successor Depositary), the Company and the Trustee shall be obligated to deliver Certificates evidencing the Certificates as described in the Trust Agreement and in accordance with Section 2.14(f) hereof. In the event Certificates evidencing the Certificates are issued, the provisions of the Trust Agreement shall apply to, among other things, the transfer and exchange of such Certificates evidencing the Certificates and the method of payment of Principal or Redemption Price of, and Interest on, such Certificates evidencing the Certificates. Whenever the Depositary requests the Company and the Trustee to do so, the Trustee and the Company will cooperate with the Depositary in taking appropriate action after reasonable notice (i) to make available one or more separate Certificates evidencing the Certificates to any beneficial owner having Certificates credited to its account with the Depositary or (ii) to arrange for a successor Depositary to maintain custody of a Global Certificate evidencing the Certificates. (d) Notwithstanding any other provision of this Trust Agreement to the contrary, so long as the Global Certificate is registered in the name of the Depositary (or its nominee), all payments with respect to the Principal or Redemption Price of, and Interest on, such Global Certificate and all notices with respect to such Global Certificate shall be made and given, respectively, to the Depositary as provided in the representation letter between the Depositary, the Company and the Trustee. (e) In connection with any notice or other communication to be provided to Certificate Holders pursuant to the Trust Agreement by the Company or the Trustee or with respect to any consent or other action to be taken by Certificate Holders, the Company or the Trustee, as the case may be, shall establish a record date for such consent or other action and give the Depositary notice of such record date not less than 15 days in advance of such record date to the extent possible. (f) In the event that any transfer or exchange of Certificates is permitted under Section 2.14 (b) or (c) hereof, such transfer or exchange shall be accomplished upon receipt by the Trustee from the registered Holder thereof of the Global Certificate to be transferred or exchanged and appropriate instruments of transfer to the permitted transferee, all in accordance with the applicable provisions of the Trust Agreement. In the event Certificates evidencing the Certificates are issued to owners other than the Depositary (or its nominee), as Holder of the Global Certificate representing all the Certificates, or a successor Depositary as Holder of the Global Certificate representing all the Certificates, the provisions of the Trust Agreement shall also apply to, among other things, the printing of such Certificates evidencing the Certificates and the methods of payment of Principal or Redemption Price of, and Interest on, such Certificates evidencing the Certificates. Section 2.15 Issuance of Additional Certificates. (a) Subject to, and in compliance with, all of the terms and conditions of this Article II, except as expressly modified by the provisions of this Section 2.15, and upon the written request of the Company in the form attached as Exhibit 2.1, the Trustee is authorized to execute and deliver "Additional Certificates", which shall be payable from ESPC Task Order Payments on a pari passu basis with all Certificates originally issued under this Trust Agreement on the Closing Date, and which shall be entitled to all of the benefits hereof and the security interests in the Pledged Property provided hereunder, all on an equal priority basis with all other Certificates Outstanding hereunder. Additional Certificates shall be dated the date on which such Additional Certificates are executed by the Trustee, and shall be delivered in denominations of $100,000 and any $1,000 multiples in excess thereof; provided, however, that if the total authorized Principal amount of the Additional Certificates is $100,000 or less, then, the Trustee shall issue only a single Additional Certificate. (b) Additional Certificates may be issued, either (i) to finance facilities necessary to complete the construction and placement into operation of the ESPC Project, or (ii) to finance extraordinary capital repairs or replacements necessary to maintain or restore the ESPC Project in/to service, or (iii) to finance the installation, operation and maintenance by the Company of additional Energy Cost Savings Measures as part of the ESPC Project, upon the request and with the approval of the Government, in each of the foregoing cases, subject to fulfillment of the following conditions: (A) The Company shall certify in an Authorized Officer's certificate to the Trustee, which shall be confirmed in a certificate of the Independent Engineer, that the proceeds of such Additional Certificates are necessary and would reasonably be expected to be sufficient either, to complete construction of the ESPC Project, or to maintain or restore the ESPC Project in/to service, or to finance the installation, operation and maintenance by the Company of additional Energy Cost Savings Measures, as the case may be; (B) Either: (1) the Company shall certify in an Authorized Officer's certificate that it has obtained from the Government, and delivered to the Trustee, a modification to the Task Order increasing the amount of the monthly ESPC Task Order Payment, by means of an increase in the monthly fixed Amortization Payment and PIAC thereon (as such terms are used and defined in the ESPC Contract and ESPC Task Order), in an amount sufficient to maintain a minimum projected debt service coverage equal to 1.19 times during the remaining term of the Certificates, including the Additional Certificates proposed for issuance; or (2) in the absence of a Task Order modification satisfying the requirements set forth in the foregoing clause (1) of this Section 2.15(b)(B), the issuance of Additional Certificates shall be approved by a majority in aggregate Principal amount of the Certificates then Outstanding; (C) The Company shall certify in an Authorized Officer's certificate to the Trustee that, after giving effect to the issuance of the Additional Certificates, no Event of Default shall have occurred which shall be continuing; (D) The Additional Certificates shall have a final maturity date not later than the date on which the ESPC Contract and the ESPC Task Order are scheduled to expire; and (E) The Trustee shall have received an Opinion of Counsel to the effect that there will be no resulting adverse effect on the fixed investment trust status of the Trust created hereby for federal income tax purposes. Section 2.16 Termination of Trust. If and when the Certificates shall have become due and payable in accordance with their respective terms, and the whole amount of the Principal and the Interest so due and payable upon all of the Certificates and all amounts due the Trustee shall be paid and all administrative expenses hereunder have been paid or provided for, then the Trustee shall assign, without recourse, and transfer to or upon order of the Company all cash and real or personal property including the Pledged Property, (in excess of the amounts required for the foregoing) then held by the Trustee (including all balances and any fund or account created under this Trust Agreement), shall assign or cause to be assigned to the Company (or its designee), without recourse, all documents relating to the ESPC Project to which documents the Trustee is a party and shall execute such documents prepared by the Company as may be reasonably required by the Company in this regard, all to the extent permitted by applicable law, and thereafter neither the Trustee nor the Company shall have any further obligations under this Trust Agreement. ARTICLE III ESTABLISHMENT AND ADMINISTRATION OF TRUST FUND AND ACCOUNTS Section 3. Section 3.1 Trust Fund. There is hereby established with the Trustee a special trust fund to be designated the "(HEC/Tobyhanna Energy Project, Inc.) Trust Fund" referred to herein as the "Trust Fund". The Trustee shall keep the Trust Fund separate and apart from all other funds and monies held by it, and shall withdraw and transfer any sums contained therein only as provided in this Trust Agreement and the Project Loan Agreement. The Trustee shall administer and maintain the Trust Fund in accordance with the terms of this Trust Agreement. Within the Trust Fund, there are hereby established the following accounts: (a) the Construction Account described in Section 3.2 hereof; (b) the Gate Station Reserve Account described in Section 3.3 hereof; (c) the Capitalized Debt Service Account described in Section 3.4 hereof, which shall consist of a Capitalized Interest Subaccount and a Capitalized Principal Subaccount; (d) the Debt Service Reserve Account described in Section 3.5 hereof; (e) the ESPC Task Order Payment Account described in Section 3.6 hereof; (f) the Certificate Payment Account described in Section 3.7 hereof, which shall consist of a General Subaccount and a Termination Payment Subaccount; (g) the Capital Repair and Replacement Account described in Section 3.8 hereof; (h) the Capital Proceeds Account described in Section 3.9 hereof; and (i) the Company Account described in Section 3.10 hereof. The Trustee agrees to accept the Proceeds on the Closing Date, together with the Closing Memorandum executed by the Company prescribing the allocation of Proceeds among the various accounts established pursuant to this Article III and to other purposes specified therein. The Trustee agrees to deposit the Proceeds derived from the sale of the Certificates in the Construction Account, the Gate Station Reserve Account, the Capitalized Debt Service Account and the Debt Service Reserve Account in the respective amounts set forth in the Closing Memorandum. Section 3.2 Establishment and Application of Construction Account. (a) Within the Trust Fund, there is hereby established a special account to be designated as the "HEC/Tobyhanna Energy Project, Inc. Construction Account", referred to herein as the "Construction Account". The Trustee shall administer the Construction Account as provided in this Section 3.2. (b) At Closing the Trustee shall deposit in the Construction Account the amount of Proceeds specified in the Closing Memorandum. (c) There shall be deposited into the Construction Account any of the following received prior to Acceptance of the Project: (i) all proceeds of condemnation of a portion of the ESPC Project received by the Trustee; (ii) all casualty insurance payments or other payments received by the Trustee with respect to any damage to the ESPC Project; and (iii) any liquidated damages or other payments received by the Trustee from any contractor, or from any surety with respect to the ESPC Project. (d) Disbursement from the Construction Account shall be made pursuant to the Project Loan Agreement from time to time upon receipt by the Trustee of a completed and fully executed Requisition which has been approved as provided in the Project Loan Agreement. (e) The Trustee shall make transfers and distributions from the Construction Account as provided in this Section, Section 3.5 and in Section 3.7 hereof. (f) Three Business Days after the date on which Acceptance of the ESPC Project (exclusive of the Gate Station Work) occurs, the balance, if any, held in the Construction Account shall be transferred to the Gate Station Reserve Account, and the Construction Account shall be closed. Section 3.3 Establishment and Application of Gate Station Reserve Account. (a) Within the Trust Fund, there is hereby established a special account to be designated as the "HEC/Tobyhanna Energy Project, Inc. Gate Station Reserve Account", referred to herein as the "Gate Station Reserve Account". The Trustee shall administer the Gate Station Reserve Account as provided in this Section 3.3. (b) At Closing, the Trustee shall deposit in the Gate Station Reserve Account the amount of Proceeds specified in the Closing Memorandum. (c) Disbursement from the Gate Station Reserve Account shall be made pursuant to the Project Loan Agreement from time to time upon receipt by the Trustee of a completed and fully executed Requisition which has been approved as provided in the Project Loan Agreement. (d) The Trustee shall make transfers and distributions from the Gate Station Reserve Account as provided in this Section, Section 3.5 and Section 3.7 hereof. (e) Three Business Days after the date on which the Gate Station Work is completed, as evidenced by certificates of the Company, the Contractor and the Independent Engineer, and by a Task Order modification from the Government, the balance, if any, in the Gate Station Reserve Account shall be transferred first, to the Debt Service Reserve Account to the extent that the balance therein is less than the Debt Service Reserve Requirement, and then, the balance if any to the Company Account, and the Gate Station Reserve Account shall be closed. Section 3.4 Establishment and Application of Capitalized Debt Service Account. (a) Within the Trust Fund, there is hereby established a special account to be designated as the "HEC/Tobyhanna Energy Project, Inc. Capitalized Debt Service Account", referred to herein as the "Capitalized Debt Service Account," which shall consist of a Capitalized Interest Subaccount and a Capitalized Principal Subaccount. The Trustee shall administer the Capitalized Debt Service Account as provided in this Section 3.4. (b) At Closing, the Trustee shall deposit in the Capitalized Interest Subaccount the amount of Proceeds specified in the Closing Memorandum. (c) At Closing, the Trustee shall deposit in the Capitalized Principal Subaccount the amount of Proceeds specified in the Closing Memorandum. (d) The Trustee shall make transfers from the Capitalized Debt Service account as provided in Section 3.7 (c) and 3.7(d) hereof. (e) After making the first payment of Principal and Interest due on the Certificates on February 15, 2001, from amounts on deposit in the Certificate Payment Account, the balance, if any, in the Capitalized Debt Service Account shall be transferred first, to the Debt Service Reserve Account to the extent that the balance therein is less than the Debt Service Reserve Requirement, and then, the balance, if any, to the Company Account, and the Capitalized Debt Service Account shall be closed. Section 3.5 Establishment and Application of Debt Service Reserve Account. (a) Within the Trust Fund, there is hereby established a special account to be designated as the "HEC/Tobyhanna Energy Project, Inc. Debt Service Reserve Account", referred to herein as the "Debt Service Reserve Account". The Trustee shall administer the Debt Service Reserve Account as provided in this Section 3.5. (b) At Closing, the Trustee shall deposit in the Debt Service Reserve Account the amount of Proceeds specified in the Closing Memorandum (the "Debt Service Reserve Requirement"). (c) All amounts, if any, received by the Trustee pursuant to the HEC Contribution Agreement shall be deposited to the Debt Service Reserve Account. (d) The Trustee shall make transfers from the Debt Service Reserve Account as provided in Section 3.7 hereof. (e) Whenever the amount of funds on deposit in the Debt Service Reserve Account (inclusive of interest earnings thereon) shall be less than the Debt Service Reserve Requirement, the Trustee shall make transfers, in an amount sufficient to satisfy the Debt Service Reserve Requirement, from the following Trust Fund accounts, in the following order of priority: (i) from the ESPC Task Order Payment Account; (ii) from the Company Account; (iii) from the Construction Account; (iv) from the Gate Station Reserve Account; and (v) from the Capital Repair and Replacement Account. (f) When no Certificates remain Outstanding, the balance, if any, in the Debt Service Reserve Account shall be transferred to the Company Account, and the Debt Service Reserve Account shall be closed. Section 3.6 Establishment and Application of ESPC Task Order Payment Account. (a) tc "Section 3.6 Establishment and Application of ESPC Contract Payment Account." \f # \l 2 Within the Trust Fund, there is hereby established a special account to be designated as the "HEC/Tobyhanna Energy Project, Inc. ESPC Task Order Payment Account", referred to herein as the "ESPC Task Order Payment Account". The Trustee shall administer the ESPC Task Order Payment Account as provided in this Section 3.6. (b) All ESPC Task Order Payments and any other amounts not otherwise provided for in this Trust Agreement as may be paid to the Trustee, as assignee of the Company pursuant to the ESPC Task Order, the Assignment Agreement or this Trust Agreement, shall be deposited in the ESPC Task Order Payment Account. (c) Subject to Section 3.6(d) hereof, within one (1) Business Day after te receipt of each ESPC Task Order Payment, the Trustee shall make the following transfers from the ESPC Task Order Payment Account: (i) to the Certificate Payment Account: (A) an amount equal to one-sixth (1/6) of the Interest coming due on the Certificates on the immediately succeeding Payment Date for the Certificates, provided, however, that if there are less than six (6) monthly ESPC Task Order Payments to be received prior to the Payment Date for the first Interest payment on the Certificates, the amount to be deposited pursuant to this clause (A) shall be an amount equal to the Interest coming due on such Payment Date multiplied by a fraction, the numerator of which is one (1) and the denominator of which is the number of ESPC Task Order Payments to be received prior to such Payment Date, plus (B) an amount equal to one-sixth (1/6) of the Principal coming due on the Certificates on the immediately succeeding Payment Date for the Certificates, provided, however, that if there are less than six (6) monthly ESPC Task Order Payments to be received prior to the Payment Date for the first Principal payment on the Certificates, the amount to be deposited pursuant to this clause (B) shall be an amount equal to the Principal coming due on such Payment Date multiplied by a fraction, the numerator of which is one (1) and the denominator of which is the number of ESPC Task Order Payments to be received prior to such Payment Date, plus (C) an amount (the "Coverage Amount") equal to 0.19 multiplied by the combined amounts determined pursuant to Sections 3.6(c)(i)(A) and (B) above, plus (D) the amount of an unrestored shortfall occurring in any prior month(s) as a result of the amount available for deposit in such month(s) being less than the amount required to be deposited for such month(s), pursuant to clauses (A), (B) and (C), above; , plus, (E) Unless previously deposited by the Company with the Trustee in compliance with the requirements of Section 2.4(c) hereof, the amount necessary to pay any additional interest, calculated at the Default Rate, in respect of a late payment on the Certificates, as set forth in Section 2.4(c); then (ii) to the Debt Service Reserve Account, the amount, if any, necessary to satisfy (or all remaining available amounts if not sufficient to satisfy) the Debt Service Reserve Requirement; then, (iii) to the Capital Repair and Replacement Account, commencing with the first monthly ESPC Task Order Payment, and subject to the maximum funding level set forth in Section 3.8(b) hereof, [$16,667.00], plus the amount of any unrestored shortfall occurring in any prior month(s) as a result of the amount available for deposit in such month(s) being less than the amount required to be deposited for such month(s); and (iv) the balance to the Company Account. (d) Notwithstanding the provisions of Section 3.6(c) above, if the Government commences to make ESPC Task Order Payments in or applicable to any month (an "Early Month") which is more than six (6) calendar months prior to the date the first Principal payment is scheduled to be made on the Certificates, then, for each such Early Month ESPC Task Order Payment, the Trustee shall transfer to the Debt Service Reserve Account an amount equal to one-sixth (1/6) of the Interest and one-sixth (1/6) of the Principal scheduled to be paid on the first scheduled Principal Payment Date, plus, the amounts required pursuant to Section 3.6(c) (i)(C) and (D) above, and shall transfer to the Capital Repair and Replacement Account the amount required pursuant to Section 3.6(c)(iii) above. (e) When no Certificates remain Outstanding, the balance, if any, in the ESPC Task Order Payment Account shall be transferred to the Company Account, and the ESPC Task Order Payment Account shall be closed. Section 3.7 Establishment and Application of Certificate Payment Account. (a) Within the Trust Fund, there is hereby established a special account to be designated as the "HEC/Tobyhanna Energy Project, Inc. Certificate Payment Account", referred to herein as the "Certificate Payment Account", which shall consist of a General Subaccount and a Termination Payment Subaccount. Except for amounts required to be deposited to the Termination Payment Subaccount pursuant to Section 3.7(f) hereof, all amounts transferred to or deposited in the Certificate Payment Account shall be deposited in, and disbursed from the General Subaccount The Trustee shall administer the Certificate Payment Account as provided in this Section 3.7. (b) The Trustee shall transfer funds from the ESPC Task Order Payment Account to the Certificate Payment Account in accordance with Section 3.6(c)(i) hereof. (c) Prior to the occurrence of partial or full Acceptance and the commencement of ESPC Task Order Payments by the Government, unless the Certificates have been accelerated by the Trustee pursuant to Section 4.2(a) or (b) hereof or are subject to redemption pursuant to Sections 5.1, 5.2 or 5.3 hereof, then, on each Payment Date, the Trustee shall cause funds in an amount equal to the Interest due on the Certificates on such Payment Date to be on deposit in the Certificate Payment Account, from and to the extent of monies in the following Trust Fund accounts in the following priority, and shall disburse such funds to the Holders of Outstanding Certificates on such Payment Date: (i) by transfers from the Capitalized Interest Subaccount; then (ii) by transfers from the Debt Service Reserve Account; then (iii)by transfers from the Construction Account; then (iv) by transfers from the Gate Station Reserve Account; then (v) by transfers from the Company Account. (d) Following the occurrence of partial or full Acceptance and the commencement of ESPC Task Order Payments by the Government, unless the Certificates have been accelerated by the Trustee pursuant to Section 4.2(a) or (b) hereof or are subject to redemption pursuant to Sections 5.1, 5.2 or 5.3 hereof, then, on each Payment Date, the Trustee shall cause funds in an amount equal to the Interest and/or Principal due on the Certificates on such Payment Date to be on deposit in the Certificate Payment Account, first, by making the transfers described in Section 3.6(c)(i), and in the event of any shortfall, then from and to the extent of monies in the following Trust Fund accounts in the following priority, and shall disburse such funds to the Holders of Outstanding Certificates on such Payment Date: (i) by transfers from the Capitalized Interest Subaccount; then (ii) by transfers from the Capitalized Principal Subaccount; then (iii)by transfers from the Debt Service Reserve Account; then (iv) by transfers from the Company Account; then (v) by transfers from the Construction Account; then (vi) by transfers from the Gate Station Reserve Account; then (vii)by transfers from the Capital Repair and Replacement Account. (e) On a semi-annual basis, one (1) Business Day after making the payment to Certificate Holders required pursuant to Section 3.7(d) above, the Trustee shall transfer the balance, if any, of the Coverage Amount remaining in the Certificate Payment Account to the Company Account. (f) There shall be deposited in the Termination Payment Subaccount all payments received from the Government as a result of the exercise of the termination for convenience of the Government provision of the ESPC Task Order. (g) In the event of any acceleration of the Certificates pursuant to Section 4.2(a) or (b) hereof, or any redemption of all of the Certificates pursuant to Sections 5.1, 5.2 or 5.3(a) or (b) hereof, on the special Payment Date fixed for such redemption, the Trustee shall transfer to the Certificate Payment Account all monies held in all Trust Fund accounts and shall disburse such funds to the Holders of Outstanding Certificates on such special Payment Date, such distribution to be made on a pro rata basis in case such funds are not sufficient to pay in full the whole amount so due and unpaid. (h) In the event of any redemption of the Certificates, in part, pursuant to Section 5.3(a) hereof, on the special Payment Date fixed for such redemption, the Trustee shall disburse from the Termination Payment Subaccount the funds deposited therein pursuant to Section 3.7(f) hereof to the Holders of such Outstanding Certificates to be redeemed on such special Payment Date. (i) In the event of any redemption of the Certificates, in part, pursuant to Section 5.3(b) hereof, on the special Payment Date fixed for such redemption, the Trustee shall transfer to the Certificate Payment Account from the Capital Proceeds Account an amount equal to the Principal due on the Certificates to be redeemed on such special Payment Date and shall transfer to the Certificate Payment Account from the Capitalized Interest Debt Service Account, the Certificate Payment Account and the Debt Service Reserve Account (in the foregoing order of priority) an amount equal to the Interest due on the Certificates to be so redeemed, and shall disburse the funds so transferred to the Holders of such Outstanding Certificates to be redeemed on such special Payment Date. (j) When no Certificates remain Outstanding, the balance, if any, in the Certificate Payment Account shall be transferred to the Company Account and the Certificate Payment Account shall be closed. Section 3.8 Establishment and Application of Capital Repair and Replacement Account. (a) tc "Section 3.8 Establishment and Application of Capital Repair and Replacement Account" \f # \l 2 Within the Trust Fund, there is hereby established an account referred to as the "HEC/Tobyhanna Energy Project, Inc. Capital Repair and Replacement Account", referred to herein as the "Capital Repair and Replacement Account". The Trustee shall administer the Capital Repair and Replacement Account as provided in this Section 3.8. (b) The Trustee shall transfer funds from the ESPC Task Order Payment Account to the Capital Repair and Replacement Account in accordance with Section 3.6(c)(iii) hereof; provided, however, that when the initial balance in the Capital Repair and Replacement Account reaches $600,000, the Trustee shall not make any further transfers from the ESPC Task Order Payment Account. (c) Disbursements from the Capital Repair and Replacement Account shall be made by the Trustee from time to time upon receipt by the Trustee of a completed and fully executed requisition in the form attached hereto as Exhibit 3.8. (d) When no Certificates remain Outstanding, the balance, if any, in the Capital Repair and Replacement Account shall be transferred to the Company Account and the Capital Repair and Replacement Account shall be closed. Section 3.9 Establishment and Application of Capital Proceeds Account. (a) Within the Trust Fund, there is hereby established a special account to be designated as the "HEC/Tobyhanna Energy Project, Inc. Capital Proceeds Account", referred to herein as the "Capital Proceeds Account". The Trustee shall administer the Capital Proceeds Account as provided in this Section 3.9. (b) On or after the date of Acceptance, there shall be deposited in the Capital Proceeds Account any of the following: (i) subject to Section 7.20(h) hereof, all proceeds of condemnation received by the Trustee; (ii) all casualty insurance payments or other payments received by the Trustee; (iii) any liquidated damages or other payments received by the Trustee from any contractor or surety; and (iv) all proceeds of foreclosure received by the Trustee. (c) The Trustee shall make transfers and distributions from the Capital Proceeds Account as provided in Section 3.7(g) or (i) and Section 7.20 hereof. (d) When no Certificates remain Outstanding, any amounts remaining in the Capital Proceeds Account shall be transferred to the Company Account, and the Capital Proceeds Account shall be closed. Section 3.10 Establishment and Application of Company Account. (a) Within the Trust Fund, there is hereby established an account referred to as the "HEC/Tobyhanna Energy Project, Inc. Company Account", referred to herein as the "Company Account". The Trustee shall administer the Company Account as provided in this Section 3.10. (b) The Trustee shall make the deposits and transfers to the Company Account required pursuant to Sections 3.3(e), 3.4(e), 3.5(e), 3.6(c)(iv), 3.6(d), 3.7(j), 3.8(d), 3.9(d) and 3.11(b) hereof. (c) Prior to making any disbursement described in Section 3.10(d) hereof, the Trustee shall make transfers from the Company Account as provided in Sections 3.5(d) and 3.7(c) or (d) hereof, and shall make transfers to the Certificate Payment Account to the extent necessary to eliminate any shortfall described in Section 3.6(c)(i)(D) hereof and to the Capital Repair and Replacement Account to the extent necessary to eliminate any shortfall described in Section 3.6(c)(iii) hereof. (d) Three (3) Business Days after the last to occur of (A) the making of any required transfers pursuant to Section 3.10(c) and (B) the payment of any outstanding obligations of the Company due to the Trustee (other than amounts due on the Project Note), the Trustee shall, on a monthly basis, disburse to, or at the direction of, the Company the balance of funds in the Company Account. (e) When no Certificates remain Outstanding, the balance, if any, in the Company Account shall be transferred to pay any outstanding obligations of the Company due to the Trustee with respect to the ESPC Project or the Trust Agreement. After such transfers have been made, the balance, if any, in the Company Account shall be transferred to the Company, and the Company Account shall be closed. Section 3.11 Deposit and Investment of Moneys in Trust Fund; Certain Transfers and Distributions. (a) All monies held in the Trust Fund shall at all times be invested in Permitted Investments. The Trustee shall invest monies in the Trust Fund in Permitted Investments pursuant to written instructions from the Company delivered to the Trustee at Closing and from time to time thereafter. In the absence of written instructions, or if the Trustee is unable to invest the Trust Funds in Permitted Investments in accordance with the Company's investment instructions, the Trustee shall invest the Trust Funds in the investments described in clause (vi) of the definition of Permitted Investments,having due regard for the dates upon which such monies will be required for uses and purposes specified in this Escrow Agreement. (b) All interest or other income earned on the ESPC Task Order Payment Account, the Certificate Payment Account and the Capital Repair and Replacement Account shall be transferred on a semi-annual basis to the Company Account. All interest or other income earned on all other accounts shall be retained in the respective account where earned and shall be applied as stated in the relevant sections of this Trust Agreement governing application of funds in such account. (c) The Trustee shall not be liable for any loss resulting from the making or disposition of any investment pursuant to the provisions of Section 3.11(a) hereof, and any such losses shall be charged to the account with respect to which such investment was made. The Company shall be liable and shall reimburse the Trustee for any loss resulting from the making or disposition at its direction of any investment pursuant to Section 3.11(a) hereof. (d) The Company or the Contractor, each in its discretion, at any time may advance funds to the Trustee. Such funds shall be deposited by the Trustee in the accounts maintained within the Trust Fund as designated by the party depositing the same. Except for an Event of default described in Section 4.1(b) hereof, to the extent that any other Event of Default existed hereunder as a result of the absence of funds, the advance of sufficient funds to the Trustee to cure such Event of Default shall be accepted by the Trustee and shall cure such Event of Default. The Trustee shall have no obligation to repay the Company or the Contractor any amount so advanced thereby. Section 3.12 Termination Of Trust Fund. (a) If and when (i) the Certificates and the Project Note shall have become due and payable in accordance with their respective terms, and the whole amount of the Principal and the Interest so due and payable upon all of the Certificatesand all amounts due the Trustee shall be paid, and all administrative expenses hereunder and under the Trust Agreement have been paid or provided for, or (ii)(A) there shall have been deposited with the Trustee either monies in an amount which shall be sufficient, or Investment Securities (hereinafter defined) the principal of and the interest on which when due will provide monies which, together with the monies, if any, deposited with the Trustee at the same time, shall be sufficient, to pay when due the Principal of and Interest due and to become due on said Certificates (and the related principal and interest on the Project Note) on or prior to the maturity date thereof, and (B) provisions shall have been made with the Trustee that other than the amounts designated in clause (1) of the parenthetical provision set forth below in this Section 3.12(a), neither the Investment Securities nor monies deposited with the Trustee pursuant to this Section 3.12 nor principal or interest payments on any such Investment Securities shall be withdrawn or used for any purposes other than, and shall be held in trust for, the payment of Principal and Interest on said Certificates (and the related principal and interest on the Project Note) (provided that any cash not required for such purpose from such principal or interest payments on such Investment Securities deposited with the Trustee, (1) to the extent that such cash will not be required at any time for such purpose and all administrative expenses hereunder and have been paid or provided for, shall be paid over to the Company as received by the Trustee together with any balances in any fund or account created (other than by this Section 3.12) under this Trust Agreement, free and clear of any trust, lein or pledge or assignment securing said Certificates and the Project Note and (2) to the extent such cash will be required for such purpose at a later date, shall to the extent practicable, be reinvested in Investment Securities maturing at times and in amounts sufficient to pay when due the Principal and Interest to become due on said Certificates (and the related principal and interest on the Project Note), on or prior to the maturity date thereof and interest earned from such reinvestments, to the extent that such interest shall not be required for such purpose and all administrative expenses hereunder and have been paid or provided for, shall be paid over to the Company as received by the Trustee, free and clear of any trust, lien, pledge or assignment securing said Certificates), then the Trustee shall assign and transfer to or upon order of the Company all cash and real or personal property (in excess of the amounts required for the foregoing) then held by the Trustee. For the purposes of this Section 3.12, "Investment Securities" shall mean only the types of securities that are non-callable and which are listed in clause (i) of the definition of Permitted Investments. (b) Upon compliance by the Company with the provisions of clauses (i) or (ii) of Section 3.12(a) hereof, the Trustee shall assign, without recourse, to the Company (or its designee) the Trustee's Interest in all documents relating to the ESPC Project to which documents the Trustee is a party and shall execute such documents prepared by the Company (or such designee) as may be reasonably required by the Company in this regard, all to the extent permitted by applicable law, and thereafter no party hereto shall have any further obligations under this Trust Agreement other than continued compliance, to the extent required therein, with Section 3.12(a) hereof, provided, however, that provision for payment of Principal and Interest on the Certificates shall not be deemed to have been made pursuant to clause (ii) of Section 3.12(a) hereof, (1) until the Trustee has received the opinion of a certified public accountant of recognized national standing (the costs of which opinion shall be paid for by the Company) that the monies and Investment Securities deposited with the Trustee will be sufficient in time and amount to pay all amounts due on the Certificates, (ii) until the Trustee has received an Opinion of Counsel reasonably acceptable to the Trustee that the monies and Investment Securities deposited with the Trustee cannot be recovered by a trustee in bankruptcy upon the bankruptcy of the Company pursuant to Sections 544, 547 and 550 of the United States Bankruptcy Code and (iii) until the Trustee has received an Opinion of Counsel reasonably acceptable to the Trustee that there will be no resulting adverse effect on the fixed investment trust status of the Trust created by the Trust Agreement for federal income tax purposes. ARTICLE IV DEFAULT; REMEDIES Section 4. Section 4.1 Events of Default The occurrence of any one or more of the following events shall constitute an Event of Default (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary, or be effected by operation of law or pursuantto a judgment, decree or order of any court or any order, directive, rule or regulation of any administrative or governmental body): (a) on any regular or special Payment Date, there are insufficient funds contained in the Certificate Payment Account (after making transfers of available funds, if any, as specified in Section 3.7 hereof) in the Trust Fund to pay the Principal and Interest due on such Payment Date with respect to the Certificates; or (b) the entry of a decree or order by a court having jurisdiction in the premises adjudging the Company bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under Title 11 of the United States Code or any successor thereto, or any other applicable federal or state law or law of the District of Columbia, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of ninety (90) consecutive days; or (c) the institution by the Company of proceedings to be adjudicated bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under Title 11 of the United States Code or any successor thereto, or any other applicable federal or state law or law of the District of Columbia, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action; or (d) if Acceptance does not occur on or prior to December 31, 2000; or (e) any material representation or warranty made by the Company herein or in the Project Loan Agreement is incorrect or misleading to an extent deemed by the Trustee, in its sole judgment, to be material; or (f) the occurrence of a default (other than as described in clauses (a)-(e) above) by the Company in the due observance or performance of any covenant or agreement set forth herein, in the Project Loan Agreement or in the Project Management Services Agreement, and such default shall have continued for a period of thirty (30) days after notice thereof given by the Trustee to the Company; provided, however, that if such default is curable but cannot be cured with diligent efforts within such thirty (30) day period, and if extending the cure period will not subject the Trustee to any claim or liability, or the ESPC Project to any lien, or result in the breach of the ESPC Task Order, or the termination or impairment of this Trust Agreement or the Project Loan Agreement, the Project Management Services Agreement, the Certificates or any other agreement to which the Trustee is a party, so long as the Company shall initiate the cure of such default within such initial thirty (30) day period and thereafter shall continuously and diligently prosecute such cure to completion, the cure period shall be extended for an additional sixty (60) days; or (g) either (i) the occurrence (and continuance beyond any applicable cure period therein provided) of a breach, failure or default by the Contractor in the due observance or performance of any covenant or agreement set forth in the Project Management Services Agreement, or (ii) the receipt by the Company or the Trustee of any cure or show cause notice, or notice of default, from the Government pursuant to the terms of the ESPC Task Order alleging a breach in the performance of the work thereunder, and the continuation of such breach beyond the shorter of (A) thirty (30) days from receipt of any such notice or (B) the cure period set forth in such notice, less five (5) days. Section 4.2 Acceleration; Remedies on Event of Default (a) Upon the occurrence of an Event of Default described in Section 4.1(a) above, the Trustee may, and upon the direction of the Holders of not less than a majority in Principal amount of the Certificates Outstanding shall, exercise any one or more of the following remedies: (i) refuse to make further Advances under the Project Loan Agreement; (ii) declare all Principal of and accrued Interest on the Outstanding Certificates due and payable on the date such declaration is given; (iii) exercise its rights under the Project Note and this Trust Agreement with respect to the Pledged Property, including its rights as a secured party under the Uniform Commercial Code in effect in the Commonwealth of Pennsylvania, in which case any foreclosure proceeds payable to the Trustee shall be deposited with the Trustee; (iv) exercise any other right, remedy or privilege which may be available to it under the ESPC Task Order or under applicable law, including without limitation, pursuit of an action for nonpayment against the Government in the U.S. Court of Federal Claims. (b) Upon the occurrence of an Event of Default described in Sections 4.1(b) and (c) above, all Principal of and accrued Interest on the Outstanding Certificates shall automatically become immediately due and payable, and the Trustee, to the extent permitted by applicable law, shall exercise any one or more of the remedies described in Sections 4.2(a)(i), (iii) or (iv), above. (c) Upon the occurrence of an Event of Default described in Sections 4.1(e) or (f) above, the Trustee may, and upon the direction of the Holders of not less than a majority in Principal amount of the Certificates Outstanding shall, exercise one or more of the remedies described in Sections 4.2(a)(i), (iii) or (iv) above. (d) Upon the occurrence of an Event of Default described in Section 4.1(d) or (g) above, the Trustee shall immediately replace, or cause the Company to replace, the Contractor under the ESPC Task Order, and exercise all rights, powers and privileges of either the Company or the Contractor under the ESPC Task Order and the Project Management Services Agreement, and utilize any monies held by the Trustee in any of the accounts established as part of the Trust Fund (i) in connection with the exercise of such rights, powers and privileges and (ii) to pay debt service on the Certificates. (e) At any time after either an automatic acceleration under Section 4.2(b) has occurred or a declaration of acceleration under Section 4.2(a) has been made, and before any sale of the Collateral, or any part thereof, pursuant to this Trust Agreement shall have been made pursuant to any power of sale as hereinafter in this Article, the Holders of a majority in Principal amount of the Certificates Outstanding, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if (i) there shall have been paid to or deposited with the Trustee a sum sufficient to pay (A) all overdue installments of Interest on all Certificates, (B) the Principal of (and premium, if any, on) any Certificates which have become due otherwise than by such declaration of acceleration and interest thereon at the respective rates provided in the Certificates for late payments of Principal or premium, (C) to the extent that payment of such interest is lawful, interest upon overdue installments of Interest at the respective rates provided in the Certificates for late payments of Interest, and (D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and (E) all Events of Default, other than the non-payment of the Principal of Certificates which have become due solely by such acceleration, have been cured or waived as provided in Section 4.10. No such rescission shall affect any subsequent default or impair any right consequent thereon. Section 4.3 Notice of Default. The Trustee shall give written notice by first class postage prepaid mail to the Certificate Holders (or if the Certificates are then evidenced by one or more Global certificates, to the Depositary) as soon as practicable, but in no event later than five Business Days after the Trustee receives notice of any Event of Default. If such notice relates to failure to pay any ESPC Task Order Payment, it shall specify the amount of the ESPC Task Order Payment not so paid. Section 4.4 Notice of Acceleration or Redemption. When the Trustee is required or elects to accelerate or redeem any of the Certificates in accordance herewith, the Trustee shall issue the notice of acceleration or redemption to the Certificate Holders (or if the Certificates are then evidenced by one or more Global Certificates, to the Depositary) and the Company. Each notice of acceleration or redemption shall set forth the date and the place of acceleration or redemption, and such additional matters as may be directed by the Company. Each notice of acceleration or redemption shall be mailed, first class postage prepaid, as soon as practicable. Notices of acceleration shall be mailed not later than seven days after the Trustee determines any of the Certificates are to be accelerated. Notices of redemption shall be mailed not less than 15 days nor more than 60 days prior to the date set for redemption. Section 4.5 Trustee's Power of Sale; Power to Bring Suit If an Event of Default (other than an Event of Default described in Section 4.1(d) (if the Trustee is pursuing the remedy provided in Section 4.2(d)), or in Section 4.1(g)) shall have occurred and be continuing, subject to the provisions of Sections 4.8 and 4.9 hereof, the Trustee, by such officer or agent as it may appoint, may: (a) sell, to the extent permitted by law, without recourse, for cash, or credit or for other property, for immediate or future delivery, and for such price or prices and on such terms as the Trustee in its discretion may determine, the Pledged Property as an entirety, or in any such portions as the Holders of a majority in aggregate Principal amount of the Certificates then Outstanding shall request, or, in the absence of such request, as the Trustee in its discretion shall deem expedient in the Interest of the Certificate Holders, at public or private sale; and/or (b) proceed by one or more suits, actions or proceedings at law or in equity or otherwise or by any other appropriate remedy, to enforce payment of the Certificates, or to foreclose this Trust Agreement or to sell the Pledged Property under a judgment or decree of a court or courts of competent jurisdiction, or by the enforcement of any such other appropriate legal or equitable remedy, as the Trustee, being advised by counsel, shall deem most effectual to protect and enforce any of its rights or powers or any of the rights or powers of the Certificate Holders. Section 4.6 Incidents of Sale of Pledged Property Upon or in connection with any sale of all or any part of the Pledged Property made either under the power of sale given under this Trust Agreement, under judgment or decree in any judicial proceedings for foreclosure, under the provisions of the Uniform Commercial Code applicable in Pennsylvania or otherwise for the enforcement of this Trust Agreement, the following shall be applicable: (a) The Trustee is hereby irrevocably appointed the true and lawful attorney of the Company, in its name and stead, to make all necessary deeds, bills of sale and instruments of assignment, transfer or conveyance of the property thus sold; and for that purpose the Trustee may execute all such documents and instruments and may substitute one or more persons with like power; and the Company hereby ratifies and confirms all that its said attorneys, or such substitute or substitutes, shall lawfully do by virtue hereof. (b) If so requested by the Trustee or by any purchaser, the Company shall ratify and confirm any such sale or transfer by executing and delivering to the Trustee or to such purchaser or purchasers all proper deeds, bills of sale, instruments of assignment, conveyance or transfer and releases as may be designated in any such request. (c) Any Certificate Holder or the Trustee may bid for and purchase any of the Pledged Property, and upon compliance with the terms of sale, may hold, retain, possess and dispose of such Pledged Property in his or its own absolute right without further accountability. (d) The receipt of the Trustee or of the officer making such sale under judicial proceedings shall be a sufficient discharge to any purchaser for his purchase money, and, after paying such purchase money and receiving such receipt, such purchaser or his personal representative or assigns shall not be obliged to see to the application of such purchase money, or be in any way answerable for any loss, misapplication or non-application thereof. (e) Any such sale shall operate to divest the Company of all right, title, interest, claim and demand whatsoever, either at law or in equity otherwise, in and to the Pledged Property so sold, and shall be a perpetual bar both at law and in equity or otherwise against the Company, and its successors and assigns, and any and all persons claiming or who may claim the Pledged Property sold or any part hereof from, through or under the Company, or its successors and assigns. (f) Any monies collected by the Trustee upon any sale made either under the power of sale given by this Trust Agreement or under judgment or decree in any judicial proceedings for foreclosure or otherwise for the enforcement of this Trust Agreement, shall be applied as provided in Section 4.11. Section 4.7 Judicial Proceedings Instituted by Trustee (a) The Trustee is hereby irrevocably appointed (and the successive respective Holders of the Certificates, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) the true and lawful attorney-in-fact of the respective Holders, with authority to (i) make and file in the respective names of the Holders (subject to deduction from any such claims of the amounts of any claims filed by any of the Holders themselves), any claim, proof of claim or amendment thereof, debt, proof of debt or amendment thereof, petition or other document in any such proceedings and to receive payment of any amounts distributable on account thereof, (ii) execute any such other papers and documents and to do and perform any and all such acts and things for and on behalf of such Holders, as may be necessary or advisable in order to have the respective claims of the Trustee and of the Holders against the Company or any such obligor, the Pledged Property or any other property of the Company allowed in any such proceeding and (iii) receive payment of or on account of such claims and debt; provided, however, that nothing contained in this Trust Agreement shall be deemed to give to the Trustee any right to accept or consent to any plan of reorganization or otherwise by action of any character in any such proceeding to waive or change in any way any right of any Holder. Any monies collected by the Trustee under this Section shall be applied as provided in Section 4.11. (b) All rights of action and of asserting claims under this Trust Agreement or under any of the Certificates enforceable by the Trustee may be enforced by the Trustee without possession of any of such Certificates or the production thereof at the trial or other proceedings relative thereto. (c) Any suit, action or other proceeding at law, in equity or otherwise which shall be instituted by the Trustee under any of the provisions of this Trust Agreement shall be for the equal, ratable and common benefit of all the Holders, subject to the provisions of this Trust Agreement. Section 4.8 Certificate Holders May Demand Enforcement of Rights by Trustee If an Event of Default (other than an Event of Default described in Section 4.1(d) (if the Trustee is pursuing the remedy provided in Section 4.2(d)), or in Section 4.1(g)) shall have occurred and shall be continuing, the Trustee shall, upon the written request of the Holders of a majority in aggregate Principal amount of the Certificates then Outstanding, and upon the offering of indemnity as provided in Section 6.3,proceed to institute, one or more suits, actions or proceedings at law, in equity or otherwise, or take any other appropriate remedy, to enforce payment of the Principal of, or premium, if any, or Interest on, the Certificates or to foreclose this Trust Agreement or to sell the Pledged Property under a judgment or decree of a court or courts of competent jurisdiction or under the power of sale herein granted, or take such other appropriate legal, equitable or other remedy, as the Trustee, being advised by counsel, shall deem most effectual to protect and enforce any of the rights or powers of the Trustee or the Holders, or, in case such Holders shall have requested a specific method of enforcement permitted hereunder, in the manner requested, provided that such action shall not be otherwise than in accordance with law and the provisions of this Trust Agreement, and the Trustee, subject to such indemnity provisions, shall have the right to decline to follow any such request if the Trustee in good faith shall determine that the suit, proceeding or exercise of the remedy so requested would involve the Trustee in personal liability or expense. Section 4.9 Control by Certificate Holders Holders of a majority in Principal amount of the Outstanding Certificates shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee, provided that (a) such direction shall not be in conflict with any rule of law or with this Trust Agreement, and (b) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. Section 4.10 Waiver of Past Defaults The Holders of not less than a majority in Principal amount of the Outstanding Certificates may, on behalf of the Holders of all the Certificates, waive any past defaults and its consequences, except that only the Holders of all Certificates affected thereby may waive a default (a) in the payment of the Principal of (or premium, if any) or Interest on such Certificates, or (b) in respect of a covenant or provision hereof which under Article IX cannot be modified or amended without the consent of the Holder of each Outstanding Certificate affected. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Trust Agreement; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. Section 4.11 Application of Monies Collected by Trustee. Any monies collected or to be applied by the Trustee pursuant to this Article, together with any other monies which may then be held by the Trustee under any of the provisions of this Trust Agreement as security for the Certificates (other than monies at the time required to be held for the payment of specific Certificates at their stated maturates or at a time fixed for the redemption thereof) shall be applied in the following order from time to time, on the date or dates fixed by the Trustee and, in the case of a distribution of such monies on account of Principal, premium, if any, or Interest, upon presentation of the several Outstanding Certificates, and stamping thereon of payment, if only partially paid, and upon surrender thereof, if fully paid: FIRST: to the payment of all taxes, assessments or liens, imposed upon or payable from the Pledged Property, and prior to the lien of this Trust Agreement, except those subject to which any sale shall have been made, all reasonable costs and expenses of collection, including the reasonable costs and expenses of handling the Collateral and of any sale thereof pursuant to the provisions of this Article and of the enforcement of any remedies hereunder, and to the payment of all amounts due the Trustee or any predecessor Trustee; SECOND: in case the Principal of the Certificates or any of them shall not have become due, to the payment of any Interest in default, in the order of the maturity of the installments of such Interest, with Interest at the rates specified in the respective Certificates in respect of overdue payments (to the extent that payment of such interest shall be legally enforceable) on the overdue installments thereof ratably, without discrimination or preference; THIRD: in case the Principal of any of but not all the Certificates shall have become due at their stated maturities, upon redemption or otherwise, first to the payment of accrued Interest in the order of the maturity of the installments thereof, with Interest at the respective rates specified in the Certificates in respect of payments on overdue Principal, premium, if any, and (to the extent that payment of such interest shall be legally enforceable) on overdue installments of Interest, and next to the payment of the Principal of all Certificates then due ratably, without discrimination or preference; FOURTH: in case the Principal of all the Certificates shall have become due at their stated maturities, by declaration, upon redemption or otherwise, to the payment of the whole amount then due and unpaid upon the Certificates then Outstanding for Principal, premium, if any, and Interest, together with Interest at the respective rates specified in the Certificates in respect of overdue payments on Principal, premium, if any, and (to the extent that payment of such interest shall be legally enforceable) on overdue installments of Interest, and, in case such proceeds shall be insufficient to pay in full the whole amount so due and unpaid, then to the payment of such Principal, premium, if any, and Interest ratably, without discrimination or preference; and FIFTH: in case the Principal of all the Certificates shall have become due at their stated maturities, by declaration, upon redemption or otherwise, and all of such Certificates shall have been fully paid, together with all interest (including any interest on overdue payments) and premium, if any, thereon, any surplus then remaining shall be paid to the Company, its successors or assigns, or to whomsoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may direct; Section 4.12 Rights and Remedies of Certificate Holders. Each Holder shall have the absolute and unconditional right to receive payment of all amounts due on any Certificate held thereby and to institute suit against the Government for the enforcement of any such payment, such right not to be impaired without the consent of such Holder. Notwithstanding the foregoing, no Holder of any Certificate shall have any right to institute any suit, action or proceeding for the enforcement of this Trust Agreement, for the execution of any trust thereof or any other remedy thereunder, unless (i) an Event of Default under Section 4.1 hereof has occurred; (ii) the Holders of not less than a majority of the aggregate Principal of Certificates then Outstanding shall have made written request to the Trustee and shall have offered the Trustee reasonable opportunity either to proceed to exercise the powers hereinbefore granted to institute such action, suit or proceeding in its own name; (iii) such Holders have offered the Trustee indemnification in a manner satisfactory to it for any liability and expense either of them might incur in carrying out the aforementioned request; and (iv) the Trustee shall thereafter fail or refuse to exercise the powers herein before granted, or to institute such action, suit or proceeding in its, his or their own name or names. Such request and offer of indemnity are hereby declared in every case at the option of the Trustee to be conditions precedent to the execution of the powers and trusts of this Trust Agreement, and to the initiation of any action or cause of action for the enforcement of this Trust Agreement; provided, however, that the Trustee may not, as condition precedent to the execution of the powers and trusts hereunder, request indemnification for liability arising out of the Trustee's grossly negligent or willful action, misconduct or failure to act, it being understood and intended that no one or more of the Holders of the Certificates shall have any right in any manner whatsoever to affect, disturb or prejudice the lien of this Trust Agreement by its, his or their action or to enforce any right hereunder except in the manner provided herein, and that proceedings shall be instituted, had and maintained in the manner provided herein, and for the ratable benefit (based on the then outstanding Principal amount of each Certificate) of the Holders of all Certificates then Outstanding. Nothing in this Trust Agreement shall, however, affect or impair the right of any Certificate Holder to enforce the payment of the Principal of and Interest on any Certificate at and after the maturity thereof, or the obligation of the Trustee to pay the Principal, and Interest on each of the Certificates issued hereunder to the respective Holders thereof at the time and place and from the source and in the manner provided in said Certificates. Section 4.13 Termination of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Trust Agreement and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely then and in every such case the Company, the Trustee and the Certificate Holders shall be restored to their former positions and rights hereunder, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken. Section 4.14 Remedies Cumulative; Delay or Omission Not a Waiver. Every remedy given hereunder to the Trustee or to any of the Certificate Holders shall not be exclusive of any other remedy or remedies, and every such remedy shall be cumulative and in addition to every other remedy given hereunder or now or hereafter given by statute, law, equity or otherwise. The Trustee may exercise all or any of the powers, rights or remedies given to it hereunder or which may now or hereafter be given by statute, law or equity or otherwise, in its absolute discretion. No course of dealing between the Company and the Trustee or the Certificate Holders, or any delay or omission of the Trustee or of any Holder to exercise any right, remedy or power accruing upon any Event of Default shall impair any such right, remedy or power or shall be construed to be a waiver of any such Event of Default or of any right of the Trustee or of the Certificate Holders or acquiescence therein, and, subject to the provisions of Section 4.9, every right, remedy and power given by this Article to the Trustee or to the Certificate Holders may be exercised from time to time and as often as may be deemed expedient by the Trustee or by the Noteholders. ARTICLE V REDEMPTION Section 5. Section 5.1 Optional Redemption. The Certificates are subject to redemption before their stated maturity, in whole, at the option of the Company, on any date after the first anniversary ofthe Closing Date, at a Redemption Price equal to the Principal amount thereof Outstanding, together with accrued interest thereon to the date fixed for redemption, and the Make-Whole Premium (as defined below). The Company shall give written notice to the Trustee of its election to optionally redeem Certificates, including the date fixed for redemption. Such notice shall be given to the Trustee at least sixty (60) days prior to the specified redemption date, or such shorter period as shall be acceptable to the Trustee: For purposes of this Section 5.1, the term "Make-Whole Premium" shall mean the excess, if any, of (i) the aggregate present value, as of the Redemption Date for an optional redemption permitted hereunder, of each dollar of Principal being redeemed and the amount of Interest (exclusive of Interest accrued to the Redemption Date) that would have been payable in respect of such dollar if such redemption had not been made, determined by discounting such amounts at the Reinvestment Rate (as defined below) from the respective dates on which they would have been payable, over (ii) 100% of the Principal amount of the Outstanding Certificates being redeemed. If the Reinvestment Rate is equal to or greater than 7.625%, the Make-Whole Premium shall be zero. "Reinvestment Rate" shall mean the sum of (i) 0.25% plus (ii) the arithmetic mean of the yields under the respective headings "This Week" and "Last Week" published in the Statistical Release (as defined below) under the caption "Treasury Constant Maturities" for the maturity corresponding to the remaining term of the Certificates (rounded to the nearest month). If no maturity exactly corresponds to such remaining term of the Certificates, yields for the two published maturities most closely corresponding to such remaining term of the Certificates shall be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month. For the purposes of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Premium hereunder shall be used. "Statistical Release" shall mean the statistical release designated "H.15(519)" or any successor publication which is published weekly by the Federal Reserve System and which establishes yields on actively traded U.S. Government Securities adjusted to constant maturities or, if such statistical release is not published at the time of any determination hereunder, then such other reasonably comparable index which shall be designated by the Holders of a majority in aggregate Principal amount of the Outstanding Certificates. Section 5.2 Extraordinary Redemption in Whole. Event of Default occurs and the Trustee has, pursuant to Section 4.2 hereof, accelerated the Certificates, the Certificates shall be redeemed in whole at the Redemption Price equal to the Principal amount thereof Outstanding, with all accrued Interest thereon. Such redemption shall be made on a Redemption Date which shall be the date thirty (30) days after the date on which the Trustee shall have given the declaration of acceleration pursuant to Section 4.2 hereof (or if such day is not a Business Day, the preceding Business Day). If on such Redemption Date there are not sufficient monies available in the Trust Fund to pay in full the Interest accrued to the Redemption Date and the Principal amount of Certificates then Outstanding, the Trustee shall apply available monies first to the payment of Interest accrued to such Redemption Date with respect to the Certificates pro rata, if necessary, according to the total Interest so accrued, and second to the payment of Principal with respect to the Certificates, pro rata, if necessary according to the total Principal amount thereof then Outstanding. Section 5.3 Mandatory Redemption. (a) The Trustee shall be required to redeem the Certificates in whole, or in part, at the Redemption Price equal to the Principal amount thereof Outstanding, together with all accrued Interest thereon through the Redemption Date and with the Government Termination Redemption Premium, if the Company or the Government advises the Trustee that the Government is exercising its right to terminate the ESPC Task Order, in whole or in part, pursuant to the "termination for convenience of the Government" right contained therein. (b) The Trustee shall be required to redeem Certificates, in whole or in part, at the Redemption Price equal to the Principal amount thereof Outstanding, with all accrued Interest thereon through the Redemption Date, if the Company advises the Trustee that the ESPC Project has been damaged or destroyed by fire or other casualty, or becomes subject to condemnation or taking by eminent domain, and the available insurance or condemnation proceeds are to be applied in redemption of Certificates pursuant to the requirements of Sections 7.20(g) or (h) hereof. (c) If Certificates are to be redeemed in part pursuant to Section 5.3(a) hereof, the Principal amount of such Certificates to be redeemed shall be an amount equal to the principal portion of the termination payment proceeds. If Certificates are to be redeemed in part pursuant to Section 5.3(b) hereof, the Principal amount of such Certificates to be redeemed shall be equal to the amount of available insurance or condemnation proceedings received. (d) Any redemption pursuant to Section 5.3(a) or 5.3(b) hereof shall be made on a Redemption Date which shall be the date thirty (30) days after the date on which the available termination payment proceeds received in connection with a Section 5.3(a) event, or the available casualty or condemnation proceeds received in connection with a Section 5.3(b) event, are received by the Trustee (or if such day is not a Business Day, the preceding Business Day). Section 5.4 Partial Redemption Procedure. In the event of a partial redemption of Certificates pursuant to Section 5.3 hereof, the Certificates to be redeemed shall be redeemed on a reasonably proportionate basis, such basis to be determined and effectuated as nearly as practicable by the Trustee, utilizing the ratio described in the final sentence of Section 2.4(a) hereof. Certificates will be redeemable only in multiples of $1,000, provided that the Trustee shall, to the extent practicable, endeavor to maintain minimum denominations of $100,000. In the case of any Certificate in a denomination greater than $1,000, the Trustee shall treat each such Certificate as representing such number of separate certificates each of the denomination of $1,000 as is obtained by dividing the actual Principal amount of such Certificate by $1,000. Section 5.5 Notice of Redemption. Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 15 nor more than 60 days prior to the Redemption Date, to each Holder of Certificates to be redeemed, at the address appearing in the Certificate Register. All notices of redemption shall state: (a) the Redemption Date, (b) the Redemption Price, (c) if fewer than all Outstanding Certificates of any series are to be redeemed, the identification (and, in the case of partial redemption, the respective Principal amounts) of the particular Certificates, including the series and the stated maturity of Principal of such Certificates, to be redeemed, (d) that on the Redemption Date the Redemption Price will become due and payable upon each such Certificate, and that Interest thereon shall cease to accrue from and after said date, and (e) the place where such Certificates are to be surrendered for payment of the Redemption Price. Notice of redemption of Certificates to be redeemed shall be given by the Trustee in the name of the Company. Section 5.6 Certificates Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Certificates to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless there shall be a default in the payment of the Redemption Price) such Certificates shall cease to bear Interest. Upon surrender of such Certificates for redemption in accordance with said notice, such Certificates shall be paid at the Redemption Price, exclusive, however, of installments of Interest maturing on or prior to the Redemption Date, payment of which shall have been made or duly provided for to the Holders of such Notes registered as such on the relevant Record Dates, or otherwise, according to their terms. If any Certificate called for redemption shall not be so paid upon surrender thereof for redemption, the Principal (and premium, if any) shall, until paid, continue to bear Interest from the Redemption Date at the Default Rate. Section 5.7 Certificates Redeemed in Part. Any Certificate which is to be redeemed only in part shall be surrendered at the Principal Office of the Trustee (with due endorsement by, or a written instrument of transfer in form satisfactory to the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing) and the Trustee shall execute and deliver to the Holder of such Certificate a new Certificate or Certificates of the same series and the same stated maturity of Principal, of any authorized denomination as requested by such Holder in aggregate Principal amount equal to and in exchange for the unredeemed portion of the Principal of the Certificate so surrendered. ARTICLE VI THE TRUSTEE Section 6. Section 6.1 Employment of Trustee In consideration of the recitals hereinabove set forth and for other valuable consideration, the Company hereby appoints the Trustee to: (a) execute and deliver the Certificates; (b) receive the proceeds Proceeds from the sale of the Certificates; (c) receive all payments to be made to the Trustee in accordance with the terms of the ESPC Task Order and the assignment of payments thereunder; (d) receive all payments, if any, made to the Trustee pursuant to the HEC Contribution Agreement; (e) apply and disburse the payments received hereunder as provided for herein; and (f) perform all the other duties and obligations of the Trustee as provided for herein. Section 6.2 Acceptance Of Appointment The Trustee hereby accepts the appointment above referred to, subject to the terms and conditions of this Trust Agreement. The Trustee shall not be requiredto give any bond or surety in respect of the execution of the trust created hereby. Section 6.3 Duties By executing and delivering this Trust Agreement, the Trustee accepts the duties and obligation of the Trustee provided in this Trust Agreement, but only upon the terms and conditions set forth in this Trust Agreement. The Trustee undertakes to perform such duties, and only such duties, as are specifically set forth in this Trust Agreement and no implied duties or obligations shall be read into this Trust Agreement against the Trustee. The Trustee shall be under no obligation to institute any suit, or to take any proceeding under this Trust Agreement or to enter any appearance or in any way defend in any suit in which it may be made defendant, or to take any steps in the execution of the trusts hereby created or in the enforcement of any rights and powers hereunder, until it shall be paid or reimbursed or indemnified to its satisfaction by the Company against any and all reasonable costs and expenses, outlays and counsel fees and expenses and other reasonable disbursements. The Trustee may nevertheless begin suit, or appear in and defend suit, or do anything else in its judgment proper to be done by it as the Trustee, and in such case the Company shall reimburse the Trustee for all costs and expenses, outlays and counsel fees and expenses and other reasonable disbursements properly incurred in connection therewith. If the Company shall fail to make such reimbursement, the Trustee may, upon written notice to the Company, reimburse itself from any monies in the Company Account. Indemnification for liability for any action taken hereunder shall be made to the Trustee except for liability arising from the gross negligence, misconduct or default of the Trustee. Section 6.4 Removal and Resignation. A bank or trust company authorized to provide corporate trust services in Massachusetts and Pennsylvania may be substituted to act as Trustee under this Trust Agreement, either (a) upon written request of the Holders of a majority in aggregate Principal amount of Outstanding Certificates and, provided no Event of Default has occurred and is continuing hereunder, with the consent of the Company, which consent shall not be unreasonably withheld, or (b) by the Company, provided no Event of Default has occurred and is continuing hereunder. Such substitution shall not be deemed to affect the rights or obligations of the Holders. No such substitution shall be effective unless the Company furnishes a written acknowledgment from the Government agreeing to recognize such successor and agreeing to continue ESPC Task Order Payments pursuant to the Notice of Assignment. Upon any such substitution, the Trustee agrees to assign to such substitute Trustee its rights under this Trust Agreement and all related documents, and to deliver all documents and funds held in connection with this Trust Agreement to such substituted Trustee. Any such successor shall have capital and surplus exclusive of borrowed capital aggregating at least $50,000,000 and shall be subject to examination or supervision by a federal or state banking authority. The Trustee or any successor may at any time resign by giving mailed notice to all Holders, the Company and the Government of its intention to resign and of the proposed date of resignation, which shall be a date not less than 30 days after such notice is deposited in the United States mail with postage fully prepaid, unless an earlier resignation date and the appointment of a successor Trustee shall have been or is approved in writing by the Company. In the event that a successor Trustee is not appointed within 30 days after such notice is deposited in the United States mail, the Company or the resigning Trustee may petition the appropriate court having jurisdiction to appoint a successor Trustee. No resignation or removal of the Trustee and appointment of a successor Trustee shall become effective until (i) acceptance of appointment by the successor Trustee, (ii) receipt of written acknowledgment from the Government agreeing to recognize such successor and agreeing to continue ESPC Task Order Payments pursuant to the Notice of Assignment, and (iii) execution of documents releasing the Trustee from any further obligations under this Trust Agreement. Section 6.5 Property Held in Trust; Limitation on Authority. All monies and securities held by the Trustee at any time pursuant to the terms of this Trust Agreement shall be and hereby are assigned, transferred and set over unto the Trustee in trust for the purposes and under the terms and conditions of this Trust Agreement By its acceptance hereof, the Trustee acknowledges that the sole purpose of the trust created hereby shall be for the protection and conservation of the trust corpus, including the Pledged Property and the Trust Fund, for the benefit of the Certificate Holders. Notwithstanding any contrary provision contained herein, the Trustee acknowledges and agrees that it shall have no power or authority (i) to cause the trust to engage in any trade or business, or (ii) to vary the investment of the Certificate Holder. Section 6.6 Evidence on which Trustee may Act. The Trustee shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bond or other paper or document believed by it to be genuine, and to have been signed or presented by the proper party or parties. The Trustee may consult with counsel, who may or may not be of counsel to the Company, and may rely on an Opinion of Counsel. Any such Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered, or any action not taken, by it in good faith and in accordance therewith, and the Trustee shall not be liable for any action taken or omitted in good faith in reliance on such Opinion of Counsel. Whenever the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or not taking any action under this Trust Agreement, such matter (unless other evidence in respect thereof be hereby specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by an authorized officer of the Company, which evidence shall be furnished to the Trustee upon its reasonable request. Section 6.7 Co-Trustee. (a) At any time or times, for the purpose of meeting the legal requirements of any jurisdiction in which any part of the Trust Fund hereunder may at the time be located, the Trustee shall have power to appoint one or more persons approved by the Company either to act as co-trustee jointly with the Trustee, of all or any part of the Trust Fund hereunder, or to act as a separateco-trustee of any property constituting part thereof, in either case with such powers as may be provided in the instrument of appointment, and to vest in such person or persons in the capacity as aforesaid, any property, title, right or power deemed necessary or desirable, subject to the remaining provisions of this Section 6.7. (b) Every separate trustee or co-trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms: (i) The rights, powers, duties and obligations hereby conferred or imposed upon the Trustee shall apply to the Trustee and such separate or co-trustee jointly, as shall be provided in the instrument appointing such separate trustee or co-trustee, except to the extent that, under any law of any jurisdiction in which any particular act or acts are to be performed, the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations shall be exercised and performed by such separate trustee or co-trustee. (ii) The Trustee at any time, by an instrument in writing executed by it, may accept the resignation of or remove any separate trustee or co-trustee appointed under this Section 6.7. A successor to any separate trustee or co-trustee so resigned or removed may be appointed in the manner provided in this Section 6.7. (iii) No trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder. (iv) No power given hereby to any such separate trustee or co- trustee shall be separately exercised hereunder by such separate trustee or co-trustee except with the consent in writing of the Trustee, anything here in contained to the contrary notwithstanding. (c) Upon the acceptance in writing of such appointment by any such separate trustee or co-trustee it shall be vested with the estates or property specified in the instrument of appointment jointly with the Trustee (except insofar as local law makes it necessary for any such separate trustee to act alone) subject to all the terms of this Trust Agreement. Every such acceptance shall be filed with the Company. Any separate trustee or co- trustee may, at any time by an instrument in writing, constitute the Trustee its agent and attorney-in-fact, with full power and authority to do all acts and things and to exercise all discretion on its behalf and in its name. Section 6.8 Merger or Consolidation of Trustee. Section 6.8 Merger or Consolidation of Trustee." Any corporation or national banking association resulting from any merger or consolidation to which the Trustee or any successor to it shall be a party, or any corporation or national banking association in any manner succeeding to all or substantially all of the corporate trust business of the Trustee or any successor Trustee, shall be the successor Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation or national banking association, if not an affiliate of the Trustee, shall satisfy the requirements for a successor to the Trustee set forth in Section 6.4 hereof. Section 6.9 Compensation of Trustee The Trustee shall receive compensation for its services hereunder as set forth in the letter of even date herewith executed by the Trustee and the Company. Any and all amounts payable to the Trustee hereunder (including without limitation attorneys' fees) shall be payable by the Company, and for the payment of such amounts, the Trustee shall have a lien therefore on any and all funds at any time held by it in the Company Account. The compensation which the Trustee is entitled to receive hereunder shall not be limited by any provision of law regarding the compensation of a Trustee of an express trust. Section 6.10 Release and Indemnification Covenants. (a) The Company agrees to indemnify and hold harmless the Trustee and any member, director, official, employee and attorney of the Trustee (collectively called the "Indemnified Parties") from and against any and all losses, claims, damages or liabilities caused by any untrue statement of material fact with respect to the Company or the ESPC Project, or in the other documents, certificates and information submitted to the Trustee by the Company or caused by any omission of any material fact necessary to be stated to make such statements not misleading or not incomplete; and from and against all costs, counsel fees, expenses and liabilities incurred in connection with any claims asserted thereon. (b) In addition, the Company agrees that the Indemnified Parties shall not be liable for, and covenants and agrees to defend and indemnify the Indemnified Parties from and against, any and all costs, damages or liabilities which may arise out of issuing the Certificates or loaning the proceeds thereof to the Company and from any and all claims or actions by or on behalf of any person, firm, or Company, arising from any act, failure to act, or occurrence whatsoever with respect to the ESPC Project or arising from any breach or default on the part of the Company in the performance of any act to be performed pursuant to the terms of this Trust Agreement or the Assignment Agreement. (c) In case any action shall be brought against one or more of the Indemnified Parties based upon the provision of Section 6.10(a) or (b) hereof and in respect of which indemnity may be sought against the Company, such Indemnified Parties shall promptly notify the Company in writing, and the Company shall assume the defense thereof, including the employment of counsel the payment of all expenses and the right to negotiate and consent to settlement. Any one or more of the Indemnified Parties shall have the right to employ separate counsel in any such action and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Parties unless the employment of such counsel has been specifically authorized by the Company, except that in the case of any action concerning the matters referred to in Section 6.10(a) hereof, the fees and expenses of such counsel shall be borne by the Company. The Company shall not be liable for any settlement of any such action effected without its consent, but if settled with the consent of the Company or if there be a final judgment for the plaintiff in any such action, the Company agrees to indemnify and hold harmless the Indemnified Parties from and against any loss or liability by reason of such settlement or judgment. (d) The Company shall and hereby agrees to indemnify and save the Indemnified Parties harmless from and against all claims, losses and damages, including consequential damages and legal fees and expenses, arising out of (i) the administration of the Trust Fund under the Trust Agreement, including any duties the Trustee may have as assignee under the Assignment Agreement, and payee of the Project Note, and (ii) any act of negligence of the Company or any of their respective officers, agents, contractors, servants, employees, licenses or invitees in connection with the ESPC Project or the ESPC Task Order. Indemnification for any cause of action mentioned in this Section 6.10 shall be limited to the extent and amounts permitted by law. No indemnification will be made under this Section 6.10 or elsewhere in this Trust Agreement for the willful misconduct, gross negligence or breach of duty under this Trust Agreement by the Trustee, its officers, agents, employees, successors and assigns. (e) The provisions of this Section 6.10 shall survive repayment of the Certificates. ARTICLE VII REPRESENTATIONS AND COVENANTS OF THE COMPANY Section 7. Section 7.1 Authority to Contract The Company represents that it has authority to enter into and perform this Trust Agreement and has taken all actions necessary to authorize its execution and delivery by its authorized officer signing at the signature page hereof. Section 7.2 Adequacy of ESPC Task Order Payments. The Company represents that, to the best of its knowledge, the ESPC Task Order Payments, together with the portion of the Proceeds to be retained for such purpose, will be sufficient in amount and time to pay the Principal and Interest on the Certificates Outstanding as the same become due. The Company covenants and agrees that it will not agree to any amendment to the ESPC Task Order that would modify or reduce the Monthly Amortized Estimated Cost and/or the Amortization Payment, as such terms are used in the ESPC Contract and the ESPC Task Order,. The Company will not agree to amend the ESPC Task Order in any other respect without the prior written consent of the Trustee. Section 7.3 Construction, Maintenance and Operation of the ESPC Project. The Company will comply (or will cause the Contractor to comply) with the construction, installation, testing, operation, monitoring and verification, and maintenance provisions of the ESPC Task Order, and will enforce against the Contractor the terms and conditions of the Project Management Services Agreement to the extent required in order to comply with the provisions of the ESPC Task Order and this Trust Agreement. The Company will not amend the Project Management Services Agreement in any respect, and will not amend the UGI Pipeline Agreements in any material respect, in each instance without the prior written consent of the Trustee. Section 7.4 Governmental Approvals. The Company represents that it has obtained all material Governmental Approvals required for the construction, installation and operation of the ESPC Project, except for those Governmental Approvals listed on Schedule 7.4 attached hereto but which the Company reasonably expects to obtain in a timely manner and without material restrictions. Section 7.5 Further Assurances The Company covenants and agrees for the benefit of the Trustee and the Holders that at its own expense it will do, execute, acknowledge and deliver all and every further acts, deeds, conveyances, transfers and assurances necessary or proper for the perfection of liens and security interests in the ESPC Project, the ESPC Task Order and the Pledged Property (including both real and personal property) in favor of the Trustee, as the secured party, whether the property is now owned or held or hereafter acquired, including but not limited to executing or causing to be executed such assignments, security agreements, financing statements and continuation statements as shall be necessary under applicable law to perfect and maintain such liens and security interests. Section 7.6 Maintenance of Existence; Provisions of Charter Documents The Company will maintain its legal existence under the laws of The Commonwealth of Massachusetts, and its qualification to do business in the Commonwealth of Pennsylvania. Upon the written request of the Holders of a majority in aggregate Principal amount of the Certificates then Outstanding, the Company's Articles of Organization shall be amended to include a requirement for an Independent Director if required by a Rating Agency in connection with a future request to issue a rating for the Certificates. Section 7.7 Limitation on Nature of Business. So long as any of the Certificates remain Outstanding, the Company covenants and agrees not to conduct any business other than business relating to installing, owning, operating, monitoring and verifying, or maintaining the ESPC Project as contemplated by the Project Financing Documents, and the consummation of the transactions contemplated by the Project Financing Documents. Section 7.8 Additional Agreements So long as any of the Certificates remain Outstanding, the Company covenants and agrees that it will not enter into any agreements other than those required by or in connection with the Project Financing Documents and anyamendments thereto, and will only enter into agreements and contracts to rebuild or reinstall all or any portion of the ESPC Project if sufficient insurance proceeds are available to the Trustee for such rebuilding. Section 7.9 Additional Indebtedness . tc "Section 7.9 Additional Indebtedness" \f # \l 2 So long as any of the Certificates remain Outstanding, the Company will not create, assume or incur any additional indebtedness unless (i) it has received the prior written approval of the Trustee, (ii) such indebtedness is related solely to the ESPC Project and is reasonably necessary to enable the Company to fulfill its obligations under the ESPC Task Order, (iii) such indebtedness or obligation is expressly subordinated in writing to all obligations of the Company to the Trustee for the benefit of the Certificate Holders, including, without limitation, all obligations under the Trust Agreement, the Project Loan Agreement, the Project Note and the Certificates, and (iv) the holder of such indebtedness has agreed in writing that it will not institute any involuntary bankruptcy or similar proceeding against the Company. Section 7.10 Liens. So long as any of the Certificates remain Outstanding, the Company shall not create or suffer to exist or permit any lien or security interest upon or with respect to the Pledged Property, other than liens and security interests required by the Project Financing Documents. Section 7.11 Guaranties. So long as any of the Certificates remain Outstanding, the Company shall not contingently or otherwise be or become liable, directly or indirectly, in connection with any Guaranty except (a) indemnities with respect to unfiled materialmen's, mechanic's, workmen's, repairmen's, employee's or other like liens arising in the ordinary course of operations or maintenance of the ESPC Project, and (b) indemnities to Governmental Authorities relating to any expenses incurred that are incidental to obtaining easements or permits for the benefit of the ESPC Project. Section 7.12 Prohibition on Disposition of Assets; Prohibition on Leases. So long as any of the Certificates remain Outstanding, (a) the Company agrees that it will not sell or dispose of the Pledged Property or any of its other property or assets, and (b) the Company will not enter into any lease (as lessee) of property. Section 7.13 Prohibition on Fundamental Changes. So long as any of the Certificates remain Outstanding, the Company shall not enter into any transaction of sale, merger or consolidation, change its form of organization or its business, liquidate or dissolve itself (or suffer any liquidation or dissolution), or amend or modify its Articles of Organization or its corporate By-Laws so as to violate the restrictions set forth in Sections 7.6 and 7.7 hereof. So long as any of the Certificates remain Outstanding, the Company shall not purchase or otherwise acquire all or substantially all of the assets of any Person. Section 7.14 Employee Plans. So long as any of the Certificates remain Outstanding, the Company shall not become a party to, participate in or assume any liability with respect to any "pension plan", as defined in the Employee Retirement Income Security Act of 1974, as amended from time to time. Section 7.15 Transactions with Affiliates. So long as any of the Certificates remain Outstanding, the Company shall not enter into any transaction or agreement with any Affiliate other than the Project Financing Documents and the transactions contemplated thereby. Section 7.16 Taxes; Other Governmental Charges. (a) The Company shall pay, or cause to be paid before the same become delinquent, all taxes, assessments, whether general or special, and governmental charges of any kind whatsoever that may at any time be lawfully assessed or levied against or with respect to any portion or element of the ESPC Project, including any equipment or related property installed or brought by the Company therein or thereon. Section 7.17 Insurance. (a) At all times while any Certificates remain Outstanding, the Company and/or the Contractor shall provide, maintain and keep in force the following policies of insurance for the ESPC Project: (i) Insurance against loss or damage to the ESPC Project by fire, lightning and any of the risks covered by insurance of the type now known as "broad form coverage" in an amount at least equal to 100% of the replacement cost thereof, and, in an amount which is sufficient to void any co-insurance requirements; provided, however, that the aggregate amount of coverage provided by such insurance for the ESPC Project shall not, at any time, be less than the aggregate Principal amount of Certificates Outstanding. The policies of insurance carried in accordance with this clause (i) shall contain a "Replacement Cost Endorsement", and a waiver of co-insurance endorsement; (ii) Comprehensive public liability insurance (including, completed operations coverage for one year after construction/installation of the ESPC Project has been completed) on an "occurrence basis" against claims for "personal injury" including, without limitation, bodily injury, death or property damage occurring on, in or about the ESPC Project and the adjoining streets, sidewalks and passageways, such insurance to afford immediate minimum protection to limits of not less than that as are customarily carried by operators of similar properties (which shall in no event be less than $1,000,000 per occurrence and $2,000,000 in the aggregate primary coverage); (iii) Worker's compensation insurance including employer's liability insurance for all employees of the Company and the Contractor, if any, engaged on or with respect to the ESPC Project in amounts normally carried by prudent operation of similar properties, or, if such limits are established by either the ESPC Task Order or by law, then in the greater of such amounts; (iv) During the course of any demolition, construction, renovation or repair of the ESPC Project, builder's completed value risk insurance against "all risks of physical loss", including transit coverage, during construction of the ESPC Project, in non-reporting form, in an amount at least equal to 100% of the replacement cost thereof. Such policy of insurance shall contain a waiver of coinsurance endorsement; (v) Boiler and machinery explosion liability insurance in such amounts as are usually carried by prudent operators of similar properties in the vicinity of the ESPC Project, or if greater, in the amounts, if any, required under the ESPC Task Order; and (vi) Flood insurance (if the ESPC Project is located in a flood hazard area). (b) All policies of insurance required pursuant to Section 7.17(a) hereof shall contain a standard non-contributory negligence endorsement providing an agreement by the insurer that any loss shall be payable in accordance with the terms of such policy notwithstanding any act or negligence of the Company or the Contractor which might otherwise result in forfeiture of such insurance and the further agreement of the insurer waiving all rights of set-off, counterclaim or deductions against the Company or the Contractor. (c) All policies of insurance shall be issued by companies rated AA or better by Standard & Poor's Company and A IX or better by A. M. Best. All policies of property insurance shall name the Trustee (and, if applicable, the Company) as additional insureds and have attached thereto a lender's loss payable endorsement for the benefit of the Trustee. The Company shall pay the premiums for all policies of insurance as the same become due and payable, and shall furnish the Trustee with a single duplicate original policy with respect to all required insurance coverage. At least 30 days prior to the expiration of each such policy, the Company shall furnish the Trustee with evidence of the payment of premium and the reissuance of a policy continuing insurance in force as required pursuant hereto. All such policies, including policies for any amounts carried in excess of the required minimum and policies not specifically required hereby, shall be maintained in full force and effect, shall be assigned and delivered to the Trustee, with premium prepaid, as collateral security for payment of all obligations on the Project Note, and shall contain a provision that such policies will not be canceled or amended, without at least 30 days prior written notice to the Trustee and at no time shall there be any reduction in the scope or limits of coverage. If the insurance, or any part thereof, shall expire, or be withdrawn, or become void for any reason, the Company shall immediately upon learning of such expiration or termination place new insurance on the ESPC Project meeting the requirements of Section 7.17(a) hereof. (d) In the event the Company fails to provide, maintain, keep in force or deliver and furnish to the Trustee the policies of insurance required hereunder, the Trustee may procure such insurance or single-interest insurance for such risks covering the Company's and the Trustee's interest, and pay all premiums thereon from any monies in its possession under the provisions of this Trust Agreement, except for monies in the Certificate Payment Account, the Debt Service Reserve Account or otherwise held specifically for payment to Certificate Holders under the terms of this Trust Agreement. (e) All proceeds of insurance shall be payable to the Trustee and the Trustee shall have the right to join the Company in adjusting or compromising any claims for loss, damage or destruction in excess of $50,000 under any policy or policies of insurance. Each insurance company concerned is hereby authorized and directed to make payment under such insurance, including return of unearned premiums, directly to the Trustee instead of to the Company and the Trustee jointly, and the Company irrevocably appoints the Trustee as the Company's attorney-in-fact to endorse any draft therefor. Section 7.18 Compliance with Laws. With respect to the ESPC Project, the Company will at all times comply with, and will cause the Contractor to comply with, the terms, conditions and requirements of all Governmental Approvals, with all other applicable requirements of federal, state and local laws and with all applicable lawful requirements of any Governmental Authority. Section 7.19 Reporting Requirements. Until such time as no Certificates remain Outstanding, the Company will furnish, or cause to be furnished, to the Trustee the following financial and other information with respect to the Company and the Contractor: (a) Promptly upon, and in any event within three (3) Business Days after becoming aware of (i) the occurrence of an Event of Default hereunder or under the ESPC Task Order, or (ii) the occurrence of any event which with the giving of notice or the lapse of time or both would constitute an Event of Default hereunder or under the ESPC Task Order, or (iii) upon receipt by the Company of any notice or advice from any Governmental Authority or any other source with respect to hazardous materials on, from or affecting the ESPC Project, a certificate of an authorized officer of the Company specifying the nature thereof and the Company's proposed response thereto; (b) Promptly upon, and in any event within three (3) Business Days after, receipt of any notice from the Government exercising, or indicating its intention to exercise, the Government's right to terminate the ESPC Task Order pursuant to the so-called termination for convenience provision of such Contract, a copy of such notice and any accompanying documents. (c) Promptly after (i) the occurrence thereof, notice of the institution of or any material adverse development in any action, suit or proceeding or any governmental investigation or any arbitration, before any court or arbitrator or any Governmental Authority against the Company, the Contractor or the ESPC Project, or (ii) actual knowledge thereof, notice of the threat of any such action, suit, proceeding, investigation or arbitration; and (d) With reasonable promptness, such other information about the Company, the Contractor or the ESPC Project as the Trustee may reasonably request from time to time. Section 7.20 Casualty or Condemnation Events. (a) The Company shall promptly notify the Trustee if any of the Pledged Property is damaged or destroyed by fire or other casualty, or becomes subject to condemnation or taking by eminent domain. The Company also shall promptly notify the Trustee if, following such damage, destruction or taking, the Government ceases making ESPC Task Order Payments with respect to all or any portion of the ESPC Project, and shall promptly notify the Trustee if the Government resumes making such payments. (b) Subject to the requirements of Section 7.17(e) hereof, the Company shall promptly file appropriate claims relating to any of the Pledged Property damaged by fire or other casualty with the insurance carriers providing property and casualty insurance with respect to the ESPC Project. If the Company fails to notify the Trustee that it has filed such claims within ten (10) Business Days after the Trustee's receipt of notice as to the damage or destruction, the Trustee shall promptly file the required claims with respect to such Pledged Property. With respect to any condemnation or taking event, the Trustee shall be entitled to receive all compensation, damages, awards and other payments or relief therefor, or accruing as a result thereof, and shall be entitled, at its option to participate in any such action or proceedings. No award, settlement or compromise of any claim, action or proceeding arising as a result of a condemnation or taking event shall be made or accepted without the written consent of the Trustee. (c) If prior to the date of Acceptance of the ESPC Project, the Company or the Trustee receives any amount in respect of (i) any insurance proceeds as a result of any loss or damage to any Pledged Property or (ii) any condemnation proceeds as a result of any condemnation or taking by eminent domain of any Pledged Property, the amount of such insurance proceeds or condemnation proceeds, as the case may be, less the reasonable cost, if any, to the Company or the Trustee of such recovery, shall be deposited in the Construction Account and applied as provided in the Project Loan Agreement and Section 3.2 hereof. (d) Within thirty (30) days after the damage, destruction or taking of any Pledged Property occurring after Acceptance of the ESPC Project, the Company shall deliver to the Trustee written evidence reasonably satisfactory to the Trustee that the affected Pledged Property will be repaired or replaced by the Company and stating the period required for such repair or replacement (the "Reconstruction Period"). If the Company does not deliver written notice of its ability to repair or replace the Pledged Property as provided in the preceding sentence, or if, following such delivery, the Company does not undertake to repair or replace the Pledged Property in a timely fashion, the Trustee shall use its best efforts (i) to retain the Contractor, or (ii) if the Contractor declines, to retain contractors of recognized standing in the Tobyhanna, Pennsylvania area capable of repairing or replacing the Pledged Property for an amount equal to or less than the available insurance or condemnation proceeds, and the party so selected shall establish the Reconstruction Period. The Trustee shall not be required to expend any of its own funds pursuant to the foregoing sentence. The party performing the work relating to the repair or replacement of Pledged Property pursuant to this Section 7.20(d) is herein referred to as the "Reconstruction Contractor". (e) If the Company or the Trustee receives any amount in respect of (x) any insurance proceeds as a result of any loss or damage to the Pledged Property occurring after Acceptance or (y) any condemnation proceeds as a result of any condemnation or taking by eminent domain of the Pledged Property occurring after Acceptance, then in each such case, the Trustee shall retain the Independent Engineer to perform the actions described in this Section 7.20, and the amount of such insurance proceeds or condemnation proceeds, as the case may be, less the reasonable costs, if any, to the Company or the Trustee of such recovery and of paying out such proceeds (including reasonable attorneys' fees and costs allocable to inspecting the Reconstruction Work (as defined below) and the plans and specifications therefor) shall be deposited and held hereunder in the Capital Proceeds Account, and shall be remitted to the Reconstruction Contractor from time to time as the Reconstruction Work progresses and shall be applied by the Reconstruction Contractor to the payment of the cost of repairing, restoring or rebuilding the portion of the Pledged Property so taken, damaged or destroyed (the "Reconstruction Work"), such remittance to be subject to satisfaction of the following conditions: (i) The amount of the insurance or condemnation proceeds (together with all ESPC Task Order Payments reasonably expected to be available to the Company or such other cash, letters of credit or cash equivalents deposited by the Company with the Trustee) must be sufficient, in the opinion of the Independent Engineer, to repair, restore or rebuild the Pledged Property so as to restore the ESPC Project to substantially the same level of operation as immediately prior to the casualty or condemnation, to pay or perform all operation and maintenance expenses and obligations to be paid or performed by the Company under the ESPC Task Order, if any, and to pay all payments of Interest and Principal on the Certificates coming due during the period of time required to repair, restore or rebuild the Pledged Property during the Reconstruction Period; (ii) Each request for payment shall be made on ten (10) days' prior written notice to the Trustee and shall be accompanied by a certificate to be made by an authorized officer of the Reconstruction Contractor, stating that (A) all of the Reconstruction Work completed has been done substantially in compliance with the approved plans and specifications, if any, (B) the sum requested is required to pay, or to reimburse the Reconstruction Contractor for, the cost incurred in connection with such Reconstruction Work (giving a brief description of the services and materials provided in connection with such Reconstruction Work), (C) the sum requested, when added to all proceeds previously paid out by the Trustee, does not exceed the value of the Reconstruction Work done as of the date of such certificate and (D) the amount of such proceeds remaining in the hands of, or to be paid to, the Trustee, together with other amounts available to the Reconstruction Contractor (in the opinion of the party furnishing the certificate), will be sufficient on completion of the Reconstruction Work to pay for the same in full, together with operation and maintenance expenses and indebtedness on the Certificates during the remaining period of time to repair, restore or rebuild such Pledged Property (giving, in such reasonable detail as the Trustee may require, an estimate of the cost of such completion); (iii) Each request shall be accompanied by waivers of liens (conditional as to the current request and unconditional as to prior requests) reasonably satisfactory to the Trustee covering that part of the Reconstruction Work for which payment or reimbursement is being requested; (iv) The ESPC Task Order shall not have been modified, canceled or terminated by the Government with respect to the Pledged Property requiring the Reconstruction Work; and (v) No Event of Default shall have occurred and be continuing hereunder. (f) After completion of the Reconstruction Work relating to any portion of the Pledged Property for which the Trustee has received any insurance or condemnation proceeds pursuant to Section 7.20(e) hereof, and payment of all costs thereof, any such remaining funds held by the Trustee in the Capital Proceeds Account shall be transferred to the Company Account upon satisfaction of each of the following conditions: (i) The Trustee shall have received unconditional waivers of liens reasonably satisfactory to it covering all such Reconstruction Work, and evidence satisfactory to it that there has not been filed with respect to the ESPC Project any lien in respect of any part of the Reconstruction Work not discharged of record; (ii) The ESPC Task Order shall not have been modified, canceled or terminated by the Government with respect to the Pledged Property requiring the Reconstruction Work and the Government shall have resumed making full ESPC Task Order Payments; (iii) There shall be no shortfall in the amounts required to be on deposit in the Capitalized Debt Service Account, the Debt Service Reserve Account, the Certificate Payment Account or the Capital Repair and Replacement Account; and (iv) No Event of Default shall have occurred and be continuing hereunder. (g) If (i) the Company or the Trustee is unable to retain a Reconstruction Contractor to perform the Reconstruction Work as contemplated by Sections 7.20(d) and 7.20(e) hereof, or it is determined that the proceeds and other amounts available are insufficient to pay the amounts called for by Section 7.20(e)(i) hereof or, (ii) the Government terminates the ESPC Task Order in whole or with respect to the portion of the Pledged Property subject to damage, destruction or taking, then, to the extent that the available insurance or condemnation proceeds shall not otherwise have been disbursed as aforesaid to the Reconstruction Contractor, the Trustee shall transfer such proceeds to the Certificate Payment Account to redeem Certificates in accordance with Section 5.3(b) hereof. (h) Notwithstanding any other provision of this Section 7.20 or the Trust Agreement, in the event of a taking or condemnation of all or substantially all of the Pledged Property, the proceeds received by the Company or the Trustee shall be deposited to the Certificate Payment Account to redeem Certificates in accordance with Section 5.3(b) hereof. Section 7.21 Security Agreement. If and to the extent that the Company and the Trustee shall become the Debtor and Secured Party respectively in any Uniform Commercial Code financing statement affecting any of the Pledged Property referred to or described herein, this Trust Agreement shall be deemed a "security agreement" as defined in the Pennsylvania Uniform Commercial Code, and the remedies for any violation of the covenants, terms and conditions herein contained shall be (a) as prescribed herein, and (b) as to such part of the security which is also reflected in such financing statement, as prescribed by the specific statutory consequences now or hereafter enacted and specified in such Uniform Commercial Code. Pursuant to such Uniform Commercial Code, the Company hereby authorizes the Trustee, without the signature of the Company, to execute and file financing statements and continuation statements if the Trustee shall determine that the same are necessary or advisable in order to perfect, or continue the perfection of, the Trustee's security interest in any Pledged Property, and shall pay to the Trustee on demand all expenses incurred by the Trustee in connection with the preparation, execution and filing of such statements and any continuation statements that may be filed by the Trustee. ARTICLE VIII ACTION BY THE CERTIFICATE HOLDERS Section 8. Section 8.1 General A meeting of the Certificate Holders may be called at any time pursuant to the terms of this Article VIII for any of the following purposes: (a) to give any notice to the Company or the Trustee, or to give any directions to the Trustee, or to waive or consent to the waiving of any Event of Default hereunder and its consequences, or to take any other action authorized to be taken by the Certificate Holders under this Trust Agreement; (b) to remove the Trustee pursuant to the provisions of Section 6.4 hereof, (c) to consent to the execution of any amendment hereto; or (d) to take any other action authorized to be taken by or on behalf of the Holders of any specified aggregate Principal amount of the Certificates under any other provision of this Trust Agreement or authorized or permitted by law, Section 8.2 Meetings Convened by the Trustee. (a) The Trustee may at any time call a meeting of Holders to take any action specified in Section 8.1 hereof, to be held at such time and at such place in the city where the Trustee maintains its Principal Office as the Trustee shall determine. Notice of every meeting of the Holders, setting forth the time and place of such meeting and in general terms the action proposed to be taken at such meeting, shall be mailed by the Trustee, in the manner provided by Section 9.3 hereof, to the Company and to each Holder at its last address as it shall appear on the Certificate Register not less than 20 nor more than 60 days prior to the date fixed for the meeting. (b) Any meeting of Holders shall be valid without notice if all Holders are present in person or by proxy, or if notice is waived before or after the meeting by all Holders and if the Company and the Trustee are either present by duly authorized representatives or have, before or after the meeting, waived notice. Section 8.3 Meetings Convened by the Holders In case at any time the Holders of not less than a majority in aggregate Principal amount of the Certificates then Outstanding, shall have requested the Trustee to call a meeting of Holders to take any action specified in Section 8.1 hereof, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have transmitted the notice of such meeting in the manner provided by Section 9.3 hereof within 20 days after receipt of such request, then the Holders of Certificates in the amount above specified may determine the time and the place in the city where the Trustee maintains its Principal Office for such meeting and may call such meeting for the purpose of taking such action, by mailing or causing to be mailed notice of it as provided in Section 8.2 hereof. Section 8.4 Persons Entitled to Vote To be entitled to vote at any meeting of Holders a person shall (a) be registered in the Certificate Register as a Holder of one or more Certificates, or (b) be a person appointed by an instrument in writing as proxy for such a registered Holder or Holders of Certificates. The only persons who shall be entitled to be present or to speak at any meeting of Holders shall be the persons entitled to vote at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Company and its counsel. Section 8.5 Other Procedures. (a) Notwithstanding any other provisions hereof, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders, in regard to proof of the holding of Certificates and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, and submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall think fit. Such regulations may fix a record date and time for determining the Holders entitled to vote at such meeting, in which case those and only those persons who are registered in the Certificate Register as Holders of Certificates at the record date and time so fixed shall be entitled to vote at such meeting whether or not they shall be such Holders at the time of the meeting. Such regulations may further provide that written instruments appointing proxies, regular on their face, may be presumed valid and genuine without other proof except as otherwise permitted or required by any such regulations, appointment of any proxy shall be proved by having the signature of the person executing the proxy witnessed or guaranteed by any bank, banker or trust company satisfactory to the Trustee. (b) The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Holders as provided in Section 8.3 hereof, in which case the Holders calling the meeting shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Holders of a majority in Principal amount of the Certificates represented at the meeting and entitled to vote. (c) At any meeting each Holder or proxy shall be entitled to one vote for each $1,000 Principal amount of Certificates then Outstanding and held thereby; provided, however, that no vote shall be cast or counted at any meeting in respect of any Certificates challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote other than by virtue of Certificates held by him or her or instruments in writing as previously stated duly designating him or her as the person to vote on behalf of other Holders. At any meeting of Holders, the presence of persons holding or representing any number of Certificates shall be sufficient for a quorum. Any meeting of Holders duly called pursuant to the provisions of Section 8.2 or 8.3 may be adjourned from time to time by vote of the Holders of a majority in Principal amount of the Certificates represented at the meeting and entitled to vote, and the meeting may be held as so adjourned without further notice. Section 8.6 Voting The vote on any resolution submitted to any meeting of Holders shall be by written ballots on which shall be subscribed the signatures of the Holders or of their representatives by proxy and the Principal amount of the Certificates voted by the ballot. The affirmative vote of the Holders of a majority of the Principal amount of the Certificates shall be necessary and sufficient for the approval of any such resolution, except as otherwise expressly provided herein. The permanent chairman of the meeting shall appoint an inspector of votes, who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting his or her verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspector of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts, setting forth a copy of the notice of the meeting and showing that said notice was mailed as provided in Section 8.2 hereof. The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Company and the other to the to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters stated in it. Section 8.7 Special Committee of Holders At any meeting of the Holders, the Holders may appoint a Special Committee comprised of not more than five Holders, which Special Committee shall have the authority to act for and on behalf of all Holders in respect of any matter. Section 8.8 No Right to Delay Nothing contained in this Article VIII shall be deemed or construed to authorize or permit, by reason of any call of a meeting of Holders or any rights expressly or impliedly conferred here to make such call, any hindrance or delay in the exercise of any right or rights conferred on or reserved to the Trustee or to the Certificates under any of the provisions hereof or of the Holders. ARTICLE IX AMENDMENT; ADMINISTRATIVE PROVISIONS Section 9. Section 9.1 Amendment. (a) The Company and the Trustee may, without the prior written approval of or notice to any of the Certificate Holders, amend this Trust Agreement or any other agreement entered into by the Trustee in connection herewith as shall not be inconsistent with the terms and provisions hereof, for any one of the following purposes: (i) to cure any ambiguity, inconsistency or formal defect or omission in this Trust Agreement; (ii) to grant to or confer upon the Trustee for the benefit of the Certificate Holders any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the Certificate Holders or the Trustee or either of them, subject to receipt by the Trustee of an Opinion of Counsel reasonably satisfactory to the Trustee to the effect that there will be no resulting adverse effect on the fixed investment trust status of the Trust created hereby for federal income tax purposes; (iii) to add to the covenants and agreements of the Trustee contained in this Trust Agreement other covenants and agreements thereafter to be observed for the protection of the Certificate Holders, subject to receipt by the Trustee of an Opinion of Counsel reasonably satisfactory to the Trustee that there will be no resulting adverse effect on the fixed investment trust status of the Trust created hereby for federal income tax purposes; (iv) to evidence any succession within the Government, the Trustee or the Company, and the assumption by such successors of the requirements, covenants and agreements of the Government, the Trustee or the Company in this Trust Agreement, the ESPC Task Order and the Certificates; (v) to conform to the requirements of the Trust Indenture Act of 1939, if applicable; or (vi) to change the respective amounts (but not the aggregate amount) of the Certificates, subject to receipt by the Trustee of an Opinion of Counsel reasonably satisfactory to the Trustee to the effect that there will be no resulting adverse effect on the fixed investment trust status of the Trust created hereby for federal income tax purposes. (b) Exclusive of the aforementioned types of amendment and subject to the terms and provisions contained in this Section 9.1, and not otherwise, the Trustee, with the approval of the Holders of not less than a majority in aggregate Principal amount of the Certificates then Outstanding, shall have the right, from time to time, anything contained in this Trust Agreement to the contrary notwithstanding, to consent to and approve the execution by the Company and the Trustee of such other amendments, as shall be deemed necessary and desirable by the Company and the Trustee for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Trust Agreement or in any amendment thereto or in any agreement entered into by the Trustee in connection herewith; provided, however that nothing in this Section 9.1 shall permit, or be construed as permitting: (i) an extension of the date on which the payments of the Principal of or the Interest on any Certificate issued hereunder are due, or a reduction in the Principal amount of any Certificate or the rate of Interest thereon, without the consent of each Certificate Holder so affected; or (ii) a privilege or priority of any Certificate over any other Certificates or a reduction in the aggregate Principal amount of the Certificates required for consent to such amendment, without the consent of the Holders of all of the Certificates then Outstanding. (c) If at any time, the Trustee shall propose an amendment for any of the purposes of this Section 9.1, requiring the approval of the Certificate Holders, the Trustee shall convene a meeting of the Holders in the manner specified in Section 8.2 hereof. The notice for such meeting shall briefly set forth the nature of the proposed amendment and shall state that copies thereof are on file at the Principal Office of the Trustee for inspection by all Certificate Holders. If at such meeting of the Holders the proposed amendment hereto is approved by the affirmative vote of the requisite number of Holders, no Holder of any Certificate shall have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the Company from executing the same or from taking any action pursuant to the provisions thereof. (d) Upon the execution of any such amendment, this Trust Agreement shall be and is deemed to be modified and amended in accordance with such amendment. Section 9.2 Trustee to Keep Records; Reports. (a) The Trustee shall keep a copy of this Trust Agreement and books and records of all monies received and disbursed under this Trust Agreement, which shall be available for inspection by the Company and the Holders at any time during regular business hours. (b) On each Payment Date, the Trustee will forward to each Certificate Holder of record a statement prepared by the Trustee setting forth the following: (i) the total amount distributed; (ii) the amount of the distribution on such Payment Date allocable to Principal on the Certificates; and (iii) the amount of the distribution on such Payment Date allocable to Interest on the Certificates. (c) On or before January 31 of each calendar year, beginning with 2000, the Trustee will furnish to each person which at any time during the preceding calendar year was a Certificate Holder a statement prepared by the Trustee containing information required to be contained in the reports to be sent to Certificate Holders on each Payment Date as provided in Section 9.2(b) hereof, aggregated for such calendar year (or the applicable portion thereof during which such person was a Certificate Holder), together with such other customary or required information (consistent with the treatment of the Certificates as debt) to enable Certificate Holders to prepare their tax returns. Section 9.3 Notice All notices, requests, and other communications to any party hereunder shall be in writing and shall be given to such party at its address or telecopy number set forth below, or such other address or telecopy number as such party may hereafter specify by notice to the other parties. Each such notice, request, or other communication shall be effective (i) if given by telecopy, when such telecopy is transmitted on a Business Day, to the telecopy number specified in this Section 9.3, (ii) if given by mail, four days after such communication is deposited in the U.S. mails, first class postage prepaid, in certified form, addressed as specified below, or (iii) if given by any other means (including, without limitation, by overnight courier service), when delivered on a Business Day at the address specified below; provided, that any notice to the Trustee shall be effective only upon its receipt thereby. Addresses for Notices: To the Company: HEC/Tobyhanna Energy Project, Inc. 24 Prime Parkway, Suite 302 Natick, Massachusetts 01760 Attn: President Telecopy: (508)653-0266 with a copy to: HEC Inc. 24 Prime Parkway, Suite 302 Natick, Massachusetts 01760 Attn: President Telecopy: (508) 653-0266 To the Trustee: U.S. Trust Company of New York 114 West 47th Street New York, New York 10036 Attn: Corporate Trust Services Telecopy: (212) 852-1625 Section 9.4 Governing Law This Trust Agreement shall construed and governed in accordance with the laws of The Commonwealth of Massachusetts. Section 9.5 Severability Any provision of this Trust Agreement found to be prohibited by law shall be ineffective only to the extent of such prohibition, and shall not invalidate the remainder of this Trust Agreement. Section 9.6 Assignment The Trust Agreement may not be assigned by the Company. Section 9.7 Binding on Successors This Trust Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Section 9.8 Limitation on Liability. No past, present or future partner, member, shareholder, officer, employee, servant, executive, director, agent, authorized representative or other Affiliate, parent or subsidiary of the Company (each such Person, an "operative") shall be personally liable for payments (including costs of collection) due hereunder or under any other agreement or document entered into by or for the benefit of the Trustee, or for the performance of any obligation, or breach of any representation or warranty made by the Company, hereunder or thereunder. The sole recourse of the Trustee for the satisfaction of the obligations (including costs of collection) of the Company hereunder shall be against the Pledged Property, and not against any assets or property of any such operative. In the event that a default occurs in connection with such obligations, no action shall be brought against any such operative by virtue of his direct or indirect ownership interest in the Company. In the event of foreclosure or other sale or disposition of Pledged Property, no judgment for any deficiency upon the obligations hereunder or any other agreement or document entered into with or for the benefit of the Trustee shall be obtainable by the Trustee against any such operative. Notwithstanding the foregoing, (a) the Trustee shall be entitled to bring suit against any operative for the purpose of obtaining jurisdiction over the Company, and (b) nothing in this Section 9.8 shall be deemed to release any operative from liability for his fraudulent actions, misappropriation of any ESPC Task Order Payments, insurance proceeds, condemnation awards or other sums received by the Company, misrepresentations or willful misconduct, or affect or diminish the obligations of such operative under or in respect of each agreement to which he is, or is intended to be, a party. Section 9.9 Headings; Construction. (a) Headings preceding the text of the several Articles and Sections hereof, and the table of contents, are solely for convenience of reference and shall not constitute a part of this Trust Agreement or affect its meaning, construction or effect. (b) All references herein to "Articles", "Sections" and other subdivisions are to the corresponding Articles, Section or subdivisions of this Trust Agreement. Section 9.10 Execution in Counterparts This Trust Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. IN WITNESS WHEREOF, the parties have cause this Trust Agreement to be executed as an instrument under seal by their duly authorized representatives as of the date first above written. HEC/TOBYHANNA ENERGY PROJECT, INC. By: Name: Linda A. Jensen Title: Treasurer UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee By: Name: Gus Kourkoulis Title: SCHEDULE 7.4 Governmental Approval Exceptions 1. Final approval from the Commonwealth of Pennsylvania Department of Environmental Protection for certain wetlands and stream crossings in connection with the construction of the natural gas pipeline. 2. Boiler operating permits which can not be obtained prior to installation and testing of the units. 3. Permits required for the Gate Station Work, to be obtained prior to commencement of such Work, anticipated to be in the summer of 2000. EXHIBIT 2.1 FORM OF REQUEST FOR EXECUTION AND DELIVERY OF CERTIFICATES REQUEST FOR EXECUTION AND DELIVERY OF CERTIFICATES HEC/Tobyhanna Energy Project, Inc. hereby authorizes and requests United States Trust Company of New York, as trustee under a Trust Indenture and Security Agreement Relating to an Energy Savings Performance Contract Project dated as of September 30, 1999 ("Trust Agreement"), to prepare, execute and deliver the following Certificates of Participation pursuant to said Trust Name, address and taxpayer identification Principal Amount number of registered Holder First Union Capital Markets Corp. $26,477,000 One First Union Center 301 South College Street Charlotte, North Carolina 28288 Tax ID No. _____________________ Dated: September 30, 1999. HEC/Tobyhanna Energy Project, Inc. By: Name: Linda A. Jensen Title: Treasurer The undersigned hereby acknowledges that this request is authorized and timely pursuant to the terms of the above-referenced Trust Agreement. United States Trust Company of New York, as Trustee By: Name: Gus Kourkoulis Title: EXHIBIT 2.2A FORM OF FULLY REGISTERED CERTIFICATE OF PARTICIPATION NUMBER $26,477,000 R- 7.625% CERTIFICATE OF PARTICIPATION Evidencing a Proportionate Interest of the Holder Hereof in a Portion of ESPC Task Order Payments to be Made by THE UNITED STATES GOVERNMENT Pursuant to An ESPC Task Order Awarded Under An Energy Savings Performance Contract Undivided Final Proportionate Payment Certificate CUSIP Ownership Percentage Date Dated as of Number 100% August 15, 2022 September 30, 1999 40415EAA2 Registered Owner: First Union Capital Markets Corp. Principal Sum: $26,477,000 Dollars This is to certify that the Registered Owner (named above) (the "Holder") of this Certificate of Participation (herein called the "Certificate") is the Holder of an undivided proportionate interest as stated above in a certain portion of the ESPC Task Order Payments (and in any corresponding insurance proceeds, contract termination payments or other amounts equivalent thereto) to be made pursuant to that certain ESPC Task Order No. 0001, dated January 7, 1999, as amended, by and between HEC/Tobyhanna Energy Project, Inc. (the "Company") and the United States of America (the "Government"), relating to the installation, operation and maintenance of certain energy conservation and energy cost savings measures at the Tobyhanna Army Depot, Tobyhanna, Pennsylvania. This Certificate has been issued pursuant to the Trust Indenture and Security Agreement Relating to an Energy Savings Performance Contract Project, dated as of September 1, 1999 (the "Trust Agreement") by and among the Company and United States Trust Company of New York, as trustee (the "Trustee"). Until the final Payment Date stated above, the Holder shall have the above-stated undivided proportionate ownership percentage in 100% of the ESPC Task Order Payments (and in any corresponding insurance proceeds, contract termination payments or other amounts equivalent thereto), up to an amount necessary to satisfy all payments of Interest and of Principal, together with premiums, if any, upon redemption, on the Certificates as and when such payments become due and payable. The right to receive the ESPC Task Order Payments has been assigned by the Company to the Trustee pursuant to the Assignment Agreement dated as of September 1, 1999, notice of which assignment has been provided to the Government by the Trustee pursuant to the Notice of Assignment. Subject to the terms of the ESPC Task Order described above and the Trust Agreement, the Holder of this Certificate is entitled to receive (i) distributions of portions of ESPC Task Order Payments aggregating $56,228,253.59, which is the "Total Dollar Amount" of this Certificate, payable in semiannual installments as set forth in the Payment Schedule hereinafter set forth, on the dates set forth therein (the "Payment Dates"), and (ii) premiums and Default Rate interest if any, to the extent set forth in this Trust Agreement. The payments due hereunder (exclusive of premiums and Default Rate interest, if any) consist of Principal and Interest in the amounts set forth in the Payment Schedule. It cannot be determined from the face of this Certificate whether all or a portion of the Principal amount hereof has been paid. The Certificates are payable from the ESPC Task Order Payments, such ESPC Task Order Payments to be held in and disbursed from the funds and accounts established pursuant to the Trust Agreement. The obligation of the Government to make ESPC Task Order Payments under the ESPC Task Order is subject to the availability of appropriations for the payment of ESPC Task Order Payments. The obligation to make ESPC Task Order Payments is neither a debt nor obligation of the Government except in any fiscal year for which appropriations are available to make ESPC Task Order Payments. Prior to the Government's acceptance of all of the ESPC Project, all or a portion of the amounts due with respect to the Certificates will be paid from the Proceeds from the sale of the Certificates. All amounts payable hereunder are to be paid in lawful money of the United States of America, which at the time of payment is legal tender. Overdue Principal (and, to the extent permitted by applicable law, overdue Interest) on the Certificates shall bear interest at the per annum rate equal to the Default Rate, from the date due until the date paid. All future payments of Principal and Interest on each Certificate which has been partially redeemed pursuant to Section 5.3 of the Trust Agreement shall be reduced by the percentage determined by dividing (i) the amount of Principal redeemed on such Certificate by (ii) the amount of Principal Outstanding on such Certificate immediately prior to such redemption. The final payment on this Certificate shall be made at the Principal Office at which the Trustee conducts corporate trust business in New York, New York (the "Principal Office"), upon the surrender of this Certificate. All other Principal and the Interest payable on this Certificate shall be paid by check or draft of the Trustee mailed on the Payment Dates to the Holders at the addresses recorded on the Certificate Register. The Certificates evidence an interest in the ESPC Task Order Payments under the ESPC Task Order (and in any corresponding insurance proceeds, contract termination payments or other amounts equivalent thereto), and certain other property held pursuant to the Trust Agreement, all of which are subject to the provisions of the Trust Agreement permitting the application thereof for or to the purposes and on the terms and conditions set forth in the Trust Agreement. This Certificate has been executed by the Trustee pursuant to the terms of the Trust Agreement. Copies of the ESPC Task Order, the Trust Agreement and related documents are on file and available for inspection at the Principal Office of the Trustee and reference is hereby made to these documents, and any and all amendments thereto, for a description of the pledges and covenants securing the Certificates, the nature, extent and manner of enforcement of such pledges and covenants, the rights with respect thereto, and the other terms and conditions upon which the Certificates are delivered thereunder. The Certificates are issuable in the form of fully registered Certificates in denominations of $100,000 and any $1,000 multiples in excess thereof. The Certificates, upon surrender thereof at the Principal Office of the Trustee with a written request for exchange satisfactory to the Trustee duly executed by the registered Holder or his, her or its attorney-in-fact duly authorized in writing and upon payment of the Trustee's reasonable exchange fee for each new Certificate issued, may be exchanged for an equal proportionate share of the outstanding Principal amount of fully registered Certificates of any minimum denomination of the same maturity. This Certificate shall be transferable upon the Certificate Register, which shall be kept for that purpose at the Principal Office of the Trustee, upon surrender and cancellation of this Certificate together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered Holder or his, her or its duly authorized attorney-in-fact and upon payment of the charges provided in the Trust Agreement including its reasonable transfer fee for each new Certificate issued. Upon such transfer a new fully registered Certificate or Certificates, of the same maturity and aggregate Principal amount will be issued to the transferee. The Trustee may treat the registered Holder hereof as the absolute owner hereof for all purposes, and the Trustee shall not be affected by any notice to the contrary. The Trust Agreement permits certain amendments or supplements to the Trust Agreement and the ESPC Task Order not prejudicial to the Holders to be made without the consent of or notice to the Holders, certain other amendments or supplements thereto to be made with the consent of the Holders of not less than a majority in aggregate Principal amount of the Certificates then outstanding, and other amendments or supplements thereto to be made only with the consent of all the Holders. The Certificates are subject to optional redemption, in whole, at the election of the Company in accordance with Section 5.1 of the Trust Agreement. The Certificates are subject to extraordinary redemption in whole, in accordance with Section 5.2 of the Trust Agreement. The Certificates are subject to mandatory redemption in whole or in part, in accordance with Section 5.3(a) of the Trust Agreement, and are subject to mandatory redemption in whole or in part, in accordance with Section 5.3(b) of the Trust Agreement. If certain Events of Default occur as provided for in the Trust Agreement, the Certificates shall be paid to the extent of available funds under the terms and conditions set forth in the Trust Agreement. The Trustee has no obligation or liability to the registered Holders for the payment of the Certificates; the Trustee's sole obligation is to administer, for the benefit of the Company and the Holders, the Trust Fund and accounts established in the Trust Agreement. The Trustee has no obligation to pay any portion of the Interest or Principal pertaining to the Certificates from any source other than the funds and accounts established in the Trust Agreement. Except as provided for in the Trust Agreement, the Trustee and the Company shall not have any obligation or liability to the registered Holders with respect to the payment, when due, of ESPC Task Order Payments by the Government or with respect to the performance by the Government of any other covenant made by it in the ESPC Task Order. Initially capitalized terms utilized herein without definition have the meanings assigned thereto in the Trust Agreement. This Certificate has been executed as of the certificate date first stated above by the manual signature of an authorized signatory of the Trustee solely in its capacity as trustee pursuant to and in accordance with the Trust Agreement. UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee By: Authorized Signatory THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THE REGISTRATION PROVISIONS OF SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS HAVE BEEN SATISFIED OR UNLESS IN THE OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AND THE COMPANY COMPLIANCE WITH SUCH PROVISIONS IS NOT REQUIRED. Payment Date Interest Payment Principal Payment Total Payment February 15, 2000 $757,076.72 $ 0 $757,076.72 August 15, 2000 1,009,435.63 $ 0 1,009,435.63 February 15, 2001 1,009,435.63 31,000.00 1,040,435.63 August 15, 2001 1,008,253.75 467,000.00 1,475,253.75 February 15, 2002 990,449.38 485,000.00 1,475,449.38 August 15, 2002 971,958.75 503,000.00 1,474,958.75 February 15, 2003 952,781.88 523,000.00 1,475,781.88 August 15, 2003 932,842.50 519,000.00 1,451,842.50 February 15, 2004 913,055.63 283,000.00 1,196,055.63 August 15, 2004 902,266.25 294,000.00 1,196,266.25 February 15, 2005 891,057.50 305,000.00 1,196,057.50 August 15, 2005 879,429.38 316,000.00 1,195,429.38 February 15, 2006 867,381.88 328,000.00 1,195,381.88 August 15, 2006 854,876.88 341,000.00 1,195,876.88 February 15, 2007 841,876.25 354,000.00 1,195,876.25 August 15, 2007 828,380.00 367,000.00 1,195,380.00 February 15, 2008 814,388.13 381,000.00 1,195,388.13 August 15, 2008 799,862.50 396,000.00 1,195,862.50 February 15, 2009 784,765.00 411,000.00 1,195,765.00 August 15, 2009 769,095.63 427,000.00 1,196,095.63 February 15,2010 752,816.25 443,000.00 1,195,816.25 August 15, 2010 735,926.88 460,000.00 1,195,926.88 February 15, 2011 718,389.38 477,000.00 1,195,389.38 August 15, 2011 700,203.75 496,000.00 1,196,203.75 February 15, 2012 681,293.75 514,000.00 1,195,293.75 August 15, 2012 661,697.50 534,000.00 1,195,697.50 February 15, 2013 641,338.75 554,000.00 1,195,338.75 August 15, 2013 620,217.50 576,000.00 1,196,217.50 February 15, 2014 598,257.50 598,000.00 1,196,257.50 August 15, 2014 575,458.75 620,000.00 1,195,458.75 February 15, 2015 551,821.25 644,000.00 1,195,821.25 August 15, 2015 527,268.75 669,000.00 1,196,268.75 February 15, 2016 501,763.13 694,000.00 1,195,763.13 August 15, 2016 475,304.38 721,000.00 1,196,304.38 February 15, 2017 447,816.25 748,000.00 1,195,816.25 August 15, 2017 419,298.75 776,000.00 1,195,298.75 February 15, 2018 389,713.75 806,000.00 1,195,713.75 August 15, 2018 358,985.00 837,000.00 1,195,985.00 February 15, 2019 327,074.38 869,000.00 1,196,074.38 August 15, 2019 293,943.75 902,000.00 1,195,943.75 February 15, 2020 259,555.00 936,000.00 1,195,555.00 August 15, 2020 223,870.00 972,000.00 1,195,870.00 February 15, 2021 186,812.50 1,009,000.00 1,195,812.50 August 15, 2021 148,344.38 1,047,000.00 1,195,344.38 February 15, 2022 108,427.50 1,087,000.00 1,195,427.50 August 15, 2022 66,985.63 1,757,000.00 1,823,985.63 TOTAL: $29,751,253.59 $26,477,000.00 $56,228,253.59 INSTRUCTION FOR TRANSFER The Certificate must be presented for transfer and registration into Assignee's name at the Principal Office of United States Trust Company of New York, as transfer agent. The transfer agent requires payment of a transfer fee for each new Certificate issued. Checks should be made payable to the order of United States Trust Company of New York, and should accompany each requested transfer. The re-registered Certificate may be picked up after two Business Days or may be mailed according to your instructions. Certificates will only be registered exactly as the name appears below. Direct inquiries regarding transfer shall be directed to the Trustee at its Principal Office. The Record Date for any Payment Date is the 15th day (or the immediately preceding Business Day ) prior to such Payment Date. IT IS THE RESPONSIBILITY OF THE ASSIGNEE TO PRESENT THE CERTIFICATE FOR TRANSFER. The Trustee's sole responsibility is to pay the registered Holder as of Record Date. No claims for payment will be recognized other than for failure to pay the registered Holder. All other claims for payments, accrued Interest, etc. must be presented to the Assignor. (Form of Assignment) ASSIGNMENT For value received the undersigned do(es) hereby sell, assign and transfer unto the within mentioned registered Certificate and hereby irrevocably constitutes and appoint(s) ________________ attorney, to transfer the same on the Certificate Register of the Trustee with full power of substitution in the premises. Signature(s) of Holder(s) Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within registered Certificate in every particular without alteration or enlargement or any change whatsoever. Date: _________________ Signature Guaranteed: _______________ EXHIBIT 2.2B FORM OF GLOBAL CERTIFICATE OF PARTICIPATION NUMBER $26,477,000 R- 7.625% GLOBAL CERTIFICATE OF PARTICIPATION Evidencing a Proportionate Interest of the Hereof in a Portion of ESPC Task Order Payments to be Made by THE UNITED STATES GOVERNMENT Pursuant to An ESPC Task Order Awarded Under An Energy Savings Performance Contract Undivided Final Proportionate Payment Certificate CUSIP Ownership Percentage Date Dated as of Number 100% August 15, 2022 September 30, 1999 40415EAA2 Registered Owner: Principal Sum: $26,477,000 Dollars This is to certify that the Registered Owner (named above) (the "Holder") of this Global Certificate of Participation (herein called the "Certificate") is the Holder of an undivided proportionate interest as stated above in a certain portion of the ESPC Task Order Payments (and in any corresponding insurance proceeds, contract termination payments or other amounts equivalent thereto) to be made pursuant to that certain ESPC Tak Order No. 0001, dated January 7, 1999, as amended, by and between HEC/Tobyhanna Energy Project, Inc. (the "Company") and the United States of America (the "Government"), relating to the installation, operation and maintenance of certain energy conservation and energy cost savings measures at the Tobyhanna Army Depot, Tobyhanna, Pennsylvania. This Certificate has been issued pursuant to the Trust Indenture and Security Agreement Relating to an Energy Savings Performance Contract Project, dated as of September 1, 1999 (the "Trust Agreement"), by and among the Company and United States Trust Company of New York, as trustee (the "Trustee"). Until the final Payment Date stated above, the Holder shall have the above-stated undivided proportionate ownership percentage in 100% of the ESPC Task Order Payments (and in any corresponding insurance proceeds, contract termination payments or other amounts equivalent thereto), up to an amount necessary to satisfy all payments of Interest and Principal, together with premiums, if any, upon redemption, on the Certificates as and when such payments become due and payable. The right to receive the ESPC Task Order Payments has been assigned by the Company to the Trustee pursuant to the Assignment Agreement dated as of September 1, 1999, notice of which assignment has been provided to the Government by the Trustee pursuant to the Notice of Assignment. Subject to the terms of the ESPC Task Order described above and the Trust Agreement, the Holder of this Certificate is entitled to receive (i) distributions of portions of ESPC Task Order Payments aggregating $56,228,253.59, which is the "Total Dollar Amount" of this Certificate, payable in semiannual installments as set forth in the Payment Schedule hereinafter set forth, on the dates set forth therein (the "Payment Dates"), and (ii) premiums and Default Rate interest, if any, to the extent set forth in the Trust Agreement. The payments due hereunder (exclusive of premiums and Default Rate interest, if any) consist of Principal and Interest in the amounts set forth in the Payment Schedule. It cannot be determined from the face of this Certificate whether all or a portion of the Principal amount hereof has been paid. The Certificates are payable from the ESPC Task Order Payments, such ESPC Task Order Payments to be held in and disbursed from the funds and accounts established pursuant to the Trust Agreement. The obligation of the Government to make ESPC Task Order Payments under the ESPC Task Order is subject to the availability of appropriations for the payment of ESPC Task Order Payments. The obligation to make ESPC Task Order Payments is neither a debt nor obligation of the Government except in a fiscal year for which appropriations are available to make ESPC Task Order Payments. Prior to the Government's acceptance of all of the ESPC Project, all or a portion of the amounts due with respect to the Certificates will be paid from the Proceeds from the sale of the Certificates. All amounts payable hereunder are to be paid in lawful money of the United States of America, which at the time of payment is legal tender. Overdue Principal (and, to the extent permitted by applicable law, overdue Interest) on the Certificates shall bear interest at the per annum rate equal to the Default Rate, from the date due until the date paid. All future payments of Principal and Interest on each Certificate which has been partially redeemed pursuant to Section 5.3 of the Trust Agreement shall be reduced by the percentage determined by dividing (i) the amount of Principal redeemed on such Certificate by (ii) the amount of Principal Outstanding on such Certificate immediately prior to such redemption. The final payment on this Certificate shall be made at the Principal Office at which the Trustee conducts corporate trust business in New York, New York (the "Principal Office"), upon the surrender of this Certificate. All other Principal and the Interest payable on this Certificate shall be paid by check or draft of the Trustee mailed on the Payment Dates to the Holders at the addresses recorded on the Certificate Register. The Certificates evidence an interest in the ESPC Task Order Payments under the ESPC Task Order (and in any corresponding insurance proceeds, contract termination payment or other amounts equivalent thereto), and certain other property held pursuant to the Trust Agreement, all of which are subject to the provisions of the Trust Agreement permitting the application thereof for or to the purposes and on the terms and conditions set forth in the Trust Agreement. This Certificate has been executed by the Trustee pursuant to the terms of the Trust Agreement. Copies of the ESPC Task Order, the Trust Agreement and related documents are on file and available for inspection at the Principal Office of the Trustee and reference is hereby made to these documents, and any and all amendments thereto, for a description of the pledges and covenants securing the Certificates, the nature, extent and manner of enforcement of such pledges and covenants, the rights with respect thereto, and the other terms and conditions upon which the Certificates are delivered thereunder. The Certificates are issuable in the form of fully registered Certificates in denominations of $100,000 and any $1,000 multiples in excess thereof. The Certificates, upon surrender thereof at the Principal Office of the Trustee with a written request for exchange satisfactory to the Trustee duly executed by the registered Holder or his, her or its attorney-in-fact duly authorized in writing and upon payment of the Trustee's reasonable exchange fee for each new Certificate issued, may be exchanged for an equal proportionate share of the outstanding Principal amount of fully registered Certificates of any minimum denomination of the same maturity. This Certificate shall be transferable upon the Certificate Register, which shall be kept for that purpose at the Principal Office of the Trustee, upon surrender and cancellation of this Certificate together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered Holder or his, her or its duly authorized attorney-in-fact and upon payment of the charges provided in the Trust Agreement including its reasonable transfer fee for each new Certificate issued. Upon such transfer a new fully registered Certificate or Certificates, of the same maturity and aggregate Principal amount will be issued to the transferee. The Trustee may treat the registered Holder hereof as the absolute owner hereof for all purposes, and the Trustee shall not be affected by any notice to the contrary. For so long as the Depositary (or any successor Depositary appointed pursuant to the Trust Agreement) maintains a book-entry only system for registration of the Certificates, the Depositary or its nominee, and any successor Depositary or its nominee, shall be deemed the Holder of the Certificates for all purposes of the Trust Agreement, including without limitation, the timing and manner of the payment of the Principal or Redemption Price of and Interest on the Certificates, the selection of Certificates or portions thereof to be redeemed, the giving of notices, and any consent or direction required to be given to or on behalf of the registered owners of the Certificates. The Trustee, without the consent of the Holders of the Certificates, may replace the Depositary with another qualified Depositary at its option or in the event the Depositary discontinues the maintenance of the Certificates under a book-entry only system in accordance with the terms of the Trust Agreement. For so long as the Certificates are registered under a book-entry only system maintained by a Depositary, the manner, timing and method of payment of the Principal or Redemption Price of and Interest on the Certificates, the manner, timing and method of disseminating notices to the registered owners of the Certificates and the selection of Certificates or portions thereof to be redeemed shall be governed by agreement between the Trustee and the Depositary, notwithstanding anything to the contrary contained in this Certificate. The Trust Agreement permits certain amendments or supplements to the Trust Agreement and the ESPC Task Order not prejudicial to the Holders to be made without the consent of or notice to the Holders, certain other amendments or supplements thereto to be made with the consent of the Holders of not less than a majority in aggregate Principal amount of the Certificates then outstanding, and other amendments or supplements thereto to be made only with the consent of all the Holders. The Certificates are subject to optional redemption, in whole, at the election of the Company in accordance with Section 5.1 of the Trust Agreement. The Certificates are subject to extraordinary redemption in whole, in accordance with Section 5.2 of the Trust Agreement. The Certificates are subject to mandatory redemption in whole or in part, in accordance with Section 5.3(a) of the Trust Agreement, and are subject to mandatory redemption in whole or in part, in accordance with Section 5.3(b) of the Trust Agreement. If certain Events of Default occur as provided for in the Trust Agreement, the Certificates shall be paid to the extent of available funds under the terms and conditions set forth in the Trust Agreement. The Trustee has no obligation or liability to the registered Holders for the payment of the Certificates; the Trustee's sole obligation is to administer, for the benefit of the Company and the Holders, the Trust Fund and accounts established in the Trust Agreement. The Trustee has no obligation to pay any portion of the Interest or Principal pertaining to the Certificates from any source other than the funds and accounts established in the Trust Agreement. Except as provided for in the Trust Agreement, the Trustee and the Company shall not have any obligation or liability to the registered Holders with respect to the payment, when due, of ESPC Task Order Payments by the Government or with respect to the performance by the Government of any other covenant made by it in the ESPC Task Order. Initially capitalized terms utilized herein without definition have the meanings assigned thereto in the Trust Agreement. [END OF PAGE] This Certificate has been executed as of the certificate date first stated above by the manual signature of an authorized signatory of the Trustee solely in its capacity as trustee pursuant to and in accordance with the Trust Agreement. UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee By: Authorized Signatory THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THE REGISTRATION PROVISIONS OF SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS HAVE BEEN SATISFIED OR UNLESS IN THE OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AND THE COMPANY COMPLIANCE WITH SUCH PROVISIONS IS NOT REQUIRED. Payment Date Interest Payment Principal Payment Total Payment February 15, 2000 $757,076.72 $ 0 $757,076.72 August 15, 2000 1,009,435.63 $ 0 1,009,435.63 February 15, 2001 1,009,435.63 31,000.00 1,040,435.63 August 15, 2001 1,008,253.75 467,000.00 1,475,253.75 February 15, 2002 990,449.38 485,000.00 1,475,449.38 August 15, 2002 971,958.75 503,000.00 1,474,958.75 February 15, 2003 952,781.88 523,000.00 1,475,781.88 August 15, 2003 932,842.50 519,000.00 1,451,842.50 February 15, 2004 913,055.63 283,000.00 1,196,055.63 August 15, 2004 902,266.25 294,000.00 1,196,266.25 February 15, 2005 891,057.50 305,000.00 1,196,057.50 August 15, 2005 879,429.38 316,000.00 1,195,429.38 February 15, 2006 867,381.88 328,000.00 1,195,381.88 August 15, 2006 854,876.88 341,000.00 1,195,876.88 February 15, 2007 841,876.25 354,000.00 1,195,876.25 August 15, 2007 828,380.00 367,000.00 1,195,380.00 February 15, 2008 814,388.13 381,000.00 1,195,388.13 August 15, 2008 799,862.50 396,000.00 1,195,862.50 February 15, 2009 784,765.00 411,000.00 1,195,765.00 August 15, 2009 769,095.63 427,000.00 1,196,095.63 February 15,2010 752,816.25 443,000.00 1,195,816.25 August 15, 2010 735,926.88 460,000.00 1,195,926.88 February 15, 2011 718,389.38 477,000.00 1,195,389.38 August 15, 2011 700,203.75 496,000.00 1,196,203.75 February 15, 2012 681,293.75 514,000.00 1,195,293.75 August 15, 2012 661,697.50 534,000.00 1,195,697.50 February 15, 2013 641,338.75 554,000.00 1,195,338.75 August 15, 2013 620,217.50 576,000.00 1,196,217.50 February 15, 2014 598,257.50 598,000.00 1,196,257.50 August 15, 2014 575,458.75 620,000.00 1,195,458.75 February 15, 2015 551,821.25 644,000.00 1,195,821.25 August 15, 2015 527,268.75 669,000.00 1,196,268.75 February 15, 2016 501,763.13 694,000.00 1,195,763.13 August 15, 2016 475,304.38 721,000.00 1,196,304.38 February 15, 2017 447,816.25 748,000.00 1,195,816.25 August 15, 2017 419,298.75 776,000.00 1,195,298.75 February 15, 2018 389,713.75 806,000.00 1,195,713.75 August 15, 2018 358,985.00 837,000.00 1,195,985.00 February 15, 2019 327,074.38 869,000.00 1,196,074.38 August 15, 2019 293,943.75 902,000.00 1,195,943.75 February 15, 2020 259,555.00 936,000.00 1,195,555.00 August 15, 2020 223,870.00 972,000.00 1,195,870.00 February 15, 2021 186,812.50 1,009,000.00 1,195,812.50 August 15, 2021 148,344.38 1,047,000.00 1,195,344.38 February 15, 2022 108,427.50 1,087,000.00 1,195,427.50 August 15, 2022 66,985.63 1,757,000.00 1,823,985.63 TOTAL: $29,751,253.59 $26,477,000.00 $56,228,253.59 INSTRUCTION FOR TRANSFER The Certificate must be presented for transfer and registration into Assignee's name at the Principal Office of United States Trust Company of New York, as transfer agent. The transfer agent requires payment of a transfer fee for each new Certificate issued. Checks should be made payable to the order of United States Trust Company of New York and should accompany each requested transfer. The re-registered Certificate may be picked up after two Business Days or may be mailed according to your instructions. Certificates will only be registered exactly as the name appears below. Direct inquiries regarding transfer shall be directed to the Trustee at its Principal Office. The Record Date for any Payment Date is the 15th day (or the immediately preceding Business Day ) prior to such Payment Date. IT IS THE RESPONSIBILITY OF THE ASSIGNEE TO PRESENT THE CERTIFICATE FOR TRANSFER. The Trustee's sole responsibility is to pay the registered Holder as of Record Date. No claims for payment will be recognized other than for failure to pay the registered Holder. All other claims for payments, accrued Interest, etc. must be presented to the Assignor. (Form of Assignment) ASSIGNMENT For value received the undersigned do(es) hereby sell, assign and transfer unto the within mentioned registered Certificate and hereby irrevocably constitutes and appoint(s) _________________________ attorney, to transfer the same on the Certificate Register of the Trustee with full power of substitution in the premises. Signature(s) of Holder(s) Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within registered Certificate in every particular without alteration, or enlargement or any change whatsoever. Dated: Signature Guaranteed: EXHIBIT 3.8 FORM OF REQUISITION FOR DISBURSEMENT FROM CAPITAL REPAIR AND REPLACEMENT ACCOUNT ______________, 19____ United States Trust Company of New York, as Trustee 114 West 47th Street New York, New York, New York Attention: Corporate Trust Services In accordance with the terms of the Trust Indenture and Security Agreement Relating to an Energy Savings Performance Contract Project, dated as of September 1, 1999 (the "Trust Agreement"), by and between HEC/Tobyhanna Energy Project, Inc. (the "Company") and you, as trustee (the "Trustee"), the Contractor as agent for the Company, hereby requests that the Trustee make a disbursement from the Capital Repair and Replacement Account maintained pursuant to Section 3.8 of the Trust Agreement as follows: 1. The total amount to be disbursed from the Capital Repair and Replacement Account is $____________, consisting of disbursements for the following purposes and in the following amounts: $________________ for _________________ $________________ for _________________ $________________ for _________________; 2. Payment is to be made to the Contractor at the following address: 24 Prime Parkway, Suite 302 Natick, Massachusetts 01760; 3. This request is submitted to the Trustee for the purpose of inducing the Trustee to approve a disbursement, and the Contractor intends that the Trustee shall rely upon the same being true, accurate and complete in all material respects: 4. This request for a disbursement has been reviewed and approved by the Company, as is evidenced by its signature below. CONTRACTOR: HEC Inc. By: __________________________________ Name: ___________________________ Title: ____________________________ APPROVED BY: COMPANY: HEC/Tobyhanna Energy Project, Inc. By: _____________________________ Name: ______________________ Title: _______________________ EX-99.13OTHCONTRCT 38 c11-2.txt Exhibit C.11.2 PROJECT LOAN AGREEMENT Dated as of September 30, 1999 UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee ("Trustee") and HEC/TOBYHANNA ENERGY PROJECT, INC. ("Company") UNITED STATES ARMY TOBYHANNA ARMY DEPOT TOBYHANNA, PENNSYLVANIA ENERGY SAVINGS PERFORMANCE CONTRACT PROJECT TABLE OF CONTENTS RECITALS ARTICLE I - DEFINITIONS AND RULES OF CONSTRUCTION Section 1.01 Definitions Section 1.02 Rules of Construction ARTICLE II - PROJECT LOAN; ADVANCES Section 2.01 Commitment to Lend Section 2.02 Note Section 2.03 Security Section 2.04 Interest on Project Financing Section 2.05 Repayment of Project Financing Section 2.06 Prepayments Section 2.07 Advances Section 2.08 Contractor as Agent of Company ARTICLE III - CONDITIONS TO THE TRUSTEE'S OBLIGATION TO MAKE ADVANCES Section 3.01 Advance Conditions ARTICLE IV - REPRESENTATIONS AND COVENANTS OF THE BORROWER Section 4.01 Reliance on Representations and Compliance with Covenants ARTICLE V - EVENTS OF DEFAULT; REMEDIES Section 5.01 Events of Default Section 5.02 Remedies on Event of Default ARTICLE VI - MISCELLANEOUS PROVISIONS Section 6.01 Notice Section 6.02 Amendment; Waiver Section 6.03 Governing Law Section 6.04 Consent to Jurisdiction Section 6.05 WAIVER OF TRIAL BY JURY Section 6.06 Limitation on Liability Section 6.07 Indemnification Section 6.08 Severability EXHIBITS Exhibit A Form of Project Note Exhibit B Form of Requisition for Advance PROJECT LOAN AGREEMENT THIS PROJECT LOAN AGREEMENT (the "Loan Agreement") is dated as of the 1st day of September, 1999, by and between United States Trust Company of New York, as Trustee under the Trust Indenture and Security Agreement referred to herein ("Trustee") and HEC/Tobyhanna Energy Project, Inc., a Massachusetts corporation ("Company"). Reference is made to Section 1.01 of this Loan Agreement for the definitions of certain initially-capitalized terms used herein. RECITALS WHEREAS, the Company and the Trustee have entered into that certain Trust Indenture and Security Agreement Relating to an Energy Savings Performance Contract Project dated as of September 1, 1999 (as amended and supplemented from time to time, the "Trust Agreement"), pursuant to which the Trustee has received Proceeds from the sale of Certificates in the principal amount of $26,000,000; and WHEREAS, such Proceeds are to be used by the Company to finance the costs of the ESPC Project, consisting of acquiring, installing, owning, operating and maintaining a series of energy conservation and energy cost savings measures at the Tobyhanna Army Depot located in Tobyhanna, Pennsylvania, pursuant to the ESPC Task Order with the United States of America, acting by and through the Department of the Army; and WHEREAS, the Trustee, in its capacity as trustee under the Trust Agreement, has agreed to advance to, or for the benefit of, the Company the proceeds of the sale of the Certificates for Project Costs incurred and to be incurred in connection with the ESPC Project; and WHEREAS, the Trustee has advised the Company that, subject to the terms of this Loan Agreement, and the other Project Financing Documents to be executed in connection herewith, and based upon the representations, warranties, covenants and undertakings of the Company herein and therein contained, the Trustee (i) will disburse a portion of the Proceeds pursuant to direction set forth in the Closing Memorandum, (ii) will advance the amounts held from time to time in the Construction Account and in the Gate Station Reserve Account to, or at the direction of, the Company, based upon the approval of the Independent Engineer, and (iii) will disburse the remainder of the Proceeds, and all other monies received, as provided in the Trust Agreement; NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt whereof is hereby acknowledged, the Trustee and Company hereby agree as follows: ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION Section 1.01 Definitions. Terms defined in the Trust Agreement and initially capitalized herein, for all purposes of this Loan Agreement and all Exhibits hereto, have the same meanings given to them in the Trust Agreement unless the context requires otherwise. The terms defined below shall have the meanings given to them for purposes of this Loan Agreement and all Exhibits hereto unless otherwise specifically defined in such Exhibits (such terms to be equally applicable to both singular and plural form of the terms defined). Contractor means HEC Inc., a Massachusetts corporation, acting pursuant to that certain Project Management Services Agreement dated of even date herewith, by and between the Company and HEC Inc. Closing means the time of execution and delivery hereof by the Company and the Trustee, which must occur simultaneously with the execution and delivery of the Trust Agreement and other Project Financing Documents. Project Costs means all costs of, payment of or reimbursement for the design, acquisition, construction, installation, ownership, operation, maintenance and financing of the ESPC Project, including, but not limited to, architectural, engineering, construction management and development fees and charges, construction, installation and management costs, administrative costs and capital expenditures relating to construction and financing of the ESPC Project, sales taxes, costs of feasibility, environmental and other reports, inspection costs, permit fees, filing and recording taxes and fees, printing cost, reproduction and binding cost, any initial fees charged by the Trustee and annual fees and charges of the Trustee for services rendered under the Trust Agreement, legal fees and charges, investment banking, financial and other professional consulting fees, cost of rating agencies or credit ratings, fees for the execution, transportation and safekeeping of Certificates, including any DTC costs, and fees, charges and other expenses in connection with the foregoing. Project Financing means the advances to the Company made pursuant to this Loan Agreement and the Project Note by the Trustee in the aggregate principal amount of $26,000,000, utilizing the Proceeds of the Certificates deposited for the account of the Company in the Trust Fund, including amounts deposited by the Trustee pursuant to the Closing Memorandum in the accounts established pursuant to Article III of the Trust Agreement and all amounts to be disbursed directly to the Company, the Contractor and third-parties on the Closing Date pursuant to the Closing Memorandum. Project Note means the promissory note dated as of the Closing Date, substantially in the form attached hereto as Exhibit A, issued by the Company and payable to the Trustee in the aggregate principal amount of the Project Financing. Requisition means the form of Requisition for Advance attached hereto as Exhibit B, executed and delivered by the Contractor to the Trustee, and which must be approved and countersigned by the Company and, with the exception of the initial disbursement of Proceeds pursuant to the Closing Memorandum, by the Independent Engineer prior to each Advance (as defined in Section 2.07 hereof) hereunder. Section 1.02 Rules of Construction. Words of the masculine and feminine gender shall be deemed and construed to include the neuter gender. Unless the context otherwise indicates, the singular number shall include the plural number and vice versa, and words importing persons shall include corporations and associations, including public bodies, as well as natural persons. The terms "hereby", "hereof", "hereto", "herein", "hereunder" and any similar terms, as used in this Loan Agreement, refer to this Loan Agreement. ARTICLE II PROJECT LOAN; ADVANCES Section 2.01 Commitment to Lend. Subject to the provisions of this Loan Agreement, the Trustee will advance upon the request of the Contractor, at the direction of the Company, and the Company, in accordance with its representations, warranties and agreements set forth in this Loan Agreement, will accept, the amount of the Project Financing, from time to time, as set forth in this Article. Section 2.02 Note. The Project Financing shall be evidenced by the Project Note, in substantially the form set forth as Exhibit A hereto. The Project Note will be dated as of the Closing Date and shall be payable to the order of the Trustee. Section 2.03 Security. The Project Financing to be made hereunder shall be secured by, and entitled to the benefits of, the Pledged Property described in the Trust Agreement. Section 2.04 Interest on Project Financing. The Company agrees to pay interest on the outstanding unpaid principal amount of the Project Financing from the Closing Date until the principal amount thereof is repaid in full at the rate per annum set forth in the Project Note. For purposes of determining the amount due under the Project Note, the full amount of the Proceeds of the Certificates are deemed to be advanced to, or for the benefit of, the Company on the Closing Date. Overdue principal (and to the extent permitted by applicable law) overdue interest on the Project Note shall bear interest payable on demand at the rate per annum equal to the Default Rate (as defined in the Project Note) until all such amounts shall be repaid in full. Section 2.05 Repayment of Project Financing. The outstanding amount of the Project Financing shall be repaid in installments on each Payment Date beginning on February 15, 2000 and in accordance with the principal and interest schedule set forth in the Project Note. All amounts received for application by the Trustee, as the result of the receipt of ESPC Task Order Payments, shall be deposited to the ESPC Task Order Payment Account established as part of the Trust Fund under the Trust Agreement, shall be applied in the manner specified in Section 3.6 of the Trust Agreement, and shall be credited in payment of the corresponding amounts due on the Project Note, such payments to be applied first to accrued interest and then to principal. Section 2.06 Prepayments. (a) The Project Note is subject to prepayment, in whole, at the option of the Company in connection with an optional redemption of Certificates pursuant to Section 5.1 of the Trust Agreement. In the event of such prepayment, the Company shall pay to the Trustee for the account of the Certificate Holders a Make-Whole Premium calculated in the manner set forth in said Section 5.1. (b) In the event of a prepayment of the Project Note, in whole or in part, in connection with a mandatory redemption of the Certificates pursuant to Section 5.3(a) of the Trust Agreement, the Company shall pay to the Trustee, as liquidated damages, and not as a penalty, a prepayment premium in the amount of the Government Termination Redemption Premium. (c) In the event of a prepayment of the Project Note, in whole or in part, in connection with a mandatory redemption of the Certificates pursuant to Section 5.3(b) of the Trust Agreement, no premium or penalty shall be due on the amount of such prepayment. Section 2.07 Advances. (a) All disbursements of Proceeds to be made pursuant to the Closing Memorandum shall be made on the Closing Date. For all advances following the initial disbursement of Proceeds pursuant to the Closing Memorandum, within five Business Days of the Trustee's receipt of a Requisition from the Contractor which includes the Company's and the Independent Engineer's written consent thereto, the Trustee shall disburse such Project Financing advance (each, an "Advance") from collected funds on deposit in the Construction Account, or in the case of the Gate Station Work, from collected funds on deposit in the Gate Station Reserve Account, to the parties designated in such Requisition and in the amounts provided for in the Requisition. All requests for Advances shall be submitted on the Requisition form attached hereto as Exhibit B. (b) The making of any Advance by the Trustee shall not be deemed an acceptance or approval by the Trustee (for the benefit of the Company or any third party) of the work done, or any of the fixtures or equipment installed. (c) The execution of this Loan Agreement by the Company shall, and hereby does, constitute an irrevocable direction to the Trustee to make such Advances, and, except for execution of individual Requisitions, no further authorization from Company shall be necessary to warrant such Advances as are described in clause (a) of this Section 2.07, and all such Advances shall be deemed evidenced by the Project Note and secured pursuant to the Trust Agreement. Section 2.08 Contractor as Agent of Company. The Company hereby constitutes and appoints the Contractor as its true and lawful agent and attorney-in-fact to act for the Company under, and to take such action on behalf of the Company required or permitted to be taken by the Company pursuant to: (a) Article II of this Loan Agreement for purposes of preparing and submitting Requisitions for Advances from the Construction Account and the Gate Station Reserve Account; and (b) Section 3.8(c) of the Trust Agreement for purposes of preparing and submitting requisitions for disbursements from the Capital Repair and Replacement Account. The Contractor shall have the power and authority to take such action on behalf of the Company as the Contractor deems necessary or desirable in its sole discretion. The authority granted to the Contractor by the Company shall continue throughout the term of this Loan Agreement, unless sooner terminated by the Company by written notice delivered to the Trustee. ARTICLE III CONDITIONS TO THE TRUSTEE'S OBLIGATION TO MAKE ADVANCES Section 3.01 Advance Conditions. The Trustee's obligation to make any Project Financing Advance shall be subject to the satisfaction of the following conditions: (a) No Event of Default shall have occurred and be continuing hereunder; (b) The Company shall have approved such Advance in writing; (c) For each Advance other than the first disbursement pursuant to the Closing Memorandum, the Independent Engineer shall have approved such Advance in writing; and (d) In the case of the first disbursement of the Project Financing pursuant to the Closing Memorandum: (i) the Trustee shall have sold 100% of the Certificates and shall be in receipt of 100% of such sale proceeds; (ii) all instruments required to create and protect the Trustee's security interest in the Pledged Property shall have been duly executed, delivered, recorded or filed in such manner and places as required by law to establish, protect and preserve the lien of the Trust Agreement on such Pledged Property, and all taxes, fees and other charges required by law in connection with such recording or filing shall have been duly paid or provided for; (iii) all other Project Financing Documents shall have been duly executed and delivered by the parties thereto; and (iv) the Trustee shall have received the Engineer's Report; and (v) the Company shall have delivered or caused the Contractor to deliver, to the Trustee unconditional lien waivers reasonably satisfactory to it covering all lienable work performed with respect to the ESPC Project prior to the Closing Date. ARTICLE IV REPRESENTATIONS AND COVENANTS OF THE BORROWER Section 4.01 Reliance on Representations and Compliance with Covenants. In order to induce the Trustee to execute this Agreement and to advance the Project Financing to the Company, the Company, from and after the date hereof and so long as the Project Financing is outstanding or the Company shall have any obligations remaining hereunder, agrees that the Trustee may rely on its representations set forth in Article VII of the Trust Agreement and further agrees to comply with all of its covenants set forth in Article VII of the Trust Agreement. Such representations and covenants are hereby incorporated herein by reference and constitute a part of this Agreement. ARTICLE V EVENTS OF DEFAULT; REMEDIES Section 5.01 Events of Default. For purposes hereof, an Event of Default is the occurrence of any one or more of the events described in Section 4.1 of the Trust Agreement. Section 5.02 Remedies on Event of Default. Upon the occurrence and during the continuation of any Event of Default, the Trustee may exercise the remedies set forth in Section 4.2 of the Trust Agreement, subject to the conditions and limitations thereof. ARTICLE VI MISCELLANEOUS PROVISIONS Section 6.01 Notice. All notices hereunder shall be in writing and shall be given to such party at its address or telecopy number set forth below, or such other address or telecopy number as such party may hereafter specify by notice to the other parties. Each such notice, request, or other communication shall be effective (i) if given by telecopy, when such telecopy is transmitted on a Business Day, to the telecopy number specified in this Section 6.01, (ii) if given by mail, four days after such communication is deposited in the U.S. mails, first class postage prepaid, in certified form, addressed as specified below, or (iii) if given by any other means (including, without limitation, by overnight courier service), when delivered on a Business Day at the address specified below; provided, that any notice to the Trustee shall be effective only upon its receipt thereof. (a) If to the Trustee: U.S. Trust Company of New York 114 West 47th Street New York, New York 10036 Attn: Corporate Trust Services Telecopy: (212) 852-1625 (b) If to Company: HEC/Tobyhanna Energy Project, Inc. 24 Prime Parkway, Suite 302 Natick, Massachusetts 01760 Attn: President Telecopy: (508) 653-0266 with a copy to: HEC, Inc. 24 Prime Parkway, Suite 302 Natick, Massachusetts 01760 Attn: President Telecopy: (508) 653-0266 Section 6.02 Amendment; Waiver. Neither this Loan Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against whom enforcement of the change, waiver, discharge or termination is sought. Section 6.03 Governing Law. This Loan Agreement shall be governed by the laws of The Commonwealth of Massachusetts, without giving effect to the principles of conflicts of laws. Section 6.04 Consent to Jurisdiction. The Company and the Trustee irrevocably submit to the jurisdiction of any Massachusetts state court, or any Federal court sitting in Massachusetts, over any suit, action or proceeding arising out of or relating to this Loan Agreement or the Trust Agreement. The Company and the Trustee hereby waive to the fullest extent permitted by law, any objection which either may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in such courts and any claim that any suit, action or proceeding brought in such court has been brought in an inconvenient forum. Section 6.05 WAIVER OF TRIAL BY JURY. THE TRUSTEE AND THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THE PROJECT FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREIN. FURTHER, THE COMPANY HEREBY CERTIFIES THAT NO REPRESENTATIVE OF TRUSTEE, OR COUNSEL TO THE TRUSTEE, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE TRUSTEE WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. THE COMPANY ACKNOWLEDGES THAT THE TRUSTEE HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, INTER ALIA, THE PROVISIONS OF THIS SECTION. Section 6.06 Limitation on Liability. No past, present or future partner, member, shareholder, officer, employee, servant, executive, director, agent, authorized representative or other Affiliate, parent or subsidiary of the Company (each such Person, an "operative") shall be personally liable for payments (including costs of collection) due hereunder or under any other agreement or document entered into by or for the benefit of the Trustee, or for the performance of any obligation, or breach of any representation or warranty made by the Company, hereunder or thereunder. The sole recourse of the Trustee for the satisfaction of the obligations (including costs of collection) of the Company hereunder shall be against the Pledged Property, and not against any assets or property of any such operative. In the event that a default occurs in connection with such obligations, no action shall be brought against any such operative by virtue of his direct or indirect ownership interest in the Company. In the event of foreclosure or other sale or disposition of Pledged Property, no judgment for any deficiency upon the obligations hereunder or any other agreement or document entered into with or for the benefit of the Trustee shall be obtainable by the Trustee against any such operative. Notwithstanding the foregoing, (a) the Trustee shall be entitled to bring suit against any operative for the purpose of obtaining jurisdiction over the Company, and (b) nothing in this Section 6.06 shall be deemed to release any operative from liability for his fraudulent actions, misappropriation of any ESPC Task Order Payments, insurance proceeds, condemnation awards or other sums received by the Company, misrepresentations or willful misconduct, or affect or diminish the obligations of such operative under or in respect of each agreement to which he is, or is intended to be, a party. Section 6.07 Indemnification. The provisions of Section 6.10 of the Trust Agreement are incorporated herein by reference as if set forth herein in full. Section 6.08 Severability. In the event any one or more of the provisions contained in this Loan Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Loan Agreement, but this Loan Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein or therein. IN WITNESS WHEREOF, the parties have executed this Loan Agreement as an instrument under seal the day and year first above written. TRUSTEE: UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee By: _______________________________ Name: Title: BORROWER: HEC/TOBYHANNA ENERGY PROJECT, INC. By: _____________________________________ Name: Title: EXHIBIT A FORM OF PROJECT NOTE BOSTON, MASSACHUSETTS $26,000,000 September 30, 1999 FOR VALUE RECEIVED, the undersigned, HEC/Tobyhanna Energy Project, Inc., a Massachusetts corporation ("Company"), promises to pay to the order of United States Trust Company of New York ("Trustee"), as trustee under a certain Trust Indenture and Security Agreement Relating to an Energy Saving Performance Contract Project , dated as of September 1, 1999, (the "Trust Agreement") , at the offices of the Trustee at 114 West 47th Street, New York, New York 10036, Attn: Corporate Trust Services, or at such other place as Trustee may designate by notice to Company, the principal sum of $26,000,000 plus interest on the principal balance hereof at a per annum rate of [ ]% (the "Note Rate"). Interest on this Note shall be payable semiannually in arrears on each February 15 and August 15 (the "Payment Dates"), commencing February 15, 2000, until this Note is paid in full. The principal amount of this Note shall be payable in semiannual installments on each Payment Date commencing February 15, 2001 and ending August 15, 2022 (the "Maturity Date"). Interest on, and principal of, this Note shall be payable in accordance with the following schedule: Payment Interest Principal Total Date Payment Payment Payment $ $ 0 $ 0 February 15, 2000 August 15, 2000 February 15, 2001 August 15, 2001 February 15, 2002 August 15, 2002 February 15, 2003 August 15, 2003 February 15, 2004 August 15, 2004 February 15, 2005 August 15, 2005 February 15, 2006 August 15, 2006 February 15, 2007 August 15, 2007 February 15, 2008 August 15, 2008 February 15, 2009 August 15, 2009 February 15, 2010 August 15, 2010 February 15, 2011 August 15, 2011 February 15, 2012 August 15, 2012 February 15, 2013 August 15, 2013 February 15, 2014 August 15, 2014 February 15, 2015 August 15, 2015 February 15, 2016 August 15, 2016 February 15, 2017 August 15, 2017 February 15, 2018 August 15, 2018 February 15, 2019 August 15, 2019 February 15, 2020 August 15, 2020 February 15, 2021 August 15, 2021 February 15, 2022 August 15, 2022 TOTAL: $ $[26,000,000] $ This Note is made and delivered by Company pursuant to that certain Project Loan Agreement, dated as of September 1, 1999, by and between Company and Trustee (the "Project Loan Agreement"), and is entitled to the benefits and subject to the terms of the Project Loan Agreement. Initially capitalized terms utilized herein without definition shall have the meanings attributed thereto in the Project Loan Agreement and the Trust Agreement. Interest on the principal amount of this Note shall be calculated on the basis of a 360-day year consisting of twelve (12) thirty (30) day months. All payments of interest and principal hereon shall be payable in lawful money of the United States. All amounts received for application by the Trustee, as the result of the receipt of ESPC, Task Order Payments, shall be deposited to the ESPC Task Order Payment Account established as part of the Trust Fund under the Trust Agreement, shall be applied in the manner specified in Section 3.6 of the Trust Agreement, and shall be credited in payment of the corresponding amounts due on this Note, such payments to be applied first to accrued interest and then to principal. Overdue principal (and to the extent permitted by applicable law) overdue interest on this Note shall bear interest payable on demand at the rate per annum (the "Default Rate") equal to the lower of (i) two percent (2%) plus the Note Rate, or (ii) the maximum interest rate permitted by law, until all such amounts shall be repaid in full. Nothing contained in this Note or any of the other Project Financing Documents shall require payment of, or permit the collection of, interest in an amount in excess of the maximum amount permitted by applicable law. If interest in excess of such maximum legal rate shall be payable hereunder, then ipso facto such rate shall be reduced to the highest lawful rate so that no amounts shall be charged which are in excess thereof, and, in the event it should be determined that any excess over such highest lawful rate has been received, such excess shall be applied by the Trustee in reduction of the outstanding indebtedness on this Note. This Note is subject to prepayment, in whole, at the election of the Company, at par together with payment of a Make-Whole Premium, in accordance with Section 5.1 of the Trust Agreement. This Note is subject to mandatory prepayment, in whole or in part, including payment of the Government Termination Redemption Premium, in accordance with Section 5.3(a) of the Trust Agreement. This Note is subject to mandatory prepayment, in whole or in part, without premium or penalty, in accordance with Section 5.3(b) of the Trust Agreement. Upon the occurrence of an Event of Default or Partial Event of Default (as defined in Article V of the Project Loan Agreement), the Trustee may exercise the rights and remedies set forth in said Article V. Subject to the limitation on liability set forth in Section 6.06 of the Project Loan Agreement and in the penultimate paragraph of this Note, the Company promises to pay all reasonable costs of collection, including without limitation, expenses of enforcement of rights under the Trust Agreement and reasonable attorneys' fees, upon default in the payment of this Note or interest hereon when due. Any notice to the Company or the Trustee provided for in this Note shall be given in the manner specified in the Project Loan Agreement. This Note is secured by the Pledged Property, in the manner and to the extent set forth in the Trust Agreement. Presentment, protest and demand, notice of demand, dishonor, nonpayment and protest are hereby waived by all makers, sureties, guarantors and endorsers hereof. All makers, sureties, guarantors and endorsers hereof agree that the Maturity Date of this Note, or any payment hereunder, may be extended from time to time without in any way effecting the liability of such makers, sureties, guarantors or endorsers. In the event any one or more of the provisions contained in this Note shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Note, but this Note shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein or therein. This Note may not be changed orally, but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification or discharge is sought. This Note shall be construed and governed in accordance with the laws of the Commonwealth of Massachusetts, without giving effect to principles of conflict of laws, and shall inure to the benefit of the parties hereto and their respective successors and assigns. No past, present or future partner, member, shareholder, officer, employee, servant, executive, director, agent, authorized representative or other Affiliate, parent or subsidiary of the Company (each such Person, an "operative") shall be personally liable for payments (including costs of collection) due hereunder or any other agreement or document entered into by or for the benefit of the Trustee, or for the performance of any obligation, or breach of any representation or warranty made by the Company, hereunder or thereunder. The sole recourse of the Trustee for the satisfaction of the obligations (including costs of collection) of the Company hereunder shall be against the Pledged Property, and not against any assets or property of any such operative. In the event that a default occurs in connection with such obligations, no action shall be brought against any such operative by virtue of his direct or indirect ownership interest in the Company. In the event of foreclosure or other sale or disposition of Pledged Property, no judgment for any deficiency upon the obligations hereunder or any other agreement or document entered into with or for the benefit of the Trustee shall be obtainable by the Certificate owners or the Trustee against any such operative. Notwithstanding the foregoing, (a) the Trustee or any Certificate owner shall be entitled to bring such suit against any operative for the purpose of obtaining jurisdiction over the Company, and (b) nothing in this paragraph shall be deemed to release any operative from liability for his fraudulent actions, misappropriation of any ESPC Task Order Payments, insurance proceeds, condemnation awards or other sums received by the Company, misrepresentations or willful misconduct, or affect or diminish the obligations of such operative under or in respect of each agreement to which he is, or is intended to be, a party. IN WITNESS WHEREOF, the Company has caused this Note to be executed as a sealed instrument by its duly authorized officer, as of the date first written above. HEC/TOBYHANNA ENERGY PROJECT, INC. By:_________________________________________ Name: Title: EXHIBIT B FORM OF REQUISITION FOR ADVANCE ____________, 19_ United States Trust Company of New York, as Trustee 114 West 47th Street New York, New York 10036 Attention: Corporate Trust Services In accordance with the terms of the Trust Indenture and Security Agreement Relating to an Energy Savings Performance Contract Project, dated as of September 1, 1999 (the "Trust Agreement"), by and between HEC/Tobyhanna Energy Project, Inc. (the "Company") and you, as trustee (the "Trustee"), the Contractor, as agent for the Company, hereby requests that the Trustee make an Advance from the [Construction Account maintained pursuant to Section 3.2] [Gate Station Reserve Account maintained pursuant to Section 3.3] of the Trust Agreement as follows: 1. The total amount to be advanced from the [Construction Account] [Gate Station Reserve Account] is $________, consisting of disbursements for the following purposes and in the following amounts: $________________ for ________________ $________________ for ________________ $________________ for ________________; 2. Payment is to be made to the Contractor at the following address: _____________________________________________________________; 3. The Advance requested of $_____________, when added to prior Advances of $__________, will result in aggregate Advances of $_________ from the [Construction Account] [Gate Station Reserve Account], and will leave $____________ not yet advanced under the Project Financing; 4. All proceeds of all prior Advances have been expended solely for Project Costs and solely for the purposes for which they were requisitioned, and no proceeds of the current or any prior Advance have been or will be returned to Company as a rebate, refund or otherwise; 5. Full payment has been made of all obligations incurred by Company to the Contractor for and with respect to all work and materials supplied through and including the date of Contractor's last Requisition, and full payment has been made (except for applicable retention) by the Contractor and any other contractors, workers, and materialmen employed directly by Contractor to such parties' subcontractors, workmen and materialmen for and with respect to all work and materials supplied through and including the date of Contractor's last Requisition; 6. After due inquiry, the Contractor has no knowledge or notice of notices of contracts, liens or claims for liens either filed or threatened to be filed against the ESPC Project which have not been previously disclosed to Trustee in writing; 7. This request for an Advance, and the accompanying certificates, requisitions and supporting data, are submitted to the Trustee for the purpose of inducing the Trustee to approve an Advance, and the Contractor intends that the Trustee shall rely upon each of the same being true, accurate and complete in all material respects; 8. This request for an Advance has been reviewed and approved by the Company and the Independent Engineer, as is evidenced by their respective signatures below. CONTRACTOR: HEC Inc. By: ______________________________ Name:________________________ Title:_________________________ APPROVED BY: COMPANY: HEC/Tobyhanna Energy Project, Inc. By: ______________________________ Name:________________________ Title:_________________________ INDEPENDENT ENGINEER: [_______________________________] By: ______________________________ Name: _______________________ Title: ________________________ - - 10 - A-6 A-1 B-3 B-1 EX-99.13OTHCONTRCT 39 c12-1.txt Exhibit C.12.1 ASSIGNMENT AND SECURITY AGREEMENT between HEC INC. (as Seller) and ABB ENERGY CAPITAL L.L.C. (as Buyer) As of November 30, 1999 Relating to Energy Conservation Measures at Portsmouth Naval Shipyard Kittery, Maine ASSIGNMENT AND SECURITY AGREEMENT THIS ASSIGNMENT AND SECURITY AGREEMENT is entered into as of November 30, 1999 between HEC INC., a Massachusetts corporation (together with its successors and permitted assigns, the "Seller"), and ABB ENERGY CAPITAL L.L.C., a Delaware limited liability company (together with its successors and assigns, the "Buyer"). RECITALS WHEREAS, the Seller and the United States of America (the "Government"), acting through the agency identified in the attached contract schedule (the "Contract Schedule") dated as of even date herewith and incorporated herein and made a part hereof, are parties to a contract and task order (as amended, modified, supplemented, renewed or extended from time to time in accordance therewith, together with all exhibits, schedules, annexes and other attachments thereto, collectively, the "Contract") described in the Contract Schedule, pursuant to which the Seller has agreed, among other things, to provide to the Government the resources, services and expertise necessary to implement an energy conservation project (the "Project") in order to reduce energy consumption at certain government facilities, all as more particularly described in the Contract Schedule; and WHEREAS, the Government may have the right to terminate the Contract or exercise its right of buyout with respect thereto following acceptance by paying the Termination Schedule Amount (hereinafter defined) set forth therein; and WHEREAS, the Seller desires to (a) sell and assign to the Buyer a portion of the monies due or to become due under the Contract, including, without limitation, all late interest charges owing pursuant thereto and all Termination Schedule Amounts (collectively, the "Contract Payments"), and the Buyer desires to purchase a portion of the Contract Payments from the Seller for the Purchase Price set forth in the Contract Schedule; NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 1. Definitions 1.1. Terms Defined . As used herein, unless the context otherwise requires: "Acceptance" means a modification to the Task Order executed by the Government stating that such Project conforms in all material respects with the specifications set forth in the Contract. "Agreement" means this Assignment and Security Agreement, as amended, modified or supplemented from time to time in accordance herewith, together with all exhibits, schedules, including the Contract Schedule incorporated herein, annexes and other attachments hereto. "Business Day" means any day except a Saturday, Sunday or other day on which commercial banks in Massachusetts are authorized by law to close. "Buyer" has the meaning ascribed to such term in the first paragraph hereof. "Base Contract" has the meaning ascribed to such term in the Contract Schedule. "CERCLA" means the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended and in effect from time to time, and all rules and regulations arising thereunder "Closing Date" has the meaning ascribed to such term in Section 2.1(b). "Collateral" has the meaning ascribed to such term in Section 2.6(a). "Contract" means the Task Order and to the extent relevant thereto the Base Contract, as described in the Contract Schedule. "Contract Payments" means the payments from the Government under the Contract as described in the Contract Schedule. "Contract Revenues" means the portion of the Contract Payments being purchased under this Agreement, as described in the Contract Schedule. "Contract Schedule" means the Contract Schedule attached hereto as Schedule 1. "Default" means an Event of Default or an event or occurrence that with the passage of time or the giving of notice or both may become an Event of Default. "Default Interest Rate" means the annual rate equal to the Interest Rate plus 2 percent. "Environmental Laws" means all laws pertaining to environmental matters, including without limitation, the Resource Conservation and Recovery Act, CERCLA, the Superfund Amendments and Reauthorization Act of 1986, the Federal Clean Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, and all applicable local and state laws in each case as amended, and all rules, regulations, judgments, decrees, orders and licenses arising under such laws. "Equipment" means the equipment and other property installed at the Facility as part of the Project pursuant to the Contract. "Event of Default" has the meaning ascribed to such term in Section 7.1. "Facility" has the meaning ascribed to such term in the Contract Schedule. "GAAP" means the generally accepted accounting principles consistent with those adopted by the Financial Accounting Standards Board, as in effect from time to time. "Hazardous Materials" means any substance (i) the presence of which requires or may hereafter require notification, investigation or remediation under any Environmental Law; (ii) which is or becomes defined as a "hazardous waste" or "hazardous material" or "hazardous Substance" or "controlled industrial waste" or "pollutant" or "contaminant" under any present or future Environmental Law or amendments thereto including, without limitation, CERCLA and any applicable local statues and the regulations promulgated thereunder; (iii) which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous and is or becomes regulated by any governmental authority, agency, department, commission, board or instrumentality of the United States, any state of the United States, or any political subdivision thereof to the extent any of the foregoing has or had jurisdiction over the Seller or the Facility or any landlord under any real property lease under which the Seller or the Facility is a tenant; or (iv) without limitation, which contains gasoline, diesel fuel or other petroleum products, asbestos or polychlorinated biphenyls. "Independent Engineer" means Shooshanian Engineering, Inc., or such other independent engineer selected by the Buyer and reasonably acceptable to the Seller. "Initial Financial Statements" has the meaning ascribed to such term in Section 5.5. "Instrument of Assignment" has the meaning ascribed to such term in Section 2.2. "Interest Rate" has the meaning ascribed to such term in the Contract Schedule. "Investment" means the principal amount of the Investment, as described below, plus the Investment Interest Costs and any unpaid fees which the Seller has agreed to pay hereunder and where applicable the Termination Amount. The initial principal amount of the Investment is the Purchase Price, and the principal amount of the Investment will thereafter be increased as set forth in Section 3.3, and reduced by the amount applied to the principal amount of the Investment as set forth in Sections 3 and 7. "Investment Interest Costs" means the amount calculated as set forth in the Contract Schedule. "Lien" means, with respect to any asset, a mortgage, lien, pledge, charge, security interest or other encumbrance of any kind relating to such asset. For purposes of this Agreement, a Person shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset. "Major Maintenance Reserve" has the meaning ascribed to such term in Section 3.2(d). "Material Adverse Effect" means any material adverse effect on the financial condition or business operations, assets or prospects of the Seller or material impairment of the ability of the Seller to perform its obligations hereunder or under the Contract or any of the Purchase Documents in a timely fashion. "Permitted Liens" has the meaning ascribed to such term in Section 6.14. "Person" means any individual, corporation, partnership, joint venture, association, trust, government or political subdivision or an agency or instrumentality thereof, or other entity or organization. "Prepayment Premium" has the meaning ascribed to such term in the Contract Schedule. "Pro Forma Projections" has the meaning ascribed to such term in Section 5.5. "Project" has the meaning ascribed to such term in the Contract Schedule. "Project Account" means the Buyer's deposit account identified in the Contract Schedule. "Project Expenses" has the meaning ascribed to such term in the Contract Schedule. "Purchase Documents" means this Agreement, the Contract, all Instruments of Assignment, all notices of assignment and all other documents, instruments, agreements and other writings executed or delivered in connection with this Agreement, as the same may be amended, modified or supplemented from time to time in accordance therewith, together with all exhibits, schedules, annexes and other attachments thereto. "Purchase Price" has the meaning ascribed to such term in the Contract Schedule. "Repayment Amounts" has the meaning ascribed to such term in the Contract Schedule. "Seller" has the meaning ascribed to such term in the first paragraph hereof. "Task Order" has the meaning ascribed to such term in the Contract Schedule. "Termination Amount" means the amount payable hereunder upon the prepayment of the Repayment Amounts, as set forth in the Contract Schedule. "Termination Schedule Amount" means the amount the Government is required to pay upon the occurrence of a termination or buyout of the Contract after the Acceptance thereunder. "UCC" means the Uniform Commercial Code as in effect from time to time in the Commonwealth of Massachusetts and, where applicable, in the jurisdiction in which the Collateral is located. 1.2 Rules of Construction . Unless the context otherwise requires, (a) the singular of each term used in this Agreement includes the plural and the plural of each such term includes the singular, (b) the term "Section" refers to a section of this Agreement and the terms "Exhibit" and "Schedule" refer to an exhibit or schedule to this Agreement, and (c) the symbol "dollar" refers to United States dollars or such coin or currency at the time of payment is legal tender for the payment of public and private debts in the United States of America. 2. Purchase And Sale 2.1. Purchase of Contract Payments . (a) Upon the terms and subject to the conditions set forth herein, the Buyer agrees to purchase from the Seller and the Seller agrees to assign, sell, transfer and convey to the Buyer, from time to time upon Acceptance, all of the Seller's right, title and interest, whether now owned or hereafter acquired, in and to the Contract Revenues owing to the Seller by the Government pursuant to the Contract; provided that nothing in this Agreement or in any Purchase Document shall be deemed or construed to constitute an assumption by the Buyer of any obligations, liabilities or responsibilities of the Seller under the Contract. (b) The closing date for the purchase and assignment of the Contract Revenues shall be within 5 days following receipt by the Buyer of a written acknowledgment of Acceptance executed by the Government and the satisfaction of the other conditions to closing set forth in Section 4.1 (the "Closing Date"). 2.2. Instrument of Assignment . To evidence the assignment of all of the Contract Payments due or to become due under the Contract to the Buyer, the Seller agrees to execute and deliver to the Buyer or its assigns on the Closing Date an instruments of assignment substantially in the form of Exhibit A (the "Instrument of Assignment"). The Buyer shall have the right at any time to file any Instrument of Assignment with such governmental bodies, agencies and officials, including the contracting and disbursing officers of the Government, as the Buyer deems appropriate. 2.3. Purchase Price . (a) The purchase price for the Contract Revenues purchased hereunder shall be the amount set forth in the Contract Schedule (the "Purchase Price"). (b) In the event the Government proposes a change to the Project under the Contract which would result in a change in the Purchase Price hereunder, the Seller shall notify the Buyer of such proposal and will not agree to such proposal without the prior written consent of the Buyer, provided, however, that in the event the Purchase Price would be reduced as a result of such proposed change, the Buyer's consent shall not be unreasonably withheld if the Seller makes arrangements satisfactory to the Buyer to reimburse the Buyer for its out-of-pocket costs relating to any hedging arrangement relating to the Buyer's purchase of its interest in the Contract Payments. (c) The Buyer shall have no obligation to purchase the Contract Payments unless the Buyer is satisfied with any changes in the terms and conditions of the Contract, including, without limitation, the calculation and amount of the Contract Payments and the Termination Schedule Amounts thereunder. 2.4. Notice of Acceptance . Within five Business Days following the Acceptance of the Project by the Government under the Contract, the Seller shall give notice of such Acceptance to the Buyer. 2.5. Termination After Acceptance . In the event the Government, following Acceptance of the Project under the Contract, terminates the Contract, the Seller shall direct the Government to remit to the Buyer an amount equal to the Termination Schedule Amount then owing as set forth in the Contract, from which the Buyer shall, in the absence of the occurrence of an Event of Default, be entitled to retain the Termination Amount and shall remit any balance to the Seller in accordance with Section 3.4. 2.6. Security Interest to Secure the Seller's Obligations Hereunder. (a) In order to secure the performance of the Seller's obligations to the Buyer under this Agreement and the receipt by the Buyer of the Contract Payments and all other sums to which Buyer is or may be entitled hereunder, the Seller hereby pledges, collaterally assigns and hypothecates to the Buyer, and grants to the Buyer a continuing security interest in and to the Equipment and all amounts due or to be due to the Seller under the Contract, all rights to receive such amounts under and pursuant to the Contract and all proceeds of such payments and of any insurance relating to any of the foregoing (collectively, the "Collateral"). This Agreement shall be and constitute a security agreement under the UCC with respect to the Collateral. (b) Upon receipt by the Buyer of its Investment in full, or, in the absence of an Event of Default the receipt by the Buyer of the Termination Amount, the Buyer's security interest in the Collateral shall terminate. As soon as practicable thereafter, the Buyer shall deliver to the Seller termination statements under the UCC with respect to the Collateral, and such notices of release as may be required to reassign any remaining Contract Payments to the Seller. 2.7. Independent Engineer. (a) The Seller agrees that the Buyer may retain, at the Seller's sole cost and expense, the Independent Engineer. Prior to the Closing Date, the Independent Engineer shall prepare a written report evaluating whether installation of the Project (i) is complete, (ii) has been performed by the Seller in a manner satisfactory to achieve sufficient energy savings to provide the Contract Payments and Contract Revenues under the Contract and to meet the intended purposes thereof and (iii) has been performed in compliance with the requirements of the Contract. (b) The Seller shall pay the fees and out-of-pocket expenses of the Independent Engineer as a condition of Closing. Should any fees or expenses not be billed as of the Closing Date, the Seller shall pay such fees and expenses forthwith upon its receipt of a bill for such fees and expenses. (c) Neither the Buyer nor the Independent Engineer shall have any liability to Seller on account of (i) the services performed by the Independent Engineer, (ii) any neglect or failure on the part of the Independent Engineer properly to perform its services or (iii) any approval or disapproval by the Independent Engineer of the Project or its completion generally, and it is expressly understood that neither the Independent Engineer nor Buyer assumes any obligation to Seller or any other party in respect of the proper performance of the Project. 3. Payment Of Contract Payments 3.1. Distribution of Contract Payments. All Contract Payments paid or payable on and after the Closing Date, except for any Contract Payments excluded as set forth in the Contract Schedule, shall be deposited into the Project Account. Any Contract Payments which are received by Buyer or Seller shall be deposited into the Project Account. 3.2. Application of Contract Payments. (a) Contract Payments (excluding any payment of the Termination Schedule Amounts) deposited into the Project Account shall be applied on the first Business Day of each month (the "Withdrawal Date"). (b) If no Default or Event of Default shall exist, the Buyer shall disburse the Contract Revenues withdrawn from the Project Account in the following priority: (i) to the Buyer to pay any overdue principal of the Repayment Amounts which was required to be paid on any prior Withdrawal Date; (ii) any excess Contract Revenues remaining after payment of the expenses referenced in clause (b)(i) above, to the Buyer to pay any fees, reimbursements, premiums or penalties due to the Buyer under any of the Purchase Documents; (iii) any excess Contract Revenues remaining after payment of the expenses referenced in clauses (b)(i) and (ii) above, to Buyer to pay the Investment Interest Costs on the Investment for the period commencing on the day after the immediately preceding Withdrawal Date (or the Closing Date if there was no prior Withdrawal Date) to and including the then current Withdrawal Date; and (iv) any excess Contract Revenues remaining after payment of the expenses referenced in clause (b)(i) through (iii) above, to the Buyer to pay the principal amount of the current installment of the Repayment Amounts in accordance with the amortization schedule set forth in Contract Schedule. (c) If no Default or Event of Default shall exist, the Buyer shall disburse the Contract Payments in excess of the Contract Revenues withdrawn from the Project Account in the following priority: (i) In the event that the amount of Contract Payments less Project Expenses for the previous month is less than 120 percent of the Repayment Amounts, all of the Contract Payments shall be applied to reduce theInvestment, and the remaining Repayment Amounts will be reamortized over the remaining term, until the amount of the next monthly payment of Contract Payments shall be at least equal to 120 percent of the next monthly installment of the Repayment Amount. (ii) In the event that the amount of Contract Payments less Project Expenses for the previous month equals or exceeds 120 percent of the Repayment Amounts, the amount of Contract Payments in excess of Contract Revenues shall be distributed first to satisfy any obligations to deposit amounts for the Major Maintenance Reserve under Section 3.2(d), and any balance shall be distributed to the Seller. (d) The Seller and the Buyer agree that a portion of the Project Expenses payable as part of the Contract Payments will be used to provide funds for major maintenance activities for the Project. The Buyer and the Independent Engineer, in consultation with the Seller, will reasonably determine the appropriate amount of the Contract Payments to be allocated for major maintenance activities. If the Seller enters into an agreement with a third party to provide for major maintenance of the Project, the Buyer will review the creditworthiness of such third party to determine the amount, if any, of the Contract Payments to be deposited in the Project Account as a reserve (the "Major Maintenance Reserve") to be used to fund major maintenance activities. All funds held in the Major Maintenance Reserve shall accrue interest at the Buyer's overnight rate, and such interest shall be deposited in and become a part of the Major Maintenance Reserve. On each Withdrawal Date, the portion of the Contract Payments determined by the Buyer to be set aside for deposit in the Major Maintenance Reserve shall be deposited from the Contract Payments in accordance with Section 3.2(c)(ii). Funds held in the Major Maintenance Reserve shall be disbursed by the Buyer from the Project Account to pay costs of major maintenance activities performed by such third party upon submission to the Buyer of invoices in form satisfactory to the Buyer. (e) If no Default or Event of Default shall exist upon satisfaction in full of the Repayment Amounts, then Buyer shall promptly remit to Seller any remaining Contract Revenues (the "Final Residual") (which Final Residual shall thereupon be deemed to be owned by and shall belong to Seller), and Buyer and the Seller shall enter into appropriate transfer documentation to transfer to Seller all of the Buyer's right, title and interest in the Contract. 3.3. Adjustment Of Investment . If in any month the Contract Revenues deposited to the Project Account, together with amounts paid by Seller pursuant to its indemnities hereunder, are not sufficient to pay the Investment Interest Cost for such month, then the amount of such deficit will be added to and increase the Principal Amount of the Investment. 3.4. Termination Payments . Notwithstanding anything to the contrary stated herein, Contract Payments constituting Termination Schedule Amount shall be applied to reduce the Investment. Such payments shall be applied to installments of the Repayment Amounts in inverse order of maturity. If no Default or Event of Default shall exist, the Buyer shall promptly remit to the Seller any balance of the Termination Schedule Amount it has received in excess of the amounts sufficient to pay the Termination Amount. The entire Investment, and any and all Investment Interest Costs, shall be indefeasibly due and payable on the final payment date reflected in the Contract Schedule. 3.5. Application of Contract Payments after Default. So long as a Default or Event of Default shall have occurred and be continuing, the Seller shall not be entitled to receive any funds from the Project Account, and the Buyer shall apply any funds remaining after the application of clauses (b)(i) through (iii) of Section 3.2 to the prepayment of the Investment. Any such amounts shall be applied first to the Prepayment Premium on the amount of principal prepaid and then to installments of the Repayment Amounts in inverse order of maturity. 4. Conditions Precedent 4.1. Conditions Precedent to the Purchase of the Contract Revenues. The obligation of the Buyer to purchase the Contract Revenues is subject to the satisfaction of the following conditions: (a) Deliveries. The following items or documents dated as of the Closing Date, shall have been delivered to the Buyer by the Seller and shall be in form and substance satisfactory to the Buyer: (i) a true, correct and complete copy of the Contract, including the Base Contract and the Task Order (including all modifications, amendments and supplements thereto), providing for the Contract Payments and Termination Amount as set forth in the Contract Schedule, and of the notice of the cancellation ceiling relating thereto, certified as such by the Seller; (ii) a completed Contract Schedule identifying the Contract, Contract Payments and Termination Schedule Amount, substantially in the form of Schedule 1, duly executed by the Seller; (iii) an Acceptance of the Project duly executed by the Government; (iv) a final report from the Independent Engineer; (v) the Instrument of Assignment substantially in the form of Exhibit A, duly executed by the Seller; (vi) a notice of assignment duly executed by the Government acknowledging the assignment of the Contract Payments to the Buyer and authorizing the grant of security in the Collateral and the right of the Buyer to cure defaults by the Seller in the performance of the Contract; (vii) certificates of insurance that comply with the requirements set forth in Section 6.3; (viii) a secretary's certificate of the Seller certifying the Seller's articles of organization, bylaws, resolutions and incumbency of the officers executing this Agreement and the Purchase Documents, duly executed by the corporate secretary or an assistant secretary of the Seller; (ix) a closing certificate of the Seller certifying the accuracy of all representations and warranties and that all conditions for the purchase of the Contract Revenues have been satisfied; (x) the Initial Financial Statements and the Pro Forma Projections; (xi) UCC-1 financing statements in form and substance satisfactory to the Buyer, duly executed by the Seller and covering, among other things, the sale of all of the Seller's right, title and interest in the Contract Payments and the security interest in the Collateral; (xii) a financing statement, judgment lien and tax lien search in such jurisdictions as the Buyer shall elect showing no Liens of record affecting the Contract Payments or the Collateral; (xiii) an opinion of counsel to the Seller, substantially in the form of Exhibit B, duly executed and delivered by counsel to the Seller; and (xiv) such other documents, instruments, agreements and other writings as may be reasonably requested by the Buyer to effectuate the transactions contemplated by this Agreement. (b) Purchase Documents. Each of the Purchase Documents shall have been duly authorized, executed and delivered by the respective partners thereto, shall be in full force and effect and shall be in form and substance satisfactory to the Buyer. (c) Perfection of Interest. All filings and recordings necessary or advisable, in the reasonable opinion of the Buyer or its counsel, to perfect the Buyer's right, title and interest in and to the Contract Payments and the Collateral, shall have been duly made, and all taxes, recordation fees and other amounts due in connection therewith shall have been paid in full by the Seller. (d) Acceptance, Representations and Warranties, No Default. The Project shall have been accepted by the Government, the representations and warranties of the Seller contained in this Agreement and the other Purchase Documents shall be true on and as of the Closing Date, no material adverse change in the Seller's financial condition from that set forth in the Initial Financial Statements shall have occurred, the Seller shall not have breached any of its obligations under this Agreement or any other Purchase Document, and no Default or Event of Default shall have occurred and be continuing. 5. Representations And Warranties The Seller represents and warrants that: 5.1. Corporate Existence and Power . The Seller (a) is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, (b) has all corporate powers and all material governmental licenses, Task Orders, consents and approvals required to carry on its business as now conducted and to perform its obligations under this Agreement and the other Purchase Documents, and (c) is duly qualified to transact business as a foreign corporation in each jurisdiction where the nature of its business requires the same, except where the failure to so qualify would not have a material adverse effect on its business or condition (financial or otherwise) or the performance of its obligations under this Agreement or any Purchase Document. 5.2. Powers; Task Order; and Contravention. The execution, delivery and performance by the Seller of this Agreement and the Purchase Documents (a) are within the Seller's corporate powers, (b) have been duly authorized by all necessary corporate action, (c) require no action by or in respect of, or filing with, any governmental body, agency or official, except for the filing of financing statements under the UCC and the approval of the Government, all as provided for in Section 4, (d) will not contravene, conflict with, result in a breach of, or constitute a default under, any provision of applicable law or regulation, the certificate of incorporation or bylaws of the Seller, any Task Order, or any lease, mortgage, note, loan or other agreement or any judgment, injunction, order or decree to which the Seller or any of its assets is subject, and (e) will not result in the imposition of any Lien on the Purchased Assets or Collateral other than Permitted Liens. 5.3. Binding Effect . This Agreement and each Purchase Document constitutes a valid and binding agreement of the Seller and is enforceable in accordance with its terms, except as the enforceability thereof may be limited by or subject to (a) bankruptcy, insolvency or similar laws affecting creditors' rights generally or (b) the effect of general principles of equity. 5.4. Disputes, Etc. The Seller (a) has duly, punctually, faithfully and diligently performed and otherwise complied in all material respects with the covenants, agreements, duties, obligations, terms and conditions applicable to it under the Contract, and all other contracts between the Seller and any department, agency, bureau or other subdivision of the federal government, and (b) has not received any notice of any dispute, default, opportunity to cure, show cause, termination (in whole or in part), intent to terminate or other notice that could affect the obligation of the Government to make all of the scheduled Contract Payments in full when due or that would have a Material Adverse Effect. 5.5. Financial Statements . The Seller has provided to the Buyer (a) the balance sheet of the Seller as of December 31, 1998, and its statements of income for the fiscal year then ended, certified by the chief financial officer of the Seller and the controller of Northeast Utilities and (b) the unaudited balance sheet of the Seller as of June 30, 1999, and its statements of income for the fiscal period then ended (collectively, the "Initial Financial Statements"). All such financial statements were prepared in accordance with GAAP, with the exception of footnotes, consistently applied, and present fairly the financial position of the Seller as of such dates and the results of the operations of the Seller for such periods. There are no liabilities, contingent or otherwise, not disclosed in any of such financial statements, involving a material amount. The Seller has also provided to the Buyer pro forma projections (the "Pro Forma Projections") as to operation of the Project during the term of the Project as contemplated in the Contract and such projections have been prepared in good faith based upon reasonable assumptions. 5.6. Instruments of Assignment . The Seller has not executed any instrument covering any moneys due or to become due under the Contract, except in favor of the Buyer, and no notice of assignment has been filed with any contracting officer, disbursing officer or other officer, employee or agent of the federal government covering any such moneys, except such notices as may have been filed by the Buyer. 5.7. Financing Statements . No financing statement, security agreement or other instrument similar in effect covering all or any part of the Contract Payments has been executed by the Seller or is on file in any governmental office, except such as may have been filed by the Buyer, the Seller has good title to the Contract Payments, and upon the filing of documents hereby required, the Buyer shall have a first-priority perfected Lien on the Collateral, subject only to Permitted Liens. The Seller has not changed its name or the state of its principal executive office within five years before the date hereof. 5.8. Litigation . There is no action, suit, proceeding or investigation pending against or, to the knowledge of the Seller, threatened against or affecting the Seller before any court or arbitrator or any governmental agency or official which could in any manner have a Material Adverse Effect or that could in any manner draw into question the validity of this Agreement or any Purchase Document. 5.9. Environmental Matters . (a) The Seller has obtained, or is expected to be able to obtain in the ordinary course, all approvals which are required under all Environmental Laws, except to the extent failure to have any such approvals would not have a Material Adverse Effect. The Seller is in compliance with the terms and conditions of all such approvals, and is also in compliance with all other limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules and timetables contained in any applicable Environmental Law or in any regulation, code, plan order, decree, judgment or injunction issued, entered, promulgated or approved thereunder, except to the extent failure to so comply would not, individually or in the aggregate, have a Material Adverse Effect. (b) No notice, notification, demand, request for information, citation, summons or order has been issued, no complaint has been filed, no penalty has been assessed and no investigation or review is pending or threatened by any governmental or other entity with respect to any alleged failure by the Seller to have any approval required in connection with the conduct of its business or with respect to any Environmental Laws, including, without limitation, Environmental Laws relating to the generation, treatment, storage, recycling, transportation, disposal or release of any Hazardous Materials. The Seller has not been identified as a potentially responsible party (as that term has been construed pursuant to CERCLA, or any similar state or local laws) at any site. (c) No material oral or written notification of a release of a Hazardous Material has been filed by or on behalf of the Seller and no property now or previously owned, leased, or used by the Seller is listed or proposed for listing on the National Priorities List under CERCLA, as amended, or on any similar state list of sites requiring investigation or clean-up. (d) There are no Liens arising under or pursuant to any Environmental Laws on any of the real property or properties owned, leased or used by the Seller and no governmental actions have been taken or are in process which could subject any of such properties to such Liens or as a result of which the Seller would be required to place any notice or restriction relating to the presence of Hazardous Materials at any property owned by it in any deed to such property. 5.10. Project Approvals Obtained . All governmental approvals necessary for the construction and installation of the Project have been obtained or are expected to be obtained in the ordinary course so as to comply with all requirements of the Contract, and the Project fully complies with all approvals heretofore or which may hereafter be issued by governmental authorities. No violation of any applicable law, ordinance, order, rule, regulation or other governmental requirement, as it pertains to the Seller or the Project, exists. 5.11. Seller's Certifications . All of the representations, certifications and other statements made by the Seller in the Contract and all other agreements with the Government were true and correct in all material respects when made, and no such representation, certification or other statement will give the Government any rights or remedies that could adversely affect the Buyer or the Contract Payments or have a Material Adverse Effect. 5.12. Full Disclosure . The representations and warranties contained in this Agreement and in the other Purchase Documents and all written information heretofore furnished by the Seller to the Buyer for purposes of or in connection with this Agreement or any transaction contemplated hereby are true, correct and complete in every material respect and contain no untrue statement of material fact or omits no material fact necessary to make the statements contained therein not misleading. The Seller has disclosed to the Buyer in writing any and all facts (except facts of general public knowledge) which materially and adversely affect or, to the extent the Seller can now reasonably foresee, may affect, the Buyer's receipt of the Contract Payments on the dates when due, or the business, prospects or condition (financial or otherwise) of the Seller. 5.13. No Broker . Neither the Seller, nor anyone acting on its behalf, has dealt with any broker, finder or other person or entity who or which may be entitled to a broker's or finder's fee, or other compensation, payable by the Buyer in connection with any transaction contemplated by the Purchase Documents.The Seller has no knowledge of any broker's or finder's fees (or the like)which may have been incurred in connection with any transaction contemplated by the Purchase Documents. The Seller agrees to defend, save harmless and indemnify the Buyer from any and all such claims on account thereof. This provision shall survive the satisfaction in full of the entire Investment owed to the Buyer under this Agreement, and shall continue in full force and effect so long as the possibility of any such claim exists. 6. Covenants The Seller covenants and agrees that from and after the date hereof and until the Buyer has received all of the Contract Payments and the Seller has satisfied all of its obligations to the Buyer hereunder in full: 6.1. Financial Statements and Other Reporting Requirements . The Seller shall furnish to the Buyer: (a) as soon as available, but in any event within one hundred twenty (120) days after the end of each fiscal year of the Seller, a balance sheet as of the end of, and a related statement of income, changes in stockholders' equity and cash flow for, such fiscal year, prepared in accordance with GAAP and certified by the chief financial officer of the Seller and the controller of Northeast Utilities; (b) as soon as available, but in any event within forty-five (45) days after the end of each fiscal quarter of the Seller, a balance sheet as of the end of, and a related statement of income, changes in stockholders' equity and cash flow for, the portion of the fiscal year then ended and for the fiscal quarter then ended, prepared in accordance with GAAP and certified by the chief financial officer of the Seller, but subject, however, to normal, recurring year-end adjustments that shall not in the aggregate be material in amount; (c) concurrently with the delivery of each financial statement pursuant to subsections (a) and (b) of this section, a certification signed on behalf of the Seller by its chief financial officer that no Default or Event of Default has occurred or, if it has, a statement of the actions taken by the Seller with respect thereto; and (d) immediately upon first obtaining knowledge of the existence of any conditions, litigation, investigation pending or threatened, (i) constituting a Default or Event of Default under this Agreement or any other Purchase Document, or (ii) which has had or reasonably could be expected to have a Material Adverse Effect, and in any event within five (5) days after obtaining such knowledge, written notice of such condition or event specifying the nature and duration thereof and the action or proposed to be taken with respect thereto (and including a copy of any notice of such condition or event received by the Seller). 6.2. Maintenance of Financial Records . The Seller shall maintain its current fiscal year and keep adequate books and records of account, in which true and complete entries will be made reflecting all of its business and financial transactions, and such entries will be made in accordance with GAAP and applicable governmental regulations. 6.3. Insurance . The Seller shall maintain with financially sound and reputable insurers all insurance coverage required to be maintained by the Seller under the Contract, and with respect to the Project and the Collateral insurance for risk of loss or damage in an amount at least equal to the then applicable Termination Schedule Amount. In addition, the Seller will keep in effect business interruption insurance in an amount equal to six monthly installments of the Repayment Amounts. With respect to such insurance policies maintained in accordance with the Contract and maintained with respect to the Collateral, the Seller shall (a) cause the Buyer (i) to be named as loss payee and additional insured, and (ii) to be given thirty (30) days' prior written notice of any cancellation or modification of such insurance; and (b) furnish to the Buyer certificates or other evidence satisfactory to the Buyer establishing that the Seller has obtained the insurance coverage required by this Agreement and that it is not cancelable for or on account of any misrepresentation by the Seller. 6.4. Inspection by the Buyer . The Seller shall: (a) obtain all necessary approvals and consents to allow the Buyer and its representatives and agents (including without limitation the Independent Engineer) to enter upon any portion of the Facility subject to the Government's restrictions or limitations, in furtherance of any right of the Buyer under this Agreement; and (b) permit the Buyer and its representatives and agents to examine the books and records of the Seller relating to the Project (and to make copies thereof and extracts therefrom), and to discuss the affairs, finances and accounts of the Seller with, and to be advised as to the same by, its officers, all at such reasonable times and intervals as the Buyer may reasonably request upon reasonable advance notice; provided, however, that nothing in this section shall be deemed to impose upon the Buyer an obligation to make any such inspection. 6.5. Invoicing; Fiscal Agent . (a) The Seller will submit to the Government no later than the fifth day of each month, an invoice requesting that the Government remit to the Seller the Contract Payment then owing by the Government within 30 days following receipt of such invoice. (b) The Seller agrees to act as the Buyer's fiscal agent with respect to the collection and receipt of the Contract Payments on behalf of the Buyer. To that end, the Seller agrees that, notwithstanding the previous instructions to make all Contract Payments to the Project Account, the Seller receives a Contract Payment from the Government, the Seller will, as fiscal agent for the Buyer, (i) hold such Contract Payment in trust for the benefit of the Buyer, and (ii) remit such Contract Payment to the Buyer by wire transfer in immediately available funds on the next succeeding Business Day to the Project Account. 6.6. Performance of Obligations . The Seller will duly, punctually, faithfully and diligently perform and otherwise comply in all material respects with the covenants, agreements, duties, obligations, terms and conditions applicable to it under the Contract. 6.7. Notices Regarding Task Orders . The Seller shall use its reasonable best efforts to cause the Government to deliver directly to the Buyer copies of all notices relating to any default by the Seller under the Contract or any termination or cancellation thereof. In addition, the Seller will deliver to the Buyer (a) promptly (but in no event more than two Business Days) after its receipt thereof, a copy of any notice, correspondence, report, request, demand, certificate or other writing furnished to the Seller by the Government with respect to the Contract Payments or which would affect the Contract Payments (including the Termination Schedule Amounts), including, without limitation, any writing relating to any default, show cause, opportunity to cure or intent to terminate (in whole or in part), not renew, cancel or otherwise discontinue the Task Order, and (b) promptly following the Buyer's request from time to time, such additional information regarding the Contract Payments and the Task Order as the Buyer may reasonably request. 6.8. Modification of Task Orders . The Seller will not, without the prior written consent of the Buyer, agree to (a) modify or amend the Base Contract or the Task Order or consent to any action with respect thereto, or waive any obligation to the Government thereunder if such modification, amendment, consent or waiver could have an adverse effect on any Contract Payment (including the amount and due date thereof) from the amounts shown in the Contract Schedule, or (b) any reduction, concession, adjustment, credit, allowance, settlement or special understanding with regard to any Contract Payment (including the amount and due date thereof). 6.9. Claims and Appeals . The Seller will, upon the request of the Buyer, submit an appropriate claim to the Government, obtain a contracting officer decision or prosecute an appeal of any contracting officer decision with respect to any action taken or not taken by the Government under the Contract that in any way reduces or delays the payment of any Contract Payment or that, in the reasonable opinion of the Buyer, could adversely affect the Contract Payments. 6.10. Taxes, Etc. The Seller will pay or cause to be paid all taxes (including, without limitation, all local, state, federal and foreign sales, use, rental, license, ad valorem, property, excise and value-added taxes and other governmental charges) on or against the Seller or its properties on or before they are due, including without limitation, any taxes which may now or hereafter be imposed on the Buyer or the Seller that in any way relate to the Project, the Contract Payments or the transactions contemplated by this Agreement, together with interest and penalties thereon, including, without limitation, taxes and other governmental charges relating to, arising out of or resulting from the assignment by the Seller to the Buyer of the Contract Payments and the receipt from time to time by the Buyer of the Contract Payments, but excluding all taxes on or measured by the income of the Buyer or the Seller, provided, however, that this covenant shall not apply to any tax, assessment or charge that is being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been established and are being maintained in accordance with GAAP if no Lien shall have been filed to secure such tax, assessment or charge. 6.11. Protection of Title . The Seller will (a) protect and defend the Buyer's title to the Contract Payments against all Persons claiming any right, title or interest therein, and (b) give the Buyer written notice of any adverse claim asserted with respect to the Contract Payments promptly (but in no event more than five days) after the Seller has knowledge thereof. 6.12. Terminations . The Seller will not, without the prior written consent of the Buyer, take any action or fail to take any action that could the Government to terminate (in whole or in part), fail to renew or otherwise discontinue the Contract prior to the end of the expected term of the Contract. 6.13. Prompt Payment Interest . The Seller will submit to the Government, on or before the date when due, a claim for any interest owing by the Government pursuant to the Prompt Payment Act, as amended (31 U.S.C. 3901-3906), or otherwise, due to the failure of the Government to timely pay a proper invoice submitted by the Seller to the Government. 6.14. Prohibition Against Liens . The Seller will not enter into any contract or arrangement which could give rise to a Lien, or otherwise directly or indirectly create, assume or suffer to exist any Lien, on the Contract Payments or the Collateral except Liens in favor of or created by the Buyer or the rights of the Government under the Contract (the "Permitted Liens"). 6.15. Change of Location . The Seller's principal place of business, chief executive office and place where it keeps its corporate records is its address set forth in the Contract Schedule. The Seller will provide written notice to the Buyer 30 days prior to any contemplated change in the name or address of the Seller or its principal place of business, chief executive office or place where the Seller keeps its corporate records concerning the Contract Payments, and will execute and deliver to the Buyer such financing statements and other instruments as may be reasonably requested by the Buyer in connection therewith. 6.16. Setoff . If all or any portion of any Contract Payment is setoff for any reason by the Government, the Seller will immediately remit to the Buyer an amount equal to the amount which was so setoff. 6.17. Indemnification . (a) The Seller assumes liability for, and hereby agrees to indemnify, protect, defend and hold harmless the Buyer, its participants, shareholders, directors, officers, employees, agents, successors and assigns, from and against any and all liabilities, losses, damages, claims and expenses (including attorneys fees and disbursements) of any kind at any time relating to, arising out of or resulting from (i) the inaccuracy of any representation, warranty or certification made by the Seller herein or in any Purchase Document or (ii) the failure of the Seller to observe or perform any covenant, agreement or promise made or assumed by the Seller in the Contract, this Agreement or in any other Purchase Document. (b) In addition to the foregoing, the Seller assumes liability for, and hereby agrees to indemnify the Buyer for any amount by which the energy savings under the Contract are insufficient to provide sufficient Contract Revenues to pay the Repayment Amounts in full. To the extent that the Contract Revenues in any month are less than the amount of the Payment Amount for that month by reason of the insufficiency of energy savings under the Contract, the Seller shall pay to the Buyer, on the date on which each monthly amount of the Payment Amount is due, an amount sufficient, with the Contract Revenues received, to pay in full the Payment Amount then due. 6.18. Further Assurances . The Seller will, at its expense and in such manner and form as the Buyer may from time to time require, promptly and duly execute and deliver to the Buyer such further documents, instruments and other writings, including, without limitation, financing statements and assignments, and take such other actions, as the Buyer may from time to time reasonably request in order to carry out the intent and purposes of this Agreement and the other Purchase Documents and to establish and protect the rights and remedies created or intended to be created in favor of the Buyer under this Agreement and the other Purchase Documents, and pay all necessary costs to record any such writing. To the extent permitted by applicable law, the Seller hereby authorizes the Buyer to execute and file, in the name of the Seller or otherwise, financing statements or similar instruments which the Buyer may deem necessary or appropriate. 7. Events Of Default 7.1. Events of Default . The occurrence of any one or more following conditions or events shall constitute an "Event of Default" hereunder: (a) the Seller shall fail to perform any term, covenant or agreement o f the Seller contained in the Contract, and such failure shall have continued for a period of twenty (20) days after the Buyer or the Government has given written notice of such failure to the Seller; or (b) the Seller shall have failed to turn over to the Buyer any Contract Payments received by the Seller following the Closing Date within five (5) Business Days after receipt by the Seller; or (c) the security interest in the Collateral shall cease to be a perfected first lien on the Collateral for any reason other than by failure of the Buyer to file any necessary continuation statements; or (d) the Seller shall fail to perform any other term, covenant or a greement of the Seller contained in this Agreement or any other Purchase Document, and such failure shall have continued for a period of twenty (20) days after the Buyer has given written notice of such failure to the Seller; or (e) the Contract or any of the other Purchase Documents shall cease to be in full force and effect as a result of any action or inaction by the Seller; or (f) any representation or warranty made by or on behalf of the Seller in any of the Purchase Documents or in any certificate or notice given in connection therewith shall have been false or misleading in any material respect at the time made or deemed to have been made; or (g) any material part of the property of the Seller shall be attached, or the Seller shall be unable to pay its debts as they mature, or there shall remain undischarged for more than thirty (30) days any final judgment or execution against the Seller that, together with all other judgments and executions against the Seller, exceeds $100,000 in the aggregate; or (h) the Seller (i) shall make a general assignment for the benefit of creditors, (ii) shall be adjudicated bankrupt or insolvent, (iii) shall seek the appointment of, or be the subject of an order appointing, a trustee, liquidator or receiver as to all or part of its assets, (iv) shall commence, approve or consent to, any case or proceeding under any bankruptcy, reorganization or similar law and, in the case of an involuntary case or proceeding, such case or proceeding is not dismissed within thirty (30) days following the commencement thereof, or (v) shall be the subject of an order for relief in an involuntary case under federal bankruptcy law. 7.2. Acceleration . If any one or more Events of Default shall occur, the Buyer may by notice to the Seller declare the entire unpaid Investment and any accrued Investment Interest Costs, together with all other amounts owing under the Purchase Documents, to be immediately due and payable, whereupon same shall become and be immediately due and payable, anything in the Purchase Documents to the contrary notwithstanding, without presentment, protest, demand or other notice of any kind, all of which are hereby expressly waived by the Seller; provided, however, that if any one or more of the Events of Default specified in Section 7.1(h), above, shall occur with respect to the Seller, the entire unpaid Investment and any accrued Investment Interest Costs, together with all other amounts owing under the Purchase Documents, automatically shall become and be immediately so due and payable, without any declaration or other act on the part of the Buyer. 7.3. Performance of Seller's Obligations . (a) If any one or more Events of Default shall occur, the Buyer may, but shall have no obligation or liability with respect thereto, to the extent permitted by the Purchase Documents and by law, and with or without notice to the Seller, perform any of the obligations of the Seller under or pursuant to the Contract or any other Purchase Document, present or file any claim, take action to enforce any performance or collect payments of any amounts to which the Buyer may be entitled thereunder. (b) The Seller shall be liable to the Buyer for all sums paid or incurred pursuant to the provisions of this section, and all payments made or liabilities incurred by the Buyer hereunder of any kind whatsoever shall be paid by the Seller to the Buyer upon demand with interest at the Default Interest Rate from the date of payment by the Buyer to the date of payment to the Buyer. In addition to any costs incurred by the Buyer to perform such services, the Seller also agrees to pay the Buyer for services rendered in connection with actions taken by the Buyer pursuant to this section an amount equal to fifteen percent (15 percent) of the Buyer's out-of-pocket cost of such services. 7.4. Limited Recourse to Seller's Assets . The Investment and the Seller's obligations hereunder shall be on a limited recourse basis to the Seller, which shall be exculpated from all personal liability for the payment of interest on and principal of the Investment and for the performance of any of the terms and conditions contained in any of the Purchase Documents, and the Buyer's recourse for payment and performance of the Investment and the Seller's obligations hereunder shall be limited to its interest in the Collateral, except that the Seller shall not be exculpated from personal liability for any of the following acts of omissions: (a) fraud or intentional misrepresentation by the Seller in connection with the Investment; (b) the negligence or willful misconduct of Seller; (c) the removal or disposal by the Seller, without the consent of the Buyer, of any portion of the Collateral after an Event of Default; (d) the misapplication or conversion by the Seller of (i) any insurance proceeds paid by reason of any loss, damage or destruction to the Collateral, (ii) any awards or other amounts received in connection with the condemnation of all or a portion of the Collateral, or (iii) any payments received by the Buyer from the Government; or (e) any other Event of Default by the Seller. Nothing contained in this Section 7.4 or elsewhere shall limit the right of Buyer to obtain injunctive relief or to pursue equitable remedies under any of the Purchase Documents, excluding only any injunctive relief ordering payment of obligations by any person or entity for which personal liability does not otherwise exist. 7.5. Set-Off . If as a result of any action or inaction by the Seller any payment is not made when due under the Contract or any of the Purchase Documents, after giving regard to applicable grace periods, if any, or if any Event of Default occurs and is continuing, any deposits, balances or other sums credited by or due from the Buyer to the Seller may to the fullest extent permitted by law at any time or from time to time, without notice or compliance with any other condition precedent now or hereafter imposed by statute, rule of law or otherwise all of which are hereby waived, be set off, appropriated and applied by the Buyer to pay any or all of the Investment irrespective of whether demand shall have been made and although such the Investment may be unmatured, in such manner as the Buyer in its sole and absolute discretion may determine. Within five (5) Business Days of making any such set off, appropriation or application, the Buyer agrees to notify the Seller thereof, provided, however, that the failure to give such notice shall not affect the validity of such set off or appropriation or application. 7.6. Power of Attorney . For the purpose of exercising the rights grantedby this Section, as well as any and all other rights and remedies of the Buyer, but only after and during the continuance of an Event of Default, the Seller hereby irrevocably constitutes and appoints the Buyer its true and lawful attorney-in-fact, with full power of substitution, upon and following any Event of Default, to execute, acknowledge and deliver any instruments and to do and perform any acts in the name and on behalf of the Seller which relate to performing the obligations of the Seller under the Contract or any of the other Purchase Documents. 7.7. Remedies Cumulative . No remedy herein conferred upon the Buyer is intended to be exclusive of any other remedy and each and every remedy shall be cumulative and in addition to every other remedy hereunder, now or hereafter existing at law or in equity or otherwise. 7.8. Other Remedies . If any one or more Events of Default shall have occurred, the Buyer may proceed to protect and enforce its rights and remedies under this Agreement, or any of the other Purchase Documents, including, by foreclosure, exercise of set-off or pledge rights and/or by suit in equity, action at law or other appropriate proceeding, whether for the specific performance of any covenant or agreement contained in this Agreement and/or the other Purchase Documents or any instrument pursuant to which the Investment is evidenced, including as permitted by applicable law the obtaining of the ex parte appointment of a receiver, and, if any amount owed to the Buyer shall have become due, by declaration or otherwise, proceed to enforce the payment thereof or any other legal or equitable right of the Buyer. 7.9. Distribution of Collateral Proceeds . In the event that, following the occurrence or during the continuance of any Default or Event of Default, the Buyer possesses or receives any monies in connection with the enforcement of any of this Agreement, or otherwise with respect to the realization upon any of the Collateral, such monies shall be distributed for application as follows: (a) First, to the payment of, or (as the case may be) the reimbursement of the Buyer for or in respect of all reasonable costs, expenses, disbursements and losses which shall have been incurred or sustained by the Buyer in with the collection of such monies by the Buyer, for the exercise, protection or enforcement by the Buyer of all or any of the rights, remedies, powers and privileges of the Buyer under this Agreement or any of the other Purchase Documents or in respect of the Collateral or in support of any provision of adequate indemnity to the Buyer against any taxes or liens which by law shall have, or may have, priority over the rights of the Buyer to such monies; (b) Second, to the Investment in such order or preference as the Buyer may determine; provided, however, that the Buyer may in its discretion make proper allowance to take into account any part of the Investment not then due and payable; (c) Third, upon payment and satisfaction in full or other provisions for payment in full satisfactory to the Buyer of all of the Investment, to the payment of any obligations required to be paid pursuant to Section 9-504(1)(c) of the UCC; and (d) Fourth, the excess, if any, shall be returned to the Seller or to such other Persons as are entitled thereto. 8. Miscellaneous 8.1. Notices . All notices, requests and other communications to either party hereunder shall be in writing and shall be given to such party at its addressor telecopier number set forth on the signature pages hereof or such other addressor telecopier number as such party may hereafter specify in writing to the other party in accordance with this section. Each such notice, request or other communication shall be effective (a) if given by certified mail, 72 hours after such communication is deposited with the United States Postal Service with first class postage prepaid, addressed as aforesaid or (b) if given by any other means, when delivered at the address or telecopier number specified in this section. 8.2. No Waivers . No failure or delay by the Buyer in exercising any right hereunder or under any other Purchase Document shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of the Buyer under this Agreement shall be cumulative and not exclusive of any rights or remedies provided by law or in any of the other Purchase Documents. 8.3. Amendments; Etc. No amendment, modification, consent or waiver of any provision of this Agreement or any other Purchase Document, and no consent to any departure by the Seller therefrom, shall be effective unless the same shall be in writing and signed by an officer of the Buyer, and then be effective only in the specific instance and for the specific purpose for which given. 8.4. Survival . All representations, warranties and covenants made by the Seller herein or in any certificate or other instrument delivered by it or on its behalf under the Purchase Documents shall be considered to have been relied upon by the Buyer and shall survive the delivery to the Buyer of such Purchase Documents, regardless of any investigation made by or on behalf of the Buyer. 8.5. Severability . If any provision contained in this Agreement or any other Purchase Document is held to be illegal, invalid or unenforceable under present or future laws, such provision shall be fully severable, such Purchase Document shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part thereof, and the remaining provisions thereof shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance therefrom. 8.6. Successors and Assigns . The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Seller may not assign or otherwise transfer any of its rights or obligations under this Agreement withoutthe prior written consent of the Buyer. The Buyer may encumber or assign all or any portion of its rights in the Contract Payments, this Agreement or theother Purchase Document without the consent of the Seller, provided, however, that the Lender will not assign its interest in this Agreement to a companyprimarily engaged in the business of energy savings performance contracting or any affiliate thereof without the consent of the Borrower. 8.7. Headings . The headings of sections hereof are inserted for convenience only and shall in no way define or limit the scope or intent of any provision of this Agreement. 8.8. Governing Law . This Agreement shall be construed in accordance with and governed by laws of The Commonwealth of Massachusetts. 8.9. Expenses . Whether or not the transactions contemplated by this Agreement close, the Seller agrees to pay (a) all fees and expenses of the Independent Engineer and the fees and expenses of special counsel to the Buyer in connection with the preparation and negotiation of this Agreement and the exhibits hereto, the review of the Contract and the related materials, the filing of financing statements, the closing of the transactions contemplated hereby and the preparation, negotiation and closing of such other agreements and instruments as may relate hereto, and (b) all other fees and expenses of the Buyer, including, without limitation, attorneys fees and disbursements, incurred in connection with enforcing any rights under this Agreement or any other Purchase Document. 8.10. Terms Commercially Reasonable . The Seller and the Buyer agree that the terms of this Agreement are and shall be deemed commercially reasonable within the meaning of the UCC. 8.11. Covenants Cumulative . All covenants, agreements and other undertakings of the Seller contained in this Agreement shall be deemed cumulative to and not in derogation or substitution of any of the covenants, agreements and other undertakings contained in any other Purchase Document. The Seller may not take any action or fail to take any action which is permitted by this Agreement if such action or failure would result in the breach of any provision of any other Purchase Document. 8.12. Counterparts; Effectiveness . This Agreement may be executed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument, and in making proof of this Agreement it shall not be necessary to produce or account for more than one such counterpart. This Agreement shall become effective when the Buyer shall have received counterparts hereof signed by all of the parties hereto. 8.13. Entire Agreement . The parties hereto intend this Agreement, including all Schedules attached hereto and the other Purchase Documents, to be the final expression of their agreement with respect to the subject matter hereof and the complete and exclusive statement thereof, notwithstanding any representation or statements to the contrary heretofore made. 8.14. Consent to Jurisdiction . The parties hereby absolutely and irrevocably consent and submit to the jurisdiction of the Courts of the Commonwealth of Massachusetts and of any Federal Court located in the said Commonwealth in connection with any actions or proceedings brought by or against such parties arising out of or relating to this Agreement or any other Purchase Documents. In any such action or proceeding, the parties hereto absolutely and irrevocably waive personal service of any summons, complaint, declaration or other process and agree that the service thereof may be made by certified or registered first class mail directed to each party at the address set forth in Section 8.1. 8.15. Waiver of Jury Trial . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY LITIGATION WITH THE OTHER IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF ANY OF THE PURCHASE DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS (WHETHER VERBAL OR WRITTEN) OR OTHER ACTIONS OF EITHER PARTY. THIS WAIVER OF JURY TRIAL CONSTITUTES A MATERIAL INDUCEMENT FOR THE SELLER AND THE BUYER TO ENTER INTO THE PURCHASE DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED THEREBY. THIS WAIVER OF JURY TRIAL SHALL BE EFFECTIVE FOR EACH AND EVERY PURCHASE DOCUMENT WHETHER OR NOT SUCH DOCUMENT SHALL CONTAIN SUCH A WAIVER OF JURY TRIAL. THE PARTIES HERETO CONFIRM THAT THE FOREGOING WAIVERS ARE INFORMED AND FREELY MADE. 8.16. Advance Notice of the Seller Litigation . No suit at law or in equity shall be brought by the Seller for any alleged breach of the terms of any Purchase Document unless notice in writing, particularly describing said alleged breach, shall have been given to the Buyer within thirty (30) days after such alleged breach of the terms of such Purchase Document. In no event shall the Buyer have any liability to the Seller for incidental or consequential damages, nor shall the liability of the Buyer to the Seller for any breach hereof by the Buyer exceed a sum equal to the amount which the Buyer may have failed to advance in breach of this Agreement, together with interest thereon at the rate then being charged by the Buyer, but not more than the non-Default Interest Rate computed from the due date for the payment of such amount to the earlier of the date on which this Agreement is to be fully performed by the Seller or the date on which such payment is made by the Buyer, which sum when paid shall be deemed part of the Purchase Price paid by the Buyer. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date first above written. HEC INC. By: Name: Title: Address of Seller: HEC INC. 24 Prime Parkway Natick, MA 01760 Attn: President Telecopier: (508)653-0266 ABB ENERGY CAPITAL L.L.C. By: Charles L. Taben Senior Vice President and Chief Underwriting Officer By: Matthew Heller Executive Vice President Address of Buyer: ABB Energy Capital L.L.C. Two Oliver Street Boston, MA 02109 Attn: Mr. Matthew Heller, Executive Vice President Telecopier: (617) 292-0630 SCHEDULE 1 FORM OF CONTRACT SCHEDULE THIS CONTRACT SCHEDULE ("Contract Schedule"), dated as of November 30, 1999, is between HEC INC., a Massachusetts corporation (together with its successors and assigns, "Seller"), and ABB ENERGY CAPITAL L.L.C., a Delaware limited liability company (together with its successors and assigns, the "Buyer"), and is attached to and is incorporated into that certain Assignment and Security Agreement dated as of even date herewith (the "Assignment Agreement") between the Seller and the Buyer. 1. Contract. The Contract is Task Order No. 0002 (the "Task Order") dated August 30, 1999, between United States of America through the U.S. Army Engineering and Support Center acting for the Portsmouth Naval Shipyard in Kittery, Maine (the "Government") and the Seller, pursuant to Contract No. DACA87-97-D-0068 dated as of August 11, 1997, as amended (the "Base Contract") between the Government and the Seller. 2. Project. The Project is the installation of energy costs savings measures to be installed at the Portsmouth Naval Shipyard in Kittery, Maine (the "Facility"). 3. Chief Executive Office. The Seller's chief executive office, its principal place of business and the place where it keeps its corporate records are 24 Prime Parkway, Natick, MA 01760. 4. Contract Payments. The contract payments (the "Contract Payments") expected to be paid by the Government under the Contract are set forth in Annex A attached hereto. The portion of the Contract Payments consisting of the project expenses for operations and maintenance (the "Project Expenses") is also shown in Annex A. The portion of the Contract Payments consisting of the amortization payments (the "Contract Revenues") is also set forth in Annex A attached hereto. The Seller is selling an interest equal to the Contract Revenues to the Buyer for the Purchase Price. 5. Termination Schedule Amount. In the event of a termination of the Contract, the Government has agreed to pay the amounts (the "Termination Schedule Amount") set forth in Annex B. The amounts set forth in Annex B are also the cancellation ceiling under the Contract. 6. Termination Amount. The amount due upon the termination of the Contract (the "Termination Amount") shall be equal to the sum of (i) the outstanding principal balance of the Investment, (ii) any accrued but unpaid Investment Interest Costs, (iii) any unpaid fees, reimbursements, premiums or penalties due under the Assignment Agreement, and (iv) the Prepayment Premium with respect to then outstanding principal amount of the Investment. 7. Prepayment Premium. The prepayment premium (the "Prepayment Premium") is an amount set forth on Annex D. 8. Purchase Price. The purchase price (the "Purchase Price") for the Contract Revenues is 8,036,076.24 dollars. In the event that the Contract Revenues are less than the amounts shown in Annex A, the Purchase Price will be reduced to reflect the present value of the Contract Revenues being purchased calculated at the Interest Rate on the basis of actual days and a 360 day yearand further assuming the first payment is made 60 days following the Closing Dateand the Seller shall pay to the Buyer any costs incurred by the Buyer to maintain the commitment to purchase the Contract Revenues at the Interest Rate. 9. Repayment Amounts. The principal and interest payable to the Buyer (the "Repayment Amounts") are set forth in Annex C. 10. Investment Interest Costs. The Investment Interest Cost accrues at the rate equal to 8.23 percent per annum (the "Interest Rate") of the principal amount of the Investment, calculated on the basis of actual days and a 360 day year, provided, however, that the Investment Interest Cost on all amounts overdue shall accrue at the Default Interest Rate. 11. Contract Proceeds Excluded. Unless an Event of Default has occurred and is continuing, the initial payment from the Government for engineering under the Contract in the amount of 373,538.00 dollars shall be paid to the Seller and shall not be applied to reduce the Investment. 12. Payment Account. The Seller will make all amounts payable under or with respect to the Assignment Agreement by wire transfer of immediately available funds to the following account: Bank: BankBoston, N.A. ABA Routing No.: 011 000 390 Account No.: 511-55267 Name: Energy Capital Partners - Operating IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written. HEC INC. By: Name: Title: ABB ENERGY CAPITAL L.L.C. By: Charles L. Taben Senior Vice President and Chief Underwriting Officer By: Matthew Heller Executive Vice President ANNEX A ANNEX B Termination Schedule/Termination Ceiling Month Termination Schedule Amount ANNEX C Repayment Amount Beginning of Period Outstanding Principal Principal Interest End of Period Outstanding Principal Month 1 Month 2 Month 168 ANNEX D Prepayment Premium The Prepayment Premium (the "Prepayment Premium") is an amount equal to the Yield Maintenance Amount, calculated as of the date on which the Investment is to be prepaid in whole or in part or is declared to be immediately due and payable pursuant to the Agreement in accordance with the following formula: Yield Principal Maintenance = Amount x (R - r) x 1 - (1 + r)-N Amount Being Prepaid r Where: R = The original yield on the U.S. Treasury bond utilized to determine the Purchase Price. N = The number of years, and any fraction thereof, remaining between the prepayment date and the original term of Contract Revenues. r = The yield on the U.S. Treasury bond as reported in the Wall Street Journal that is the equivalent term to the remaining maturity date on the Contract Revenues that are prepaid. SCHEDULE 2 LIST OF CLOSING DOCUMENTS 1. Assignment and Security Agreement 2. Contract Schedule 3. Certificate from the Seller as to: (a) Base Contract (b) Task Order (c) Congressional Notification 4. Instrument of Assignment 5. Notices of Assignment acknowledged by the contracting officer and the disbursing officer 6. Acceptance Certificate 7. Engineer's Report as to the Project 8. Secretary's Certificate of the Seller as to organization, authorization and incumbency 9. Good Standing Certificate of the Seller 10. Orders or other certificates confirming that the Public Utility Holding Company Act is not applicable to the Seller's execution and performance of the Agreement 11. Closing Certificate of Seller as to representations, warranties, satisfaction of conditions, and no default 12. Initial Financial Statements and Pro Forma Projections of the Seller 13. Certificate of Insurance as to the Collateral 14. UCC Financing Statements naming the Seller as Debtor and the Buyer as Secured Party 15. Lien search with respect to filings against the Seller 16. Opinion of counsel to the Seller EXHIBIT A FORM OF INSTRUMENT OF ASSIGNMENT FOR VALUE RECEIVED, the undersigned, HEC Inc., a Massachusetts corporation (the "Assignor"), in accordance with the Federal Assignment of Claims Act, as amended (41 U.S.C. Section 15, 31 U.S.C. Section 3727), hereby assigns to ABB Energy Capital L.L.C., a Delaware limited liability company, and its successors and assigns, all of the Assignor's right, title and interest now owned and hereafter acquired in and to all moneys due or to become due under that certain TASK ORDER NO. 0002 dated August 30, 1999, as amended, under Contract No. DACA87-97-D-0068 dated August 11, 1997, as amended, between the Portsmouth Naval Shipyard in Kittery, Maine, and the Assignor. IN WITNESS WHEREOF, the Assignor has caused this Instrument of Assignment to be executed by its duly authorized officer as of November 30, 1999. HEC INC. ATTEST: By: By: Name Name: Secretary Title: [CORPORATE SEAL OF SELLER] EXHIBIT B FORM OF OPINION OF COUNSEL , 1999 ABB Energy Capital L.L.C. Two Oliver Street Boston, MA 02109 Gentlemen: We have acted as counsel to HEC Inc., a Massachusetts corporation (the "Seller"), and are furnishing this opinion at the Seller's request pursuant to that certain Assignment and Security Agreement (the "Assignment Agreement") dated as of November 30, 1999, between the Seller and ABB Energy Capital L.L.C., a Delaware limited liability company (the "Buyer"). Terms defined in the Assignment Agreement are used herein as therein defined, unless otherwise indicated. For purposes of this opinion, we have examined the following documents (the "Transaction Documents"): 1. the Assignment Agreement; 2. the Base Contract; 3. the Task Order; 4. financing statement, judgment lien and tax lien searches on the Seller in the filing offices in the states of Maine and Massachusetts (the "Filing Offices"); 5. financing statements relating to the Agreement to be filed in the Filing Offices; and 6. that certain Instrument of Assignment of even date herewith duly executed by the Seller. In addition, we have reviewed such other corporrate records and certificates as we have deemed relevant and necessary for the opinions herein expressed. Based on the foregoing and subject to the qualifications herein stated, we are of the opinion that: (a) The Seller is a corporation duly incorporated, validly existing and in good standing under the laws of its state of incorporation. (b) The execution, delivery and performance by the Seller of the Transaction Documents (i) are within its corporate powers, (ii) have been duly authorized by all necessary corporate action, (iii) require no action by or in respect of, or filing with, any governmental body, agency or official, other than the filing of UCC financing statements, and (iv) will not contravene, conflict with, result in a breach of, or constitute a default under, any provision of applicable law or regulation, its articles of incorporation or bylaws, or, to our current actual knowledge, any lease, mortgage, note, loan or other agreement or any judgment, injunction, order or decree to which it or any of its assets is subject. (c) Each Person who executed and delivered the Transaction Documents on behalf of the Seller was duly authorized to execute and deliver such documents. (d) The Seller possesses such valid licenses, permits, franchises, certificates of convenience and necessity, consents, exemptions and orders of such governmental bodies, agencies, officials and tribunals, as are necessary to carry on its business as now being conducted, and to perform its obligations under the Transaction Documents. (e) Each of the Transaction Documents constitutes a legal, valid and binding agreement of the Seller and is enforceable against the Seller in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency or other laws affecting creditors' rights generally and the effect of general principles of equity. There is no statute, regulation, order or ruling that would permit any governmental authority to declare any of the Transaction Documents void. The assignment of the Contract Revenues to the Buyer complies with the Federal Assignment of Claims Act. The Contract is enforceable against the Government in accordance with its terms. (f) To our knowledge there is no action, suit or proceeding pending or threatened against the Seller before any court, arbitrator or administrative or governmental body, agency or official which could reasonably be expected to have a material adverse effect on the business or financial condition of the Seller or that could reasonably be expected to draw into question the validity of any Transaction Document. (g) No financing statement, security agreement or other instrument similar in effect covering all or any part of the Contract Payments in the Collateral is on file in any governmental office in the State of Massachusetts or Maine except such as may have been filed by the Buyer. Upon the filing of the financing statements as provided in the Agreement, the Buyer will have a perfected security interest in the Collateral owned by the Seller, and, to the extent the Uniform Commercial Code applies to the assignment of the Contract Revenues to the Buyer under the Agreement, such assignment constitutes the sale and assignment to the Buyer of all of the Seller's rights to the Contract Revenues, subject in each case to the rights of the Government. The foregoing opinions are limited to existing law. We undertake no responsibility to update or supplement this opinion in response to subsequent changes in the law or future events or circumstances. This letter is solely for the benefit of the addressee and its participants, successors, assigns and counsel, who may rely on it as if addressed to them. Sincerely, Counsel for Seller 1. Definitions 1.1. Terms Defined 1.2. Rules of Construction 2. Purchase And Sale 2.1. Purchase of Contract Payments 2.2. Instrument of Assignment 2.3. Purchase Price 2.4. Notice of Acceptance 2.5. Termination After Acceptance 2.6. Security Interest to Secure the Seller's Obligations Hereunder 2.7. Independent Engineer 3. Payment Of Contract Payments 3.1. Distribution of Contract Payments. 3.2. Application of Contract Payments 3.3. Adjustment Of Investment 3.4. Termination Payments 3.5. Application of Contract Payments after Default. 4. Conditions Precedent 4.1. Conditions Precedent to the Purchase of the Contract Revenues 5. Representations And Warranties 5.1. Corporate Existence and Power 5.2. Powers; Task Order; and Contravention 5.3. Binding Effect 5.4. Disputes, Etc. 5.5. Financial Statements 5.6. Instruments of Assignment 5.7. Financing Statements 5.8. Litigation 5.9. Environmental Matters 5.10. Project Approvals Obtained 5.11. Seller's Certifications 5.12. Full Disclosure 5.13. No Broker 6. Covenants 6.1. Financial Statements and Other Reporting Requirements 6.2. Maintenance of Financial Records 6.3. Insurance 6.4. Inspection by the Buyer 6.5. Invoicing; Fiscal Agent 6.6. Performance of Obligations 6.7. Notices Regarding Task Orders 6.8. Modification of Task Orders 6.9. Claims and Appeals 6.10. Taxes, Etc. 6.11. Protection of Title 6.12. Terminations 6.13. Prompt Payment Interest 6.14. Prohibition Against Liens 6.15. Change of Location 6.16. Setoff 6.17. Indemnification 6.18. Further Assurances 7. Events Of Default 7.1. Events of Default 7.2. Acceleration 7.3. Performance of Seller's Obligations 7.4. Limited Recourse to Seller's Assets 7.5. Set-Off 7.6. Power of Attorney 7.7. Remedies Cumulative 7.8. Other Remedies 7.9. Distribution of Collateral Proceeds 8. Miscellaneous 8.1. Notices 8.2. No Waivers 8.3. Amendments; Etc. 8.4. Survival 8.5. Severability 8.6. Successors and Assigns 8.7. Headings 8.8. Governing Law 8.9. Expenses 8.10. Terms Commercially Reasonable 8.11. Covenants Cumulative 8.12. Counterparts; Effectiveness 8.13. Entire Agreement 8.14. Consent to Jurisdiction 8.15. Waiver of Jury Trial 8.16. Advance Notice of the Seller Litigation SCHEDULE 1 FORM OF CONTRACT SCHEDULE SCHEDULE 2 LIST OF CLOSING DOCUMENTS EXHIBIT A FORM OF INSTRUMENT OF ASSIGNMENT EXHIBIT B FORM OF OPINION OF COUNSEL EX-99.13OTHCONTRCT 40 c13-6.txt Exhibit C.13.6 FIFTH SUPPLEMENTAL INDENTURE from YANKEE GAS SERVICES COMPANY to THE BANK OF NEW YORK TRUSTEE ________________________________ Dated as of January 1, 1999 Supplemental to Indenture of Mortgage and Deed of Trust from Yankee Gas Services Company to The Bank of New York (successor as trustee to Fleet National Bank, formerly known as The Connecticut National Bank), Trustee, dated as of July 1, 1989 FIFTH SUPPLEMENTAL INDENTURE FIFTH SUPPLEMENTAL INDENTURE, dated as of January 1, 1999 between YANKEE GAS SERVICES COMPANY, a specially chartered Connecticut corporation (herein called the "Company"), and THE BANK OF NEW YORK, a New York banking corporation, successor to Fleet National Bank (formerly known as The Connecticut National Bank), as Trustee (the "Trustee") under the Indenture of Mortgage and Deed of Trust, dated as of July 1, 1989, executed and delivered by the Company (herein called the "Original Indenture"; the Original Indenture and any and all indentures and instruments supplemental thereto, including, without limitation, this Fifth Supplemental Indenture, being herein called the "Indenture"); WHEREAS, pursuant to Sections 13.01(C), 13.01(G), 3.03 and Article Five of the Original Indenture, the Company desires to provide for the issuance under the Indenture of a new series of Bonds, which Bonds will be secured by and entitled to the benefits of the Indenture, and to add to its covenants and agreements contained in the Original Indenture certain other covenants and agreements; and WHEREAS, all acts and things necessary to make this Fifth Supplemental Indenture a valid, binding and legal instrument have been performed, and the issuance of the new series of Bonds, subject to the terms of the Original Indenture, has been duly authorized by the Board of Directors of the Company and approved by the Connecticut Department of Public Utility Control, and the Company has requested and hereby requests the Trustee to enter into and join the Company in the execution and delivery of this Fifth Supplemental Indenture; NOW, THEREFORE, THIS FIFTH SUPPLEMENTAL INDENTURE WITNESSETH, that, to secure the payment of the principal of (and premium, if any) and interest on the Outstanding Secured Bonds, including the new series of Bonds hereunder issued, and the performance of the covenants therein and herein contained and to declare the terms and conditions on which all such Outstanding Secured Bonds are secured, and in consideration of the premises and of the purchase of the Bonds by the Holders thereof, the Company by these presents does grant, bargain, sell, alien, remise, release, convey, assign, transfer, mortgage, hypothecate, pledge, set over and confirm to the Trustee, all property, rights, privileges and franchises of the Company of every kind and description, real, personal or mixed, tangible and intangible, whether now owned or hereafter acquired by the Company, wherever located, and grants a security interest therein for the purposes herein expressed, except any Excepted Property which is expressly excepted from the lien hereof in the Original Indenture, and including, without limitation, all and singular the following: All property, rights, privileges and franchises particularly described in the Original Indenture, and any and all indentures and instruments supplemental thereto, including, without limitation, the First Supplemental Indenture dated as of April 1, 1992, the Second Supplemental Indenture dated as of December 1, 1992, the Third Supplemental Indenture dated as of June 1, 1995, the Fourth Supplemental Indenture dated as of April 1, 1997, and in addition, all the property, rights, privileges and franchises particularly described in Schedule A annexed to this Fifth Supplemental Indenture, which are hereby made a part of, and deemed to be described herein, as fully as if set forth herein at length. TO HAVE AND TO HOLD all said property, rights, privileges and franchises of every kind and description, real, personal or mixed, hereby and hereafter (by supplemental indenture or otherwise) granted, bargained, sold, aliened, remised, released, conveyed, assigned, transferred, mortgaged, hypothecated, pledged, set over or confirmed as aforesaid, or intended, agreed or covenanted so to be, together with all the appurtenances thereto appertaining (said properties, rights, privileges and franchises, including any cash and securities hereafter deposited or required to be deposited with the Trustee (other than any such cash which is specifically stated herein not to be deemed part of the Trust Estate), being herein collectively called "Trust Estate") unto the Trustee and its successors and assigns forever. SUBJECT, HOWEVER, to Permitted Encumbrances (as defined in Section 1.01 of the Original Indenture). BUT IN TRUST, NEVERTHELESS, for the proportionate and equal benefit and security of the Holders from time to time of all the Outstanding Secured Bonds without any preference or priority of any such Bond over any other such Bond. UPON CONDITION that, until the happening of an Event of Default (as defined in Section 1.01 of the Original Indenture) and subject to the provisions of Article Six of the Original Indenture, the Company shall be permitted to possess and use the Trust Estate, except cash, securities and other personal property deposited and pledged, or required to be deposited and pledged, with the Trustee, and to receive and use the rents, issues, profits, revenues and other income of the Trust Estate. AND IT IS HEREBY DECLARED that in order to set forth the terms and provisions of the new series of Bonds and in consideration of the premises and of the purchase and acceptance of such Bonds by the holders thereof, and in consideration of the sum of One Dollar ($1.00) to it duly paid by the Trustee, and of other good and valuable consideration, the receipt whereof is hereby acknowledged, and for the purpose of securing the faithful performance and observance of all the covenants and conditions of the Indenture, the Company hereby covenants and agrees with the Trustee and provides as follows: ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION Section 1.01. Terms from the Original Indenture. All defined terms used in this Fifth Supplemental Indenture and not otherwise defined herein shall have the respective meanings ascribed to them in the Original Indenture. Section 1.02. References are to Fifth Supplemental Indenture. Unless the context otherwise requires, all references herein to "Articles," "Sections" and other subdivisions are to the designated Articles, Sections and other subdivisions of this Fifth Supplemental Indenture, and the words "herein," "hereof," "hereby," "hereunder" and words of similar import refer to this Fifth Supplemental Indenture as a whole and not to any particular Article, Section or other subdivision hereof or to the Original Indenture. ARTICLE II SERIES F BONDS Section 2.01 Specific Title, Terms and Forms. There is hereby created and shall be outstanding under and secured by the Indenture a series of Bonds entitled "First Mortgage Bonds, 6.20% Series F, Due 2009" (herein called the "Series F Bonds"), limited in aggregate principal amount at any one time outstanding to Fifty Million Dollars ($50,000,000). The form of the Series F Bonds shall be substantially as set forth in Exhibit A hereto with such insertions, omissions, substitutions and variations as may be determined by the officers executing the same as evidenced by their execution thereof. The Series F Bonds shall be issued as fully registered Bonds in denominations of $1,000,000 or any amount in excess thereof which is an integral multiple of $250,000 (except as may be necessary to reflect any principal amount not evenly divisible by $250,000 remaining after any partial redemption). The Series F Bonds shall be numbered F-1 and consecutively upwards, or in any other manner deemed appropriate by the Trustee. The Series F Bonds shall mature on April 1, 2009 and shall bear interest from the date of issuance thereof (or from the most recent Interest Payment Date to which interest has been paid or duly provided for) at the rate of six and twenty one-hundredths percent (6.20%) per annum (computed on the basis of a 360-day year of twelve 30-day months). Interest Payment Dates for the Series F Bonds shall be (i) February 1 and August 1 of each year, commencing August 1, 1999, and (ii) at the Stated Maturity of the principal. Notwithstanding the otherwise applicable provisions of the Indenture, the principal and the Redemption Price of, and interest on, the Series F Bonds shall be payable by wire transfer of immediately available funds so long as required by Section 5.1 of the Bond Purchase Agreements, each dated as of January 1, 1999, between the Company and the initial purchasers of the Series F Bonds (the "Bond Purchase Agreements") or, in the event Section 5.1 shall no longer be applicable, at the office or agency of the Company in New York, New York, in such coin or currency of the United States of America as at the time of payment is legal tender for public or private debts. The Regular Record Date referred to in Section 3.09 of the Original Indenture for the payment of the interest on the Series F Bonds payable, and punctually paid or duly provided for, on any Interest Payment Date shall be the 15th day (whether or not a business day) of the calendar month next preceding such Interest Payment Date. Section 2.02 No Sinking Fund; No Mandatory Scheduled Redemptions Prior to Final Maturity. The Series F Bonds shall not be subject to any sinking fund or mandatory scheduled redemption prior to final maturity. Section 2.03 Optional Redemption. The Series F Bonds shall be redeemable at the option of the Company in whole at any time or in part from time to time prior to their Stated Maturity, at a redemption price equal to the principal amount of the Series F Bonds being prepaid plus accrued interest thereon to the date of such redemption together with a premium equal to the then applicable Make-Whole Amount. The Company will give notice of any optional redemption of the Series F Bonds pursuant to this Section 2.03 to each Holder thereof not less than 30 days nor more than 60 days before the date fixed for such optional redemption, specifying (a) such date, (b) the principal amount of the Holder's Bond to be redeemed on such date, (c) that a premium may be payable, (d) the estimated premium, calculated as of the day such notice is given, and (e) the accrued interest applicable to the redemption. Such notice of redemption shall also certify all facts, if any, which are conditions precedent to any such redemption. Notice of redemption having been so given, the aggregate principal amount of the Series F Bonds specified in such notice, together with accrued interest thereon, and the premium, if any, payable with respect thereto shall become due and payable on the redemption date specified in such notice. Two business days prior to the redemption date specified in such notice of optional redemption, the Company shall provide the Trustee and each Holder of a Bond written notice of whether or not any premium is payable in connection with such redemption, the premium, if any, calculated as of the second business day prior to the redemption date, and a reasonably detailed computation of the Make-Whole Amount. The Trustee shall be under no duty to inquire into, may conclusively presume the correctness of, and shall be fully protected in acting upon the Company's calculation of any Make-Whole Amount. For purposes of this Section 2.03, the term "Make-Whole Amount" shall mean in connection with any optional redemption of the Series F Bonds the excess, if any, of (a) the aggregate present value as of the date of such redemption of each dollar of principal amount of Series F Bonds being redeemed and the amount of interest (exclusive of interest accrued to the date of redemption) that would have been payable in respect of such dollar if such redemption had not been made, determined by discounting such amounts at the Reinvestment Rate from the respective dates on which they would have been payable, over (b) 100% of the principal amount of the outstanding Series F Bonds being redeemed. The "Reinvestment Rate" means (1) the sum of .50% plus the yield reported on page "USD" of the Bloomberg Treasury/Money Market Monitor Screen (or, if not available, any other nationally recognized trading screen reporting on-line intraday trading in United States government securities) at 12:00 noon (New York time) on such date for United States government securities having a maturity rounded to the nearest month corresponding to the remaining Weighted Average Life to Maturity of the principal being redeemed, prepaid or paid or (2) in the event that no such nationally recognized trading screen reporting on-line intraday trading in United States government Securities is available, Reinvestment Rate means .50 plus the arithmetic mean of the yields under the respective headings "This Week" and "Last Week" published in the Statistical Release under the caption "Treasury Constant Maturities" for the maturity (rounded to the nearest month) corresponding to the Weighted Average Life to Maturity of the principal being redeemed. If no maturity exactly corresponds to such Weighted Average Life to Maturity, yields for the two published maturities most closely corresponding to such Weighted Average Life to Maturity shall be calculated pursuant to the immediately preceding sentence, and the Reinvestment Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month. For purposes of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount shall be used. For purposes of this Section 2.03, "Weighted Average Life to Maturity" of the principal amount of the Series F Bonds being redeemed shall mean, as of the time of any determination thereof, the number of years obtained by dividing the then Remaining Dollar-Years of such principal by the aggregate amount of such principal. The term "Remaining Dollar-Years" of such principal shall mean the amount obtained by multiplying the amount of principal that would have become due at the Stated Maturity of the Series F Bonds if such redemption had not been made by the number of years (calculated to the nearest one- twelfth) which will elapse between the date of determination and the Stated Maturity of the Series F Bonds. As used in this Section 2.03, "Statistical Release" shall mean the then most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Federal Reserve System and which establishes yields on actively traded United States government securities adjusted to constant maturities or, if such statistical release is not published at the time of any determination hereunder, then such other reasonably comparable index which shall be designated by the holders of 66-2/3% in aggregate principal amount of the outstanding Series F Bonds. The principal amount, if any, of the Series F Bonds to be redeemed pursuant to this Section 2.03 shall be selected on a pro rata basis from all Series F Bonds Outstanding on the Redemption Date. The Series F Bonds shall not be redeemable at the option of the Company prior to their Stated Maturity other than as provided in this Section 2.03. Section 2.04. Place of Payment. The principal and the Redemption price of, and the premium, if any, and the interest on, the Series F Bonds shall be payable at the principal corporate trust office of The Bank of New York, in New York, New York. Section 2.05. Exchangeability. Subject to Section 3.07 of the Original Indenture, all Series F Bonds shall be fully interchangeable, and, upon surrender at the office or agency of the Company in a Place of Payment therefor, shall be exchangeable for other Series F Bonds of a different authorized denomination or denominations, as requested by the Holder surrendering the same. The Company will execute, and the Trustee shall authenticate and deliver, Series F Bonds whenever the same are required for any such exchange. Section 2.06. Bond Purchase Agreements. Reference is made to Sections 5 and 7 of the Bond Purchase Agreement for certain provisions governing the rights and obligations of the Company, the Trustee and the Holders of the Series F Bonds. Such provisions are deemed to be incorporated in this Article II by reference as if set forth herein at length. Section 2.07. Restrictions on Transfer. All Series F Bonds originally issued hereunder shall bear the following legend: THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF YANKEE GAS SERVICES COMPANY (THE "COMPANY") AND PRIOR HOLDERS THAT THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE COMPANY (UPON REDEMPTION THEREOF OR OTHERWISE), (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE 144A UNDER THE 1933 ACT, IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE 1933 ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 (IF AVAILABLE) UNDER THE 1933 ACT, (5) IN RELIANCE ON ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT, SUBJECT TO THE RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, SUBJECT (IN THE CASE OF CLAUSES (2), (3), (4) AND (5)) TO THE RECEIPT BY THE COMPANY OF A CERTIFICATION OF THE TRANSFEROR (WHICH, IN THE CASE OF CLAUSE (4), MAY BE A COPY OF FORM 144 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION) TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE 1933 ACT, AND IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY JURISDICTION OF THE UNITED STATES. THE HOLDER OF THIS SECURITY WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO HEREIN. All Series F Bonds issued upon transfer or exchange thereof shall bear such legend unless the Company shall have delivered to the Trustee an Opinion of Counsel which states that the Series F Bonds may be issued without such legend. All Series F Bonds issued upon transfer or exchange of a Series F Bond or Bonds which do not bear such legend shall be issued without such legend. The Company may from time to time modify the foregoing restrictions on resale and other transfers, without the consent of but upon notice to the Holders, in order to reflect any amendment to Rule 144A under the Securities Act of 1933 or change in the interpretation thereof or practices thereunder. Section 2.08. Authentication and Delivery. Upon the execution of this Fifth Supplemental Indenture, the Series F Bonds shall be executed by the Company and delivered to the Trustee for authentication, and thereupon the same shall be authenticated and delivered by the Trustee pursuant to and upon Company Request. Section 2.09. Default. Pursuant to the Original Indenture (and notwithstanding any provision of Section 9.22 thereof to the contrary), for purposes of determining whether an Event of Default exists with respect to the Series F Bonds, any default in payment (whether due as a scheduled installment of principal or interest, or at original maturity or earlier redemption or acceleration, or otherwise) with respect to Bonds of any other series which constitutes an Event of Default with respect to the Bonds of such series shall also constitute an Event of Default with respect to the Series F Bonds. ARTICLE III MISCELLANEOUS PROVISIONS Section 3.01. Effectiveness and Ratification of Indenture. The provisions of this Fifth Supplemental Indenture shall be effective from and after the execution hereof; and the Indenture, as hereby supplemented, shall remain in full force and effect. Section 3.02. Titles. The titles of the several Articles and Sections of this Fifth Supplemental Indenture shall not be deemed to be any part thereof, are inserted for convenience only and shall not affect any interpretation hereof. Section 3.03. Acceptance of Trust; Not Responsible for Recitals; Etc. The Trustee hereby accepts the trusts herein declared, provided, created or supplemented and agrees to perform the same upon the terms and conditions herein and in the Original Indenture, as heretofore supplemented, set forth and upon the following terms and conditions: The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Fifth Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. In general, each and every term and condition contained in Article Ten of the Original Indenture shall apply to and form part of this Fifth Supplemental Indenture with the same force and effect as if the same were herein set forth in full with such omissions, variations and insertions, if any, as may be appropriate to make the same conform to the provisions of this Fifth Supplemental Indenture. Section 3.04. Successors and Assigns. All covenants, provisions, stipulations and agreements in this Fifth Supplemental Indenture contained are and shall be for the sole and exclusive benefit of the parties hereto, their successors and assigns, and (subject to the provisions of the Bond Purchase Agreement) of the Holders and registered owners from time to time of the Bonds issued and outstanding under and secured by the Indenture (except that the provisions of Article II hereof are and shall be for the sole and exclusive benefit of the Holders of the Series F Bonds). Section 3.05. Counterparts. This Fifth Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. Section 3.06. Governing Law. The laws of the State of Connecticut shall govern this Fifth Supplemental Indenture and the Series F Bonds, except to the extent that the validity or perfection of the lien of the Indenture, or remedies thereunder, are governed by the laws of a jurisdiction other than the State of Connecticut IN WITNESS WHEREOF, the parties hereto have caused this Fifth Supplemental Indenture to be duly executed, sealed and attested as of the day and year first above written. YANKEE GAS SERVICES COMPANY By______________________________ James M. Sepanski Its Vice President and Chief Financial Officer Attest: __________________________________ Mary J. Healey Secretary and General Counsel Executed, sealed and delivered by YANKEE GAS SERVICES COMPANY in the presence of: __________________________________ __________________________________ THE BANK OF NEW YORK, as Trustee By_______________________________ Michael Culhane Vice President Attest: __________________________________ Executed, sealed and delivered by THE BANK OF NEW YORK, as Trustee, in the presence of: __________________________________ __________________________________ STATE OF CONNECTICUT ) ) ss.: Meriden COUNTY OF NEW HAVEN ) On this ___ day of January, 1999, before me, _____________________, the undersigned officer, personally appeared James M. Sepanski and Mary J. Healey, who acknowledged themselves to be Vice President and Chief Financial Officer and Secretary and General Counsel, respectively, of Yankee Gas Services Company, a Connecticut corporation, and that they, as such officers, being authorized so to do, executed the foregoing instrument for the purpose therein contained, by signing the name of the corporation by themselves as such officers, and as their free act and deed. IN WITNESS WHEREOF, I hereunto set my hand and official seal. _______________________________ Notary Public My commission expires:_____________ (SEAL) STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) On this ____ day of January, 1999, before me, __________________, the undersigned officer, personally appeared ________________ and ________________, who acknowledged themselves to be ____________________ and _______________________, respectively, of The Bank of New York, a New York banking corporation, and that they, as such officers, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the association by themselves as such officers, and as their free act and deed. IN WITNESS WHEREOF, I hereunto set my hand and official seal. _______________________________ Notary Public My commission expires:_____________ (SEAL) EXHIBIT A [FORM OF FIRST MORTGAGE BOND, 6.20% SERIES F, DUE 2009 FORM OF LEGEND] THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF YANKEE GAS SERVICES COMPANY (THE "COMPANY") AND PRIOR HOLDERS THAT THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE COMPANY (UPON REDEMPTION THEREOF OR OTHERWISE), (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE 144A UNDER THE 1933 ACT, IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE 1933 ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 (IF AVAILABLE) UNDER THE 1933 ACT, (5) IN RELIANCE ON ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT, SUBJECT TO THE RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE 1933 ACT OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, SUBJECT (IN THE CASE OF CLAUSES (2), (3), (4) AND (5)) TO THE RECEIPT BY THE COMPANY OF A CERTIFICATION OF THE TRANSFEROR (WHICH, IN THE CASE OF CLAUSE (4), MAY BE A COPY OF FORM 144 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION) TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT, AND IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY JURISDICTION OF THE UNITED STATES. THE HOLDER OF THIS SECURITY WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO HEREIN CUSIP Number 98478* AK 3 No. F - Principal Amount: $ Stated Maturity of Principal: April 1, 2009 Applicable Rate: 6.20% Interest Payment Dates: August 1 and February 1, commencing August 1, 1999 and at the Stated Maturity of the principal Yankee Gas Services Company, a specially chartered Connecticut corporation (hereinafter called the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to [___________], or registered assigns, at the Stated Maturity set forth above, the Principal Amount set forth above (or so much thereof as shall not have been paid upon prior redemption) and to pay interest (computed on the basis of a 360- day year of twelve 30-day months) thereon from the date of issuance hereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for, on each Interest Payment Date set forth above in each year at the Applicable Rate set forth above. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in said Indenture, be paid to the Person in whose name this Bond (or one or more Predecessor Bonds, as defined in said Indenture) is registered at the close of business on the Regular Record Date for such interest, which shall be the 15th day (whether or not a business day) of the calendar month next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for shall be paid to the Person in whose name this Bond is registered on the business day immediately preceding the date of such payment. If all or any portion of the principal of, or the premium (if any) or interest on, this Bond shall not be paid when due, the amount not so paid shall bear interest at the lesser of (x) the highest rate allowed by applicable law or (y) the greater of (i) the Prime Rate (as defined in the Bond Purchase Agreements) or (ii) 7.20% (the Applicable Rate plus 1% per annum). The principal and the Redemption Price of, and the interest on, this Bond shall be payable at the principal corporate trust office of The Bank of New York, in New York, New York. All such payments shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. This Bond is one of a duly authorized issue of Bonds of the Company designated as its "First Mortgage Bonds" (herein called the "Bonds"), issued and to be issued in one or more series under, and all equally and ratably secured by, an Indenture of Mortgage and Deed of Trust, dated as of July 1, 1989, (herein, together with any indenture or instruments supplemental thereto, including the First Supplemental Indenture dated as of April 1, 1992, the Second Supplemental Indenture dated as of December 1, 1992, the Third Supplemental Indenture dated as of June 1, 1995, the Fourth Supplemental Indenture dated as of April 1, 1997, and the Fifth Supplemental Indenture dated as of January 1, 1999, called the "Indenture"), between the Company and The Bank of New York, successor to Fleet National Bank (formerly known as The Connecticut National Bank), as Trustee (herein called the "Trustee," which term includes any successor Trustee under the Indenture). Reference is hereby made to the Indenture for a description of the properties thereby mortgaged, pledged and assigned, the nature and extent of the security, the respective rights thereunder of the Holders of the Bonds, the Trustee and the Company, and the terms upon which the Bonds are, and are to be, authenticated and delivered. All capitalized terms used in this Bond which are not defined herein shall have the respective meanings ascribed thereto in the Indenture. Reference is also made to the Bond Purchase Agreements, as defined in the Fifth Supplemental Indenture, for a further description of the respective rights of the Holders of the Series F Bonds, the Company and the Trustee, and the terms applicable to the Series F Bonds. As provided in the Indenture, the Bonds are issuable in series which may vary as in the Indenture provided or permitted. This Bond is one of the series specified in its title. The Bonds are not subject to any sinking fund or mandatory scheduled redemption prior to final maturity. As provided in the Indenture, at the option of the Company, the Series F Bonds shall be redeemable in whole at any time or in part from time to time, prior to their Stated Maturity, at a redemption price equal to the principal amount of the Series F Bonds being prepaid plus accrued interest thereon to the date of such redemption together with a premium equal to the then applicable Make-Whole Amount. The Company will give notice of any optional redemption of the Series F Bonds pursuant to Section 2.03 of the Fifth Supplemental Indenture to each Holder thereof not less than 30 days nor more than 60 days before the date fixed for such optional redemption, specifying (a) such date, (b) the principal amount of the Holder's Bond to be redeemed on such date, (c) that a premium may be payable, (d) the estimated premium, calculated as of the day such notice is given and (e) the accrued interest applicable to the redemption. Notice of redemption having been so given, the aggregate principal amount of the Series F Bonds specified in such notice, together with accrued interest thereon, and the premium, if any, payable with respect thereto shall become due and payable on the redemption date specified in such notice. Two business days prior to the redemption date specified in such notice of optional redemption, the Company shall provide the Trustee and each Holder of a Bond written notice of whether or not any premium is payable in connection with such redemption, the premium, if any, calculated as of the second business day prior to the redemption date, and a reasonably detailed computation of the Make-Whole Amount. Bonds (or portions thereof) for whose redemption and payment provision is made in accordance with the Indenture shall thereupon cease to be entitled to the lien of the Indenture and shall cease to bear interest from and after the date fixed for redemption (in each event, so long as the payment due on any such date shall be made). The principal amount of the Series F Bonds to be redeemed upon any optional redemption thereof shall be applied pro rata to all such Series F Bonds Outstanding on the Redemption Date. If an Event of Default, as defined in the Indenture, shall occur, the principal of the Series F Bonds may become or be declared due and payable in the manner and with the effect provided in the Indenture and the Bond Purchase Agreements. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Bonds under the Indenture at any time by the Company with the consent of the Holders of a majority in aggregate principal amount of the Bonds of all series at the time Outstanding affected by such modification. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of Bonds at the time Outstanding on behalf of the Holders of all the Bonds, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver agreed to as set forth above by the Holder of this Bond shall be conclusive and binding upon such Holder and upon all future Holders of this Bond and of any Bond issued upon the transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Bond. No reference herein to the Indenture and no provision of this Bond or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Bond at the times, places and rates, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, this Bond is transferable on the Bond Register of the Company, upon surrender of this Bond for transfer at the office or agency of the Company in New York, New York, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Bond Registrar, duly executed by the Registered Holder hereof or by his attorney duly authorized in writing, and thereupon one or more new Bonds of the same series, or authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. All Bonds of this series shall be fully interchangeable, and, upon surrender at the office or agency of the Company in a Place of Payment therefor, shall be exchangeable for other Bonds of this series of a different authorized denomination or denominations, as requested by the Holder surrendering the same. No service charge shall be made for any transfer or exchange hereinbefore referred to, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Bond is overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. Unless the certificate of authentication hereon has been executed by the Trustee or Authenticating Agent by manual signature, this Bond shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. [THIS SPACE INTENTIONALLY LEFT BLANK [Signature page for Yankee Gas Services Company, First Mortgage Bond, 6.20% Series F, Due 2009] IN WITNESS WHEREOF, the Company has caused this Bond to be duly executed under its corporate seal. Dated: __________________ YANKEE GAS SERVICES COMPANY By __________________________ Attest: _________________________ This is one of the Bonds of the series designated therein referred to in the within-mentioned Indenture. THE BANK OF NEW YORK, as Trustee By_______________________________ Authorized Officer SCHEDULE A ALL THE PROPERTY, RIGHTS, PRIVILEGES AND FRANCHISES AS SET FORTH IN THE FOLLOWING DESCRIPTIONS. Town Name Grantor Inst_dt Volume Page SHELTON JAMES MARTIN D/B/A BEACON BLDS, LLC 2/25/97 1401 307 VERNON RAYMOND F. CAMPOSEO 4/2/97 STAMFORD 430 FAIRFIELD AVENUE 4/9/97 4742 303 STAMFORD 778 LONG RIDGE ASSOC. LIMITED PARTNERSHI 4/16/97 4744 61 STAMFORD 778 LONG RIDGE ASSOCIATES LIMITED PARTNER 4/21/97 MONROE MONROE MIDDLE SCHOOL 4/29/97 WILTON GRUMMAN HILL, LLC 5/22/97 1042 115 STAMFORD STRAWBERRY HOLLOW LLC 5/23/97 DANBURY SILVERSMITH HEIGHTS, LLC 6/17/97 NEWTOWN HARRIET B. EDWARDS AND NANCY C.BARKER 6/30/97 559 939 STAMFORD PINE HILL APARTMENTS, LLC 7/1/97 4796 71 ANSONIA ANSONIA SHOPPING CENTER, LLC 8/1/97 302 0567 DERBY ANSONIA SHOPPING CENTER LLC 8/11/97 CHESHIRE RICHARD T. CORRARO AND JUNE A. CORRARO 8/31/97 1239 056 DANBURY SILVERSMITH HEIGHTS. LLC 10/2/97 1197 1038 PLAINFIELD CONNECTICUT YANKEE COMMUNITY AVENUE ASSOC 10/21/97 247 348 PLAINVILLE LACOMBE, MARSHALL E. & GERTRUDE G. 10/23/97 339 785 DANBURY CRYSTAL BAY DEVELOPMENT, LLC 10/24/97 1196 0743 DANBURY POWERS, MELVIN J. & MARY P. 11/6/97 1197 0671 PLAINVILLE LaCOMBE, MARSHALL E. & GERTRUDE G. 11/6/97 1197 671 WALLINGFORD MCNAMARA FAMILY PARTNERSHIP 11/7/97 876 0573 SOUTHINGTON QUEEN TERRACE CONDO. ASSOC., INC 11/28/97 687 407 WOODBURY ROBERT L. CHASE TRUSTEE 12/3/97 220 706 WALLINGFORD GXG INCORPORATED 1/30/98 899 0322 PLAINVILLE JOSEPH NAPLES JR. & LORETTA NAPLES, AND 2/23/98 342 1150 PLAINVILLE JOSEPH NAPLS III 2/23/98 342 1151 DANBURY SILVERSMITH HEIGHTS, LLC 3/10/98 1210 823 VERNON VERNON CIRCLE AQUISITION CORP. 3/13/98 1150 297 VERNON MAX JAVIT 3/18/98 1147 41 MONROE DANZIGER DEVELOPMENT, INC 4/30/98 792 034 STAMFORD DORA II, LLC 5/14/98 MONROE HILLS OF MONROE 5/15/98 792 224 MONROE JOCKEY HOLLOW I, LLC 5/15/98 792 205 STAMFORD ROY J. BARRENECHEA AND JOAN BARRENECHEA 5/17/98 SHELTON FRANBARD SHELTON LLC 5/19/98 1539 078 STAMFORD WESTOVER WOODS, LLC 5/28/98 STAMFORD MICHAEL A PAVIA AND WILHELM M JOERMAN 6/23/98 5029 222 NEWTOWN R&G RIVERVIEW ASSOCIATES, LLC 6/26/98 588 88 SEYMOUR HUBBLE REALTY DEVELOPMENT CORP.8/18/98 250 0713 SEYMOUR METALTEK, INC. 9/10/98 250 0714 DANBURY SILVERSMITH HEIGHTS, LLC 9/17/98 1235 0289 MONTVILLE ALGONQUIN GAS 9/17/98 315 381 STAMFORD 85 FRANKLIN STREET ASSOCIATES, LLC 9/29/98 MONROE HOME BUILDING CONSTRUCTION 10/8/98 816 012 STAMFORD ADA, LLC 10/16/98 NORWALK CONRAD J. LAROSE (a/k/a Brad LaRose) Gr 10/23/98 NAUGATUCK TIMCO 10/30/98 474 448 SHELTON ROBERT W. PETERSON JR. and LINDA PETERSO 11/17/98 1555 113 BROOKFIELD VILLAGE AT BROOKFIELD COMMONS, LLC 11/19/98 DANBURY SILVERSMITH HEIGHTS. LLC 11/23/98 1243 269 DANBURY SILVERSMITH HEIGHTS, LLC 11/24/98 1242 0417 DANBURY TOLL LAND. XVIII, LIMITED PARNERSHIP 11/30/98 NEW MILFORD DAVID HUBBARD 12/10/98 599 0117 RIDGEFIELD CHANCELLOR OF RIDGEFIELD, INC AND CCC OF 12/10/98 EX-99.13OTHCONTRCT 41 c13-7_1.txt Exhibit C.13.7.1 FIRST AMENDMENT This First Amendment, dated as of April 10, 1990, to the several Bond Purchase Agreements (collectively, as in effect prior to this First Amendment, the "Original Bond Purchase Agreement"), each dated as of July 1, 1989, between Yankee Gas Services Company, a specially chartered Connecticut corporation (the "Company") and each of the purchasers (the "Purchasers") of the Company's Series A Bonds due 1993-2003 (the "Series A Bonds"), by and among the Company and the Purchasers; WITNESSETH WHEREAS, the parties hereto desire to amend certain provisions of the Original Bond Purchase Agreement to correct certain section references; NOW, THEREFORE, the parties hereto hereby agree as follows: 1. Section 4.2(a) of the Original Bond Purchase Agreement is hereby amended and restated in its entirety as follows: "(a) Covenant Compliance-the information (including detailed calculations) required in order to establish whether the Company was in compliance with the requirements of Section 5.25 of this Agreement, and Section 14.06 and Section 14.07 of the Indenture, during the period covered by the income statement then being furnished, together with information showing Net Earnings for Interest, and the interest charges on all bonds of all series Outstanding under the Indenture, for the period covered by the income statement then being furnished; and" 2. Section 5.9(a)(iii) of the Original Bond Purchase Agreement is hereby amended and restated in its entirety as follows: "(iii) default in the performance of any covenant set forth in Section 5.25 of this Agreement, or Article 5, Section 12.01 or Section 14.06 of the Indenture, or breach of any representation or warranty set forth in the Bond Purchase Agreement; or" 3. The second sentence of Section 5.20 of the Original Bond Purchase Agreement is hereby amended and restated in its entirety as follows: (Nothing in this Section 5.20 shall be deemed to affect the Company's obligation to make payments in the manner provided in Section 5.4 of this Agreement.) 4. The second sentence of Section 5.23 of the Original Bond Purchase Agreement is hereby amended and restated in its entirety as follows: "Executed or true and correct copies of any waiver or consent effected pursuant to the provisions of this Section 5.23, or any supplemental indenture effected pursuant to Article 13 of the Indenture, shall be delivered by the Company to each Holder of Outstanding Series A Bonds forthwith following the date on which the same shall have become executed and delivered by the parties thereto." 5. Section 5.25 of the Bond Purchase Agreement is hereby amended by amending and restating the last sentence of Section 5.25 in its entirety as follows: 'The provisions of this Section 5.25 shall not prevent the payment of any dividend on the Company's common stock within 60 days after the date of declaration thereof, if at such date of declaration such payment complied with the provisions of this Section 5.25." 6. Except as set forth in this First Amendment, none of the terms or provisions of either the Original Note Purchase Agreement or the Series A Bonds shall be deemed to be modified hereby, and each of the Original Bond Purchase Agreement, as modified herein, and the Series A Bonds issued to the Purchasers, shall continue in full force and effect. 7. This First Amendment embodies the entire agreement and understanding among the Company and the Purchasers with regard to the matters set forth herein, and supersedes all prior agreements and undertakings relating to such matters. 8. This First Amendment shall be governed by, and construed and enforced in accordance with, the internal laws of the state of Connecticut. 9. This First Amendment may be executed by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be executed by their authorized officers as of the date first written above. YANKEE GAS SERVICES COMPANY By: Name: Title: THE TRAVELERS INSURANCE COMPANY By: Name: Title: THE TRAVELERS INDEMNITY COMPANY By: Name: Title: THE TRAVELERS LIFE AND ANNUITY COMPANY By: Name: Title: THE TRAVELERS INDEMNITY COMPANY OF RHODE ISLAND By: Name: Title: ALLSTATE LIFE INSURANCE COMPANY By: Name: Title: By: Name: Title: ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK By: Name: Title: By: Name: Title: GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY By: Name: Title: By: Name: Title: THE GREAT-WEST LIFE ASSURANCE COMPANY By: Name: Title: By: Name: Title: JEFFERSON - PILOT LIFE INSURANCE COMPANY By: Name: Title: KNIGHTS OF COLUMBUS By: Name: Title: AID ASSOCIATION FOR LUTHERANS By: Name: Title: MINNESOTA MUTUAL LIFE INSURANCE COMPANY By: Name: Title: MINNESOTA MUTUAL FIRE & CASUALTY COMPANY By: MIMLIC Asset Management Company By: Name: Title: MINISTERS LIFE - A MUTUAL LIFE INSURANCE COMPANY By: MIMLIC Asset Management Company By: Name: Title: NATIONAL TRAVELERS LIFE COMPANY By: MIMLIC Asset Management Company By: Name: Title: THE RELIABLE INSURANCE COMPANY By: MIMLIC Asset Management Company By: Name: Title: SONS OF NORWAY By: MIMLIC Asset Management Company By: Name: Title: CONGRESS LIFE INSURANCE COMPANY By: MIMLIC Asset Management Company By: Name: Title: STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA By: Name: Title: TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA By: Name: Title: WOODMEN ACCIDENT AND LIFE COMPANY By: Name: Title: EX-99.13OTHCONTRCT 42 c13-11.txt Exhibit C.13.11 YANKEE GAS SERVICES COMPANY $50,000,000 in Aggregate Principal Amount of First Mortgage Bonds, 6.20% Series F, Due 2009 BOND PURCHASE AGREEMENT Dated as of January 1, 1999 TABLE OF CONTENTS SECTION 1. ISSUANCE OF BONDS. Section 1.1. Issue of Bonds and Security Section 1.2. Sale of Bonds Section 1.3. Purchase for Investment Section 1.4. Restrictions on Transfer; Legend Section 1.5. Source of Funds; ERISA Section 1.6. Ratification of Representations SECTION 2 REPRESENTATIONS AND WARRANTIES. Section 2.1 Subsidiaries Section 2.2 Corporate Organization and Authority Section 2.3 Business, Property and Indebtedness Section 2.4 Financial Statements: Material Adverse Change Clause Section 2.5 Full Disclosure Section 2.6 Pending Litigation Section 2.7 Title to Properties, Power of Eminent Domain Section 2.8 Leases Section 2.9 Patents, Trademarks. Licenses. Etc Section 2.10 Sale is Legal and Authorized: Bonds are Enforceable Section 2.11 No Defaults Section 2.12 Regulation, Status under Holding Company Act. Investment Company Act; and Foreign or Enemy Status Section 2.13 Regulatory Approval Required Section 2.14 Consents Section 2.15 Taxes Section 2.16 Use of Proceeds: No Margin Regulation Violation Section 2.17 Private Offering Section 2.18 Compliance with Law Section 2.19 ERISA Section 2.20 MGP Sites Section 2.21 Application of Other Laws Section 2.22 Compliance with Environmental Laws SECTION 3 CONDITIONS OF OBLIGATION TO PURCHASE BONDS. Section 3.1 Opinion of Your Special Counsel Section 3.2 Opinions of Counsel for the Company Section 3.3 Opinion of Counsel for the Trustee Section 3.4 Letter of Acknowledgment Section 3.5 Documents Required by Indenture: Basis for Authentication Section 3.6 Recordings Section 3.7 Representations and Warranties True Section 3.8 Performance of the Company's Obligations Section 3.9 No Pending Proceedings Section 3.10 No Default Section 3.11 Legality Section 3.12 Private Placement Number Section 3.13 Proceedings. Instruments Etc SECTION 4 EXPENSES. SECTION 5 CERTAIN SPECIAL RIGHTS. Section 5.1 Direct Payment Section 5.2 Delivery Expenses Section 5.3 Indemnity for Destroyed. Lost. or Stolen Bonds Section 5.4 Late Payments of Interest Section 5.5 No Presentation of Bonds SECTION 6 INFORMATION TO BE FURNISHED TO BONDHOLDERS. Section 6.1 Financial and Other Statements Section 6.2 Officers' Certificates Section 6.3 Inspection SECTION 7 COVENANTS. Section 7.1 Purchase of the Bonds Section 7.2 Bondholder Expenses on Acceleration Section 7.3 Transmission of Funds Section 7.4 Compensation and Reimbursement Section 7.5 Defaults and Acceleration SECTION 8 INTERPRETATION OF AGREEMENT. Section 8.1 Definitions Section 8.2 Directly or indirectly Section 8.3 Accounting Terms Section 8.4 Governing Law Section 8.5 Headings SECTION 9 MISCELLANEOUS. Section 9.1 Notices Section 9.2 Reproduction of Documents Section 9.3 Survival; Severability Section 9.4 Successors and Assigns Section 9.5 Amendment and Waiver Section 9.6 Amendment of DPUC Authorization Section 9.7 Duplicate Originals; Execution and Counterpart ATTACHMENTS TO BOND PURCHASE AGREEMENT: Schedule I Name and Address of Purchaser and Amount of Commitment Schedule 11 Indebtedness Schedule III Location of Disclosed MGP Sites Schedule IV-A Opinion of Your Special Counsel Schedule IV-B Opinion of Counsel for the Company Schedule IV-C Opinion of General Counsel of the Company Schedule IV-D Opinion of Counsel for the Trustee Schedule V Wire Transfer Instructions Exhibit A Form of Supplemental Indenture YANKEE GAS SERVICES COMPANY 599 Research Parkway Meriden. Connecticut 06450-1030 BOND PURCHASE AGREEMENT January 1. 1999 Re: $50,000,000 aggregate principal amount of First Mortgage Bonds. 6.20% Series F. Due 2009 To the Purchaser named in Schedule I of this Agreement Ladies and Gentlemen: The undersigned. YANKEE GAS SERVICES COMPANY, a specially chartered Connecticut corporation (the "Company"). hereby agrees with you as follows: SECTION 1. ISSUANCE OF BONDS. Section 1.1 Issue of Bonds and Security. The Company has duly authorized the issuance and delivery of $50.000.000 in aggregate principal amount of its First Mortgage Bonds, 6.20% Series F. Due 2009 (collectively, the "Bonds"), to be issued under and secured by that certain Indenture of Mortgage and Deed of Trust dated as of July 1, 1989 (the "Original Indenture") by and between the Company and The Bank of New York (as successor to Fleet National Bank, formerly known as The Connecticut National Bank), as Trustee (the "Trustee"), as supplemented and amended and as to be supplemented and amended by a Fifth Supplemental Indenture dated as of January 1, 1999. (the Indenture") which will be substantially in the form attached hereto as Exhibit A. but with such changes therein. if any, as may be agreed upon by you and the Company, and will be entitled to the benefits thereof. The Original Indenture, as heretofore supplemented and amended including, without limitation, by the Supplemental Indenture, is hereinafter referred to as the "Indenture." The terms of the Bonds shall be substantially as set forth in Exhibit A to the Supplemental Indenture and will be dated the date of issuance thereof; will be in the amount of $1.000.000 or any amount in excess thereof that is an integral multiple of $250,000 (except as may be necessary to reflect any principal amount not evenly divisible by $250.000 remaining after any partial redemption), will bear interest on the unpaid principal balance thereof from the date of the Bonds at the rate of 6.20% per annum, payable semiannually on the first day of February and August in each year. commencing on August 1, 1999, and when the principal amount thereof becomes due and payable. and will bear interest on overdue principal (including any optional prepayment of principal) and premium, if any, and (to the extent legally enforceable) on any overdue installment of interest at a rate equal to the lesser of (a) the highest rate allowed by applicable law or (b) the higher of (i) the Prime Rate or (ii) 7.20% per annum after the due date whether by acceleration or otherwise until paid; and will be expressed to mature on April 1 2009. Interest on the Bonds shall be computed on the basis of a 360-day year of twelve 30-day months. The Bonds are not subject to prepayment or redemption prior to their expressed maturity date except on the terms and conditions and in the amounts and with the premium if any set forth in Section 2.03 ) of the Supplemental Indenture (Optional Redemption). The Indenture creates and will create a first mortgage Lien on and a first security interest in the Property of the Company described therein as being subjected to the Lien thereof (excluding Excepted Property an d subject to Permitted Encumbrances as therein defined), except such Property as may have been released from the Lien thereof in accordance with the terms thereof (such Property not so released being hereinafter defined as the "Trust Estate"). The terms used in this Agreement and not defined at the point at which they are first used are defined in Section 8.1 (Definitions) hereof. Section 1.2 Sale of Bonds. The Company agrees to sell to you, and, subject to the terms and conditions herein set forth, you agree to purchase from the Company. Bonds in the principal amount set forth opposite your name on Schedule I hereto on the Closing Date (as defined below) at a purchase price equal to 100% of the principal amount thereof. The Bonds will be sold and delivered at one closing to be held at the principal offices of Shipman & Goodwin LLP, One American Row. Hartford. Connecticut 06103-2819, at 10:00 a.m. Hartford. Connecticut time, on January 25. 1999. or such other date as shall be mutually agreed upon between you and the Company (the date and time for such closing being hereinafter referred to as the "Closing Date"). On the Closing Date. the Company will deliver to you one duly authenticated Bond (or such other number of Bonds in such denominations of not less than $1,000,000 as you may designate by notice prior to the Closing Date). dated the Closing Date, in the full principal amount of your purchase and registered in your name (or in such nominee name as you shall designate to the Company prior to the Closing Date), against payment to the Company by wire transfer of immediately available funds to the Company in the amount of the purchase price referred to above pursuant to wire transfer instructions set forth in Schedule V attached hereto. Section 1.3 Purchase for Investment. You represent and warrant to the Company that (a) you are an Accredited Investor and (b) you are purchasing your Bonds for your own account for investment and not with a view to the distribution thereof, and that you have no present intention of distributing your Bonds or any part thereof; provided. however, that the disposition of your Property shall at all times be within your control and that your right at all times to sell or otherwise dispose of all or any part of your Bonds pursuant to applicable state securities laws and to an effective registration statement under the Securities Act or it, accordance with an exemption from such registration available under the Securities Act shall not be prejudiced. You covenant and agree that you will only sell or otherwise dispose of all or any part of your Bonds in compliance with applicable federal and state securities laws and Section 1.4 (Restrictions on Transfer; Legend) of this Agreement. Your acquisition of your Bonds hereunder shall constitute a reaffirmation by you, as of the Closing Date, of your representations set forth in this Section 1.3. Section 1.4 Restrictions on Transfer; Legend. The Bonds are subject to restrictions on transfer as described in the private placement memorandum prepared by the Company and dated December 1998. (including the Exhibits thereto and the documents incorporated by reference therein. the "Private Placement Memorandum") and the legend to be endorsed on each certificate for the Bonds. You covenant and agree when effecting resales of the Bonds pursuant to Rule 144A under the Securities Act to make offers and sales only to persons who you reasonably believe to be Qualified Institutional Buyers. The legend on the Bonds will be substantially in the following form: THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933) (THE "1933 ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF YANKEE GAS SERVICES COMPANY (THE "COMPANY") AND PRIOR HOLDERS THAT THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE COMPANY (UPON REDEMPTION THEREOF OR OTHERWISE), (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER. WITHIN THE MEANING OF RULE 144A UNDER THE 1933 ACT. IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A. (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE 1933 ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 (IF AVAILABLE) UNDER THE 1933 ACT, (5) IN RELIANCE ON ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT, SUBJECT TO THE RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, SUBJECT (IN THE CASE OF CLAUSES (2) (3) (4) AND (5) TO THE RECEIPT BY THE COMPANY OF A CERTIFICATION OF THE TRANSFEROR (WHICH IN THE CASE OF CLAUSE (4), MAY BE A COPY OF FORM 144 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION) TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE 1933 ACT, AND IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY JURISDICTION OF THE UNITED STATES. THE HOLDER OF THIS SECURITY WILL. AND EACH SUBSEQUENT HOLDER IS REQUIRED TO NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO HEREIN. Section 1.5 Source of Funds; ERISA. You further represent and warrant that either: (a) no part of the funds to be used by you to purchase the Bonds constitutes assets allocated to any separate account maintained by you; or (b) no part of the funds to be used by you to purchase the Bonds constitutes assets allocated to any separate account maintained by you such that the application of such funds constitutes a prohibited transaction under Section 406 of ERISA, or (c) all or part of such funds constitute assets of one or more separate accounts maintained by you, and you have disclosed to the Company the names of such employee benefit plans. whose assets in such separate account or accounts exceed 10% of the total assets or are expected to exceed 10% of the total assets of such account or accounts as of the date of such purchase. and the Company has advised you in writing (and in making the representations set forth in this clause (c) you are relying on such advice) that the Company is not a party-in-interest nor are the Bonds employer securities with respect to the particular employee benefit plans disclosed to the Company by you as aforesaid (for the purpose of this clause (c). all employee benefit plans maintained by the same employer or employee organization are deemed to be a single plan). As used in 'this Section 1.5. the terms "separate account." party-in-interest, employer securities and employee benefit plan" shall have the respective meanings assigned to them in ERISA. If. as contemplated in the foregoing clause (c). you are purchasing Bonds for one or more separate accounts maintained by you. and if it is intended that any of such accounts shall be deemed to be a separate holder of the Bonds allocated to such account, you have identified each such account in Schedule I and the principal amount of Bonds allocated to each such account. and the Company acknowledge (yes and agrees that for all purposes of this Agreement. each such account shall be deemed to be a separate holder of the Bonds allocated to such account as aforesaid. Section 1.6 Certification of Representations. If an agent signs this Agreement on your behalf. your acceptance of delivery of the Bonds shall be deemed a ratification of the representations and warranties of Section 1.3 and Section 1.5 of this Agreement and you acknowledge that you are in privity of contract with the Company. SECTION 2. REPRESENTATIONS AND WARRANTIES. To induce you to enter into this Agreement and to purchase the Bonds listed on Schedule I to this Agreement opposite your name, the Company warrants, represents and undertakes as follows: Section 2.1 Subsidiaries. The Company has no Subsidiaries. Each of the Company's corporate or joint venture Affiliates and the nature of the affiliation are disclosed in the Private Placement Memorandum. Section 2.2 Corporate Organization and Authority. The Company: (a) is a corporation duly organized, validly existing and in good standing under the laws of the State of Connecticut; (b) has all requisite power and authority (corporate and other) and all necessary licenses, permits and rights to own and operate its Properties and to carry on its business substantially as now conducted (except where the absence of any such license, permit, or right would not, individually or in the aggregate, have a material adverse effect on the Company's business, prospects, Properties or condition (financial or otherwise); and (c) has no Properties and carries on no activities in any jurisdiction which would require qualification. licensing or authorization to do business as a foreign corporation in such jurisdiction. Section 2.3 Business, Property and Indebtedness. (a) Nature of Business: Properties. The Private Placement Memorandum. which previously has been delivered to you. correctly describes the general nature of the business and principal Properties of the Company. (b) Indebtedness. Schedule II to this Agreement correctly lists all outstanding Indebtedness for borrowed money (including, without limitation, purchase money obligations, capital leases and contingent liabilities under guarantees) of the Company as of September 30, 1998 (provided that short-term Indebtedness may be expressed as an aggregate amount). (c) Real Property. The Company does not own or lease real Property or operate a sales or business office (or both) or have any employees located in any jurisdiction other than the State of Connecticut. Section 2.4 Financial Statements: Material Adverse Change Clause. (a) Financial Statements. The unaudited financial statements of the Company as of and for the period ended September 30, 1998, contained in the Private Placement Memorandum have been prepared in accordance with generally accepted accounting principles consistently applied. and present fairly the financial position of the Company as of such date and the results of their operations for such period. (b) Material Adverse Change. Since September 30, 1998, there has been no change in the business, prospects. Properties or condition (financial or otherwise) of the Company, except changes in the ordinary course of business, none of which, either individually or in the aggregate, has been materially adverse. Section 2.5 Full Disclosure. The financial statements referred to in Section 2.4 (Financial Statements; Material Adverse Change), as of their respective dates and for the periods presented, and the Private Placement Memorandum, as of the date hereof, do not. nor does this Agreement or any written statement furnished by or on behalf of the Company to you in connection with the negotiation of the sale of the Bonds, contain any untrue statement of a material fact or omit a material fact necessary to make the statements contained therein or herein not misleading. There is no fact that the Company has not disclosed to you in writing that materially affects adversely nor, so far as the Company can now reasonably foresee. shall materially affect adversely the business, prospects, Properties or condition (financial or otherwise) of the Company or the ability of the Company to perform its obligations set forth in this Agreement, the Indenture or the Bonds. Section 2.6 Pending Litigation. There is no action at law, suit in equity or other proceeding or investigation (whether or not purportedly on behalf of the Company) in any court or by or before any other governmental or public authority or agency or any arbitrator. or, to the best knowledge of the Company, threatened against., the Company or any of its Properties (including. without limitation. any such action, suit, proceeding or investigation relating to any action or omission of the Company) which, if determined adversely to the Company. involves the reasonable possibility of materially and adversely affecting the business. prospects, Properties or condition (financial or other) of the Company, or the ability of the Company to perform its obligations under this Agreement, the Indenture or the Bonds. To the best of its knowledge after due inquiry, the Company is not in default in any material respect with respect to any judgment, order, writ, injunction, rule or regulation or decree or demand of any court or other governmental or public authority or agency. or with respect to the award of any arbitrator. Section 2.7 Title to Properties: Power of Eminent Domain. (a) Title to Properties. The Trust Estate constitutes substantially all the Property of the Company, other than the Excepted Property (as defined in the Indenture). The Company has such title (or may obtain such title by the exercise of its power to condemn property) to its Property as is necessary to engage in its business, and substantially all such Property is in good repair, is properly maintained and is suitable for the use for which it is intended. All real Property that constitutes Trust Estate is located in the State of Connecticut. There is no outstanding Indebtedness of the Company or of any other Person for the purchase price or construction of, or for services, materials and supplies rendered or delivered in connection with the construction of. any Property, or for current operations, that has or could become the basis of a Lien prior to the Lien of the Indenture upon any portion or all of the Trust Estate. other than a Permitted Encumbrance. (b) Power of Eminent Domain. The Company has the power of eminent domain which it may exercise, subject to the requirements of law, in order to acquire any additional Property that is necessary for it to perform its responsibilities as a public service company. Section 2.8 Leases. The Company has the right to. and does, enjoy peaceful and undisturbed possession under all material leases to which it is a party or under which it Is operating. All such leases are valid. subsisting and in full force and effect, and the Company is not in default under any such lease, and no event has occurred and is continuing. and no condition exists, that, after notice or the passage of time or both, could become a material default under any such lease. All material leases to which the Company is a party or under which the Company is operating are situated on real Property located in the State of Connecticut. Section 2.9 Patents, Trademarks, Licenses, Etc. The Company holds all material franchises; patents, trademarks. service marks, trade names, copyrights, certificates, permits, licenses, rights-of-way, easements, consents and other rights, and holds, or holds in effect by acquiescence and is in compliance in all material respects with the terms of. all material franchises, patents, trademarks, service marks, trade names, and copyrights for its business and operations as currently conducted and (except for such franchises, patents, trademarks. service marks, trade names, copyrights, certificates, permits, licenses, rights-of-way. Easements, consents and other rights as may be required to be obtained in the future) as currently proposed to be conducted. without, after due inquiry, any known conflicts with the rights of others, that either individually or in the aggregate could reasonably be expected to materially adverse, affect or materially interfere with the operations of the Company's business. Section 2. 10 Sale is Legal and Authorized; Bonds are Enforceable. (a) Sale is Legal and Authorized. Each of the sale of the Bonds by the Company and compliance by the Company with all of the provisions of this Agreement, the Indenture and the Bonds; (i) is within the corporate powers of the Company; and (ii) is legal and does not conflict with. result in any breach of any of the provisions of, constitute a default under, or result in the creation of any Lien (other than the Lien created by the Indenture) upon any Property of the Company under the provisions of any agreement, charter instrument, bylaw or other instrument to which it is a party or by which it or any of its Property may be bound. (b) Bonds are Enforceable. The obligations of the Company under this Agreement, the Indenture and the Bonds have been duly authorized by proper corporate action on the part of the Company (no action by the shareholders of the Company being required by law. any charter instrument or bylaws of the Company or otherwise), and this Agreement, the Indenture and the Bonds have been executed and delivered by the Company and are valid, binding and enforceable in accordance with the terms of this Agreement, the Indenture and the Bonds. except to the extent limited by applicable bankruptcy, insolvency, reorganization, moratorium. fraudulent conveyance or similar laws of general application relating to or affecting the enforcement of the rights of creditors or by equitable principles, whether considered in a proceeding in equity or at law. Section 2.11 No Defaults. No event has occurred and no condition exists that, upon the issue of the Bonds, would constitute a Default or an Event of Default. The Company is not in violation in any respect of any term of any charter instrument or bylaw and is. to the best of its knowledge after due inquiry, not in violation in any material respect of any term in any agreement or other instrument to which it is a party or by which it or any of its Property may be bound. Section 2.12 Regulation; Status under Holding Company Act; Investment Company Act: and Foreign or Enemy Status. (a) The Company is subject to the jurisdiction of the DPUC and various other state, federal and local governmental departments and regulatory and environmental commissions, agencies, authorities and bodies with respect to its business operations. Neither the Company nor the Parent is directly subject to the jurisdiction of the FERC. The nature and extent of such regulation are generally described in the Private Placement Memorandum. (b) The Company is exempt from the requirements of the Public Utility Holding Company Act of 1935 (except Section 9(a)(2) thereof) pursuant to Section 31(a)(1) thereof. The Parent has filed all necessary exemption statements with the SEC as of the date of this Agreement. (c) The Company is not, and is not directly or indirectly controlled by, or acting on behalf of any Person that is, an "investment company" within the meaning of the Investment Company Act of 1940. Section 2.13 Regulatory Approval Required. Assuming the Bonds are offered and sold as described in the Private Placement Memorandum and that the representations set forth in Section 1.3 (Purchase for Investment) of this Agreement are correct, no consent of, approval or authorization by, filing, or registration with, or notice to any governmental or public authority or agency is required for the issuance, sale or delivery of the Bonds or the execution, delivery or performance of this Agreement or the Indenture by the Company, other than (a) the authorization of the DPUC, which authorization has been duly obtained, is in full force and effect, and has not been appealed, abrogated, modified, stayed or suspended and no subsequent appeal would, under applicable law, affect the validity or enforceability of the Bonds and (b) the recordings or filings, in respect of the Lien of the Indenture, required under the Indenture. The Company has furnished to your special counsel true, correct and complete copies of (i) said authorization and (ii) as requested by you, all applications, petitions, reports and other papers, and any amendments and supplements thereto (hereinafter in this Section 2.13 referred to collectively as "applications"), heretofore filed with or submitted to the DPUC by the Company in connection with its action to obtain said authorization. The applications did not contain, as of the respective dates of filing or submission thereof, any untrue or incorrect statements of material fact or omit to state any material fact necessary to make the statements contained therein not misleading. Prior to the Closing Date, the Company will furnish to your special counsel all subsequent applications, if any. Section 2.14 Consents. Neither the creation, authorization, issuance or sale of the, Bonds, nor the execution, delivery or performance of this Agreement or the Supplemental Indenture, will require any vote, consent or approval in any manner of any creditor of or investor in, the Company. Section 2.15 Taxes. All federal, state and other tax returns of the Company required by law to be filed have been duly filed and all federal, state and other taxes, assessments, fees and other governmental charges upon the Company or upon any of its respective Properties or assets that are due and payable have been paid, other than those not yet delinquent and except for those being contested in good faith by appropriate proceedings. There are no material Liens on any Properties or assets of the Company imposed or arising as a result of the delinquent payment or nonpayment of any such tax, assessment, fee or other governmental charge. The charges. accruals and reserves on the books of the Company in respect of federal and state income taxes for all fiscal years since December 31, 1989, and in respect of other taxes for all outstanding periods, are adequate and the Company does not know of any additional assessments for such years or any basis therefor. There are no applicable taxes, fees or other governmental charges payable by the Company in connection with the execution and delivery of this Agreement or the offer, issuance. sale or delivery of the Bonds by the Company. Section 2.16 Use of Proceeds: No Margin Regulation Violation. (a) Use of Proceeds. The net proceeds from the sale of the Bonds will be applied to and used to repay short term indebtedness and for other corporate purposes. (b) No Margin Regulation Violation. The Company does not own, directly or indirectly, and does not have the present intention of acquiring or owning any "margin stock" (as such term is defined in Regulation G of the Board of Governors of the Federal Reserve System (12 C.F.R. Part 207, as amended). The Company will not use any part of the proceeds from the sale of the Bonds. directly or indirectly, to "Purchase or carry" (within the meaning of said Regulation G) any "security" (as defined in Section 3(10) of the Exchange Act) or to reduce or retire any indebtedness or originally incurred to purchase or carry any such "security." None of the transactions contemplated by this Agreement (including. without limitation, the direct or indirect use of the proceeds from the sale of the Bonds) will violate or result in a violation of Section 7 of the Exchange Act or any regulations issued pursuant thereto, including, without limitation, said Regulation G. Regulation T (12 C.F.R., Part 220. as amended) and Regulation X (12 C.F.R. Part 224, as amended) of said Board of Governors. Section 2.17 Private Offering. Neither the Company nor A.G. Edwards & Sons, Inc. (the only Person authorized or employed by the Company as agent, broker, dealer or otherwise in connection with the offering or sale of the Bonds or any similar Security of the Company) has offered any of the Bonds or any similar Security of the Company for sale to, or solicited offers to buy any thereof from, or otherwise approached or negotiated with respect thereto with, any prospective purchaser, other than you and 69 other institutional investors, each of whom was offered all or a portion of the Bonds at private sale for investment. Section 2.18 Compliance with Law. The Company: (a) is not, to the best of its knowledge after due inquiry. in violation of any laws, ordinances or governmental rules or regulations to which it is subject, the violation of which. either individually or in the aggregate, could reasonably be expected to materially and adversely affect the business, prospects, Properties or condition (financial or other) of the Company, or (b) has not failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its Property or to the conduct of its business, which violation or failure could, either individually or in the aggregate, reasonably be expected to materially and adversely affect the business, prospects, Properties or condition (financial or other) of the Company. Neither the execution, delivery or performance of this Agreement or the Supplemental Indenture, nor the performance of the Indenture, nor the offer, issuance, sale or delivery of the Bonds, will cause the Company to be in violation of any law or any order, rule or regulation of any federal, state, county, municipal or other governmental or public authority or agency having jurisdiction over the Company or over its Properties, or the award of any arbitrator. Section 2.19 ERISA. (a) The Company has not, with respect to any of the "employee benefit plans" established or maintained, or to which contributions have been made, by the Company (the "Plans"), engaged in a "prohibited transaction" that could subject the Company to a tax or penalty on prohibited transactions. No Plan that is subject to Part 3 of Subtitle B of Title I of ERISA or Section 412 of the Code had an "accumulated funding deficiency," whether or not waived. as of the last day of the most recent fiscal year of such Plan ended prior to the date hereof. No liability to the PBGC has been or is expected by the Company to be incurred by the Company with respect to any Plan. There has been no "reportable event" with respect to any Plan (including any Plan termination) since the effective date of Section 4043 of ERISA for which a timely notice to the PBGC, not otherwise waived by the PBGC, was not furnished, and since such date no event or condition has occurred that presents a material risk of termination of any Plan by the PBGC. As of January 1. 1998. the most recent valuation date, the actuarially determined present value of all "accrued benefits" under each Plan that is subject to Part 3 of Subtitle B of Title I of ERISA did not exceed the then current value of the assets of the respective Plan allocable to such benefits. Insofar as the representations and warranties of the Company contained in the preceding sentences of this subsection (a) relate to any Plan that is a "multiemployer plan." such representations and warranties are made to the best knowledge of the Company after due inquiry. (b) The execution and delivery of this Agreement and the Supplemental Indenture, and the issuance and sale by the Company, and the purchase by you hereunder, of the Bonds, will not involve any prohibited transaction. This representation and warranty is made in reliance on your representations in Section 1.5 (Source of Funds: ERISA) hereof as to the source of the funds for your purchase of the Bonds. The Private Placement Memorandum discloses all employee benefit plans with respect to which the Company is a "party in interest" or with respect to which any of the securities of the Company, are "employer securities." If, at any time before the Closing Date, the Company becomes a party in interest with respect to any other employee benefit plan or if its securities become employer securities with respect to any such employee benefit plan, then the Company will notify you in writing of any such employee benefit plan within 15 days after it becomes a party in interest or its securities become employer securities with respect to any such employee benefit plan (but in any event not later than the Closing Date). (c) As used in this Section 2.19, the terms "accrued benefits," "employee benefit plans," and "party in interest" shall have the respective meanings assigned to such terms in Section 3 of ERISA; the term "accumulated funding deficiency" shall have the meaning, assigned to such term in Section 302 of ERISA and Section 412 of the Code; the term "employer security" shall have the meaning assigned to it in Section 407(d)(1) of ERISA; the term "multiemployer plan" shall have the meaning assigned to such term in Section 4001 of ERISA; the term "prohibited transaction" shall have the meaning assigned to such term in Section 4975 of the Code and Section 406 of ERISA; and the term "reportable event" shall have the meaning assigned to such term in Section 4043 of ERISA. Section 2.20 MGP Sites. The Company has conducted a thorough investigation of all MGP Sites currently owned by it for which it could accrue liabilities or have responsibilities pursuant to Environmental Laws. The scope of its investigation included all real Properties (i) for which the Company, to its knowledge as of the date hereof, has responsibilities pursuant to the Environmental Liability Sharing and Indemnity Agreement, dated July 1, 1989, between the Company and Connecticut Light & Power Company. and (ii) set forth in Schedule III (hereafter, the "Disclosed MGP Sites"). As of the date hereof, the Company knows of no MGP Sites other than the Disclosed MGP Sites for which it could accrue liabilities or have responsibilities pursuant to Environmental Laws. Based upon the present knowledge of the Company, the Company does not believe that the Disclosed MGP Sites, individually or in the aggregate, could reasonably be expected to have a material adverse effect on the business, prospects, Properties or conditions (financial or otherwise) of the Company. Section 2.21 Application of Other Laws. The issuance and purchase of the Bonds and the security interest granted by the Indenture and contemplated by this Agreement, are not subject to the provisions of Connecticut's Hazardous Waste Establishment Law, Conn. Gen. Stat. Section 22a-134 et seq. Section 2.22 Compliance with Environmental Laws. The Company is not in violation of applicable Environmental Laws, which violation could reasonably be expected to have a material adverse effect on the business, prospects, Properties or condition (financial or otherwise) of the Company. The Company has not received notification from any party that the Company has any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.), or the Resource Conservation and Recovery Act of 1976. as amended (42 U.S.C. Section 6901 et seq.). SECTION 3. CONDITIONS OF OBLIGATION TO PURCHASE BONDS. Your obligation to purchase and pay for the Bonds to be purchased by you on the Closing Date shall be subject to the satisfaction, prior to or concurrently with such purchase and payment, of the following conditions: Section 3.1 Opinion of Your Special Counsel. You shall have received from Winthrop, Stimson, Putnam & Roberts, who are acting as special counsel for you in connection with the transactions contemplated by this Agreement an opinion, dated the Closing Date, in form and substance satisfactory to you, to the effect specified in Schedule IV-A hereof. Section 3.2 Opinions of Counsel for the Company. You shall have received from Shipman & Goodwin LLP. counsel for the Company, and Mary J. Healey, Esq., Secretary and General Counsel of the Company, opinions. each dated the Closing Date in form and substance satisfactory to you and your special counsel. to the effect specified in Schedule IV-B and Schedule IV-C, respectively, hereof. Section 3.3 Opinion of Counsel for the Trustee. You shall have received from Gould & Wilkie, counsel for the Trustee. an opinion, dated the Closing Date, in form and substance satisfactory to you and your special counsel, to the effect specified in Schedule IV-D hereof. Section 3.4 Letter of Acknowledgment. You shall have received a letter from, or acknowledged and accepted by, the Trustee, in form and substance reasonably satisfactory to you and your special counsel, acknowledging and accepting the terms of Sections 5.1 (Direct Payment) and 5.3 ) (Indemnity for Destroyed. Lost, or Stolen Bonds hereof. Section 3.5 Documents Required by Indenture; Basis for Authentication. The Company shall have furnished to the Trustee the resolutions, certificates and other instruments and cash, if any, required to be delivered prior to or upon the issuance of the Bonds pursuant to the provisions of the Indenture. The Company shall have requested the Trustee to and the Trustee shall have authenticated the Bonds pursuant to Article Five (Authentication and Delivery of Additional Bonds) of the Indenture. The Company shall be able to comply with all other conditions with respect to the authentication of the Bonds imposed by the Indenture. Section 3.6 Recordings. On or prior to the Closing Date, the Supplemental Indenture shall have been duly authorized, executed and delivered by the Company and the Trustee, substantially in the form of Exhibit A hereof (with such changes therein as shall be agreed upon by you and the Company), and shall be in full force and effect, and the Indenture (including the Supplemental Indenture) and all other documents, including, without limitation, Uniform Commercial Code financing statements (the "Financing Statements") and lien certificates pursuant to Section 49-5 of the Connecticut General Statutes, shall have been duly executed and properly recorded or filed in such manner and in each Jurisdiction in which recording is required to establish the mortgage Lien and security interest created by the Indenture as a first mortgage Lien on and/or a first security interest in the Trust Estate. subject only to, Permitted Encumbrances. Section 3.7 Representations and Warranties True. The representations and warranties of the Company contained in Section 2 (Representations and Warranties) hereof shall be true on and as of the Closing Date with the same effect as though such representations and warranties had been made on and as of the Closing Date, and you shall have received an Officers' Certificate, dated the Closing Date, to that effect. Section 3.8 Performance of the Company's Obligations. The Company shall have performed all of its obligations to be performed hereunder and under the Indenture prior to or or the Closing Date and you shall have received an Officers' Certificate, dated the Closing Date, to that effect. Section 3.9 No Pending Proceedings. The requisite authorization of the DPUC referred to in Section 2.13 (Regulatory Approval Required) hereof shall be in full force and effect and shall not have been appealed, revoked, amended, stayed or suspended and there shall not be pending or, to the Company's best knowledge, contemplated any proceedings before or action of the DPUC to abrogate or modify such authorization, and you shall have received an Officers' Certificate, dated the Closing Date, to that effect. Such authorization shall be legally sufficient to authorize the offer, issuance, sale and delivery of the Bonds and the execution, delivery and performance of this Agreement and the Supplemental Indenture by the Company, and there can be no abrogation or modification of such authorization after the delivery of the Bonds that would invalidate the Bonds or alter. diminish or void the obligations of the Company under this Agreement, the Indenture or the Bonds. Section 3.10 No Default. No event shall have occurred, and no condition shall exist, which shall constitute a Default, or, after notice or the passage of time or both, could become a Default, and you shall have received an Officers" Certificate, dated the Closing Date, to that effect. Section 3.11 Legality. The Bonds shall qualify as a legal investment for life insurance companies under the provisions of the insurance law of any jurisdiction to which you are subject, without reference to any so-called "basket" clause of such laws (or any clause that imposes limitations on particular investments, whether in the aggregate or individually), and you shall have received from the Company such information or evidence as you may reasonably request to enable you to determine whether such purchase is so permitted. Section 3.12 Private Placement Number. On or prior to the Closing Date, your special counsel shall have duly made the appropriate filings with Standard and Poor's CUSIP Service Bureau, as agent for the National Association of Insurance Commissioners, in order to obtain a private placement number for the Bonds. Section 3.13 Proceedings, Instruments, Etc. All proceedings and actions taken on or prior to the Closing Date in connection with the transactions contemplated by this Agreement, and all instruments incident thereto, shall be satisfactory, in form and substance to you and your special counsel, and you and your special counsel shall have received copies of all such documents that you or they may reasonably have requested in connection with such proceedings, actions and transactions (including, without limitation, evidence of the correctness of representations and warranties contained herein and in the Supplemental Indenture, and evidence of compliance with the terms and the fulfillment of the conditions of this Agreement and the Indenture), in form and substance satisfactory to you and your special counsel. SECTION 4. EXPENSES. Whether or not the Bonds are sold or this Agreement is terminated the Company will pay, and will save you harmless against liability for, all costs and expenses relating to this Agreement, the Supplemental Indenture or the Bonds, to any modification, amendment or alteration of this Agreement, the Indenture or the Bonds (whether or not the same have become effective), or to any enforcement of this Agreement, the Indenture or the Bonds, including, without limitation: (a) the cost of printing. preparing and reproducing this Agreement, the Supplemental Indenture, the Bonds and every instrument of modification, amendment or alteration, the cost of all recordings and filings of or in respect of the foregoing, and the cost of obtaining a private placement number from Standard and Poor's CUSIP Service Bureau for the Bonds. (b) the fees and disbursements of your special counsel, of your local counsel, if any, of all counsel for the Company and of the Trustee and counsel for the Trustee; (c) your reasonable out-of-pocket expenses, (d) the cost of delivering to your home office, insured to your satisfaction, the Bonds purchased by you on the Closing Date: (e) all costs and expenses (including, without limitation, legal fees and disbursements) relating to any amendments. waivers or consents involving the provisions hereof, of the Indenture or of the Bonds (whether or not the same have become effective), including, without limitation, any amendments. waivers or consents resulting from any work-out, renegotiation or restructuring relating to the enforcement of this Agreement, the Indenture or the Bonds; (f) the broker's or finder's fees of any Person retained by the Company in connection with the sale of the Bonds, it being represented and warranted by the Company that: (i) A.G. Edwards and Sons, Inc. is the only Person authorized by the Company to act as agent on its behalf in connection with the sale of the Bonds, and (ii) such Person acted solely as agent for the Company and not as agent for you: and (g) all taxes in connection with the issuance and original sale by the Company of the Bonds and in connection with any modification of the Bonds at the request of the Company. and will save you and any subsequent holder of the Bonds harmless without limitation as to time against any and all liabilities with respect to all such taxes, including any interest or penalty for nonpayment or delay in payment thereof and any income taxes paid by you in connection with any reimbursement by the Company thereof. The obligations of the Company under this Section 4 shall survive the payment of the Bonds and the termination of this Agreement. SECTION 5. CERTAIN SPECIAL RIGHTS. In the event of any conflict between any provisions set forth below and the Indenture, the provisions set forth below shall control. Section 5.1 Direct Payment. Notwithstanding anything to the contrary contained in this Agreement, the Indenture or the Bonds, the Company shall pay all amounts with respect to each Bond held by each Institutional Holder of Bonds (without any presentment of such Bond and without any notation of such payment being made thereon) by crediting before 12:00 noon, New York time, by Federal funds bank wire transfer, the account of such Institutional Holder, in any bank in the United States of America as may be designated in writing by such Institutional Holder, or in such other lawful manner as may be directed or to such other address in the United States of America as may be designated in writing by such Institutional Holder. Your address on Schedule I to this Agreement shall be deemed to constitute notice, direction or designation (as appropriate) to the Company with respect to direct payments as aforesaid. Section 5.2 Delivery Expenses. If you surrender any Bond to the Company or the Trustee pursuant to this Agreement or the Indenture, or if the Company issues any new Bond pursuant to this Agreement or the Indenture (other than pursuant to requests of Bond holders for exchanges), the Company will pay the cost of delivering to or from your office from or to the Company or the Trustee, insured to your satisfaction, the surrendered Bond or Bonds and any Bond or Bonds issued in substitution or replacement for the surrendered Bond or Bonds, in each case insured to your satisfaction. Section 5.3 Indemnity for Destroyed, Lost, or Stolen Bonds. The Company and the Trustee acknowledge that any holder of Bonds that is an Institutional Holder may satisfy its obligation to deliver security or indemnity in respect of destroyed. lost, or stolen Bonds, as set forth in Section 3.08 (Mutilated, destroyed, lost and stolen Bonds) of the Indenture, by delivering its own unsecured letter of indemnity in respect thereof. Section 5.4 Late Payments of Interest. The provisions of Section 3.09 (Payment of interest on Bonds, interest rights preserved) (other than the first and last paragraphs thereof) of the Indenture shall not apply to the Bonds, Interest on any Bond, other than that paid in accordance with first sentence of such Section 3.09, shall be paid to the Person in whose name that Bond (or one or more Predecessor Bonds (as defined in the Indenture)) is registered at the close of business on the day before such payment. Section 5.5 No Presentation of Bonds. Notwithstanding any provisions of the Indenture to the contrary, no holder of Bonds shall be required to present or surrender such Bonds to the Company, the Trustee or any other Person prior to, or as a condition of receiving any payment in respect thereof. You agree that you will deliver to the Company all Bonds registered in your name, at the time of final payment in full of all amounts due in respect thereof, within a reasonable period after such final payment. SECTION 6. INFORMATION TO BE FURNISHED TO BONDHOLDERS. Section 6.1 Financial and Other Statements. The Company shall deliver to you, if at the time you or your nominee holds any Bonds (or if you are obligated to purchase any Bonds), and to each other Institutional Holder of the then outstanding Bonds (and, in the case of the financial statements delivered pursuant to Section 6.1(b) hereof. to the Securities Valuation Office, National Association of Insurance Commissioners, 195 Broadway, New York, New York 10007, provided that failure to do so shall not constitute a Default or an Event of Default): (a) Company Quarterly Statements - as soon as practicable after the end of each quarterly fiscal period in each fiscal year of the Company, and in any event within 45 days thereafter, duplicate copies of: (i) a balance sheet of the Company as at the end of such quarter, and (ii) a statement of income of the Company for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter, and a statement of cash flows of the Company for the portion of the fiscal year ending with such quarter. setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail and certified as complete and correct, subject to changes resulting from year-end adjustments, by a principal financial officer of the Company: if the Company at any time has any Subsidiaries, all of the foregoing financial statements shall be prepared on a consolidated basis. (b) Company Annual Statements - as soon as practicable after the end of each fiscal year of the Company, and in any event within 90 days thereafter, duplicate copies of. (i) a balance sheet of the Company as at the end of such year, and (ii) statements of income, changes in shareholders' equity and cash flows of the Company for such year. setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, certified and accompanied by a report thereon of Arthur Andersen LLP or other independent public accountants of recognized national standing selected by the Company or other independent public accountants acceptable to the holders of a majority in principal amount of the Bonds then outstanding, which report shall state that such financial statements fairly present the financial condition of the companies being reported upon and have been prepared in accordance with generally accepted accounting principles consistently applied (except for changes in application in which such accountants concur) and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as were considered necessary in the circumstances: if the Company at any time has any Subsidiaries, all of the foregoing financial statements shall be prepared on a consolidated basis. (c) Parent Quarterly Statements - as soon as practicable after the end of each quarterly fiscal period in each fiscal year of the Parent, and in any event within 45 days thereafter, duplicate copies of: (i) a consolidated balance sheet of the Parent and its Subsidiaries as at the end of such quarter, and (ii) a consolidated statement of income of the Parent and its Subsidiaries for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter, and a consolidated statement of cash flows of the Parent and its Subsidiaries for the portion of the fiscal year ending with such quarter, setting, forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year. all in reasonable detail and certified as complete and correct, subject to changes resulting from year-end adjustments. by a principal financial officer of the Parent; (d) Parent Annual Statements - as soon as practicable after the end of each fiscal year of the Parent, and in any event within 90 days thereafter, duplicate copies of: (i) a consolidated balance sheet of the Parent and its Subsidiaries, as at the end of such year, and (ii) consolidated statements of income, changes in shareholders' equity and cash flows of the Parent and its Subsidiaries, for such year. setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, certified and accompanied by a report thereon of Arthur Andersen LLP, or other independent public accountants of recognized national standing selected by the Parent, or other independent public accountants acceptable to the holders of a majority in principal amount of the Bonds then outstanding, which report shall state that such financial statements fairly present the financial condition of the companies being reported upon and have been prepared in accordance with generally accepted accounting principles consistently applied (except for changes in application in which such accountants concur) and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as were considered necessary in the circumstances: (e) Audit Reports - promptly upon receipt thereof, a copy of each other report submitted to the Company or any Subsidiary of the Company by independent accountants in connection with any annual, interim or special audit made by them of the books of the Company or any Subsidiary of the Company; (f) SEC and Other Reports - promptly upon their becoming available one (1) copy of each financial statement, report, notice or proxy statement sent by the Parent, the Company or any Subsidiary of the Company to stockholders generally or holders or trustees of its publicly-traded debt securities, and of each regular or periodic report and any registration statement or prospectus filed by the Parent. the Company or any Subsidiary of the Company with the National Association of Securities Dealers, any securities exchange or the SEC; (g) ERISA - promptly after becoming aware of the occurrence of any (i) "reportable event" (as such term is defined in Section 4043 of ERISA), other than reportable events with respect to which the 30-day notice period has been waived by applicable regulation, or (ii) "prohibited transaction" (as such term is defined in Section 406 or Section 4975 of the Code) in connection with any Pension Plan or any trust created thereunder, a written notice specifying the nature thereof, what action the Company is taking or proposes to take with respect thereto. And, when known, any action taken by the IRS, the Department of Labor or the PBGC with respect thereto; (h) ERISA Waivers - prompt written notice of and a description of any request pursuant to Section 303 of ERISA or Section 412 of the Code for, or notice of the granting pursuant to said Section 303 or Section 412 of, a waiver in respect of all or part of the minimum funding standard set forth in ERISA or the Code, as the case may be, of any Pension Plan, and, in connection with the granting of any such waiver, the amount of any waived funding deficiency (as such term is defined in said Section Section 303 or said Section 412) and the terms of such waiver; (i) Other ERISA Notices - prompt written notice of and, where applicable, a description of (i) any notice from the PBGC in respect of the commencement of any proceedings pursuant to Section 4042 of ERISA to terminate any Pension Plan or for the appointment of a trustee to administer any Pension Plan, (ii) any distress termination notice delivered to the PBGC under Section 4041 of ERISA in respect of any Pension Plan, and any determination of the PBGC in respect thereof, (iii) the placement of any Multiemployer Pension Plan in reorganization status under Title IV of ERISA, (iv) any Multiemployer Pension Plan becoming "insolvent" (as such term is defined in Section 4245 of ERISA under Title IV of ERISA), (v) the whole or partial withdrawal of the Company or any ERISA Affiliate from any Multiemployer Pension Plan and the withdrawal liability incurred in connection therewith, and (vi) the withdrawal of the Company or any ERISA Affiliate from any Pension Plan with respect to which it is a "substantial employer" under, and as defined in, ERISA and the withdrawal liability under ERISA incurred in connection therewith; (j) Notice of Default or Event of Default - immediately upon a Designated Officer becoming, aware of the existence of any condition or event that constitutes a Default or an Event of Default, a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto; (k) Notice of Claimed Default - immediately upon becoming aware of the existence of a Default in respect of any Bond, or any default in respect of any evidence of indebtedness or other Security of the Company or any Subsidiary of the Company in an outstanding principal amount of at least $1.000.000, a written notice specifying any notice given or action taken by any holder thereof and the nature of the claimed Default or default and what action the Company is taking or proposes to take with respect thereto; (l) Notice of Environmental Matters - (i) The Company shall provide written notice to any holder of the Bonds within thirty (30) days of the Company obtaining knowledge of: (1) any proceeding, litigation, judgment or order by a governmental authority involving any Disclosed MGP Site or other MGP Site for which the Company is or is alleged to be responsible: or, (2) any of the following, that, individually or in the aggregate, could reasonably be expected to have a material adverse effect on the business, prospects, Properties (taken as a whole) or condition (financial or otherwise) of the Company: (A) the violation of any Environmental Law; (B) any claim, demand, investigation, proceeding, cost recovery action, litigation, judgment, order or lien arising, pursuant to any Environmental Law or from the release or disposal of any Hazardous Substance; or, (C) any other environmental, health or safety condition or occurrence. (3) The Company shall deliver to any holder of the Bonds any such documents or records regarding the above matters that may be reasonably requested by any such holder and that may be obtained without need to initiate legal proceedings, except if such documents or records were generated by the Company for litigation and are protected from discovery or are otherwise protected from discovery or if such documents or records are covered by a written confidentiality agreement entered into by the Company for the purpose of maintaining the confidentiality of information provided to the Company by any Person other than an Affiliate. (m) Requested Information - with reasonable promptness, such other data and information as from time to time may be reasonably requested, including, without limitation, such financial or other information as may reasonably be requested to permit the holders of the Bonds to comply with the requirements of Rule 144A promulgated under the Securities Act in connection with a resale of the Bonds, provided that the transferee agrees to be bound by the confidentiality provisions contained in Section 6.3 (Inspection) of this Agreement. You may supply copies of any financial statements or reports furnished pursuant to this Section 6.1 to any regulatory authority having jurisdiction over you. The Company agrees to supply a reasonable number of additional copies of any of the materials referred to in this Section 6.1 upon written request. Section 6.2 Officers' Certificates. Each set of financial statements delivered to you or any other holder of the Bonds pursuant to Section 6.1(b) (Financial and Other Statements (Company Annual Statements)) hereof shall be accompanied by a certificate of the President or a vice-president and the Treasurer or an Assistant Treasurer of the Company setting forth that the signers have reviewed the relevant terms of this Agreement and the Indenture and have made. or caused to be made under their supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the accounting period covered by the income statements being delivered therewith to the date of the certificate and that such review has not disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists. specifying the nature and period of existence thereof and what action the Company has taken or proposes to take with respect thereto. Section 6.3 Inspection. The Company shall permit any of your representatives. while you or your nominee holds any Bond, or the representatives of any other Institutional Holder of the Bonds, at your or such holder's expense (unless a Default or an Event of Default has occurred and is continuing, in which case at the Company's expense), to visit and inspect any of the Properties of the Company or any Subsidiary of the Company, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers, employees and, if you reasonably believe that a Default or an Event of Default exists, with independent public accountants (and by this provision the Company authorizes said accountants to discuss the finances and affairs of the Company and its Subsidiaries) provided that prior notice of the request by you for such discussions is given to the Company (unless a Default has occurred, in which case no prior notice shall be required) all at such reasonable times and as often as may be reasonably requested. All information that is furnished to or obtained by any holder of Bonds pursuant to Section 6.1 (Financial and Other Statements) hereof, Section 6.2 (Officers' Certificates) hereof, or this Section 6.3 shall be received and held in confidence unless or until the same has been publicly disclosed (other than by or on behalf of any Bond holder): provided, however, that any holder of Bonds shall not in any way be the use of such formation in order to determine and enforce compliance with the terms and conditions of this Agreement or the Indenture or take any lawful action that it deems necessary to protect its interests herein and in the Bonds or the Indenture, and provided, further, that any holder of Bonds may furnish any such information in compliance with any court order or the requirements of any regulatory body, agency, authority or commission to whose jurisdiction such holder may be subject, to its independent accountants, attorneys or to any Person to whom such holder owes any duty of disclosure, to the National Association of Insurance Commissioners, rating agencies and to any Institutional Holder to whom such holder is considering selling any Bonds. It is understood that no Bond holder shall be liable to the Company or to any other Person in damages for failure to comply with the undertaking contained in this paragraph except in any case involving gross negligence or willful misconduct by such holder. SECTION 7. COVENANTS. In the event of any conflict between any provisions set forth below and the Indenture, the provisions set forth below shall control. Section 7.1 Purchase of the Bonds. The Company shall not, nor shall it permit any of its Subsidiaries or Affiliates to, directly or indirectly, acquire or make any offer to acquire any Bonds unless the Company or any such Subsidiary or Affiliate has offered to acquire Bonds, pro rata, from all holders of Bonds. upon the same terms. Section 7.2 Bondholder Expenses on Acceleration. So long as any Bond is outstanding, upon the rescission and annulment of a declaration of acceleration and its consequences, as provided for in Section 9.02 (Acceleration of Maturity; Rescission and Annulment) of the Indenture, the Company shall pay the reasonable expenses, disbursements and advances of each holder of Bonds (including, without limitation, the reasonable fees and disbursements of its counsel). Section 7.3 Transmission of Funds. The Trustee shall transmit to each holder of Bonds, by wire transfer of immediately available funds as provided in Schedule I hereto, or in such other manner as may be directed or to such other address in the United States of America as may be designated in writing by such holder, all funds received by it (whether by means of foreclosure on the Trust Estate or otherwise) that are payable in respect of the Bonds. (Nothing in this Section 7.3 shall be deemed to affect the Company's obligation to make payments in the manner provided in Section 5.1 (Direct Payment) of this Agreement). Such wire transmissions shall be made on the same day as the Trustee receives collected funds if such receipt occurs prior to 12:00 noon Hartford, Connecticut time on such day and, in all other cases, on the next succeeding Business Day. Section 7.4 Compensation and Reimbursement. The Company agrees to indemnify any holder of Bonds that has made a payment to the Trustee as the result of any security or indemnity given to the Trustee by such holder pursuant to Section 10.03(E) (Certain rights of Trustee) of the Indenture in circumstances where the Company would otherwise have been obligated under the terms of the Indenture or this Agreement to reimburse the Trustee or any holder of the Bonds for, or indemnify the Trustee or any holder of the Bonds against, the costs. expenses and/or liabilities for which such payment was made. Section 7.5 Defaults and Acceleration. (a) Pursuant to the Indenture. for purposes of determining whether a Default or Event of Default exists with respect to the Bonds, but only with respect to the Bonds, the following shall also constitute Events of Default under the Indenture: (i) default in the performance. or breach, of any covenant or warranty in this Agreement (other than (1) Section 6.1(1) (Financial and Other Statements (Notice of Environmental Matters) hereof or (2) a covenant or warranty a default in the performance or breach of which is specifically dealt with elsewhere in this Agreement. and continuance of such default or breach for a period of 30 days after notice has been given in accordance with the procedures described in Section 9.01C (Events of Default) of the Indenture; or (ii) default in any representation or warranty made by the Company herein, or made by the Company in any statement or certificate furnished by the Company in connection with the consummation of the issuance and delivery of the Bonds is untrue in any material respect as of the date of the issuance or making thereof, or (iii) the Company or any of its Subsidiaries defaults in any payment. beyond any period of grace provided with respect thereto, of principal of, or premium or interest on. any obligation for borrowed money having an outstanding principal amount of $10,000,000 or more; or (iv) a final, non-appealable judgment in an amount in excess of $10,000,000 above available insurance coverage (so long as the insurer shall have agreed, in writing at the time such judgment becomes final, that it is responsible for payment of such judgment up to the limit of available coverage) is rendered against the Company or any of its Subsidiaries and. within 60 days after entry thereof, such judgment is not discharged. (b) In addition to the sums stated to be payable pursuant to Section 9.06 (Covenant to pay Trustee amounts due on Bonds and right of Trustee to judgment) of the Indenture upon the occurrence of the defaults referred to therein, upon the occurrence of an acceleration pursuant to Section 9.02 (Acceleration of Maturity; Rescission and Annulment) of the Indenture, the Company shall pay the Make-Whole Amount, calculated as of the time of such payment, to each holder of bonds in respect of the bonds held by such holder. "Make-Whole Amount" shall mean in connection with any redemption or prepayment or acceleration of the Bonds, the excess, if any, of (a) the aggregate present value as of the date of such redemption or prepayment of each dollar of principal being redeemed or prepaid and the amount of interest (exclusive of interest accrued to the date of redemption or prepayment) that would have been payable in respect of such dollar if such redemption or prepayment or acceleration had not been made, determined by discounting such amounts at the Reinvestment Rate from the respective dates on which they would have been payable, over (b) 100% of the principal amount of the outstanding Bonds being redeemed, prepaid or paid. If the Reinvestment Rate is equal to or higher than 6.20%, the Make-Whole Amount shall be zero. For purposes of any determination of Make-Whole Amount: "Reinvestment Rate" shall mean (1) the sum of .50% plus the yield reported on page "USD" of the Bloomberg/Treasury Money Market Monitor Screen (or, if not available, any other nationally recognized trading screen reporting on-line intraday trading in United States government Securities) at 12:00 noon (New York time) on such date for United States government Securities having a maturity rounded to the nearest month corresponding to the remaining Weighted Average Life to Maturity of the principal being redeemed, prepaid or paid or (2) in the event that no such nationally recognized trading screen reporting on-line intraday trading in United States government Securities is available. Reinvestment Rate shall mean .50 plus the arithmetic mean of the yields under the respective headings "This Week" and "Last Week" published in the Statistical Release under the caption "Treasury Constant Maturities" for the maturity (rounded to the nearest month) corresponding to the Weighted Average Life to Maturity of the principal being redeemed, prepaid or paid. If no maturity exactly corresponds to such Weighted Average Life to Maturity, yields for the two published Maturities most closely corresponding to such Weighted Average Life to Maturity shall be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month. For the purposes of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount shall be used. "Statistical Release" shall mean the then most recently published statistical release designated "H.15(519)" or any successor publication that is published weekly by the Federal Reserve System and that establishes yields on actively traded U.S. government Securities adjusted to constant maturities or, if such statistical release is not published at the time of any determination hereunder, then such other reasonably comparable index that is designated by the holders of 66-2/3% in aggregate principal amount of the outstanding Bonds. "Weighted Average Life to Maturity" of the principal amount of the Bonds being redeemed, prepaid or paid shall mean, as of the time of any determination thereof, the number of years obtained by dividing the then Remaining Dollar-Years of such principal by the aggregate amount of such principal. The term "Remaining Dollar-Years" of such principal shall mean the amount obtained by (1) multiplying the amount of principal that would have become due at the stated maturity of the Bonds if such redemption, prepayment or payment had not been made by the number of years (calculated to the nearest one-twelfth) that will elapse between the date of determination and such stated maturity date of the Bonds. SECTION 8. INTERPRETATION OF AGREEMENT. Section 8.1 Definitions. Except as the context shall otherwise require. the following terms shall have the following meanings for all purposes of this Agreement (the definitions to be applicable to both the singular and the plural forms of the terms defined. where either such form is used in this Agreement): The term "Accredited Investor" shall have the meaning ascribed to such term in Section 2(15) or Rule 501 (a) under the Securities Act. The term "Affiliate" with respect to any Person shall mean a Person (a) that. directly. or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. (b) that, directly or indirectly, beneficially owns or holds of record 10% or more of the shares of any class of capital stock of or interest in such Person, (c) 10% or more of the shares of any class of capital stock of or interests in which is, directly or indirectly, beneficially owned or held of record by such Person, or (d) who is an officer or director of (or an individual performing similar management or supervisory functions for) such Person. The term "control" (including the related terms "controlled by" and "under common control with") shall mean the possession. direct or indirect, of the power to direct or cause the direction of the management and policies of a Person. whether through the ownership of capital stock, by contract or otherwise. The term "Bonds" shall have the meaning assigned thereto in Section 1.1 (Issue of Bonds and Security) hereof. The term "Business Day" shall mean a day other than a Saturday, Sunday or legal holiday or the equivalent banking institutions generally (other than a moratorium) in Hartford, Connecticut or New York, New York. The term "Closing Date" shall have the meaning assigned thereto in Section 1.2 (Sale of Bonds) hereof. The term "Code" shall mean the Internal Revenue Code of 1986, as amended. The term "Company" shall mean Yankee Gas Services Company, a specially chartered Connecticut corporation, and its successors and assigns. The term "Default" shall mean any event or condition, the occurrence of which would, with the lapse of time or the giving of notice, or both, constitute an Event of Default. The term "Designated Officer" shall mean any officer of the Company who may sign an Officers' Certificate under the Indenture. The term "Disclosed MGP Site" shall have the meaning set forth in Section 2.20 (MGP Sites) hereof. The term "DPUC" shall mean the Department of Public Utility Control of the State of Connecticut. The term "Environmental Law" shall mean any federal, state or local, statute, law, regulation, ordinance, order, consent decree, judgment, permit, license, code, common law or other legal requirement now or, for purposes of Section 6.1(1) (Financial and Other Statements (Notice of Environmental Matters)), hereafter enacted pertaining to protection of the environment, health or safety of persons, natural resources, conservation, wildlife, waste management, any Hazardous Substance. and pollution (including, without limitation. regulation of releases and disposals to air, land, water and groundwater), and includes, without limitation, the Comprehensive Environmental Response. Compensation and Liability Act of 1980 as amended by the Superfund Amendments and Reauthorization Action of 1986, 42 U.S.C. Section 9601 et seq., Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. Section et seq., Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. Section 1251 et seq., Clean Air Act of 1966, as amended, 42 U.S.C. Section 7401 et seq., Toxic Substances Control Act of 1976, 15 U.S.C. Section 2601 et seq., Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. Section 651 et seq., Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.. National Environmental Policy Act of 1975, 42 U.S.C. Section 4321 et. seq., Safe Drinking Water Act of 1974. as amended. 42 U.S.C. Section 300(f) et seq., and any similar or implementing state law. and all amendments. rules. regulations and publications promulgated thereunder. The term "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. The term "ERISA Affiliate" shall mean any corporation or trade or business that (i) is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the Company or (ii) is under common control (within the meaning of Section 414(c) of the Code) with the Company. The term "Event of Default" shall mean one of the "events of default" enumerated in Section 7.5(a) hereof or Article Nine (Remedies) of the Indenture. The term "Exchange Act" shall mean the Securities Exchange Act of 1934. The term "FERC" shall mean the Federal Energy Regulatory Commission. The term "Hazardous Substance" shall mean any hazardous or toxic chemical, waste. By product, pollutant, contaminant, product, material or substance, including without limitation, asbestos, polychlorinated biphenyl's, petroleum (including crude oil or any fraction thereof) and any substance defined as a hazardous substance or waste pursuant to an Environmental Law. The term "hereof", "herein," "hereunder" and other words of similar import shall be construed to refer this Agreement as a whole and not to any particular Section or other subdivision. The term "heretofore" shall be construed to refer to the time prior to the date of original execution and delivery by the Company of this Agreement. The term "holder" (with respect to any Bond) shall mean the Person in whose name a bond is registered in the register of Bonds maintained pursuant to the Indenture. The term "Indebtedness" with respect to any Person shall mean all items (other than capital stock and surplus) that, in accordance with generally accepted accounting principles, would be shown on the liability side of a balance sheet of such Person as of the date on which indebtedness is to be determined. The term "Indebtedness" shall also include, whether or not so reflected, (a) debt, obligations and liabilities secured by any Lien existing on Property owned by such Person if such Property is subject to such Lien, whether or not the debt, obligations or liabilities secured thereby have been assumed, (b) debt that has been removed in substance from the balance sheet of the Company as a result of the in-substance defeasance thereof, (c) obligations of such Person under any lease that is required under generally accepted accounting principles prevailing on the date of determination to be shown on the liability side of a balance sheet of such Person or that, whether or not required to be so shown, contains terms that require the payment of lease rentals whether or not the Property leased thereunder shall exist or can be used for the purpose for which it has been leased, or provides for a termination payment calculated to be sufficient to retire any debt, obligations or liabilities secured by a Lien on such lease or on the Property leased thereunder: (d) all obligations of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other Person and (e) all obligations of such Person to purchase any materials, supplies or other Property, or to obtain the services of any other Person, if the relevant contract or other related document requires that payment for such materials. supplies or other Property, or for such services, shall be made regardless of whether or not delivery of such materials. supplies or other Property is ever made or tendered or such services are ever performed or tendered. The term "Indenture" shall have the meaning assigned thereto in Section 1.1 (Issue of Bonds and Security) hereof. The term "IRS" shall mean the Internal Revenue Service and any successor agency. The term "Institutional Holder" shall mean (a) you and any of your Affiliates or nominees, and (b) any insurance company, bank, savings and loan association, trust company, investment company, charitable foundation, employee benefit plan (as defined in ERISA) or other institutional investor or financial institution that is the record or beneficial owner of not less than $1,000,000 in aggregate principal amount of the Bonds outstanding. provided that this limitation shall not be applicable in the event that the aggregate principal amount of the outstanding Bonds is less than $1,000,000. The term "Lien" shall mean any interest in Property securing an obligation owed to, or a claim by, any Person other than the owner of the Property, whether such interest is based on the common law, statute or contract, and including the Lien or security interest arising from a mortgage, encumbrance, pledge, conditional sale or trust receipt, or from a lease, consignment or bailment for security purposes. The term "Lien" shall also include reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances affecting Property. For purposes of this Agreement, a Person shall be deemed to be the owner of any Property that it has acquired or holds subject to a conditional sale agreement or other arrangement (including a leasing arrangement) pursuant to which title to the Property has been retained by or vested in some other Person for security purposes. The term "MGP Site" shall mean any real property upon which a manufactured gas plant or facility manufacturing, gas from coal or petroleum is or was located. The term "Multlemployer Pension Plan" shall mean any "multiemplover pension plan" (as defined in Section 3(37) of ERISA) in respect of which the Company or any ERISA Affiliate is an "employer" (as such term is defined in Section 3 of ERISA). The term "Multiple Employer Pension Plan" shall mean an employee benefit plan within the meaning of Section 3(3) of ERISA other than a Multiemployer Pension Plan, subject to Title IV of ERISA. to which the Company or any ERISA Affiliate and an "employer" (as such term is defined in Section 3 of ERISA) other than an ERISA Affiliate or the Company contribute. The term "Officers' Certificate" shall mean a certificate executed on behalf of the Company by the Chairman of the Board, the President, any Vice President, the Treasurer, the Controller or the chief financial officer of the Company. The term "Original Indenture" shall have the meaning assigned thereto in Section 1.1 (Issue of Bonds and Security) hereof. The term "Parent" shall mean Yankee Energy System, Inc., a Connecticut corporation, and its successors and assigns. The term "PBGC" shall mean the Pension Benefit Guaranty Corporation and any successor corporation or governmental agency. The term "Pension Plan" shall mean any "employee pension benefit plan" (as such term is defined in Section 3 of ERISA) maintained by the Company or any ERISA Affiliate for employees of the Company or such ERISA Affiliate, excluding any Multiemployer Pension Plan, but including, without limitation, any Multiple Employer Pension Plan. The term "Permitted Encumbrances" shall have the meaning assigned thereto in Section 1.01 (Definitions) of the Indenture. The term "Person" shall mean an individual, corporation, partnership, trust, estate, unincorporated organization or government or an agency or political subdivision thereof. The term "Prime Rate" shall mean the prime rate of interest as publicly announced from time to time by The Bank, of New York, New York, New York. The term "Private Placement Memorandum" shall have the meaning assigned thereto in Section 1.4 (Restrictions on Transfer; Legend) hereof. The term "Property" shall mean any interest in any kind of property or assets whether real, personal or mixed, and whether tangible or intangible. The term "Purchasers" shall mean and include each of the purchasers of the Bonds named in Schedule I to this Agreement. The term "Qualified Institutional Buyer" shall have the meaning assigned thereto in Rule 144A under the Securities Act. The term "SEC" shall mean the Securities and Exchange Commission. The term "Security" shall have the same meaning as in Section 2(l) of the Securities Act of 1933. The term "Securities Act" shall mean the Securities Act of 1933. The term "Subsidiary" shall mean any corporation of which more than 50% of the Voting Stock is at the time directly or indirectly owned by the Company or the Parent, as the case may be. The term "Supplemental Indenture" shall have the meaning assigned thereto in Section 1.1 (Issue of Bonds and Security) hereof. The term "this Agreement" shall mean this Bond Purchase Agreement (including the annexed Schedules and Exhibits), as it may from time to time be amended, supplemented or modified, in accordance with its terms. The term "'Trustee" shall mean The Bank of New York and its successors and assigns. The term "Voting Stock" shall mean the stock of any class or classes of a corporation the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the corporate directors (or persons performing similar functions). Section 8.2 Directly or Indirectly. Any provision in this Agreement referring to action that any Person is prohibited from taking shall be applicable whether such action is taken directly or indirectly by such Person. Section 8.3 Accounting Terms. All accounting terms used herein that are not otherwise expressly defined herein or in the Indenture shall have the meanings respectively given to them in accordance with generally accepted accounting principles applicable to a company in the same business as the Company, including applicable accounting rules imposed by an regulatory agency with jurisdiction over the Company. Section 8.4 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Connecticut. Section 8.5 Headings. The headings of the Sections and other subdivisions of this Agreement have been inserted for convenience only and shall not be deemed to constitute a part hereof. SECTION 9. MISCELLANEOUS. Section 9.1 Notices. (a) Unless otherwise expressly specified by the terms hereof all notices and other communications under this Agreement shall be in writing and shall be mailed by first class mail, postage prepaid, or by prepaid overnight courier (i) if to you. to you at your address shown in Schedule I to this Agreement. marked for attention as there indicated. or at such other address as you may have furnished to the Company in writing, (ii) if to any other holder of a Bond. to it at the address listed in the books for the registration and registration of transfer of Bonds, or at such other address as such holder may have furnished to the Company in writing and (iii) if to the Company. to it at its address shown at the head of this Agreement. or at such other address as it may have furnished in writing to you and all other holders of the Bonds at the time outstanding. (b) Any written communication so addressed and mailed by registered or certified mail (in each case with return receipt requested) or prepaid overnight courier shall be deemed to have been given when so mailed. All other written communications shall be deemed to have been given upon receipt thereof. Section 9.2 Reproduction of Documents. This Agreement and all documents relating hereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by you at the closing of your purchase of the Bonds (including specimens of the Bonds but not the Bonds themselves) and (c) financial statements, certificates and other information previously or hereafter furnished to you. may be reproduced by you by any photographic, photostatic, microfilm, microcard, miniature photographic or other similar process and you may destroy any original documents so reproduced. The Company agrees and stipulates that it will not object to the admission in evidence of such reproduction as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by you in the regular course of business) on the grounds that it is a reproduction and that any enlargement, facsimile or further reproduction of such reproduction shall have the benefit of this Section 9.2. Section 9.3 Survival; Severability. (a) Survival. All representations, warranties, and covenants made by the Company herein or in any certificate or other instrument delivered by it or on its behalf under this Agreement on or prior to the Closing Date shall be considered to have been relied upon by you and shall survive the delivery to you of the Bonds purchased by you, regardless of any investigation made by you or on your behalf and shall survive the final payment at maturity, of the Bonds with respect to causes of action accruing after said date of final payment and maturity. All statements in any such certificate or other instrument shall constitute representations and warranties as of the Closing, Date by the Company hereunder. (b) Severability. If any provision of this Agreement is invalid or unenforceable under applicable law, such provision is and shall be ineffective, to the extent to which it is contrary to applicable law but the remaining provisions of this Agreement shall remain in effect and shall not be affected thereby. Section 9.4 Successors and Assigns. This Agreement shall inure to the benefit of and shall be binding upon the successors and assignees of each of the parties (including each subsequent holder of the Bonds, unless otherwise provided herein). The provisions of this Agreement are intended to be for your benefit and for the benefit of all holders from time to time of the Bonds and shall be enforceable by you and any other such holder, whether or not an express assignment to such holder of rights under this Agreement has been made by you or your successors or assigns. Section 9.5 Amendment and Waiver. This Agreement may be amended, and the observance of any term of this Agreement may be waived, with (and only with) the written consent of the Company and holders of more than fifty percent (50%) in aggregate unpaid principal amount of the Bonds at the time outstanding (exclusive of Bonds then owned or held by the Company or any Subsidiary or other Affiliate thereof): provided, however, that no such amendment or waiver shall, without the written consent of the holders of all the Bonds at the time outstanding (exclusive of Bonds then owned or held by the Company or any Subsidiary or other Affiliate thereof), (a) amend this Section 9.5 or (b) amend Section 7.5 hereof. Nothing herein shall be deemed to amend Article Thirteen (Supplemental Indentures) of the Indenture. Section 9.6 Amendment of DPUC Authorization. The Company hereby covenants that, without the prior written consent of the Folders of all the Bonds at the time outstanding, it will not petition or otherwise request that the DPUC revoke or amend the authorization of the DPUC referred to in Section 2.13 (Regulatory Approval Required) hereof with respect to the issuance of the Bonds in any manner that would invalidate the Bonds or alter, diminish or void the obligations of the Company under this Agreement, the Indenture or the Bonds. Section 9.7 Duplicate Originals; Execution and Counterpart. Two or more duplicate originals of this Agreement may be signed by the parties, each of which shall be an original but all of which together shall constitute one and the same instrument. This Agreement may be executed in one or more counterparts and shall be effective when at least one counterpart has been executed by each party hereto, and each set of counterpart which, collectively. show execution by each party hereto shall constitute one duplicate original. If the foregoing is satisfactory to you, please sign the form of acceptance on the enclosed counterpart or counterparts hereof and return the same to the Company, whereupon this letter, as so accepted, shall become a binding contract between you and the Company. Very truly yours, YANKEE GAS SERVICES COMPANY By: Name: Title: The foregoing Agreement is hereby accepted: NEW YORK LIFE INSURANCE COMPANY By: Name: Title: If the foregoing is satisfactory to you, please sign the form of acceptance on the enclosed counterpart or counterparts hereof and return the same to the Company, whereupon this letter, as so accepted, shall become a binding contract between you and the Company. Very truly yours, YANKEE GAS SERVICES COMPANY By: Name: Title: The foregoing Agreement is hereby accepted: NEW YORK LIFE INSURANCE COMPANY By: Name: Title: SCHEDULE I Name and Address of Purchaser and Amount of Commitment Register securities in the name of. New York Life Insurance Company Instructions for Delivery of All Notices and Correspondence New York Life Insurance Company 51 Madison Avenue New York. NY 10010-1603 Attn: Investment Department Private Finance Group Room 206 Fax: 212-447-4160 with a copy of any notices regarding defaults or Events of Defaults under the operative documents to: Attn: Office of General Counsel Investment Section, Room 1104 Fax: 212-576-8340 All Payment Notices to the Above Address and to: Attn: Treasury Department Securities Income Section Room 2091 Fax: 212-447-4160 Instructions for Wire Transfer Payments Chase Manhattan Bank New York, New York 10019 ABA No. 021-000-021 For the account of New York Life Insurance Company General Account No. 008-9-00687 Taxpayer ID Number: 13-5582869 Amount of Commitment of New York Life Insurance Company: $10,000.000 EX-99.13OTHCONTRCT 43 c13-12_1.txt Exhibit C.13.12.1 ASSIGNMENT AND SECURITY AGREEMENT between HEC INC. (as Seller) and ABB ENERGY CAPITAL L.L.C. (as Buyer) As of November 30, 1999 Relating to Energy Conservation Measures at Portsmouth Naval Shipyard Kittery, Maine ASSIGNMENT AND SECURITY AGREEMENT THIS ASSIGNMENT AND SECURITY AGREEMENT is entered into as of November 30, 1999 between HEC INC., a Massachusetts corporation (together with its successors and permitted assigns, the "Seller"), and ABB ENERGY CAPITAL L.L.C., a Delaware limited liability company (together with its successors and assigns, the "Buyer"). RECITALS WHEREAS, the Seller and the United States of America (the "Government"), acting through the agency identified in the attached contract schedule (the "Contract Schedule") dated as of even date herewith and incorporated herein and made a part hereof, are parties to a contract and task order (as amended, modified, supplemented, renewed or extended from time to time in accordance therewith, together with all exhibits, schedules, annexes and other attachments thereto, collectively, the "Contract") described in the Contract Schedule, pursuant to which the Seller has agreed, among other things, to provide to the Government the resources, services and expertise necessary to implement an energy conservation project (the "Project") in order to reduce energy consumption at certain government facilities, all as more particularly described in the Contract Schedule; and WHEREAS, the Government may have the right to terminate the Contract or exercise its right of buyout with respect thereto following acceptance by paying the Termination Schedule Amount (hereinafter defined) set forth therein; and WHEREAS, the Seller desires to (a) sell and assign to the Buyer a portion of the monies due or to become due under the Contract, including, without limitation, all late interest charges owing pursuant thereto and all Termination Schedule Amounts (collectively, the "Contract Payments"), and the Buyer desires to purchase a portion of the Contract Payments from the Seller for the Purchase Price set forth in the Contract Schedule; NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 1. Definitions 1.1. Terms Defined. As used herein, unless the context otherwise requires: "Acceptance" means a modification to the Task Order executed by the Government stating that such Project conforms in all material respects with the specifications set forth in the Contract. "Agreement" means this Assignment and Security Agreement, as amended, modified or supplemented from time to time in accordance herewith, together with all exhibits, schedules, including the Contract Schedule incorporated herein, annexes and other attachments hereto. "Business Day" means any day except a Saturday, Sunday or other day on which commercial banks in Massachusetts are authorized by law to close. "Buyer" has the meaning ascribed to such term in the first paragraph hereof. "Base Contract" has the meaning ascribed to such term in the Contract Schedule. "CERCLA" means the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended and in effect from time to time, and all rules and regulations arising thereunder "Closing Date" has the meaning ascribed to such term in Section 2.1(b). "Collateral" has the meaning ascribed to such term in Section 2.6(a). "Contract" means the Task Order and to the extent relevant thereto the Base Contract, as described in the Contract Schedule. "Contract Payments" means the payments from the Government under the Contract as described in the Contract Schedule. "Contract Revenues" means the portion of the Contract Payments being purchased under this Agreement, as described in the Contract Schedule. "Contract Schedule" means the Contract Schedule attached hereto as Schedule 1. "Default" means an Event of Default or an event or occurrence that with the passage of time or the giving of notice or both may become an Event of Default. "Default Interest Rate" means the annual rate equal to the Interest Rate plus 2 percent. "Environmental Laws" means all laws pertaining to environmental matters, including without limitation, the Resource Conservation and Recovery Act, CERCLA, the Superfund Amendments and Reauthorization Act of 1986, the Federal Clean Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, and all applicable local and state laws in each case as amended, and all rules, regulations, judgments, decrees, orders and licenses arising under such laws. "Equipment" means the equipment and other property installed at the Facility as part of the Project pursuant to the Contract. "Event of Default" has the meaning ascribed to such term in Section 7.1. "Facility" has the meaning ascribed to such term in the Contract Schedule. "GAAP" means the generally accepted accounting principles consistent with those adopted by the Financial Accounting Standards Board, as in effect from time to time. "Hazardous Materials" means any substance (i) the presence of which requires or may hereafter require notification, investigation or remediation under any Environmental Law; (ii) which is or becomes defined as a "hazardous waste" or "hazardous material" or "hazardous Substance" or "controlled industrial waste" or "pollutant" or "contaminant" under any present or future Environmental Law or amendments thereto including, without limitation, CERCLA and any applicable local statues and the regulations promulgated thereunder; (iii) which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous and is or becomes regulated by any governmental authority, agency, department, commission, board or instrumentality of the United States, any state of the United States, or any political subdivision thereof to the extent any of the foregoing has or had jurisdiction over the Seller or the Facility or any landlord under any real property lease under which the Seller or the Facility is a tenant; or (iv) without limitation, which contains gasoline, diesel fuel or other petroleum products, asbestos or polychlorinated biphenyls. "Independent Engineer" means Shooshanian Engineering, Inc., or such other independent engineer selected by the Buyer and reasonably acceptable to the Seller. "Initial Financial Statements" has the meaning ascribed to such term in Section 5.5. "Instrument of Assignment" has the meaning ascribed to such term in Section 2.2. "Interest Rate" has the meaning ascribed to such term in the Contract Schedule. "Investment" means the principal amount of the Investment, as described below, plus the Investment Interest Costs and any unpaid fees which the Seller has agreed to pay hereunder and where applicable the Termination Amount. The initial principal amount of the Investment is the Purchase Price, and the principal amount of the Investment will thereafter be increased as set forth in Section 3.3, and reduced by the amount applied to the principal amount of the Investment as set forth in Sections 3 and 7. "Investment Interest Costs" means the amount calculated as set forth in the Contract Schedule. "Lien" means, with respect to any asset, a mortgage, lien, pledge, charge, security interest or other encumbrance of any kind relating to such asset. For purposes of this Agreement, a Person shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset. "Major Maintenance Reserve" has the meaning ascribed to such term in Section 3.2(d). "Material Adverse Effect" means any material adverse effect on the financial condition or business operations, assets or prospects of the Seller or material impairment of the ability of the Seller to perform its obligations hereunder or under the Contract or any of the Purchase Documents in a timely fashion. "Permitted Liens" has the meaning ascribed to such term in Section 6.14. "Person" means any individual, corporation, partnership, joint venture, association, trust, government or political subdivision or an agency or instrumentality thereof, or other entity or organization. "Prepayment Premium" has the meaning ascribed to such term in the Contract Schedule. "Pro Forma Projections" has the meaning ascribed to such term in Section 5.5. "Project" has the meaning ascribed to such term in the Contract Schedule. "Project Account" means the Buyer's deposit account identified in the Contract Schedule. "Project Expenses" has the meaning ascribed to such term in the Contract Schedule. "Purchase Documents" means this Agreement, the Contract, all Instruments of Assignment, all notices of assignment and all other documents, instruments, agreements and other writings executed or delivered in connection with this Agreement, as the same may be amended, modified or supplemented from time to time in accordance therewith, together with all exhibits, schedules, annexes and other attachments thereto. "Purchase Price" has the meaning ascribed to such term in the Contract Schedule. "Repayment Amounts" has the meaning ascribed to such term in the Contract Schedule. "Seller" has the meaning ascribed to such term in the first paragraph hereof. "Task Order" has the meaning ascribed to such term in the Contract Schedule. "Termination Amount" means the amount payable hereunder upon the prepayment of the Repayment Amounts, as set forth in the Contract Schedule. "Termination Schedule Amount" means the amount the Government is required to pay upon the occurrence of a termination or buyout of the Contract after the Acceptance thereunder. "UCC" means the Uniform Commercial Code as in effect from time to time in the Commonwealth of Massachusetts and, where applicable, in the jurisdiction in which the Collateral is located. 1.2 Rules of Construction. Unless the context otherwise requires, (a) the singular of each term used in this Agreement includes the plural and the plural of each such term includes the singular, (b) the term "Section" refers to a section of this Agreement and the terms "Exhibit" and "Schedule" refer to an exhibit or schedule to this Agreement, and (c) the symbol "dollar" refers to United States dollars or such coin or currency as at the time of payment is legal tender for the payment of public and private debts in the United States of America. 2. Purchase And Sale 2.1. Purchase of Contract Payments. (a) Upon the terms and subject to the conditions set forth herein, the Buyer agrees to purchase from the Seller and the Seller agrees to assign, sell, transfer and convey to the Buyer, from time to time upon Acceptance, all of the Seller's right, title and interest, whether now owned or hereafter acquired, in and to the Contract Revenues owing to the Seller by the Government pursuant to the Contract; provided that nothing in this Agreement or in any Purchase Document shall be deemed or construed to constitute an assumption by the Buyer of any obligations, liabilities or responsibilities of the Seller under the Contract. (b) The closing date for the purchase and assignment of the Contract Revenues shall be within 5 days following receipt by the Buyer of a written acknowledgment of Acceptance executed by the Government and the satisfaction of the other conditions to closing set forth in Section 4.1 (the "Closing Date"). 2.2. Instrument of Assignment. To evidence the assignment of all of the Contract Payments due or to become due under the Contract to the Buyer, the Seller agrees to execute and deliver to the Buyer or its assigns on the Closing Date an instruments of assignment substantially in the form of Exhibit A (the "Instrument of Assignment"). The Buyer shall have the right at any time to file any Instrument of Assignment with such governmental bodies, agencies and officials, including the contracting and disbursing officers of the Government, as the Buyer deems appropriate. 2.3. Purchase Price. (a) The purchase price for the Contract Revenues purchased hereunder shall be the amount set forth in the Contract Schedule (the "Purchase Price"). (b) In the event the Government proposes a change to the Project under the Contract which would result in a change in the Purchase Price hereunder, the Seller shall notify the Buyer of such proposal and will not agree to such proposal without the prior written consent of the Buyer, provided, however, that in the event the Purchase Price would be reduced as a result of such proposed change, the Buyer's consent shall not be unreasonably withheld if the Seller makes arrangements satisfactory to the Buyer to reimburse the Buyer for its out-of-pocket costs relating to any hedging arrangement relating to the Buyer's purchase of its interest in the Contract Payments. (c) The Buyer shall have no obligation to purchase the Contract Payments unless the Buyer is satisfied with any changes in the terms and conditions of the Contract, including, without limitation, the calculation and amount of the Contract Payments and the Termination Schedule Amounts thereunder. 2.4. Notice of Acceptance. Within five Business Days following the Acceptance of the Project by the Government under the Contract, the Seller shall give notice of such Acceptance to the Buyer. 2.5. Termination After Acceptance. In the event the Government, following Acceptance of the Project under the Contract, terminates the Contract, the Seller shall direct the Government to remit to the Buyer an amount equal to the Termination Schedule Amount then owing as set forth in the Contract, from which the Buyer shall, in the absence of the occurrence of an Event of Default, be entitled to retain the Termination Amount and shall remit any balance to the Seller in accordance with Section 3.4. 2.6. Security Interest to Secure the Seller's Obligations Hereunder. (a) In order to secure the performance of the Seller's obligations to the Buyer under this Agreement and the receipt by the Buyer of the Contract Payments and all other sums to which Buyer is or may be entitled hereunder, the Seller hereby pledges, collaterally assigns and hypothecates to the Buyer, and grants to the Buyer a continuing security interest in and to the Equipment and all amounts due or to be due to the Seller under the Contract, all rights to receive such amounts under and pursuant to the Contract and all proceeds of such payments and of any insurance relating to any of the foregoing (collectively, the "Collateral"). This Agreement shall be and constitute a security agreement under the UCC with respect to the Collateral. (b) Upon receipt by the Buyer of its Investment in full, or, in the absence of an Event of Default the receipt by the Buyer of the Termination Amount, the Buyer's security interest in the Collateral shall terminate. As soon as practicable thereafter, the Buyer shall deliver to the Seller termination statements under the UCC with respect to the Collateral, and such notices of release as may be required to reassign any remaining Contract Payments to the Seller. 2.7. Independent Engineer. (a) The Seller agrees that the Buyer may retain, at the Seller's sole cost and expense, the Independent Engineer. Prior to the Closing Date, the Independent Engineer shall prepare a written report evaluating whether installation of the Project (i) is complete, (ii) has been performed by the Seller in a manner satisfactory to achieve sufficient energy savings to provide the Contract Payments and Contract Revenues under the Contract and to meet the intended purposes thereof and (iii) has been performed in compliance with the requirements of the Contract. (b) The Seller shall pay the fees and out-of-pocket expenses of the Independent Engineer as a condition of Closing. Should any fees or expenses not be billed as of the Closing Date, the Seller shall pay such fees and expenses forthwith upon its receipt of a bill for such fees and expenses. (c) Neither the Buyer nor the Independent Engineer shall have any liability to Seller on account of (i) the services performed by the Independent Engineer, (ii) any neglect or failure on the part of the Independent Engineer properly to perform its services or (iii) any approval or disapproval by the Independent Engineer of the Project or its completion generally, and it is expressly understood that neither the Independent Engineer nor Buyer assumes any obligation to Seller or any other party in respect of the proper performance of the Project. 3. Payment Of Contract Payments 3.1. Distribution of Contract Payments. All Contract Payments paid or payable on and after the Closing Date, except for any Contract Payments excluded as set forth in the Contract Schedule, shall be deposited into the Project Account. Any Contract Payments which are received by Buyer or Seller shall be deposited into the Project Account. 3.2. Application of Contract Payments. (a) Contract Payments (excluding any payment of the Termination Schedule Amounts) deposited into the Project Account shall be applied on the first Business Day of each month (the "Withdrawal Date"). (b) If no Default or Event of Default shall exist, the Buyer shall disburse the Contract Revenues withdrawn from the Project Account in the following priority: (i) to the Buyer to pay any overdue principal of the Repayment Amounts which was required to be paid on any prior Withdrawal Date; (ii) any excess Contract Revenues remaining after payment of the expenses referenced in clause (b)(i) above, to the Buyer to pay any fees, reimbursements, premiums or penalties due to the Buyer under any of the Purchase Documents; (iii) any excess Contract Revenues remaining after payment of the expenses referenced in clauses (b)(i) and (ii) above, to Buyer to pay the Investment Interest Costs on the Investment for the period commencing on the day after the immediately preceding Withdrawal Date (or the Closing Date if there was no prior Withdrawal Date) to and including the then current Withdrawal Date; and (iv) any excess Contract Revenues remaining after payment of the expenses referenced in clause (b)(i) through (iii) above, to the Buyer to pay the principal amount of the current installment of the Repayment Amounts in accordance with the amortization schedule set forth in Contract Schedule. (c) If no Default or Event of Default shall exist, the Buyer shall disburse the Contract Payments in excess of the Contract Revenues withdrawn from the Project Account in the following priority: (i) In the event that the amount of Contract Payments less Project Expenses for the previous month is less than 120 percent of the Repayment Amounts, all of the Contract Payments shall be applied to reduce the Investment, and the remaining Repayment Amounts will be reamortized over the remaining term, until the amount of the next monthly payment of Contract Payments shall be at least equal to 120 percent of the next monthly installment of the Repayment Amount. (ii) In the event that the amount of Contract Payments less Project Expenses for the previous month equals or exceeds 120 percent of the Repayment Amounts, the amount of Contract Payments in excess of Contract Revenues shall be distributed first to satisfy any obligations to deposit amounts for the Major Maintenance Reserve under Section 3.2(d), and any balance shall be distributed to the Seller. (d) The Seller and the Buyer agree that a portion of the Project Expenses payable as part of the Contract Payments will be used to provide funds for major maintenance activities for the Project. The Buyer and the Independent Engineer, in consultation with the Seller, will reasonably determine the appropriate amount of the Contract Payments to be allocated for major maintenance activities. If the Seller enters into an agreement with a third party to provide for major maintenance of the Project, the Buyer will review the creditworthiness of such third party to determine the amount, if any, of the Contract Payments to be deposited in the Project Account as a reserve (the "Major Maintenance Reserve") to be used to fund major maintenance activities. All funds held in the Major Maintenance Reserve shall accrue interest at the Buyer's overnight rate, and such interest shall be deposited in and become a part of the Major Maintenance Reserve. On each Withdrawal Date, the portion of the Contract Payments determined by the Buyer to be set aside for deposit in the Major Maintenance Reserve shall be deposited from the Contract Payments in accordance with Section 3.2(c)(ii). Funds held in the Major Maintenance Reserve shall be disbursed by the Buyer from the Project Account to pay costs of major maintenance activities performed by such third party upon submission to the Buyer of invoices in form satisfactory to the Buyer. (e) If no Default or Event of Default shall exist upon satisfaction in full of the Repayment Amounts, then Buyer shall promptly remit to Seller any remaining Contract Revenues (the "Final Residual") (which Final Residual shall thereupon be deemed to be owned by and shall belong to Seller), and Buyer and the Seller shall enter into appropriate transfer documentation to transfer to Seller all of the Buyer's right, title and interest in the Contract. 3.3. Adjustment Of Investment. If in any month the Contract Revenues deposited to the Project Account, together with amounts paid by Seller pursuant to its indemnities hereunder, are not sufficient to pay the Investment Interest Cost for such month, then the amount of such deficit will be added to and increase the Principal Amount of the Investment. 3.4. Termination Payments. Notwithstanding anything to the contrary stated herein, Contract Payments constituting Termination Schedule Amount shall be applied to reduce the Investment. Such payments shall be applied to installments of the Repayment Amounts in inverse order of maturity. If no Default or Event of Default shall exist, the Buyer shall promptly remit to the Seller any balance of the Termination Schedule Amount it has received in excess of the amounts sufficient to pay the Termination Amount. The entire Investment, and any and all Investment Interest Costs, shall be indefeasibly due and payable on the final payment date reflected in the Contract Schedule. 3.5. Application of Contract Payments after Default. So long as a Default or Event of Default shall have occurred and be continuing, the Seller shall not be entitled to receive any funds from the Project Account, and the Buyer shall apply any funds remaining after the application of clauses (b)(i) through (iii) of Section 3.2 to the prepayment of the Investment. Any such amounts shall be applied first to the Prepayment Premium on the amount of principal prepaid and then to installments of the Repayment Amounts in inverse order of maturity. 4. Conditions Precedent 4.1. Conditions Precedent to the Purchase of the Contract Revenues. The obligation of the Buyer to purchase the Contract Revenues is subject to the satisfaction of the following conditions: (a) Deliveries. The following items or documents dated as of the Closing Date, shall have been delivered to the Buyer by the Seller and shall be in form and substance satisfactory to the Buyer: (i) a true, correct and complete copy of the Contract, including the Base Contract and the Task Order (including all modifications, amendments and supplements thereto), providing for the Contract Payments and Termination Amount as set forth in the Contract Schedule, and of the notice of the cancellation ceiling relating thereto, certified as such by the Seller; (ii) a completed Contract Schedule identifying the Contract, Contract Payments and Termination Schedule Amount, substantially in the form of Schedule 1, duly executed by the Seller; (iii) an Acceptance of the Project duly executed by the Government; (iv) a final report from the Independent Engineer; (v) the Instrument of Assignment substantially in the form of Exhibit A, duly executed by the Seller; (vi) a notice of assignment duly executed by the Government acknowledging the assignment of the Contract Payments to the Buyer and authorizing the grant of security in the Collateral and the right of the Buyer to cure defaults by the Seller in the performance of the Contract; (vii) certificates of insurance that comply with the requirements set forth in Section 6.3; (viii) a secretary's certificate of the Seller certifying the Seller's articles of organization, bylaws, resolutions and incumbency of the officers executing this Agreement and the Purchase Documents, duly executed by the corporate secretary or an assistant secretary of the Seller; (ix) a closing certificate of the Seller certifying the accuracy of all representations and warranties and that all conditions for the purchase of the Contract Revenues have been satisfied; (x) the Initial Financial Statements and the Pro Forma Projections; (xi) UCC-1 financing statements in form and substance satisfactory to the Buyer, duly executed by the Seller and covering, among other things, the sale of all of the Seller's right, title and interest in the Contract Payments and the security interest in the Collateral; (xii) a financing statement, judgment lien and tax lien search in such jurisdictions as the Buyer shall elect showing no Liens of record affecting the Contract Payments or the Collateral; (xiii) an opinion of counsel to the Seller, substantially in the form of Exhibit B, duly executed and delivered by counsel to the Seller; and (xiv) such other documents, instruments, agreements and other writings as may be reasonably requested by the Buyer to effectuate the transactions contemplated by this Agreement. (b) Purchase Documents. Each of the Purchase Documents shall have been duly authorized, executed and delivered by the respective partners thereto, shall be in full force and effect and shall be in form and substance satisfactory to the Buyer. (c) Perfection of Interest. All filings and recordings necessary or advisable, in the reasonable opinion of the Buyer or its counsel, to perfect the Buyer's right, title and interest in and to the Contract Payments and the Collateral, shall have been duly made, and all taxes, recordation fees and other amounts due in connection therewith shall have been paid in full by the Seller. (d) Acceptance, Representations and Warranties, No Default. The Project shall have been accepted by the Government, the representations and warranties of the Seller contained in this Agreement and the other Purchase Documents shall be true on and as of the Closing Date, no material adverse change in the Seller's financial condition from that set forth in the Initial Financial Statements shall have occurred, the Seller shall not have breached any of its obligations under this Agreement or any other Purchase Document, and no Default or Event of Default shall have occurred and be continuing. 5. Representations And Warranties The Seller represents and warrants that: 5.1. Corporate Existence and Power. The Seller (a) is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, (b) has all corporate powers and all material governmental licenses, Task Orders, consents and approvals required to carry on its business as now conducted and to perform its obligations under this Agreement and the other Purchase Documents, and (c) is duly qualified to transact business as a foreign corporation in each jurisdiction where the nature of its business requires the same, except where the failure to so qualify would not have a material adverse effect on its business or condition (financial or otherwise) or the performance of its obligations under this Agreement or any Purchase Document. 5.2. Powers; Task Order; and Contravention. The execution, delivery and performance by the Seller of this Agreement and the Purchase Documents (a) are within the Seller's corporate powers, (b) have been duly authorized by all necessary corporate action, (c) require no action by or in respect of, or filing with, any governmental body, agency or official, except for the filing of financing statements under the UCC and the approval of the Government, all as provided for in Section 4, (d) will not contravene, conflict with, result in a breach of, or constitute a default under, any provision of applicable law or regulation, the certificate of incorporation or bylaws of the Seller, any Task Order, or any lease, mortgage, note, loan or other agreement or any judgment, injunction, order or decree to which the Seller or any of its assets is subject, and (e) will not result in the imposition of any Lien on the Purchased Assets or Collateral other than Permitted Liens. 5.3. Binding Effect. This Agreement and each Purchase Document constitutes a valid and binding agreement of the Seller and is enforceable in accordance with its terms, except as the enforceability thereof may be limited by or subject to (a) bankruptcy, insolvency or similar laws affecting creditors' rights generally or (b) the effect of general principles of equity. 5.4. Disputes, Etc. The Seller (a) has duly, punctually, faithfully and diligently performed and otherwise complied in all material respects with the covenants, agreements, duties, obligations, terms and conditions applicable to it under the Contract, and all other contracts between the Seller and any department, agency, bureau or other subdivision of the federal government, and (b) has not received any notice of any dispute, default, opportunity to cure, show cause, termination (in whole or in part), intent to terminate or other notice that could affect the obligation of the Government to make all of the scheduled Contract Payments in full when due or that would have a Material Adverse Effect. 5.5. Financial Statements. The Seller has provided to the Buyer (a) the balance sheet of the Seller as of December 31, 1998, and its statements of income for the fiscal year then ended, certified by the chief financial officer of the Seller and the controller of Northeast Utilities and (b) the unaudited balance sheet of the Seller as of June 30, 1999, and its statements of income for the fiscal period then ended (collectively, the "Initial Financial Statements"). All such financial statements were prepared in accordance with GAAP, with the exception of footnotes, consistently applied, and present fairly the financial position of the Seller as of such dates and the results of the operations of the Seller for such periods. There are no liabilities, contingent or otherwise, not disclosed in any of such financial statements, involving a material amount. The Seller has also provided to the Buyer pro forma projections (the "Pro Forma Projections") as to operation of the Project during the term of the Project as contemplated in the Contract and such projections have been prepared in good faith based upon reasonable assumptions. 5.6. Instruments of Assignment. The Seller has not executed any instrument covering any moneys due or to become due under the Contract, except in favor of the Buyer, and no notice of assignment has been filed with any contracting officer, disbursing officer or other officer, employee or agent of the federal government covering any such moneys, except such notices as may have been filed by the Buyer. 5.7. Financing Statements. No financing statement, security agreement or other instrument similar in effect covering all or any part of the Contract Payments has been executed by the Seller or is on file in any governmental office, except such as may have been filed by the Buyer, the Seller has good title to the Contract Payments, and upon the filing of documents hereby required, the Buyer shall have a first-priority perfected Lien on the Collateral, subject only to Permitted Liens. The Seller has not changed its name or the state of its principal executive office within five years before the date hereof. 5.8. Litigation. There is no action, suit, proceeding or investigation pending against or, to the knowledge of the Seller, threatened against or affecting the Seller before any court or arbitrator or any governmental body, agency or official which could in any manner have a Material Adverse Effect or that could in any manner draw into question the validity of this Agreement or any Purchase Document. 5.9. Environmental Matters. (a) The Seller has obtained, or is expected to be able to obtain in the ordinary course, all approvals which are required under all Environmental Laws, except to the extent failure to have any such approvals would not have a Material Adverse Effect. The Seller is in compliance with the terms and conditions of all such approvals, and is also in compliance with all other limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules and timetables contained in any applicable Environmental Law or in any regulation, code, plan order, decree, judgment or injunction issued, entered, promulgated or approved thereunder, except to the extent failure to so comply would not, individually or in the aggregate, have a Material Adverse Effect. (b) No notice, notification, demand, request for information, citation, summons or order has been issued, no complaint has been filed, no penalty has been assessed and no investigation or review is pending or threatened by any governmental or other entity with respect to any alleged failure by the Seller to have any approval required in connection with the conduct of its business or with respect to any Environmental Laws, including, without limitation, Environmental Laws relating to the generation, treatment, storage, recycling, transportation, disposal or release of any Hazardous Materials. The Seller has not been identified as a potentially responsible party (as that term has been construed pursuant to CERCLA, or any similar state or local laws) at any site. (c) No material oral or written notification of a release of a Hazardous Material has been filed by or on behalf of the Seller and no property now or previously owned, leased, or used by the Seller is listed or proposed for listing on the National Priorities List under CERCLA, as amended, or on any similar state list of sites requiring investigation or clean-up. (d) There are no Liens arising under or pursuant to any Environmental Laws on any of the real property or properties owned, leased or used by the Seller and no governmental actions have been taken or are in process which could subject any of such properties to such Liens or as a result of which the Seller would be required to place any notice or restriction relating to the presence of Hazardous Materials at any property owned by it in any deed to such property. 5.10. Project Approvals Obtained. All governmental approvals necessary for the construction and installation of the Project have been obtained or are expected to be obtained in the ordinary course so as to comply with all requirements of the Contract, and the Project fully complies with all approvals heretofore or which may hereafter be issued by governmental authorities. No violation of any applicable law, ordinance, order, rule, regulation or other governmental requirement, as it pertains to the Seller or the Project, exists. 5.11. Seller's Certifications. All of the representations, certifications and other statements made by the Seller in the Contract and all other agreements with the Government were true and correct in all material respects when made, and no such representation, certification or other statement will give the Government any rights or remedies that could adversely affect the Buyer or the Contract Payments or have a Material Adverse Effect. 5.12. Full Disclosure. The representations and warranties contained in this Agreement and in the other Purchase Documents and all written information heretofore furnished by the Seller to the Buyer for purposes of or in connection with this Agreement or any transaction contemplated hereby are true, correct and complete in every material respect and contain no untrue statement of material fact or omits no material fact necessary to make the statements contained therein not misleading. The Seller has disclosed to the Buyer in writing any and all facts (except facts of general public knowledge) which materially and adversely affect or, to the extent the Seller can now reasonably foresee, may affect, the Buyer's receipt of the Contract Payments on the dates when due, or the business, prospects or condition (financial or otherwise) of the Seller. 5.13. No Broker. Neither the Seller, nor anyone acting on its behalf, has dealt with any broker, finder or other person or entity who or which may be entitled to a broker's or finder's fee, or other compensation, payable by the Buyer in connection with any transaction contemplated by the Purchase Documents. The Seller has no knowledge of any broker's or finder's fees (or the like) which may have been incurred in connection with any transaction contemplated by the Purchase Documents. The Seller agrees to defend, save harmless and indemnify the Buyer from any and all such claims on account thereof. This provision shall survive the satisfaction in full of the entire Investment owed to the Buyer under this Agreement, and shall continue in full force and effect so long as the possibility of any such claim exists. 6. Covenants The Seller covenants and agrees that from and after the date hereof and until the Buyer has received all of the Contract Payments and the Seller has satisfied all of its obligations to the Buyer hereunder in full: 6.1. Financial Statements and Other Reporting Requirements. The Seller shall furnish to the Buyer: (a) as soon as available, but in any event within one hundred twenty (120) days after the end of each fiscal year of the Seller, a balance sheet as of the end of, and a related statement of income, changes in stockholders' equity and cash flow for, such fiscal year, prepared in accordance with GAAP and certified by the chief financial officer of the Seller and the controller of Northeast Utilities; (b) as soon as available, but in any event within forty-five (45) days after the end of each fiscal quarter of the Seller, a balance sheet as of the end of, and a related statement of income, changes in stockholders' equity and cash flow for, the portion of the fiscal year then ended and for the fiscal quarter then ended, prepared in accordance with GAAP and certified by the chief financial officer of the Seller, but subject, however, to normal, recurring year-end adjustments that shall not in the aggregate be material in amount; (c) concurrently with the delivery of each financial statement pursuant to subsections (a) and (b) of this section, a certification signed on behalf of the Seller by its chief financial officer that no Default or Event of Default has occurred or, if it has, a statement of the actions taken by the Seller with respect thereto; and (d) immediately upon first obtaining knowledge of the existence of any conditions, litigation, investigation pending or threatened, (i) constituting a Default or Event of Default under this Agreement or any other Purchase Document, or (ii) which has had or reasonably could be expected to have a Material Adverse Effect, and in any event within five (5) days after obtaining such knowledge, written notice of such condition or event specifying the nature and duration thereof and the action or proposed to be taken with respect thereto (and including a copy of any notice of such condition or event received by the Seller). 6.2. Maintenance of Financial Records. The Seller shall maintain its current fiscal year and keep adequate books and records of account, in which true and complete entries will be made reflecting all of its business and financial transactions, and such entries will be made in accordance with GAAP and applicable governmental regulations. 6.3. Insurance. The Seller shall maintain with financially sound and reputable insurers all insurance coverage required to be maintained by the Seller under the Contract, and with respect to the Project and the Collateral insurance for risk of loss or damage in an amount at least equal to the then applicable Termination Schedule Amount. In addition, the Seller will keep in effect business interruption insurance in an amount equal to six monthly installments of the Repayment Amounts. With respect to such insurance policies maintained in accordance with the Contract and maintained with respect to the Collateral, the Seller shall (a) cause the Buyer (i) to be named as loss payee and additional insured, and (ii) to be given thirty (30) days' prior written notice of any cancellation or modification of such insurance; and (b) furnish to the Buyer certificates or other evidence satisfactory to the Buyer establishing that the Seller has obtained the insurance coverage required by this Agreement and that it is not cancelable for or on account of any misrepresentation by the Seller. 6.4. Inspection by the Buyer. The Seller shall: (a) obtain all necessary approvals and consents to allow the Buyer and its representatives and agents (including without limitation the Independent Engineer) to enter upon any portion of the Facility subject to the Government's restrictions or limitations, in furtherance of any right of the Buyer under this Agreement; and (b) permit the Buyer and its representatives and agents to examine the books and records of the Seller relating to the Project (and to make copies thereof and extracts therefrom), and to discuss the affairs, finances and accounts of the Seller with, and to be advised as to the same by, its officers, all at such reasonable times and intervals as the Buyer may reasonably request upon reasonable advance notice; provided, however, that nothing in this section shall be deemed to impose upon the Buyer an obligation to make any such inspection. 6.5. Invoicing; Fiscal Agent. (a) The Seller will submit to the Government no later than the fifth day of each month, an invoice requesting that the Government remit to the Seller the Contract Payment then owing by the Government within 30 days following receipt of such invoice. (b) The Seller agrees to act as the Buyer's fiscal agent with respect to the collection and receipt of the Contract Payments on behalf of the Buyer. To that end, the Seller agrees that, notwithstanding the previous instructions to make all Contract Payments to the Project Account, the Seller receives a Contract Payment from the Government, the Seller will, as fiscal agent for the Buyer, (i) hold such Contract Payment in trust for the benefit of the Buyer, and (ii) remit such Contract Payment to the Buyer by wire transfer in immediately available funds on the next succeeding Business Day to the Project Account. 6.6. Performance of Obligations. The Seller will duly, punctually, faithfully and diligently perform and otherwise comply in all material respects with the covenants, agreements, duties, obligations, terms and conditions applicable to it under the Contract. 6.7. Notices Regarding Task Orders. The Seller shall use its reasonable best efforts to cause the Government to deliver directly to the Buyer copies of all notices relating to any default by the Seller under the Contract or any termination or cancellation thereof. In addition, the Seller will deliver to the Buyer (a) promptly (but in no event more than two Business Days) after its receipt thereof, a copy of any notice, correspondence, report, request, demand, certificate or other writing furnished to the Seller by the Government with respect to the Contract Payments or which would affect the Contract Payments (including the Termination Schedule Amounts), including, without limitation, any writing relating to any default, show cause, opportunity to cure or intent to terminate (in whole or in part), not renew, cancel or otherwise discontinue the Task Order, and (b) promptly following the Buyer's request from time to time, such additional information regarding the Contract Payments and the Task Order as the Buyer may reasonably request. 6.8. Modification of Task Orders. The Seller will not, without the prior written consent of the Buyer, agree to (a) modify or amend the Base Contract or the Task Order or consent to any action with respect thereto, or waive any obligation to the Government thereunder if such modification, amendment, consent or waiver could have an adverse effect on any Contract Payment (including the amount and due date thereof) from the amounts shown in the Contract Schedule, or (b) any reduction, concession, adjustment, credit, allowance, settlement or special understanding with regard to any Contract Payment (including the amount and due date thereof). 6.9. Claims and Appeals. The Seller will, upon the request of the Buyer, submit an appropriate claim to the Government, obtain a contracting officer decision or prosecute an appeal of any contracting officer decision with respect to any action taken or not taken by the Government under the Contract that in any way reduces or delays the payment of any Contract Payment or that, in the reasonable opinion of the Buyer, could adversely affect the Contract Payments. 6.10. Taxes, Etc. The Seller will pay or cause to be paid all taxes (including, without limitation, all local, state, federal and foreign sales, use, rental, license, ad valorem, property, excise and value-added taxes and other governmental charges) on or against the Seller or its properties on or before they are due, including without limitation, any taxes which may now or hereafter be imposed on the Buyer or the Seller that in any way relate to the Project, the Contract Payments or the transactions contemplated by this Agreement, together with interest and penalties thereon, including, without limitation, taxes and other governmental charges relating to, arising out of or resulting from the assignment by the Seller to the Buyer of the Contract Payments and the receipt from time to time by the Buyer of the Contract Payments, but excluding all taxes on or measured by the income of the Buyer or the Seller, provided, however, that this covenant shall not apply to any tax, assessment or charge that is being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been established and are being maintained in accordance with GAAP if no Lien shall have been filed to secure such tax, assessment or charge. 6.11. Protection of Title. The Seller will (a) protect and defend the Buyer's title to the Contract Payments against all Persons claiming any right, title or interest therein, and (b) give the Buyer written notice of any adverse claim asserted with respect to the Contract Payments promptly (but in no event more than five days) after the Seller has knowledge thereof. 6.12. Terminations. The Seller will not, without the prior written consent of the Buyer, take any action or fail to take any action that could cause the Government to terminate (in whole or in part), fail to renew or otherwise discontinue the Contract prior to the end of the expected term of the Contract. 6.13. Prompt Payment Interest. The Seller will submit to the Government, on or before the date when due, a claim for any interest owing by the Government pursuant to the Prompt Payment Act, as amended (31 U.S.C. 3901-3906), or otherwise, due to the failure of the Government to timely pay a proper invoice submitted by the Seller to the Government. 6.14. Prohibition Against Liens. The Seller will not enter into any contract or arrangement which could give rise to a Lien, or otherwise directly or indirectly create, assume or suffer to exist any Lien, on the Contract Payments or the Collateral except Liens in favor of or created by the Buyer or the rights of the Government under the Contract (the "Permitted Liens"). 6.15. Change of Location. The Seller's principal place of business, chief executive office and place where it keeps its corporate records is its address set forth in the Contract Schedule. The Seller will provide written notice to the Buyer 30 days prior to any contemplated change in the name or address of the Seller or its principal place of business, chief executive office or place where the Seller keeps its corporate records concerning the Contract Payments, and will execute and deliver to the Buyer such financing statements and other instruments as may be reasonably requested by the Buyer in connection therewith. 6.16. Setoff. If all or any portion of any Contract Payment is setoff for any reason by the Government, the Seller will immediately remit to the Buyer an amount equal to the amount which was so setoff. 6.17. Indemnification. (a) The Seller assumes liability for, and hereby agrees to indemnify, protect, defend and hold harmless the Buyer, its participants, shareholders, directors, officers, employees, agents, successors and assigns, from and against any and all liabilities, losses, damages, claims and expenses (including attorneys fees and disbursements) of any kind at any time relating to, arising out of or resulting from (i) the inaccuracy of any representation, warranty or certification made by the Seller herein or in any Purchase Document or (ii) the failure of the Seller to observe or perform any covenant, agreement or promise made or assumed by the Seller in the Contract, this Agreement or in any other Purchase Document. (b) In addition to the foregoing, the Seller assumes liability for, and hereby agrees to indemnify the Buyer for any amount by which the energy savings under the Contract are insufficient to provide sufficient Contract Revenues to pay the Repayment Amounts in full. To the extent that the Contract Revenues in any month are less than the amount of the Payment Amount for that month by reason of the insufficiency of energy savings under the Contract, the Seller shall pay to the Buyer, on the date on which each monthly amount of the Payment Amount is due, an amount sufficient, with the Contract Revenues received, to pay in full the Payment Amount then due. 6.18. Further Assurances. The Seller will, at its expense and in such manner and form as the Buyer may from time to time require, promptly and duly execute and deliver to the Buyer such further documents, instruments and other writings, including, without limitation, financing statements and assignments, and take such other actions, as the Buyer may from time to time reasonably request in order to carry out the intent and purposes of this Agreement and the other Purchase Documents and to establish and protect the rights and remedies created or intended to be created in favor of the Buyer under this Agreement and the other Purchase Documents, and pay all necessary costs to record any such writing. To the extent permitted by applicable law, the Seller hereby authorizes the Buyer to execute and file, in the name of the Seller or otherwise, financing statements or similar instruments which the Buyer may deem necessary or appropriate. 7. Events Of Default 7.1. Events of Default. The occurrence of any one or more following conditions or events shall constitute an "Event of Default" hereunder: (a) the Seller shall fail to perform any term, covenant or agreement of the Seller contained in the Contract, and such failure shall have continued for a period of twenty (20) days after the Buyer or the Government has given written notice of such failure to the Seller; or (b) the Seller shall have failed to turn over to the Buyer any Contract Payments received by the Seller following the Closing Date within five (5) Business Days after receipt by the Seller; or (c) the security interest in the Collateral shall cease to be a perfected first lien on the Collateral for any reason other than by failure of the Buyer to file any necessary continuation statements; or (d) the Seller shall fail to perform any other term, covenant or agreement of the Seller contained in this Agreement or any other Purchase Document, and such failure shall have continued for a period of twenty (20) days after the Buyer has given written notice of such failure to the Seller; or (e) the Contract or any of the other Purchase Documents shall cease to be in full force and effect as a result of any action or inaction by the Seller; or (f) any representation or warranty made by or on behalf of the Seller in any of the Purchase Documents or in any certificate or notice given in connection therewith shall have been false or misleading in any material respect at the time made or deemed to have been made; or (g) any material part of the property of the Seller shall be attached, or the Seller shall be unable to pay its debts as they mature, or there shall remain undischarged for more than thirty (30) days any final judgment or execution against the Seller that, together with all other judgments and executions against the Seller, exceeds $100,000 in the aggregate; or (h) the Seller (i) shall make a general assignment for the benefit of creditors, (ii) shall be adjudicated bankrupt or insolvent, (iii) shall seek the appointment of, or be the subject of an order appointing, a trustee, liquidator or receiver as to all or part of its assets, (iv) shall commence, approve or consent to, any case or proceeding under any bankruptcy, reorganization or similar law and, in the case of an involuntary case or proceeding, such case or proceeding is not dismissed within thirty (30) days following the commencement thereof, or (v) shall be the subject of an order for relief in an involuntary case under federal bankruptcy law. 7.2. Acceleration . If any one or more Events of Default shall occur, the Buyer may by notice to the Seller declare the entire unpaid Investment and any accrued Investment Interest Costs, together with all other amounts owing under the Purchase Documents, to be immediately due and payable, whereupon same shall become and be immediately due and payable, anything in the Purchase Documents to the contrary notwithstanding, without presentment, protest, demand or other notice of any kind, all of which are hereby expressly waived by the Seller; provided, however, that if any one or more of the Events of Default specified in Section 7.1(h), above, shall occur with respect to the Seller, the entire unpaid Investment and any accrued Investment Interest Costs, together with all other amounts owing under the Purchase Documents, automatically shall become and be immediately so due and payable, without any declaration or other act on the part of the Buyer. 7.3. Performance of Seller's Obligations. (a) If any one or more Events of Default shall occur, the Buyer may, but shall have no obligation or liability with respect thereto, to the extent permitted by the Purchase Documents and by law, and with or without notice to the Seller, perform any of the obligations of the Seller under or pursuant to the Contract or any other Purchase Document, present or file any claim, take action to enforce any performance or collect payments of any amounts to which the Buyer may be entitled thereunder. (b) The Seller shall be liable to the Buyer for all sums paid or incurred pursuant to the provisions of this section, and all payments made or liabilities incurred by the Buyer hereunder of any kind whatsoever shall be paid by the Seller to the Buyer upon demand with interest at the Default Interest Rate from the date of payment by the Buyer to the date of payment to the Buyer. In addition to any costs incurred by the Buyer to perform such services, the Seller also agrees to pay the Buyer for services rendered in connection with actions taken by the Buyer pursuant to this section an amount equal to fifteen percent (15 percent) of the Buyer's out-of-pocket cost of such services. 7.4. Limited Recourse to Seller's Assets. The Investment and the Seller's obligations hereunder shall be on a limited recourse basis to the Seller, which shall be exculpated from all personal liability for the payment of interest on and principal of the Investment and for the performance of any of the terms and conditions contained in any of the Purchase Documents, and the Buyer's recourse for payment and performance of the Investment and the Seller's obligations hereunder shall be limited to its interest in the Collateral, except that the Seller shall not be exculpated from personal liability for any of the following acts of omissions: (a) fraud or intentional misrepresentation by the Seller in connection with the Investment; (b) the negligence or willful misconduct of Seller; (c) the removal or disposal by the Seller, without the consent of the Buyer, of any portion of the Collateral after an Event of Default; (d) the misapplication or conversion by the Seller of (i) any insurance proceeds paid by reason of any loss, damage or destruction to the Collateral, (ii) any awards or other amounts received in connection with the condemnation of all or a portion of the Collateral, or (iii) any payments received by the Buyer from the Government; or (e) any other Event of Default by the Seller. Nothing contained in this Section 7.4 or elsewhere shall limit the right of Buyer to obtain injunctive relief or to pursue equitable remedies under any of the Purchase Documents, excluding only any injunctive relief ordering payment of obligations by any person or entity for which personal liability does not otherwise exist. 7.5. Set-Off. If as a result of any action or inaction by the Seller any payment is not made when due under the Contract or any of the Purchase Documents, after giving regard to applicable grace periods, if any, or if any Event of Default occurs and is continuing, any deposits, balances or other sums credited by or due from the Buyer to the Seller may to the fullest extent permitted by law at any time or from time to time, without notice or compliance with any other condition precedent now or hereafter imposed by statute, rule of law or otherwise all of which are hereby waived, be set off, appropriated and applied by the Buyer to pay any or all of the Investment irrespective of whether demand shall have been made and although such the Investment may be unmatured, in such manner as the Buyer in its sole and absolute discretion may determine. Within five (5) Business Days of making any such set off, appropriation or application, the Buyer agrees to notify the Seller thereof, provided, however, that the failure to give such notice shall not affect the validity of such set off or appropriation or application. 7.6. Power of Attorney. For the purpose of exercising the rights granted by this Section, as well as any and all other rights and remedies of the Buyer, but only after and during the continuance of an Event of Default, the Seller hereby irrevocably constitutes and appoints the Buyer its true and lawful attorney-in-fact, with full power of substitution, upon and following any Event of Default, to execute, acknowledge and deliver any instruments and to do and perform any acts in the name and on behalf of the Seller which relate to performing the obligations of the Seller under the Contract or any of the other Purchase Documents. 7.7. Remedies Cumulative. No remedy herein conferred upon the Buyer is intended to be exclusive of any other remedy and each and every remedy shall be cumulative and in addition to every other remedy hereunder, now or hereafter existing at law or in equity or otherwise. 7.8. Other Remedies. If any one or more Events of Default shall have occurred, the Buyer may proceed to protect and enforce its rights and remedies under this Agreement, or any of the other Purchase Documents, including, by foreclosure, exercise of set-off or pledge rights and/or by suit in equity, action at law or other appropriate proceeding, whether for the specific performance of any covenant or agreement contained in this Agreement and/or the other Purchase Documents or any instrument pursuant to which the Investment is evidenced, including as permitted by applicable law the obtaining of the ex parte appointment of a receiver, and, if any amount owed to the Buyer shall have become due, by declaration or otherwise, proceed to enforce the payment thereof or any other legal or equitable right of the Buyer. 7.9. Distribution of Collateral Proceeds. In the event that, following the occurrence or during the continuance of any Default or Event of Default, the Buyer possesses or receives any monies in connection with the enforcement of any of this Agreement, or otherwise with respect to the realization upon any of the Collateral, such monies shall be distributed for application as follows: (a) First, to the payment of, or (as the case may be) the reimbursement of the Buyer for or in respect of all reasonable costs, expenses, disbursements and losses which shall have been incurred or sustained by the Buyer in connection with the collection of such monies by the Buyer, for the exercise, protection or enforcement by the Buyer of all or any of the rights, remedies, powers and privileges of the Buyer under this Agreement or any of the other Purchase Documents or in respect of the Collateral or in support of any provision of adequate indemnity to the Buyer against any taxes or liens which by law shall have, or may have, priority over the rights of the Buyer to such monies; (b) Second, to the Investment in such order or preference as the Buyer may determine; provided, however, that the Buyer may in its discretion make proper allowance to take into account any part of the Investment not then due and payable; (c) Third, upon payment and satisfaction in full or other provisions for payment in full satisfactory to the Buyer of all of the Investment, to the payment of any obligations required to be paid pursuant to Section 9-504(1)(c) of the UCC; and (d) Fourth, the excess, if any, shall be returned to the Seller or to such other Persons as are entitled thereto. 8. Miscellaneous 8.1. Notices. All notices, requests and other communications to either party hereunder shall be in writing and shall be given to such party at its address or telecopier number set forth on the signature pages hereof or such other address or telecopier number as such party may hereafter specify in writing to the other party in accordance with this section. Each such notice, request or other communication shall be effective (a) if given by certified mail, 72 hours after such communication is deposited with the United States Postal Service with first class postage prepaid, addressed as aforesaid or (b) if given by any other means, when delivered at the address or telecopier number specified in this section. 8.2. No Waivers. No failure or delay by the Buyer in exercising any right hereunder or under any other Purchase Document shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of the Buyer under this Agreement shall be cumulative and not exclusive of any rights or remedies provided by law or in any of the other Purchase Documents. 8.3. Amendments; Etc. No amendment, modification, consent or waiver of any provision of this Agreement or any other Purchase Document, and no consent to any departure by the Seller therefrom, shall be effective unless the same shall be in writing and signed by an officer of the Buyer, and then shall be effective only in the specific instance and for the specific purpose for which given. 8.4. Survival. All representations, warranties and covenants made by the Seller herein or in any certificate or other instrument delivered by it or on its behalf under the Purchase Documents shall be considered to have been relied upon by the Buyer and shall survive the delivery to the Buyer of such Purchase Documents, regardless of any investigation made by or on behalf of the Buyer. 8.5. Severability. If any provision contained in this Agreement or any other Purchase Document is held to be illegal, invalid or unenforceable under present or future laws, such provision shall be fully severable, such Purchase Document shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part thereof, and the remaining provisions thereof shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance therefrom. 8.6. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Seller may not assign or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the Buyer. The Buyer may encumber or assign all or any portion of its rights in the Contract Payments, this Agreement or the other Purchase Document without the consent of the Seller, provided, however, that the Lender will not assign its interest in this Agreement to a company primarily engaged in the business of energy savings performance contracting or any affiliate thereof without the consent of the Borrower. 8.7. Headings. The headings of sections hereof are inserted for convenience only and shall in no way define or limit the scope or intent of any provision of this Agreement. 8.8. Governing Law. This Agreement shall be construed in accordance with and governed by laws of The Commonwealth of Massachusetts. 8.9. Expenses. Whether or not the transactions contemplated by this Agreement close, the Seller agrees to pay (a) all fees and expenses of the Independent Engineer and the fees and expenses of special counsel to the Buyer in connection with the preparation and negotiation of this Agreement and the exhibits hereto, the review of the Contract and the related materials, the filing of financing statements, the closing of the transactions contemplated hereby and the preparation, negotiation and closing of such other agreements and instruments as may relate hereto, and (b) all other fees and expenses of the Buyer, including, without limitation, attorneys fees and disbursements, incurred in connection with enforcing any rights under this Agreement or any other Purchase Document. 8.10. Terms Commercially Reasonable. The Seller and the Buyer agree that the terms of this Agreement are and shall be deemed commercially reasonable within the meaning of the UCC. 8.11. Covenants Cumulative. All covenants, agreements and other undertakings of the Seller contained in this Agreement shall be deemed cumulative to and not in derogation or substitution of any of the covenants, agreements and other undertakings contained in any other Purchase Document. The Seller may not take any action or fail to take any action which is permitted by this Agreement if such action or failure would result in the breach of any provision of any other Purchase Document. 8.12. Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument, and in making proof of this Agreement it shall not be necessary to produce or account for more than one such counterpart. This Agreement shall become effective when the Buyer shall have received counterparts hereof signed by all of the parties hereto. 8.13. Entire Agreement. The parties hereto intend this Agreement, including all Schedules attached hereto and the other Purchase Documents, to be the final expression of their agreement with respect to the subject matter hereof and the complete and exclusive statement thereof, notwithstanding any representation or statements to the contrary heretofore made. 8.14. Consent to Jurisdiction. The parties hereby absolutely and irrevocably consent and submit to the jurisdiction of the Courts of the Commonwealth of Massachusetts and of any Federal Court located in the said Commonwealth in connection with any actions or proceedings brought by or against such parties arising out of or relating to this Agreement or any other Purchase Documents. In any such action or proceeding, the parties hereto absolutely and irrevocably waive personal service of any summons, complaint, declaration or other process and agree that the service thereof may be made by certified or registered first class mail directed to each party at the address set forth in Section 8.1. 8.15. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY LITIGATION WITH THE OTHER IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF ANY OF THE PURCHASE DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS (WHETHER VERBAL OR WRITTEN) OR OTHER ACTIONS OF EITHER PARTY. THIS WAIVER OF JURY TRIAL CONSTITUTES A MATERIAL INDUCEMENT FOR THE SELLER AND THE BUYER TO ENTER INTO THE PURCHASE DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED THEREBY. THIS WAIVER OF JURY TRIAL SHALL BE EFFECTIVE FOR EACH AND EVERY PURCHASE DOCUMENT WHETHER OR NOT SUCH DOCUMENT SHALL CONTAIN SUCH A WAIVER OF JURY TRIAL. THE PARTIES HERETO CONFIRM THAT THE FOREGOING WAIVERS ARE INFORMED AND FREELY MADE. 8.16. Advance Notice of the Seller Litigation. No suit at law or in equity shall be brought by the Seller for any alleged breach of the terms of any Purchase Document unless notice in writing, particularly describing said alleged breach, shall have been given to the Buyer within thirty (30) days after such alleged breach of the terms of such Purchase Document. In no event shall the Buyer have any liability to the Seller for incidental or consequential damages, nor shall the liability of the Buyer to the Seller for any breach hereof by the Buyer exceed a sum equal to the amount which the Buyer may have failed to advance in breach of this Agreement, together with interest thereon at the rate then being charged by the Buyer, but not more than the non-Default Interest Rate computed from the due date for the payment of such amount to the earlier of the date on which this Agreement is to be fully performed by the Seller or the date on which such payment is made by the Buyer, which sum when paid shall be deemed part of the Purchase Price paid by the Buyer. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date first above written. HEC INC. By: Name: Title: Address of Seller: HEC INC. 24 Prime Parkway Natick, MA 01760 Attn: President Telecopier: (508)653-0266 ABB ENERGY CAPITAL L.L.C. By: Charles L. Taben Senior Vice President and Chief Underwriting Officer By: Matthew Heller Executive Vice President Address of Buyer: ABB Energy Capital L.L.C. Two Oliver Street Boston, MA 02109 Attn: Mr. Matthew Heller, Executive Vice President Telecopier: (617) 292-0630 SCHEDULE 1 FORM OF CONTRACT SCHEDULE THIS CONTRACT SCHEDULE ("Contract Schedule"), dated as of November 30, 1999, is between HEC INC., a Massachusetts corporation (together with its successors and assigns, "Seller"), and ABB ENERGY CAPITAL L.L.C., a Delaware limited liability company (together with its successors and assigns, the "Buyer"), and is attached to and is incorporated into that certain Assignment and Security Agreement dated as of even date herewith (the "Assignment Agreement") between the Seller and the Buyer. 1. Contract. The Contract is Task Order No. 0002 (the "Task Order") dated August 30, 1999, between United States of America through the U.S. Army Engineering and Support Center acting for the Portsmouth Naval Shipyard in Kittery, Maine (the "Government") and the Seller, pursuant to Contract No. DACA87-97-D-0068 dated as of August 11, 1997, as amended (the "Base Contract") between the Government and the Seller. 2. Project. The Project is the installation of energy costs savings measures to be installed at the Portsmouth Naval Shipyard in Kittery, Maine (the "Facility"). 3. Chief Executive Office. The Seller's chief executive office, its principal place of business and the place where it keeps its corporate records are 24 Prime Parkway, Natick, MA 01760. 4. Contract Payments. The contract payments (the "Contract Payments") expected to be paid by the Government under the Contract are set forth in Annex A attached hereto. The portion of the Contract Payments consisting of the project expenses for operations and maintenance (the "Project Expenses") is also shown in Annex A. The portion of the Contract Payments consisting of the amortization payments (the "Contract Revenues") is also set forth in Annex A attached hereto. The Seller is selling an interest equal to the Contract Revenues to the Buyer for the Purchase Price. 5. Termination Schedule Amount. In the event of a termination of the Contract, the Government has agreed to pay the amounts (the "Termination Schedule Amount") set forth in Annex B. The amounts set forth in Annex B are also the cancellation ceiling under the Contract. 6. Termination Amount. The amount due upon the termination of the Contract (the "Termination Amount") shall be equal to the sum of (i) the outstanding principal balance of the Investment, (ii) any accrued but unpaid Investment Interest Costs, (iii) any unpaid fees, reimbursements, premiums or penalties due under the Assignment Agreement, and (iv) the Prepayment Premium with respect to then outstanding principal amount of the Investment. 7. Prepayment Premium. The prepayment premium (the "Prepayment Premium") is an amount set forth on Annex D. 8. Purchase Price. The purchase price (the "Purchase Price") for the Contract Revenues is 8,036,076.24 dollars. In the event that the Contract Revenues are less than the amounts shown in Annex A, the Purchase Price will be reduced to reflect the present value of the Contract Revenues being purchased calculated at the Interest Rate on the basis of actual days and a 360 day year and further assuming the first payment is made 60 days following the Closing Date, and the Seller shall pay to the Buyer any costs incurred by the Buyer to maintain the commitment to purchase the Contract Revenues at the Interest Rate. 9. Repayment Amounts. The principal and interest payable to the Buyer (the "Repayment Amounts") are set forth in Annex C. 10. Investment Interest Costs. The Investment Interest Cost accrues at the rate equal to 8.23 percent per annum (the "Interest Rate") of the principal amount of the Investment, calculated on the basis of actual days and a 360 day year, provided, however, that the Investment Interest Cost on all amounts overdue shall accrue at the Default Interest Rate. 11. Contract Proceeds Excluded. Unless an Event of Default has occurred and is continuing, the initial payment from the Government for engineering under the Contract in the amount of 373,538.00 dollars shall be paid to the Seller and shall not be applied to reduce the Investment. 12. Payment Account. The Seller will make all amounts payable under or with respect to the Assignment Agreement by wire transfer of immediately available funds to the following account: Bank: BankBoston, N.A. ABA Routing No.: 011 000 390 Account No.: 511-55267 Name: Energy Capital Partners - Operating IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written. HEC INC. By: Name: Title: ABB ENERGY CAPITAL L.L.C. By: Charles L. Taben Senior Vice President and Chief Underwriting Officer By: Matthew Heller Executive Vice President ANNEX A ANNEX B Termination Schedule/Termination Ceiling Month Termination Schedule Amount ANNEX C Repayment Amount Beginning of Period Outstanding Principal Principal Interest End of Period Outstanding Principal Month 1 Month 2 Month 168 ANNEX D Prepayment Premium The Prepayment Premium (the "Prepayment Premium") is an amount equal to the Yield Maintenance Amount, calculated as of the date on which the Investment is to be prepaid in whole or in part or is declared to be immediately due and payable pursuant to the Agreement in accordance with the following formula: Yield Principal Maintenance = Amount x (R - r) x 1 - (1 + r)-N Amount Being Prepaid r Where: R = The original yield on the U.S. Treasury bond utilized to determine the Purchase Price. N = The number of years, and any fraction thereof, remaining between the prepayment date and the original term of Contract Revenues. r = The yield on the U.S. Treasury bond as reported in the Wall Street Journal that is the equivalent term to the remaining maturity date on the Contract Revenues that are prepaid. SCHEDULE 2 LIST OF CLOSING DOCUMENTS 1. Assignment and Security Agreement 2. Contract Schedule 3. Certificate from the Seller as to: (a) Base Contract (b) Task Order (c) Congressional Notification 4. Instrument of Assignment 5. Notices of Assignment acknowledged by the contracting officer and the disbursing officer 6. Acceptance Certificate 7. Engineer's Report as to the Project 8. Secretary's Certificate of the Seller as to organization, authorization and incumbency 9. Good Standing Certificate of the Seller 10. Orders or other certificates confirming that the Public Utility Holding Company Act is not applicable to the Seller's execution and performance of the Agreement 11. Closing Certificate of Seller as to representations, warranties, satisfaction of conditions, and no default 12. Initial Financial Statements and Pro Forma Projections of the Seller 13. Certificate of Insurance as to the Collateral 14. UCC Financing Statements naming the Seller as Debtor and the Buyer as Secured Party 15. Lien search with respect to filings against the Seller 16. Opinion of counsel to the Seller EXHIBIT A FORM OF INSTRUMENT OF ASSIGNMENT FOR VALUE RECEIVED, the undersigned, HEC Inc., a Massachusetts corporation (the "Assignor"), in accordance with the Federal Assignment of Claims Act, as amended (41 U.S.C. Section 15, 31 U.S.C. Section 3727), hereby assigns to ABB Energy Capital L.L.C., a Delaware limited liability company, and its successors and assigns, all of the Assignor's right, title and interest now owned and hereafter acquired in and to all moneys due or to become due under that certain TASK ORDER NO. 0002 dated August 30, 1999, as amended, under Contract No. DACA87-97-D-0068 dated August 11, 1997, as amended, between the Portsmouth Naval Shipyard in Kittery, Maine, and the Assignor. IN WITNESS WHEREOF, the Assignor has caused this Instrument of Assignment to be executed by its duly authorized officer as of November 30, 1999. HEC INC. ATTEST: By: By: Name Name: Secretary Title: [CORPORATE SEAL OF SELLER] EXHIBIT B FORM OF OPINION OF COUNSEL , 1999 ABB Energy Capital L.L.C. Two Oliver Street Boston, MA 02109 Gentlemen: We have acted as counsel to HEC Inc., a Massachusetts corporation (the "Seller"), and are furnishing this opinion at the Seller's request pursuant to that certain Assignment and Security Agreement (the "Assignment Agreement") dated as of November 30, 1999, between the Seller and ABB Energy Capital L.L.C., a Delaware limited liability company (the "Buyer"). Terms defined in the Assignment Agreement are used herein as therein defined, unless otherwise indicated. For purposes of this opinion, we have examined the following documents (the "Transaction Documents"): 1. the Assignment Agreement; 2. the Base Contract; 3. the Task Order; 4. financing statement, judgment lien and tax lien searches on the Seller in the filing offices in the states of Maine and Massachusetts (the "Filing Offices"); 5. financing statements relating to the Agreement to be filed in the Filing Offices; and 6. that certain Instrument of Assignment of even date herewith duly executed by the Seller. In addition, we have reviewed such other corporrate records and certificates as we have deemed relevant and necessary for the opinions herein expressed. Based on the foregoing and subject to the qualifications herein stated, we are of the opinion that: (a) The Seller is a corporation duly incorporated, validly existing and in good standing under the laws of its state of incorporation. (b) The execution, delivery and performance by the Seller of the Transaction Documents (i) are within its corporate powers, (ii) have been duly authorized by all necessary corporate action, (iii) require no action by or in respect of, or filing with, any governmental body, agency or official, other than the filing of UCC financing statements, and (iv) will not contravene, conflict with, result in a breach of, or constitute a default under, any provision of applicable law or regulation, its articles of incorporation or bylaws, or, to our current actual knowledge, any lease, mortgage, note, loan or other agreement or any judgment, injunction, order or decree to which it or any of its assets is subject. (c) Each Person who executed and delivered the Transaction Documents on behalf of the Seller was duly authorized to execute and deliver such documents. (d) The Seller possesses such valid licenses, permits, franchises, certificates of convenience and necessity, consents, exemptions and orders of such governmental bodies, agencies, officials and tribunals, as are necessary to carry on its business as now being conducted, and to perform its obligations under the Transaction Documents. (e) Each of the Transaction Documents constitutes a legal, valid and binding agreement of the Seller and is enforceable against the Seller in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency or other laws affecting creditors' rights generally and the effect of general principles of equity. There is no statute, regulation, order or ruling that would permit any governmental authority to declare any of the Transaction Documents void. The assignment of the Contract Revenues to the Buyer complies with the Federal Assignment of Claims Act. The Contract is enforceable against the Government in accordance with its terms. (f) To our knowledge there is no action, suit or proceeding pending or threatened against the Seller before any court, arbitrator or administrative or governmental body, agency or official which could reasonably be expected to have a material adverse effect on the business or financial condition of the Seller or that could reasonably be expected to draw into question the validity of any Transaction Document. (g) No financing statement, security agreement or other instrument similar in effect covering all or any part of the Contract Payments in the Collateral is on file in any governmental office in the State of Massachusetts or Maine except such as may have been filed by the Buyer. Upon the filing of the financing statements as provided in the Agreement, the Buyer will have a perfected security interest in the Collateral owned by the Seller, and, to the extent the Uniform Commercial Code applies to the assignment of the Contract Revenues to the Buyer under the Agreement, such assignment constitutes the sale and assignment to the Buyer of all of the Seller's rights to the Contract Revenues, subject in each case to the rights of the Government. The foregoing opinions are limited to existing law. We undertake no responsibility to update or supplement this opinion in response to subsequent changes in the law or future events or circumstances. This letter is solely for the benefit of the addressee and its participants, successors, assigns and counsel, who may rely on it as if addressed to them. Sincerely, Counsel for Seller 1. Definitions 1.1. Terms Defined 1.2. Rules of Construction 2. Purchase And Sale 2.1. Purchase of Contract Payments 2.2. Instrument of Assignment 2.3. Purchase Price 2.4. Notice of Acceptance 2.5. Termination After Acceptance 2.6. Security Interest to Secure the Seller's Obligations Hereunder 2.7. Independent Engineer 3. Payment Of Contract Payments 3.1. Distribution of Contract Payments. 3.2. Application of Contract Payments 3.3. Adjustment Of Investment 3.4. Termination Payments 3.5. Application of Contract Payments after Default. 4. Conditions Precedent 4.1. Conditions Precedent to the Purchase of the Contract Revenues 5. Representations And Warranties 5.1. Corporate Existence and Power 5.2. Powers; Task Order; and Contravention 5.3. Binding Effect 5.4. Disputes, Etc. 5.5. Financial Statements 5.6. Instruments of Assignment 5.7. Financing Statements 5.8. Litigation 5.9. Environmental Matters 5.10. Project Approvals Obtained 5.11. Seller's Certifications 5.12. Full Disclosure 5.13. No Broker 6. Covenants 6.1. Financial Statements and Other Reporting Requirements 6.2. Maintenance of Financial Records 6.3. Insurance 6.4. Inspection by the Buyer 6.5. Invoicing; Fiscal Agent 6.6. Performance of Obligations 6.7. Notices Regarding Task Orders 6.8. Modification of Task Orders 6.9. Claims and Appeals 6.10. Taxes, Etc. 6.11. Protection of Title 6.12. Terminations 6.13. Prompt Payment Interest 6.14. Prohibition Against Liens 6.15. Change of Location 6.16. Setoff 6.17. Indemnification 6.18. Further Assurances 7. Events Of Default 7.1. Events of Default 7.2. Acceleration 7.3. Performance of Seller's Obligations 7.4. Limited Recourse to Seller's Assets 7.5. Set-Off 7.6. Power of Attorney 7.7. Remedies Cumulative 7.8. Other Remedies 7.9. Distribution of Collateral Proceeds 8. Miscellaneous 8.1. Notices 8.2. No Waivers 8.3. Amendments; Etc. 8.4. Survival 8.5. Severability 8.6. Successors and Assigns 8.7. Headings 8.8. Governing Law 8.9. Expenses 8.10. Terms Commercially Reasonable 8.11. Covenants Cumulative 8.12. Counterparts; Effectiveness 8.13. Entire Agreement 8.14. Consent to Jurisdiction 8.15. Waiver of Jury Trial 8.16. Advance Notice of the Seller Litigation SCHEDULE 1 FORM OF CONTRACT SCHEDULE SCHEDULE 2 LIST OF CLOSING DOCUMENTS EXHIBIT A FORM OF INSTRUMENT OF ASSIGNMENT EXHIBIT B FORM OF OPINION OF COUNSEL r://sprague/u5s/assignment and security agreement.txt EX-99.13OTHCONTRCT 44 c13-12_2.txt Exhibit C.13.12.2 ASSIGNMENT AND ASSUMPTION AGREEMENT ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of September 26,1997, among BankBoston, N.A. (formerly known as The First National Bank of Boston, the "First Assignor"), State Street Bank and Trust Company, (the "First Assignee), Swiss Bank Corporation (the "Second Assignor" and, together with the First Assignor, the "Assignors"), Fleet National Bank (as successor-in- interest to Shawmut Bank Connecticut, N.A., the "Second Assignee" and, together with the First Assignee, the "Assignees"), Yankee Gas Services Company (the "Borrower") and The Bank of New York as agent under the Credit Agreement referred to below. Reference is made to that certain Amended and Restated Credit Agreement dated as of February 2, 1995 (the "Credit Agreement"), among the Borrower, the Banks listed on the signature pages thereto, and the Bank of New York, as Agent (the "Agent"). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement. The parties hereto hereby agree as follows: Section 1. Consent. Pursuant to Section 9.07(b) of the Credit Agreement, (i) the Borrower hereby consents to each of the assignments described in Section 2 below and (ii) the Agent hereby confirms that it has received notice of each such assignment. Section 2. Assignments. (a) For and in consideration of the assumption of the obligations by the First Assignee as set forth in this Section 2(a) (including, without limitation, the assumption by the First Assignee of the First Assignor's Commitment under the Credit Agreement in the amounts described on Schedule A attached hereto) and other consideration as set forth herein, the First Assignor does hereby sell, assign, transfer and convey to the First Assignee, without recourse or representation and warranty (except with respect to its representations and warranties contained herein), all of its rights and obligations under the Credit Agreement and each of the other Loan Documents (other than (i) rights under Section 9.02 of the Credit Agreement arising out of or in connection with events occurring prior to the Effective Date (as defined below) and (ii) the right to payment of interest and fees under the Loan Documents accruing prior to the Effective Date), including, without limitation, the right to payment of principal and interest and all other amounts payable under the Loan Documents from and after the Effective Date. (b) For and in consideration of the assumption of the obligations by the Second Assignee as set forth in this Section 2(b) (including, without limitation, the assumption by the Second Assignee of the Second Assignor's Commitment under the Credit Agreement in the amounts described on Schedule B attached hereto) and other consideration as set forth herein, the Second Assignor does hereby sell. assign, transfer and convey to the Second Assignee, without recourse or representation and warranty (except with respect to its representations and warranties contained herein), all of its rights and obligations under the Credit Agreement and each of the other Loan Documents (other than (i) rights under Section 9.02 of the Credit Agreement arising out of or in connection with events occurring prior to the Effective Date (as defined below) and (ii) the right to payment of interest and fees under the Loan Documents accruing prior to the Effective Date), including, without limitation, the right to payment of principal and interest and all other amounts payable under the Loan Documents from and after the Effective Date. Section 3. Assumption. For and in consideration of the assignment of rights by the Assignors set forth in Section 2 and other consideration as set forth herein, and effective as of the Effective Date, each of the Assignees, severally but not jointly, does hereby purchase and accept the applicable assigned rights described in Section 2 above, and assumes, and covenants and agrees, for the benefit of the applicable Assignor, to completely and timely perform, comply with and discharge, all of the duties and liabilities and all of the obligations of the applicable Assignor as a Bank under the Credit Agreement and each of the other Loan Documents. From and after the Effective Date, (i) each of the Assignors shall be released and discharged from such Assignor's obligations, of any kind and nature whatsoever, in respect of the Loan Documents, (ii) each of the Assignees shall be entitled to all of the applicable Assignor's rights, powers and privileges, as Banks, under the Loan Documents and (iii) each of the Assignees shall be a "Bank" for all purposes under the Credit Agreement and the other Loan Documents. Section 4. Payments. In consideration of its purchase of the rights, duties, liabilities and obligations as a Bank under the Loan Documents, (i) the First Assignee shall pay to the account of the First Assignor the amount set forth next to such Assignee's name on Schedule A attached hereto (which amount represents the aggregate principal amount of the Loans of the First Assignor outstanding on the Effective Date prior to giving effect to the payment of such amount by the First Assignee on such date), and (ii) the Second Assignee shall pay to the account of the Second Assignor the amount set forth next to such Assignee's name on Schedule B attached hereto (which amount represents the aggregate principal amount of the Loans of the Second Assignor outstanding on the Effective Date prior to giving effect to the payment of such amount by the Second Assignee on such date) (each of the amounts described in sub-clauses (i) and (ii) above shall be referred to herein as the "Purchase Price"), in accordance with the administrative information set forth on Schedule A or B, as applicable, attached hereto. Section 5. Representations and Warranties of the Assignors. (a) The First Assignor represents and warrants that, as of the Effective Date (but prior to giving effect to the payment by the First Assignee of the Purchase Price as described in Section 4), the aggregate principal balance of its Loans outstanding under the Credit Agreement is Two Million Five Hundred Thousand Dollars ($2,500,000.00). (b) The Second Assignor represents and warrants that, as of the Effective Date (but prior to giving effect to the payment by the Second Assignee of the Purchase Price as described in Section 4), the aggregate principal balance of its Loans outstanding under the Credit Agreement is Two Million Five Hundred Thousand Dollars ($2,500,000.00). (c) Each of the Assignors (i) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, the other Loan Documents or any other instrument or document furnished pursuant thereto, other than that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; and (ii) 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 the Credit Agreement or any other Loan Document or other instrument or document furnished pursuant thereto. Section 6. Representations and Warranties of the Assignees. Each of the Assignees (i) represents and warrants that it is legally authorized to enter into this Assignment and Assumption Agreement; (ii) confirms that it has received a copy of the Credit Agreement and each of the other Loan Documents, together with such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption Agreement; (iii) agrees that it will, independently and without reliance upon either of the Assignors and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement or any other Loan Document; and (iv) agrees that it will perform in accordance with their terms all the obligations which by the terms of the Credit Agreement and the other Loan Documents are required to be performed by it as a Bank. Section 7. Conditions Precedent. The obligations of each Assignor and each Assignee hereunder are subject to receipt by each Assignor of payment in full of the applicable Purchase Price. The assignment and assumption provided for herein shall become effective immediately upon each Assignor's receipt of (i) a fully executed copy of this Assignment and Assumption Agreement and (11) payment in full of the applicable Purchase Price (the "Effective Date"). Section 8. Governing Law. The rights and obligations of the parties to this Assignment and Assumption Agreement shall, pursuant to New York General Obligations Law Section 51401, be governed by, and construed in accordance with, the laws of the State of New York. Section 9. Counterparts. This Assignment and Assumption Agreement may be executed in any number of counterparts, each of which shall be identical and all of which, taken together, shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute this Assignment and Assumption Agreement as of the day first above written. BANKBOSTON, N.A., as Assignor By: Name: Michael Kane Title: Managing Director SWISS BANK CORPORATION, as Assignor By: Name: Title: By: Name: Title: STATE STREET BANK AND TRUST COMPANY, as Assignee By: Name: Title: FLEET NATIONAL BANK, as Assignee By: Name: Title: IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute this Assignment and Assumption Agreement as of the day first above written. BANKBOSTON, N.A., as Assignor By: Name: Title: SWISS BANK CORPORATION, as Assignor By: Name: Thomas R. Salzano Title: Associate Director Banking Finance Support, N.A. By: Name: Dorothy L. McKinley Title: Associate Director Banking Finance Support, N.A. STATE STREET BANK AND TRUST COMPANY, as Assignee By: Name: Title: FLEET NATIONAL BANK, as Assignee By: Name: Title: IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute this Assignment and Assumption Agreement as of the day first above written. BANKBOSTON, N.A., as Assignor By: Name: Title: SWISS BANK CORPORATION, as Assignor By: Name: Title: By: Name: Title: STATE STREET BANK AND TRUST COMPANY, as Assignee By: Name: C. Jaynelle Landy Title: Loan Officer FLEET NATIONAL BANK, as Assignee By: Name: Title: IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute this Assignment and Assumption Agreement as of the day first above written. BANKBOSTON, N.A., as Assignor By: Name: Title: SWISS BANK CORPORATION, as Assignor By: Name: Title: By: Name: Title: STATE STREET BANK AND TRUST COMPANY, as Assignee By: Name: Title: FLEET NATIONAL BANK, as Assignee By: Name: Thomas L. Rose Title: Vice President THE BANK OF NEW YORK, as Agent By: Name: John W. Hall Title: Vice President YANKEE GAS SERVICES COMPANY By: Name: Title: THE BANK OF NEW YORK, as Agent By: Name: Title: YANKEE GAS SERVICES COMPANY By: Name: Sarah K. Sanders Title: Treasurer Schedule A I. Amount of Commitment Being Assigned by First Assignor to First Assignee: $10,000,000 (assigned to State Street Bank and Trust Company) Il. Aggregate Principal Amount of First Assignor's Loans Outstanding: $2,500,000 (payable by State Street Bank and Trust Company) III. Administrative Information of First Assignor: BankBoston, N.A. ABA No. 0 11-000-390 GL No. 540-99-621 Schedule B I. Amount of Commitment Being Assigned by Second Assignor to Second Assignee: $10,000,000 (assigned to Fleet National Bank) II. Aggregate Principal Amount of Second Assignor's Loans Outstanding: $2,500,000 (payable by Fleet National Bank) III. Administrative Information of Second Assignor: Swiss Bank Corporation ABA No. 026-00-7993 GL No.101-WA-860050524 -----END PRIVACY-ENHANCED MESSAGE-----