EXHIBIT 4.2
CONFORMED COPY
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FIRST SUPPLEMENTAL INDENTURE
dated as of October 18, 2001
to
INDENTURE
dated as of October 18, 2001
among
NORTHEAST GENERATION COMPANY
and
THE BANK OF NEW YORK, as Trustee
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TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS.........................................................2
ARTICLE II THE TERMS OF THE BONDS.............................................8
SECTION 2.1. TERMS OF 4.998% SERIES A SENIOR SECURED BONDS
DUE 2005 AND 4.998% SERIES A-1 SENIOR SECURED
BONDS DUE 2005........................................8
SECTION 2.2. TERMS OF 8.812% SERIES B SENIOR SECURED
BONDS DUE 2026 AND 8.812% SERIES B-1 SENIOR
SECURED BONDS DUE 2026...............................10
SECTION 2.3. DENOMINATIONS........................................12
SECTION 2.4. INTEREST AND PRINCIPAL...............................12
SECTION 2.5. REDEMPTION; REPURCHASE...............................12
SECTION 2.6. EXCHANGE OFFER.......................................13
SECTION 2.7. RESTRICTIONS ON TRANSFER AND EXCHANGE OF INITIAL
BONDS................................................13
ARTICLE III APPLICATION OF PROCEEDS FROM SALE OF BONDS.......................16
SECTION 3.1. APPLICATION OF PROCEEDS FROM SALE OF BONDS...........16
ARTICLE IV DEBT SERVICE RESERVE ACCOUNT......................................17
SECTION 4.1. DEBT SERVICE RESERVE ACCOUNT.........................17
SECTION 4.2. SECURITIES ACCOUNT; SECURITIES INTERMEDIARY..........19
SECTION 4.3. SECURITY INTEREST....................................21
SECTION 4.4. INVESTMENT OF FUNDS..................................21
ARTICLE V COVENANTS OF THE ISSUER............................................22
SECTION 5.1. FINANCIAL STATEMENTS AND OTHER INFORMATION...........22
SECTION 5.2. INDEBTEDNESS.........................................22
SECTION 5.3. PROHIBITION ON SALE OF ASSETS........................22
SECTION 5.4. RESTRICTED PAYMENTS..................................22
SECTION 5.5. INVESTMENTS..........................................23
ARTICLE VI REPURCHASE UPON CHANGE OF CONTROL.................................24
SECTION 6.1. CHANGE OF CONTROL....................................24
ARTICLE VII MISCELLANEOUS....................................................25
SECTION 7.1. EXECUTION OF SUPPLEMENTAL INDENTURE..................25
SECTION 7.2. CONCERNING THE TRUSTEE...............................25
SECTION 7.3. COUNTERPARTS.........................................25
SECTION 7.4. GOVERNING LAW........................................25
EXHIBITS:
Exhibit A - Form of Acceptable Guarantee
Exhibit B - Form of Subordination Provisions
Exhibit C - Form of Transferor Certificate
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Exhibit D - Form of Institutional Accredited Investor Transferee
Compliance Letter
Exhibit E - Form of Regulation S Transfer Certificate
SCHEDULES
Schedule 1-A - Form of Series A Definitive Bond
Schedule 1-B - Form of Series A Global Bond
Schedule 2-A - Form of Series B Definitive Bond
Schedule 2-B - Form of Series B Global Bond
Schedule 3 - Outstanding Investments
Northeast Generation Supplemental Indenture
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FIRST SUPPLEMENTAL INDENTURE, dated as of October 18, 2001
(this "FIRST SUPPLEMENTAL INDENTURE"), among NORTHEAST GENERATION COMPANY, a
Connecticut corporation, (together with its successors and assigns, the
"ISSUER"), its executive office and mailing address being at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and THE BANK OF NEW YORK, a New York banking
corporation (the "TRUSTEE"), its corporate trust office and mailing address
being at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ to the Indenture
dated as of October 18, 2001 (the "ORIGINAL INDENTURE") between the Issuer and
the Trustee.
WHEREAS, the Issuer and the Trustee have heretofore executed
and delivered the Original Indenture to provide for the issuance from time to
time of bonds, debentures, notes or other evidences of indebtedness to be issued
in one or more series;
WHEREAS, Sections 2.1, 2.3 and 12.1 of the Original Indenture
provide, among other things, that the Issuer and the Trustee may enter into
indentures supplemental to the Original Indenture for, among other things, the
purpose of establishing the designation, form, terms and provisions of Bonds of
any series as permitted by Sections 2.1, 2.3 and 12.1 of the Original Indenture;
WHEREAS, the Issuer (i) desires the issuance of two separate
series of Bonds to be designated as hereinafter provided and (ii) has requested
the Trustee to enter into this First Supplemental Indenture for the purpose of
establishing the designation, form, terms and provisions of the Bonds of each
such series;
WHEREAS, all action on the part of the Issuer necessary to
authorize the issuance of the Bonds under the Original Indenture and this First
Supplemental Indenture (the Original Indenture, as supplemented by this First
Supplemental Indenture, being hereinafter called the "INDENTURE") has been duly
taken; and
WHEREAS, all acts and things necessary to make the Bonds, when
executed by the Issuer and authenticated and delivered by the Trustee as
provided in the Original Indenture, the legal, valid and binding obligations of
the Issuer, and to constitute these presents a valid and binding supplemental
indenture according to its terms, have been done and performed, and the
execution of this First Supplemental Indenture and the creation and issuance
under the Indenture of said Bonds have in all respects been duly authorized, and
the Issuer, in the exercise of the legal right and power vested in it, executes
this First Supplemental Indenture and proposes to create, execute, issue and
deliver the Bonds.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
That, in order to establish the designation, form, terms and
provisions of, and to authorize the authentication and delivery of, said Bonds,
and in consideration of the acceptance of the Bonds by the Holders thereof and
of other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
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ARTICLE I
DEFINITIONS
(a) Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings ascribed thereto in the Original
Indenture.
(b) Each capitalized term defined herein shall relate only to
the Series A Senior Secured Bonds due 2005, the Series A-1 Senior Secured Bonds
due 2005, the Series B Senior Secured Bonds due 2026 and the Series B-1 Secured
Bonds due 2026 and no other Series of Bonds issued by the Issuer. For all
purposes of this First Supplemental Indenture, except as otherwise expressly
provided or unless the context otherwise requires, the following terms shall
have the following respective meanings (such meanings shall apply equally to
both the singular and plural forms of the respective terms):
"ACCEPTABLE BANK" means any commercial bank or other financial
institution which (a) is organized under the laws of the United States of
America, any state thereof or any other member of the Organization for Economic
Cooperation and Development or Japan and has an office in the United States of
America, (b) has capital, surplus and undivided profits of at least
$1,000,000,000 and (c) has outstanding long-term senior unsecured, unguaranteed
indebtedness which is rated "A" or better by S&P and "A2" or better by ▇▇▇▇▇'▇
(or an equivalent rating by another nationally recognized statistical rating
organization of similar standing if neither such corporation is in the business
of rating long-term unsecured bank indebtedness).
"ACCEPTABLE GUARANTOR" means (i) an Acceptable Bank or (ii)
Northeast Utilities or any Affiliate of Northeast Utilities (except the Issuer
or any of its Subsidiaries), PROVIDED that Northeast Utilities or such Affiliate
is (a) organized under the laws of any state of the United States of America,
(b) has an aggregate stockholders' equity of at least $250,000,000 and (c) has
outstanding long-term unsecured, unguaranteed indebtedness which is rated "BBB-"
or better by S&P and "Baa3" or better by ▇▇▇▇▇'▇.
"CHANGE OF CONTROL" means (a) the acquisition of ownership,
directly or indirectly, beneficially or of record or otherwise, by any Person or
group (within the meaning of the Exchange Act and the rules of the SEC
thereunder as in effect on the date hereof) other than Northeast Utilities (or
any successor to Northeast Utilities by merger or otherwise) or wholly-owned
Subsidiaries, of ownership interests representing more than 50% of the aggregate
ordinary voting power represented by the stock certificates of the Issuer; or
(b) the acquisition of direct or indirect control of the Issuer by any Person or
group other than Northeast Utilities (or any successor to Northeast Utilities by
merger or otherwise) or wholly-owned Subsidiaries otherwise than as described in
clause (a); PROVIDED that there shall be no Change of Control if either (i)
after the occurrence of either of the events referred to in clause (a) or (b)
above, the Rating Agencies shall have confirmed their respective ratings of the
Bonds in effect immediately prior to the occurrence of such events or (ii)
holders of not less than 66% in aggregate principal amount of the
Outstanding Bonds approve the occurrence of such event.
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"CLOSING DATE" means October 18, 2001, the date on which the
Initial Bonds are first issued and sold hereunder.
"CONTRACTED GENERATING CAPACITY" means, as of any date of
determination, the percentage of the rated generating capacity of all of the
Issuer's Facilities which is contracted for pursuant to a fixed or minimum price
take-or-pay (if the plant is available) Power Sales Agreement (including energy
and capacity) with a remaining term of two years or longer from the date of
determination with (i) Select Energy or any other affiliate of Northeast
Utilities or (ii) a third party that complies with the Issuer's Electricity
Contracting Policies.
"DEBT SERVICE COVERAGE RATIO" for any period means the ratio
of, (x) all Revenues LESS Operating Expenses (other than nonrecurring expenses
in connection with the issuance of Indebtedness), LESS all capital expenditures
(unless funded with Indebtedness), to (y) the aggregate of principal, interest
and fees payable on or in respect of the Outstanding Bonds PLUS payments
required to be made under any Interest Rate Agreements, LESS payments to be
received under any Interest Rate Agreement for such period.
"DEBT SERVICE RESERVE ACCOUNT" means the account of such name
established and maintained in accordance with Section 4.1.
"DEBT SERVICE RESERVE AMOUNT" means, as of any date of
determination, the aggregate amount of cash on deposit in the Debt Service
Reserve Account, PLUS the aggregate fair market value of all Permitted
Investments on deposit therein at such time, PLUS the amount available to be
drawn or demanded under all Debt Service Reserve Support Instruments credited to
such account at such time.
"DEBT SERVICE RESERVE GUARANTEE" means a guarantee of an
Acceptable Guarantor executed and delivered to the Trustee to support the
obligations of the Issuer hereunder with respect to all or a part of the
Issuer's obligation to satisfy the Debt Service Reserve Requirement when and as
required hereunder and permitting demands for payment thereunder as contemplated
by Section 4.1, in each case:
(i) in substantially the form attached hereto as Exhibit A;
and
(ii) providing for the amount thereof to be made available in
full to the Trustee in multiple payments upon the demand of the
Trustee.
"DEBT SERVICE RESERVE LETTER OF CREDIT" means one or more
irrevocable direct pay letters of credit available for the purpose of drawing to
pay principal and interest on the Bonds in an amount up to the Debt Service
Reserve Requirement and any extensions thereof or any substitute letter of
credit therefor in the stated amount contained in such extension or substitute
and permitting draws thereon as contemplated by Section 4.1, in each case:
(i) issued to the Trustee (for the benefit of the Holders) by
an Acceptable Bank;
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(ii) expiring on the first to occur of (a) the date on which
the stated amount thereof is drawn down to zero, (b) the date on which
the Trustee returns the letter of credit to the issuer thereof for
cancellation and (c) the expiration date specified in such letter of
credit, which expiration shall not be earlier than 364 days after the
date such letter of credit was issued;
(iii) providing for the amount thereof to be made available in
full to the Trustee in multiple drawings conditioned only upon the
presentation of a sight draft accompanied by the applicable certificate
in the form attached to such letter of credit; and
(iv) with respect to which the Issuer certifies in an
Officer's Certificate that any reimbursement obligation of the Issuer
related to such letter of credit which constitutes Indebtedness of the
Issuer, is Subordinated Indebtedness.
"DEBT SERVICE RESERVE REQUIREMENT" means, as of any date of
determination,
(i) zero, if each of the Rating Agencies shall have indicated
to the Issuer in writing that no debt service reserve is required in
order for such Rating Agency to maintain an Investment Grade Rating
with respect to the Outstanding Bonds, and each such writing is still
in effect; or
(ii) an amount equal to the aggregate amount of principal,
interest and fees to be paid on or in respect of Outstanding Bonds in
the six months following such date of determination if clause (i) above
is not applicable.
"DEBT SERVICE RESERVE SUPPORT INSTRUMENT" means one or more
Debt Service Reserve Guarantees or one or more Debt Service Reserve Letters of
Credit or both (as the context requires).
"DISTRIBUTION COMPLIANCE PERIOD" has the meaning assigned to
such term in Regulation S.
"ELECTRICITY CONTRACTING POLICIES" means the customary credit
and other policies followed by the Issuer in connection with its Power Sales
Agreements, which may be the credit and other policies followed by a third party
if the Issuer has appointed such third party as its agent for marketing and
entering into Power Sales Agreements.
"EXCHANGE BONDS" shall mean, collectively, the Series A-1
Senior Secured Bonds Due 2005 and the Series B-1 Senior Secured Bonds Due 2026
to be issued under the Indenture in exchange for the Initial Bonds pursuant to
the Exchange Offer.
"EXCHANGE OFFER" shall mean the offer by the Issuer, pursuant
to an effective registration statement filed with the SEC, to exchange all of
the Exchange Bonds for all of the outstanding Initial Bonds in accordance with
the terms and provisions of the Registration Rights Agreement.
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"EXCHANGE OFFER CONSUMMATION DATE" shall mean the date on
which the Exchange Offer is consummated in accordance with the terms and
provisions of the Registration Rights Agreement.
"GUARANTEE" means, with respect to any Person, any obligation,
contingent or otherwise, of such Person directly or indirectly guaranteeing in
any manner any Indebtedness 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 Indebtedness or other
obligation (whether arising by virtue of Issuer 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), (ii) entered into for the
purpose of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part) or (iii) to reimburse any Person for
the payment by such Person under any letter of credit, surety, bond or other
guaranty issued for the benefit of such other Person, PROVIDED that the term
"GUARANTEE" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "GUARANTEE" or "GUARANTEED" used as a verb
has a correlative meaning.
"INITIAL BONDS" means, collectively, the Series A Senior
Secured Bonds Due 2005 and the Series B Senior Secured Bonds Due 2026 being
issued by the Issuer under the Indenture and sold to the Initial Purchasers
pursuant to the Purchase Agreement dated October 12, 2001 between the Issuer and
the Initial Purchasers.
"INITIAL PURCHASERS" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., Barclays
Capital and TD Securities as initial purchasers of the Initial Bonds.
"INSTITUTIONAL ACCREDITED INVESTOR" shall have the meaning
ascribed thereto in Section 2.1(b) hereof.
"INSTITUTIONAL ACCREDITED INVESTOR BOND" means a Bond
registered in the name of, or in the name of a nominee of, an Institutional
Accredited Investors.
"INTEREST RATE AGREEMENT" means any interest rate protection
agreement, interest rate future, interest rate option, interest rate swap,
interest rate cap or other interest rate hedge arrangement, to which the Issuer
is a party, entered into in the ordinary course of business in connection with
Indebtedness and not for speculative purposes.
"INVESTMENT" means, for any Person: (i) the acquisition
(whether for cash, property of such Person, services or securities or otherwise)
of capital stock, bonds, notes, debentures or other ownership interests or other
securities of any other Person or any agreement to make any such acquisition
(including, without limitation, any "short sale" or any sale of any securities
at a time when such securities are not owned by the Person entering into such
short sale), (ii) the making of any deposit with, or advance, loan or other
extension of credit to, any other Person (including the purchase of property
from another Person subject to an understanding or agreement, contingent or
otherwise, to resell such property to such Person, but
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excluding any such advance, loan or extension of credit arising in connection
with the sale of inventory or supplies by such Person in the ordinary course of
business), (iii) the entering into of any Guarantee of, or any other contingent
obligation with respect to, Indebtedness or other liability of any other Person
and (without duplication) any amount committed to be advanced, lent or extended
to such Person or (iv) the entering into of any Hedging Agreement.
"MAKE-WHOLE PREMIUM" means, with respect to any Optional
Redemption of the Initial Bonds or the Exchange Bonds (or any portion thereof),
an amount equal to the excess, if any, of (i) the present value of all interest
and principal payments scheduled to become due after the date of the optional
redemption by the Issuer in respect of the such Bonds (or any portion thereof)
being redeemed (such present value to be determined on the basis of a discount
rate equal to the sum of (a) the Treasury Rate and (b) 25 basis points in the
case of the Series A Bonds and the Series A-1 Bonds, and 50 basis points in the
case of the Series B Bonds and the Series B-1 Bonds) over (ii) the Outstanding
principal amount of the applicable Bonds (or any portion thereof).
"NON-U.S. PERSON" has the meaning assigned to such term in
Regulation S.
"OPERATING EXPENSES" means for any period, the sum, computed
without duplication, of all costs and expenses, including Taxes, incurred by the
Issuer during such period (or, in the case of any future period, projected to be
paid or payable during such period) in connection with the operation,
maintenance and administration of the Facilities.
"PROJECTED DEBT SERVICE COVERAGE RATIO" means, at any time of
determination thereof, a projection of the Debt Service Coverage Ratio over the
period specified, prepared by the Issuer in good faith based upon assumptions
consistent in all material respects with historical operating results, if any,
and the Issuer's good faith projections of future Revenues and Operating
Expenses of the Issuer in light of the then existing or reasonably expected
regulatory and market environments in the markets in which the Facilities are or
will be operated and upon the assumption that no early redemption or prepayment
of the Bonds of any series will be made prior to the stated maturity of such
series of Bonds. Whenever this First Supplemental Indenture provides for the
determination of a Projected Debt Service Coverage Ratio, the Projected Debt
Service Coverage Ratio shall be set forth in an Officer's Certificate of the
Issuer filed with the Trustee stating that, based upon reasonable investigation
and review, the Projected Debt Service Coverage Ratio is based on the criteria
set forth in the preceding sentence.
"QIB" shall have the meaning given to such term in Section
2.1(b) hereof.
"REGISTRATION DEFAULT" shall have the meaning given to such
term in Section 2.4 hereof.
"REGULAR RECORD DATE", for any Bond of a series for the
Scheduled Payment Date of any installment of principal thereof or payment of
interest thereon, means the 15th day (whether or not a Business Day) next
preceding such Scheduled Payment Date, or any other date specified for such
purpose in the form of Bond of such series attached to the Series Supplemental
Indenture relating to the Bonds of such series.
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"REGULATION S" means Regulation S promulgated under the
Securities Act, as amended and in effect from time to time and any successor
regulation.
"REGULATION S GLOBAL BOND" means one or more Bonds deposited
with a custodian for, and registered in the name of a nominee of, the Registered
Depositary, interest in which will be held for the benefit of purchasers of the
Bonds in offshore transactions under Regulation S.
"RESALE RESTRICTION TERMINATION DATE" means the period of two
years after the later of the original issue date of a Restricted Security and
the last date on which the Issuer or any affiliate of the Issuer was the owner
of such Restricted Security (or any predecessor of such Restricted Security).
"RESTRICTED PAYMENTS" means (i) shareholder distributions by
or distributions in respect of any equity interest in the Issuer (in cash,
securities, property or obligations) or (ii) any payments or distributions on
account of, payments of interest on or the setting apart of money for a sinking
or other analogous fund for, or the purchase, redemption, retirement or other
acquisition of, (a) Subordinated Indebtedness or (b) any portion of any
shareholder interest or equity interest in the Issuer or of any warrants,
options or other rights to acquire any such shareholder interest or equity
interest (or to make any payments to any Person, such as "phantom stock"
payments, where the amount thereof is calculated with reference to fair market
or equity value of the Issuer).
"RESTRICTED SECURITIES" shall have the meaning given to such
term in Section 2.7 hereof.
"REVENUES" means, with respect to the Issuer, for any period,
the sum of all revenues of the Issuer in respect of its operations under any
contract or agreement or otherwise including amounts received pursuant to
Hedging Agreements (other than Interest Rate Agreements).
"RULE 144A" means Rule 144A promulgated under the Securities
Act, as amended and in effect from time to time.
"RULE 144A GLOBAL BOND" means the one or more Bonds deposited
with a custodian for, and registered in the name of a nominee of, the Registered
Depositary, interests in which will be held for the benefit of U.S. purchasers
of bonds who are QIBs under Rule 144A.
"SERIES A BONDS" shall have the meaning given to such term in
Section 2.1(a) hereof.
"SERIES A-1 BONDS" shall have the meaning given to such term
in Section 2.1(a) hereof.
"SERIES B BONDS" shall have the meaning given to such term in
Section 2.2(a) hereof.
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"SERIES B-1 BONDS" shall have the meaning given to such term
in Section 2.2(a) hereof.
"SHELF REGISTRATION" shall have the meaning given to such term
in the Registration Rights Agreement.
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of the
Issuer that is fully subordinated in all rights and remedies to Senior Debt on
terms substantially similar to the subordination provisions set forth in Exhibit
B.
"TAX ALLOCATION AGREEMENT" means the Northeast Utilities
System Amended and Restated Tax Allocation Agreement among Northeast Utilities
and its direct and indirect subsidiaries dated as of January 1, 1990, and
amended by a First Amendment dated as of October 26, 1998 and by a Second
Amendment dated as of March 1, 2000, and as further amended and restated from
time to time.
"TRANSACTIONS" means the execution, delivery and performance
by each obligor of this Indenture and the other Transaction Documents to which
such obligor is or is intended to be a party or by which it or its properties
are bound, the issuance of the Bonds and the use of the proceeds thereof as
described in Section 3.1.
"TREASURY RATE" means, with respect to any redemption of
Bonds, the yield to maturity at the time of computation of United States
Treasury securities with a final maturity (as compiled and published in the most
recent Federal Reserve Statistical Release H. 15(519) which has become publicly
available at least two Business Days in New York prior to the Redemption Date
(or, if such statistical release is no longer published, any publicly available
source or similar market data)) most nearly equal to the remaining average life
on the Redemption Date of the Bonds being redeemed, PROVIDED, HOWEVER, that if
the period from the Redemption Date to the maturity date of the series of Bonds
being redeemed is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year shall be used.
ARTICLE II
THE TERMS OF THE BONDS
SECTION 2.1. TERMS OF 4.998% SERIES A SENIOR SECURED BONDS DUE
2005 AND 4.998% SERIES A-1 SENIOR SECURED BONDS DUE 2005.
(a) There are hereby created two series of Bonds designated:
(i) 4.998% Series A Senior Secured Bonds Due 2005, in the aggregate principal
amount which at any time may not exceed $120,000,000 (the "SERIES A BONDS"), and
(ii) 4.998% Series A-1 Senior Secured Bonds Due 2005, in an aggregate principal
amount which at any time may not exceed $120,000,000 less the aggregate
principal amount of Series A Bonds then Outstanding (the "SERIES A-1 Bonds").
The Series A Bonds may forthwith be executed by the Issuer and
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delivered to the Trustee for authentication and delivery by the Trustee in
accordance with the provisions of Section 2.4 of the Original Indenture. On or
prior to the Exchange Offer Consummation Date for the Series A Bonds, the Issuer
may execute and deliver to the Trustee, and upon delivery of an Issuer Order to
the Trustee in accordance with the provisions of Section 2.4 of the Original
Indenture, the Trustee shall authenticate and deliver, the Series A-1 Bonds in
exchange for Series A Bonds validly surrendered to the Trustee pursuant to the
Exchange Offer. Such Issuer Order shall specify the amount of the Series A-1
Bonds to be authenticated and the date on which such Series A-1 Bonds are to be
authenticated. The aggregate principal amount of the Series A Bonds together
with the Series A-1 Bonds Outstanding at any time may not exceed $120,000,000,
except as provided in the Original Indenture.
(b) The Series A Bonds, (i) if issued to Persons that are
institutional "accredited investors" meeting the requirements of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act (each, an "INSTITUTIONAL ACCREDITED
INVESTOR") that are not QIBs (as defined below), shall be issued in definitive
form, substantially in the form of Schedule 1-A hereto, registered in the name
of the purchaser thereof and (ii) (A) if issued to "qualified institutional
buyers" (as defined in Rule 144A; each, a "QIB") in reliance on Rule 144A, or
(B) if issued in offshore transactions to Non-U.S. Persons in reliance on
Regulation S shall be issued in the form of one or more Global Bonds
substantially in the form of Schedule 1-B hereto, shall be deposited on behalf
of the purchasers of the Initial Bonds represented thereby with the Trustee (at
its respective address for notices set forth in Section 1.4 of the Original
Indenture), as custodian for the Registered Depositary, shall be registered in
the name of the Registered Depositary or a nominee of the Registered Depositary
and the aggregate principal amount of Series A Bonds so issued may from time to
time be increased or decreased by adjustments made on the records of the Trustee
and the Registered Depositary or its nominee.
(c) Each of the Series A Bonds and the Series A-1 Bonds shall
have and be subject to such other terms as provided in the Indenture.
(d) The forms of the Series A-1 Bonds shall be substantially
identical to the forms of the Series A Bonds, except that: (i) the title of the
Series A-1 Bonds shall be "4.998% Series A-1 Senior Secured Bonds Due 2005";
(ii) the two paragraphs of the legend appearing immediately beneath the title of
such forms of the Series A Rule 144A Global Bonds shall be omitted, and the
paragraph of the legend appearing immediately beneath the title of such forms of
the Series A Regulation S Global Bonds shall be omitted; (iii) the first
sentence of the first paragraph of all such forms shall read in its entirety as
follows:
"NORTHEAST GENERATION COMPANY, a Connecticut corporation (hereinafter
called the "ISSUER", which term includes any successor or assign under
the Indenture referred to below), for value received hereby promises to
pay to [_______], or its registered assigns, the outstanding Principal
Amount hereof [-- if the Bond is in the form of a global security
insert, "after subtracting the aggregate principal amount of any
definitive Bonds issued in exchange for a portion or portions hereof"],
such payment to be made in semiannual installments on October 15 and
April 15 of each year
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(commencing April 15, 2002) and ending on the final Scheduled Payment
Date set forth above, each such installment to be in the amount and
payable on the date set forth on Annex A attached hereto (PROVIDED that
the portion of the Principal Amount remaining unpaid on the final
Scheduled Payment Date, together with all interest accrued thereon,
shall in any and all cases be due and payable on the final Scheduled
Payment Date), and to pay interest on the unpaid portion of the
Principal Amount at the interest rate set forth above from the most
recent Scheduled Payment Date to which interest has been paid or duly
provided for or, if no interest has been paid or duly provided for,
from the date of the last interest payment made on the Series A Bonds
(as defined in the First Supplemental Indenture) occurring prior to the
issue date set forth above or, if no interest has been paid or duly
provided for on the Series A Bonds, from October 18, 2001 semiannually
on October 15 and April 15 in each year commencing April 15, 2002
(PROVIDED, if the issue date is on or after a Regular Record Date and
prior to the related Scheduled Payment Date, the Issuer shall pay
interest from the Scheduled Payment Date immediately succeeding the
issue date semiannually on October 15 and April 15 in each year
commencing April 15, 2002) until the Principal Amount is paid in full
or payment thereof is duly provided for.";
(iv) the thirteenth and fourteenth paragraphs of the reverse of the forms of the
Series A Bonds shall be omitted; and (v) the first sentence of the first
paragraph of the reverse of all such forms shall read in its entirety as
follows: "This bond is one of an authorized issue of Bonds of the Issuer known
as its 4.998% Series A-1 Senior Secured Bonds Due 2005 (the "BONDS")."
SECTION 2.2. TERMS OF 8.812% SERIES B SENIOR SECURED BONDS DUE
2026 AND 8.812% SERIES B-1 SENIOR SECURED BONDS DUE 2026.
(a) There are hereby created two series of Bonds designated:
(i) 8.812% Series B Senior Secured Bonds Due 2026, in the aggregate principal
amount which at any time may not exceed $320,000,000 (the "SERIES B BONDS"), and
(ii) 8.812% Series B-1 Senior Secured Bonds Due 2026, in an aggregate principal
amount which at any time may not exceed $320,000,000 less the aggregate
principal amount of Series B Bonds then Outstanding (the "SERIES B-1 Bonds").
The Series B Bonds may forthwith be executed by the Issuer and delivered to the
Trustee for authentication and delivery by the Trustee in accordance with the
provisions of Section 2.4 of the Original Indenture. On or prior to the Exchange
Offer Consummation Date for the Series B Bonds, the Issuer may execute and
deliver to the Trustee, and upon delivery of an Issuer Order to the Trustee in
accordance with the provisions of Section 2.4 of the Original Indenture, the
Trustee shall authenticate and deliver, the Series B-1 Bonds in exchange for
Series B Bonds validly surrendered to the Trustee pursuant to the Exchange
Offer. Such Issuer Order shall specify the amount of the Series B-1 Bonds to be
authenticated and the date on which such Series B-1 Bonds are to be
authenticated. The aggregate principal amount of the Series B Bonds together
with the Series B-1 Bonds Outstanding at any time may not exceed $320,000,000,
except as provided in the Original Indenture.
(b) The Series B Bonds, (i) if issued to Institutional
Accredited Investors that are not QIBs, shall be issued in definitive form,
substantially in the form of Schedule 2-A hereto,
Northeast Generation Supplemental Indenture
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registered in the name of the purchaser thereof and (ii) (A) if issued to QIBs
in reliance on Rule 144A, or (B) if issued in offshore transactions to Non-U.S.
Persons in reliance on Regulation S shall be issued in the form of one or more
Global Bonds substantially in the form of Schedule 2-B hereto, shall be
deposited on behalf of the purchasers of the Initial Bonds represented thereby
with the Trustee (at its respective address for notices set forth in Section 1.4
of the Original Indenture), as custodian for the Registered Depositary, shall be
registered in the name of the Registered Depositary or a nominee of the
Registered Depositary and the aggregate principal amount of Series B Bonds so
issued may from time to time be increased or decreased by adjustments made on
the records of the Trustee and the Registered Depositary or its nominee.
(c) Each of the Series B Bonds and the Series B-1 Bonds shall
have and be subject to such other terms as provided in the Indenture.
(d) The forms of the Series B-1 Bonds shall be substantially
identical to the forms of the Series B Bonds, except that: (i) the title of the
Series B-1 Bonds shall be "8.812% Series B-1 Senior Secured Bonds Due 2026";
(ii) the two paragraphs of the legend appearing immediately beneath the title of
such forms of the Series B Rule 144A Global Bonds shall be omitted and the
paragraph of the legend appearing immediate beneath the title of such forms of
the Series B Regulation S Global Bonds shall be omitted; (iii) the first
sentence of the first paragraph of all such forms shall read in its entirety as
follows:
"NORTHEAST GENERATION COMPANY, a Connecticut corporation (hereinafter
called the "ISSUER", which term includes any successor or assign under
the Indenture referred to below), for value received hereby promises to
pay to [________________], or its registered assigns, the outstanding
Principal Amount hereof [-- if the Bond is in the form of a global
security insert, "after subtracting the aggregate principal amount of
any definitive Bonds issued in exchange for a portion or portions
hereof"], such payment to be made in semiannual installments on October
15 and April 15 of each year (commencing April 15, 2002) and ending on
the final Scheduled Payment Date set forth above, each such installment
to be in the amount and payable on the date set forth on Annex A
attached hereto (PROVIDED that the portion of the Principal Amount
remaining unpaid on the final Scheduled Payment Date, together with all
interest accrued thereon, shall in any and all cases be due and payable
on the final Scheduled Payment Date), and to pay interest on the unpaid
portion of the Principal Amount at the interest rate set forth above
from the most recent Scheduled Payment Date to which interest has been
paid or duly provided for or, if no interest has been paid or duly
provided for, from the date of the last interest payment made on the
Series B Bonds (as defined in the First Supplemental Indenture)
occurring prior to the issue date set forth above or, if no interest
has been paid or duly provided for on the Series B Bonds, from October
18, 2001 semiannually on October 15 and April 15 in each year
commencing April 15, 2002 (PROVIDED, if the issue date is on or after a
Regular Record Date and prior to the related Scheduled Payment Date,
the Issuer shall pay interest from the Scheduled Payment Date
immediately succeeding the issue date semiannually on April 15 and
October 15 in each year commencing April 15, 2002) until the Principal
Amount is paid in full or payment thereof is duly provided for.";
Northeast Generation Supplemental Indenture
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(iv) the thirteenth and fourteenth paragraphs of the reverse of the forms of the
Series B Bonds shall be omitted; and (v) the first sentence of the first
paragraph of the reverse of all such forms shall read in its entirety as
follows: "This bond is one of an authorized issue of Bonds of the Issuer known
as its 8.812% Series B-1 Senior Secured Bonds Due 2026 (the "BONDS")."
SECTION 2.3. DENOMINATIONS. Each Bond of a series created
hereby shall be issued in fully registered form without coupons in minimum
denominations of $100,000 and integral multiples of $1,000 in excess thereof.
SECTION 2.4. INTEREST AND PRINCIPAL. Each Bond of a series
created hereby shall bear interest on the unpaid principal amount thereof from
time to time outstanding at the rate of interest set forth in the forms of such
series attached hereto. The principal amount of each Bond of a series created
hereby shall be due and payable in installments as set forth in the form of Bond
of such series attached hereto.
Payment of principal of and interest on each Bond of a series
created hereby shall be made (a) if the Issuer so elects, by check mailed to the
Holder at his or her registered address or (b) otherwise as provided in Section
2.10 of the Original Indenture; PROVIDED that the final installment of principal
payable with respect to each Bond of a series created hereby shall be payable as
provided in Section 6.5 of the Original Indenture (in the case of any such Bond
redeemed) or payable upon presentation and surrender of each such Bond at the
Place of Payment.
If an Exchange Offer has not been completed on or before 360
days after the Closing Date without a Shelf Registration being filed with the
SEC (a "Registration Default"), the interest rate payable on Initial Bonds shall
increase (in addition to the interest rate set forth in such Initial Bonds) and
additional interest reflecting such increase shall accrue with respect to such
Initial Bonds, from and including such 360th day, to but excluding the earlier
of the date on which the Exchange Offer is completed and the date on which the
Shelf Registration Statement is declared effective, at the rate of one half of
one percent (0.50%) per annum, which additional interest shall be payable at the
times, in the manner and subject to the same terms and conditions set forth
herein and in the Initial Bonds, as though the interest rate set forth above had
been increased by one half of one percent (0.50%) per annum.
SECTION 2.5. REDEMPTION; REPURCHASE.
(a) OPTIONAL REDEMPTION. Subject to the provisions of Section
6.1 of the Original Indenture, the Bonds of each series created hereby are
subject to optional redemption under the conditions and on the terms set forth
in the Original Indenture at a price equal to the Redemption Price plus the
Make-Whole Premium.
(b) MANDATORY REDEMPTION. Subject to the provisions of Section
6.2 of the Original Indenture, the Bonds of each series created hereby are
subject to mandatory redemption under the conditions and on the terms set forth
in the Original Indenture at a price equal to the Redemption Price, but without
a Make-Whole Premium.
Northeast Generation Supplemental Indenture
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SECTION 2.6. EXCHANGE OFFER. Any Initial Bonds which are
presented to the Security Registrar for exchange pursuant to the Exchange Offer
in accordance with the terms thereof shall be exchanged for Exchange Bonds of
the corresponding series and of equal principal amount upon surrender to the
Security Registrar of the Initial Bonds to be exchanged; PROVIDED, HOWEVER, that
the Initial Bonds so surrendered for exchange shall be duly endorsed and
accompanied by a letter of transmittal or written instrument of transfer in form
satisfactory to the Issuer and the Security Registrar, duly executed by the
Holder thereof or its attorney who shall be duly authorized in writing to
execute such document. Whenever any Initial Bonds are so surrendered for
exchange, the Issuer shall execute, and the Trustee shall authenticate and
deliver to the Security Registrar, the same aggregate principal amount of
Exchange Bonds of the corresponding series that have been surrendered.
SECTION 2.7. RESTRICTIONS ON TRANSFER AND EXCHANGE OF INITIAL
BONDS.
(a) Initial Bonds in definitive form, all Rule 144A Global
Bonds and all beneficial interests in one or more Rule 144A Global Bonds, and
all Bonds (other than Exchange Bonds or Bonds sold pursuant to an effective
registration statement) issued upon registration of transfer of, or in exchange
for, any such Bonds, shall be restricted securities (within the meaning of Rule
144 under the Securities Act; hereinafter, collectively, "RESTRICTED
SECURITIES") and shall be subject to the restrictions on transfer provided in
the legend set forth on the Restricted Securities. The Holder of each Restricted
Security, by such Holder's acceptance thereof, agrees to be bound by such
restrictions on transfer. All Restricted Securities shall bear the legend set
forth on the face of the Restricted Securities.
Institutional Accredited Investors that are not QIBs may hold
interests in the Initial Bonds only in definitive form. Any beneficial interest
in a Global Bond that is a Restricted Security and is transferred to an
Institutional Accredited Investor which is not a QIB will be delivered in the
form of a definitive Bond and will cease to be an interest in such Global Bond.
A holder of a beneficial interest in a Global Bond may
exchange such beneficial interest for one or more definitive Bonds if (i) the
Issuer notifies the Trustee in writing that the Registered Depositary is
unwilling or unable to continue as depositary for such Global Bond, or the
Registered Depositary ceases to be a "Clearing Agency" registered under the
Exchange Act and a successor depositary is not appointed by the Issuer within 90
days of such notice or cessation or (ii) the Issuer, at its option, notifies the
Trustee in writing that it elects to cause the issuance of definitive Bonds. If
an exchange of a Global Bond for a definitive Bond is made pursuant to clauses
(i) or (ii) above, then, upon surrender by the Registered Depositary of any
beneficial interest in the Global Bonds, definitive Bonds will be issued to each
person that the Registered Depositary identifies as the beneficial owner of the
Bonds represented by the Global Bonds. Upon any such issuance, the Trustee will
be required to register such definitive Bonds in the name of such person or
persons (or nominee of any thereof) and cause the same to be delivered thereto.
Unless determined otherwise by the Issuer in accordance with applicable law,
each such Rule 144A Global Bond and all definitive Bonds, upon transfer or
exchange of
Northeast Generation Supplemental Indenture
-------------------------------------------
-14-
beneficial interests in a Rule 144A Global Bond (other than for an Exchange
Bond) will bear the legend set forth on the face of the Restricted Securities.
Each Holder of a definitive Bond or a beneficial interest in a
Global Bond that is a Restricted Security will be deemed to have represented and
agreed to offer, sell, pledge or otherwise transfer such Bonds or beneficial
interest only in accordance with the legend set forth on the face of the
Restricted Securities.
Upon the transfer, exchange or replacement of definitive Bonds
bearing the legend, or upon request for removal of the legend on a definitive
Bond, the Trustee will deliver Bonds that do not bear such legend if the Trustee
has been provided evidence satisfactory to the Issuer (which may include an
opinion of counsel) that neither the legend nor the restrictions on transfer set
forth therein are required to ensure compliance with the Securities Act.
Subject to the restrictions on transfer and exchange set forth
herein and in the Original Indenture, the holder of any Bond may transfer or
exchange such Bond in whole or in part (in a principal amount equal to the
minimum authorized denomination or any greater amount which is an integral
multiple of $1,000 or a lesser amount if the holder is transferring or
exchanging all of the Bonds held by such holder) by surrendering it at the
Corporate Trust Office of the Trustee or at the office of the transfer agent,
together with (a) an executed instrument of assignment and transfer
substantially in the form set forth in Exhibit C to this First Supplemental
Indenture (in the case of a transfer) or a written request for exchange (in the
case of exchange) and (b) additional certifications and evidence that such
transfer or exchange is in compliance with the Securities Act and the
restrictions on transfer set forth in such Bond as may be required pursuant to
the terms of this First Supplemental Indenture.
Upon surrender of a definitive Bond for transfer or exchange
with the appropriate documentation, or notification of a request for transfer or
exchange of a beneficial interest in a Global Bond for a definitive Bond or
Bonds, subject to the restrictions described herein and in the Original
Indenture, the Trustee will, within five Business Days of such request if made
at the Corporate Trust Office of the Trustee, or within 10 Business Days if made
at the office of a transfer agent (other than the Trustee), authenticate and
deliver at the Corporate Trust Office of the Trustee or the office of the
transfer agent, as the case may be, to the transferee (in the case of transfer)
or Holder (in the case of exchange) or send by first class mail at the risk of
the transferee (in the case of transfer) or Holder (in the case of exchange) to
such address as the transferee or Holder, as applicable, may request, a
definitive Bond or Bonds, as the case may require, for a like aggregate
principal amount and in such authorized denomination or denominations as may be
requested. The presentation for transfer or exchange of any definitive Bond will
not be valid unless made at the Corporate Trust Office of the Trustee or at the
office of a transfer agent by the registered holder in person or by a duly
authorized attorney-in-fact. The Security Registrar is not required (a) to
issue, register the transfer of or exchange any Initial Bonds of any series
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of Bonds of such series selected for
redemption and ending at the close of business on the day of such mailing or (b)
to issue, register the transfer of or exchange any Initial Bond selected for
redemption in whole or in part except the unredeemed
Northeast Generation Supplemental Indenture
-------------------------------------------
-15-
portion of any Initial Bond selected for redemption in part. No service charge
will be required of any Holder participating in any transfer or exchange of
Bonds in respect of such transfer or exchange, but, with certain exceptions,
payment may be required of any tax or other governmental charges that may be
imposed in connection therewith.
(b) The following provisions shall apply with respect to any
proposed transfer of a Rule 144A Global Bond or a beneficial interest therein or
an Institutional Accredited Investor Bond prior to the expiration of the Resale
Restriction Termination Date:
(i) a transfer of a Rule 144A Global Bond or a
beneficial interest therein or an Institutional Accredited Investor
Bond to a QIB shall be made upon the representation of the transferee
that it is purchasing the Bond for its own account or an account with
respect to which it exercises sole investment discretion and that it
and any such account is a QIB and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Issuer as the transferee has requested
pursuant to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration
provided by Rule 144A;
(ii) a transfer of a Rule 144A Global Bond or a
beneficial interest therein or an Institutional Accredited Investor
Bond to an Institutional Accredited Investor shall be made upon receipt
by the Trustee or its agent of a certificate substantially in the form
set forth in Exhibit D annexed hereto from the proposed transferee and,
if requested by the Issuer or the Trustee, the delivery of an opinion
of counsel, certifications and/or other information satisfactory to
each of them; and
(iii) a transfer of a Rule 144A Global Bond or a
beneficial interest therein or an Institutional Accredited Investor
Bond to a Non-U.S. Person shall be made upon receipt by the Trustee or
its agent of a certificate substantially in the form set forth in
Exhibit E annexed hereto from the proposed transferee and, if requested
by the Issuer or the Trustee, the delivery of an opinion of counsel,
certifications and/or other information satisfactory to each of them.
(c) The following provisions shall apply with respect to any
proposed transfer of a Regulation S Global Bond prior to the expiration of the
Distribution Compliance Period:
(i) a transfer of a Regulation S Global Bond or a
beneficial interest therein to a QIB shall be made upon the
representation of the transferee that it is purchasing the Bond for its
own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB and is
aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Issuer
as the transferee has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the
transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A;
Northeast Generation Supplemental Indenture
-------------------------------------------
-16-
(ii) a transfer of a Regulation S Global Bond or a
beneficial interest therein to an Institutional Accredited Investor
shall be made upon receipt by the Trustee or its agent of a certificate
substantially in the form set forth in Exhibit D annexed hereto from
the proposed transferee and, if requested by the Issuer or the Trustee,
the delivery of an opinion of counsel, certifications and/or other
information satisfactory to each of them; and
(iii) a transfer of a Regulation S Global Bond or a
beneficial interest therein to a Non-U.S. Person shall be made upon
receipt by the Trustee or its agent of a certificate substantially in
the form set forth in Exhibit E annexed hereto from the proposed
transferee and, if requested by the Issuer or the Trustee, the delivery
of an opinion of counsel, certifications and/or other information
satisfactory to each of them.
Prior to or on the expiration of the Distribution Compliance
Period, beneficial interests in a Regulation S Global Bond may only be held
through ▇▇▇▇▇▇ Guaranty Trust Company of New York, Brussels Office, as operator
of the Euroclear System ("EUROCLEAR") or Clearstream Luxembourg, a societe
anonyme ("CLEARSTREAM") (as indirect participants in the Registered Depositary)
or another agent member of Euroclear and Clearstream acting for and on behalf of
them, unless exchanged for interests in the Rule 144A Global Bond in accordance
with the certification requirements hereof. During the Distribution Compliance
Period, interests in the Regulation S Global Bond, if any, may be exchanged for
interests in the Rule 144A Global Bond or for definitive bonds only in
accordance with the certification requirements described in this Section 2.7.
After the expiration of the Distribution Compliance Period,
interests in the Regulation S Global Bond may be transferred without requiring
the certification set forth in Exhibit E annexed hereto or any additional
certification.
As used in the preceding two paragraphs of this Section 2.7,
the term "transfer" encompasses any sale, transfer or other disposition of any
Bonds referred to herein except for transfers from any Holder to an Affiliate of
such Holder; PROVIDED, that such transferring Holder shall deliver a letter to
the Trustee stating that the transferee is an Affiliate of such Holder. The
Trustee shall be entitled to rely on and be fully protected in its reliance on
such letter.
ARTICLE III
APPLICATION OF PROCEEDS
FROM SALE OF BONDS
SECTION 3.1. APPLICATION OF PROCEEDS FROM SALE OF BONDS.
Promptly upon receipt by the Issuer of the proceeds from the sale of the Initial
Bonds, the Issuer shall apply such proceeds (i) to repay existing Indebtedness
of the Issuer incurred to acquire the existing Facilities, (ii) to pay costs,
expenses and the Initial Purchasers' discounts and commissions in connection
with the offering of the Initial Bonds, and (iii) to repurchase outstanding
shares of the
Northeast Generation Supplemental Indenture
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-17-
Issuer's capital stock and to pay dividends with respect thereto (some of which
dividends may represent a return of contributed capital).
ARTICLE IV
DEBT SERVICE RESERVE ACCOUNT
SECTION 4.1. DEBT SERVICE RESERVE ACCOUNT.
(a) CREATION OF THE ACCOUNT. The Issuer hereby establishes at
the Trustee's Corporate Trust Office a special, segregated and irrevocable
collateral account (the "DEBT SERVICE RESERVE ACCOUNT") which shall be
maintained at all times until none of the Bonds of the series of Bonds created
by this First Supplemental Indenture remain outstanding. All amounts from time
to time held in the Debt Service Reserve Account shall be held in the name of
the Trustee for the benefit of the Holders. Except as expressly provided in this
First Supplemental Indenture, the Issuer shall not have any right to withdraw
funds from the Debt Service Reserve Account. All amounts on deposit in the Debt
Service Reserve Account and all Permitted Investments held therein shall
constitute a part of the Collateral and shall not constitute payment of any
Bonds until applied for such payment as provided in this First Supplemental
Indenture. The Issuer hereby irrevocably authorizes the Trustee to withdraw
funds from the Debt Service Reserve Account in accordance with this Section 4.1.
(b) (i) On the Closing Date and within 60 days following the
end of each fiscal quarter following the Closing Date, the Issuer shall
deposit in the Debt Service Reserve Account (A) cash or Permitted
Investments; (B) one or more Debt Service Reserve Support Instruments;
or (C) any combination thereof in an amount equal to the amount
necessary to satisfy the then applicable Debt Service Reserve
Requirement.
(ii) The amount on deposit in the Debt Service Reserve
Account, if any, at any time shall be deemed to be equal to the
aggregate amount of cash on deposit therein at such time, PLUS the
aggregate fair market value of all Permitted Investments on deposit
therein at such time, PLUS the amount available to be drawn or demanded
under all Debt Service Reserve Support Instruments held by the Trustee
at such time.
(c) DRAWS ON THE DEBT SERVICE RESERVE ACCOUNT.
(i) If on any Scheduled Payment Date, the Paying Agent shall
have received from or on behalf of the Issuer funds that are
insufficient to pay in full the aggregate amount of principal and
interest then due on the Bonds of any series, then (upon notice thereof
by the Paying Agent to the Trustee specifying the amount of such
insufficiency) the Trustee shall transfer, using the cash or Permitted
Investments on deposit in the Debt Service Reserve Account, to the
accounts of the Holders an amount equal to such insufficiency or, if
less, the portion of such insufficiency that can be covered by
withdrawals from the Debt Service Reserve Account.
Northeast Generation Supplemental Indenture
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(ii) If on any date on or prior to the maturity date of the
Bonds of any series on which the Trustee is or would be required to
make transfers from the Debt Service Reserve Account pursuant to the
foregoing clause (i) the cash and Permitted Investments on deposit in
or credited to the Debt Service Reserve Account are insufficient to
make such transfers in full, the Trustee shall draw on or demand
payment under any Debt Service Reserve Support Instrument then in its
possession and selected by the Trustee in an amount equal, when added
to all amounts paid under each other Debt Service Reserve Support
Instrument on such date, to such insufficiency.
(iii) Unless the Trustee shall have been notified in writing
that an Event of Default shall have occurred and is continuing or could
result therefrom, if on the last Business Day of any calendar month,
(x) the aggregate amount of cash and Permitted Investments on deposit
in the Debt Service Reserve Account PLUS the aggregate amount then
available to be drawn under all Debt Service Reserve Support
Instruments theretofore delivered to the Trustee exceeds (y) the Debt
Service Reserve Requirement at such time, then not more than two
Business Days following receipt of the written request of the Issuer
delivered to the Trustee, the Trustee shall transfer from the Debt
Service Reserve Account to the Issuer cash or Permitted Investments or
reduce the amount available to be drawn on or demanded under such Debt
Service Reserve Support Instrument(s) in an amount equal to such
excess.
(d) DEBT SERVICE RESERVE SUPPORT INSTRUMENTS.
(i) Thirty days prior to the expiration of any Debt Service
Reserve Letter of Credit furnished to the Trustee in accordance with
the requirements of Section 4.1(a) and (b), if such Debt Service
Reserve Letter of Credit has not been renewed, extended or replaced,
the Trustee shall draw on such Debt Service Reserve Letter of Credit in
an amount equal to the maximum amount available to be drawn under the
expiring Debt Service Reserve Letter of Credit (LESS any excess of the
aggregate cash and Permitted Investments and Debt Service Reserve
Instruments then held in the Debt Service Reserve Account over the Debt
Service Reserve Requirement). The Trustee shall deposit the moneys
received from the issuer of such Debt Service Reserve Letter of Credit
in payment of such draw in the Debt Service Reserve Account.
(ii) In the event that at any time the issuing financial
institution in respect of any Debt Service Reserve Letter of Credit
furnished to the Trustee in accordance with the requirements of Section
4.1(a) and (b) fails to qualify as an Acceptable Bank, the Issuer shall
cause all Debt Service Reserve Letters of Credit issued by such issuing
bank to be replaced by another Debt Service Reserve Support Instrument
or cash or Permitted Investments deposited in the Debt Service Reserve
Account in an amount at least equal to the available amount of the Debt
Service Reserve Letter(s) of Credit being replaced. If any such Debt
Service Reserve Letter of Credit is not so replaced within thirty (30)
days following notice by the Trustee to the Issuer of the failure of
such issuing financial institution to qualify as an Acceptable Bank,
then in each case, the Trustee shall draw on such Debt Service Reserve
Letter of Credit in an amount equal to the maximum amount
Northeast Generation Supplemental Indenture
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-19-
available to be drawn under such Debt Service Reserve Letter of Credit
(LESS any excess of the aggregate cash and Permitted Investments and
Debt Service Reserve Support Instruments then held in the Debt Service
Reserve Account over the Debt Service Reserve Requirement) in
accordance with the terms thereof and deposit the proceeds of such draw
into the Debt Service Reserve Account.
(iii) In the event that at any time a guarantor under any Debt
Service Reserve Guarantee furnished to the Trustee in accordance with
the requirements of Section 4.1(a) and (b) fails to qualify as an
Acceptable Guarantor, the Issuer shall cause the Debt Service Reserve
Guarantee of such Person to be replaced by another Debt Service Reserve
Support Instrument or cash or Permitted Investments deposited in the
Debt Service Reserve Account in an amount at least equal to the amount
guaranteed under the Debt Service Reserve Guarantee being replaced. If
such Debt Service Reserve Guarantee is not so replaced within thirty
(30) days following notice by the Trustee to the Issuer of the failure
of such Person to qualify as an Acceptable Guarantor, then in each
case, the Trustee shall draw on the full amount guaranteed under such
Debt Service Reserve Guarantee (LESS any excess of the aggregate cash
and Permitted Investments and Debt Service Reserve Support Instruments
then held in the Debt Service Reserve Account over the Debt Service
Reserve Requirement) in accordance with the terms thereof and deposit
the proceeds of such draw into the Debt Service Reserve Account.
SECTION 4.2. SECURITIES ACCOUNT; SECURITIES INTERMEDIARY.
(a) ACCEPTANCE OF APPOINTMENT OF SECURITIES INTERMEDIARY. The
Bank of New York hereby agrees to act as securities intermediary as that term is
defined in Section 8-102(a)(14) of the New York UCC (in such capacity, the
"SECURITIES INTERMEDIARY") under this First Supplemental Indenture.
(b) ESTABLISHMENT OF THE DEBT SERVICE RESERVE ACCOUNT. The
Securities Intermediary hereby agrees and confirms that (i) the Securities
Intermediary has established the Debt Service Reserve Account, (ii) the Debt
Service Reserve Account is and will be maintained as a "securities account"
(within the meaning of Section 8-501 of the UCC), (iii) the Trustee is the
"entitlement holder" (within the meaning of Section 8-102(a)(7) of the UCC) in
respect of the "financial assets" (within the meaning of Section 8-102(a)(9) of
the UCC) credited to the Debt Service Reserve Account, (iv) all property
delivered to the Securities Intermediary for deposit to the Debt Service Reserve
Account will be held by the Securities Intermediary and promptly credited to the
Debt Service Reserve Account by an appropriate entry in its records in
accordance with this First Supplemental Indenture, (v) all "financial assets"
(within the meaning of Section 8-102(a)(9) of the UCC) in registered form or
payable to or to the order and credited to the Debt Service Reserve Account
shall be registered in the name of, payable to or to the order of, or indorsed
to, the Securities Intermediary or in blank, or credited to another securities
account maintained in the name of the Securities Intermediary, and in no case
will any financial asset credited to the Debt Service Reserve Account be
registered in the name of, payable to or to the order of, or indorsed to, the
Issuer except to the extent the foregoing have been subsequently indorsed by the
Issuer to the Securities Intermediary or in blank, and (vi) the Securities
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Intermediary shall not change the name or account number of the Debt Service
Reserve Account without the prior written consent of the Trustee.
(c) FINANCIAL ASSETS ELECTION. The Securities Intermediary
agrees that each item of property (including any cash, security, instrument or
obligation, share, participation, interest or other property whatsoever)
credited to the Debt Service Reserve Account shall be treated as a "financial
asset" within the meaning of Section 8-102(a)(9) of the UCC.
(d) ENTITLEMENT ORDERS, NO OTHER CONTROL AGREEMENT, NO OTHER
LIENS. The Issuer agrees that the Securities Intermediary may, and the
Securities Intermediary agrees that it shall, comply with any orders if
originated by the Trustee without further consent by the Issuer or any other
Person. In the event that the Securities Intermediary receives conflicting
entitlement orders from the Trustee and the Issuer or any other Person, the
Securities Intermediary shall comply with the entitlement orders originated by
the Trustee. The Securities Intermediary shall not execute and deliver, or
otherwise become bound by, any agreement under which the Securities Intermediary
agrees with any Person other than the Trustee to comply with entitlement orders
originated by such Person relating to the Debt Service Reserve Account or the
security entitlements that are the subject of this First Supplemental Indenture.
The Securities Intermediary shall not grant any Lien in any financial asset that
is the subject of any security entitlement that is the subject of this First
Supplemental Indenture.
(e) SUBORDINATION OF LIEN; WAIVER OF SETOFF. In the event that
the Securities Intermediary has or subsequently obtains by indenture, operation
of law or otherwise a lien or security interest in the Debt Service Reserve
Account or any security entitlement credited thereto, the Securities
Intermediary agrees that such lien or security interest shall be subordinate to
the lien and security interest of the Trustee. The financial assets standing to
the credit of the Debt Service Reserve Account will not be subject to deduction,
setoff, banker's lien, or any other right in favor of any Person other than the
Trustee (except that the face amount of any checks which have been credited to
the Debt Service Reserve Account but are subsequently returned unpaid because of
uncollected or insufficient funds may be deducted from the Debt Service Reserve
Account).
(f) NO OTHER AGREEMENTS. None of the Securities Intermediary
or the Trustee or the Issuer has entered into any Agreement with respect to the
Debt Service Reserve Account or any financial assets credited to the Debt
Service Reserve Account other than this First Supplemental Indenture and the
other Financing Documents. The Securities Intermediary has not entered into any
agreement with the Issuer or any other Person purporting to limit or condition
the obligation of the Securities Intermediary to comply with entitlement orders
originated by the Trustee in accordance with Section 4.2(d). In the event of any
conflict as to such obligation between this First Supplemental Indenture and any
other Transaction Document or any other agreement now existing or hereafter
entered into, the terms of this First Supplemental Indenture shall prevail.
(g) NOTICE OF ADVERSE CLAIMS. Except for the claims and
interest of the Trustee and the Issuer to and in the Debt Service Reserve
Account, the Securities Intermediary
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does not know of any claim to, or interest in, the Debt Service Reserve Account
or in any financial asset credited thereto. If any Person asserts any lien,
encumbrance or adverse claim (including any writ, garnishment, judgment, warrant
of attachment, execution or similar process) against the Debt Service Reserve
Account or in any financial asset credited thereto, the Securities Intermediary
will promptly notify the Trustee and the Issuer.
(h) RIGHTS AND POWERS OF THE TRUSTEE. The rights and powers
granted by the Securities Intermediary to the Trustee have been granted in order
to perfect its lien and security interests in the Debt Service Reserve Account,
are powers coupled with an interest and will be affected by neither the
bankruptcy of the Issuer nor the lapse of time.
(i) CHOICE OF LAW. Each Series Supplemental Indenture and the
Debt Service Reserve Account (including all security entitlements relating
thereto) shall be governed by the law of the State of New York. For purposes of
the UCC, the "securities intermediary's jurisdiction" of the Securities
Intermediary with respect to the Debt Service Reserve Account is the State of
New York.
SECTION 4.3. SECURITY INTEREST. As collateral security for the
prompt and complete payment and performance when due of the Bonds, the Issuer
hereby pledges, assigns, hypothecates and transfers to the Trustee for the
benefit of the Trustee and the Holders, and hereby grants to the Trustee for the
benefit of the Trustee and the Holders, a lien on and security interest in and
to (i) the Debt Service Reserve Account and (ii) all property credited thereto,
including, but not limited to, cash, investments, securities and security
entitlements at any time on deposit in or credited to the Debt Service Reserve
Account, including all income or gain earned thereon and all security
entitlements with respect to any of the foregoing. The Debt Service Reserve
Account shall at all times be in the exclusive possession of and under the
exclusive domain and control of, the Trustee.
SECTION 4.4. INVESTMENT OF FUNDS. Monies held in the Debt
Service Reserve Account created pursuant to this First Supplemental Indenture
shall be invested and reinvested in Permitted Investments at the written
direction of an Authorized Representative of the Issuer to the Trustee;
PROVIDED, HOWEVER, that the Trustee shall not cause investment of such monies at
any time when the maturity of any of the Bonds has been accelerated and
PROVIDED, FURTHER, that at any time after the occurrence and during the
continuance of an Event of Default, the Trustee may, but is not obligated to,
(and, if instructed in writing by the Majority Holders of all Bonds of all
series as to which the Event of Default applies, shall) in its (or their)
discretion at any time and from time to time elect to liquidate any such
Permitted Investments (in an amount necessary to cure such Event of Default) and
apply or cause to be applied the proceeds thereof to the payment of the
principal of and interest on the Bonds in the manner specified in Section 5.09
of the Security Agreement. Such investments shall mature in such amounts and
have maturity dates or be subject to redemption at the option of the holder
thereof on or prior to maturity as needed for the purposes of such funds. Any
profit realized from investments of the Debt Service Reserve Account shall be
deposited in the Debt Service Reserve Account and any loss shall be charged to
the Debt Service Reserve Account. In no event shall the Trustee or the
Securities Intermediary be liable for the selection of Permitted Investments or
for investment losses
Northeast Generation Supplemental Indenture
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incurred thereon. Neither the Trustee nor the Securities Intermediary shall have
liability in respect of losses incurred as a result of the liquidation of any
Permitted Investment prior to its stated maturity or the failure of the Issuer
to provide timely written investment direction, except to the extent such losses
were due to the gross negligence or bad faith on the part of the Trustee or the
Securities Intermediary. Neither the Trustee nor the Securities Intermediary
shall have any obligation to invest or reinvest any amounts held hereunder in
the absence of written investment direction.
ARTICLE V
COVENANTS OF THE ISSUER
The Issuer hereby covenants and agrees that so long as any
Initial Bonds or Exchange Bonds remain Outstanding:
SECTION 5.1. FINANCIAL STATEMENTS AND OTHER INFORMATION. The
Trustee shall furnish to each of the Rating Agencies all of the information
furnished to it by the Issuer under Section 5.2 of the Original Indenture upon
receipt of such information.
SECTION 5.2. INDEBTEDNESS. The Issuer will not create, incur
or assume any Indebtedness or secured Hedging Agreement other than (i) the
Initial Bonds, (ii) the Exchange Bonds, (iii) unsecured Indebtedness incurred in
the ordinary course of business, (iv) purchase money Indebtedness not exceeding
the cost of the property involved, (v) renewals, replacements or refinancings
(but not increases in the principal amount) of any previously existing
Indebtedness at the time and (vi) secured Hedging Agreements secured solely by
cash or securities not included in the Collateral unless at the time such
additional Indebtedness is incurred or such secured Hedging Agreement is entered
into, each of the Rating Agencies has confirmed its then current rating on the
Bonds.
SECTION 5.3. PROHIBITION ON SALE OF ASSETS. The Issuer will
not sell or otherwise dispose of Northfield Mountain Facility or any material
portion thereof which would not be permitted by Section 5.9 of the Original
Indenture unless each of the Rating Agencies has confirmed its then current
ratings on the Initial Bonds or the Exchange Bonds, as the case may be.
SECTION 5.4. RESTRICTED PAYMENTS. (a) The Issuer will not
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
unless, at the time of and after giving effect to such Restricted Payment (i) no
Default or Event of Default would occur or be continuing; (ii) with respect to
the most recently completed fiscal quarter, the Debt Service Reserve Account
shall have been funded to the extent required in accordance with Section 4.1;
(iii) (x) if the Contracted Generating Capacity is at least 75%, the Debt
Service Coverage Ratio for the period consisting of the preceding four fiscal
quarters (or, if shorter, for the period from the Closing Date until the time of
such Restricted Payment) and the Projected Debt Service Coverage Ratio for the
period consisting of the next succeeding eight fiscal quarters is equal to
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or greater than 1.35 to 1.0 or (y) if the Contracted Generating Capacity is less
than 75%, the Debt Service Coverage Ratio for the period consisting of the
preceding four fiscal quarters (or, if shorter, for the period from the Closing
Date until the time of such Restricted Payment) and the Projected Debt Service
Coverage Ratio for the period consisting of the next succeeding eight fiscal
quarters is equal to or greater than 1.70 to 1.0; and (iv) the Issuer certifies
that no Material Adverse Effect with respect to the Issuer will occur as a
result of such Restricted Payment, PROVIDED, HOWEVER, that the foregoing
restrictions shall not apply to the use of the proceeds of the Initial Bonds.
(b) Unless not permitted by Law, payment of the principal of
(and Premium, if any) and interest on each of the Initial Bonds and the Exchange
Bonds shall be made prior to any payment under the Tax Allocation Agreement or
any similar agreement with respect to the allocation or sharing of taxes among
the members of the Issuer's consolidated group for tax purposes.
SECTION 5.5. INVESTMENTS. The Issuer will not make or permit
to remain outstanding any Investments except:
(a) Investments outstanding on the date hereof and identified
on Schedule 3 hereto;
(b) operating deposit accounts with banks;
(c) cash or Permitted Investments;
(d) Investments in another Person, if as a result of such
Investment such other Person is merged or consolidated with or into, or
transfers or conveys all or substantially all of its assets to the
Issuer;
(e) Investments representing capital stock or obligations
issued to the Issuer in settlement of claims against any other Person
by reason of a composition or readjustment of debt or a reorganization
of any debtor of the Issuer;
(f) Investments acquired by the Issuer in connection with any
asset sale permitted under Section 5.9 or 5.11(a) of the Original
Indenture or Section 5.3 of this First Supplemental Indenture;
(g) any Investment to the extent that the sole consideration
therefor is capital stock (other than redeemable capital stock) of the
Issuer;
(h) Investments consisting of security deposits with utilities
and other Persons made in the ordinary course of business;
(i) Hedging Agreements entered into in the ordinary course of
business and not for speculative purposes;
Northeast Generation Supplemental Indenture
-------------------------------------------
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(j) amounts constituting Restricted Payments which the Issuer
would be permitted to make under Section 5.4 of this First Supplemental
Indenture;
(k) Investments in Subsidiaries of the Issuer and any other
Person that, simultaneously with the making of such Investment, becomes
a Subsidiary of the Issuer; and
(l) additional Investments not exceeding in the aggregate at
any one time outstanding $10,000,000 plus the amount of any
paid-in-capital received for the purpose of making such Investments.
For purposes of this Section, the aggregate amount of an Investment at any time
shall be deemed to be equal to (A) the aggregate amount of cash, together with
the aggregate fair market value of property, including any securities, loaned,
advanced, contributed, transferred or otherwise invested that gives rise to such
Investment MINUS (B) the aggregate amount of dividends, distributions or other
payments received in cash in respect of such Investment; the amount of an
Investment shall not in any event be reduced by reason of any write-off of such
Investment nor increased by any increase in the amount of earnings retained in
the Person in which such Investment is made that have not been dividended,
distributed or otherwise paid out.
ARTICLE VI
REPURCHASE UPON CHANGE OF CONTROL
SECTION 6.1. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder
shall have the right to require the Issuer to repurchase all or any part of such
Holder's Bonds of any series created hereby at a purchase price in cash equal to
101% of the then Outstanding principal amount of such Bonds, PLUS accrued and
unpaid interest to but excluding the date of purchase (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date in accordance with the terms of this First
Supplemental Indenture); PROVIDED, HOWEVER, that notwithstanding the occurrence
of a Change of Control, the Issuer shall not be obligated to purchase any Bond
pursuant to this Section 6.1 to the extent that the Issuer has exercised its
rights to redeem such Bond as described in Section 6.1 of the Original
Indenture.
(b) Within 30 days following any Change of Control, the Issuer
shall mail a notice to each Holder of Bonds of any series created hereby with a
copy thereof to the Trustee stating, among other things: (1) that a Change of
Control has occurred and that such Holder has the right to require the Issuer to
purchase all or any portion of such Holder's Bonds of any series created hereby
at a purchase price in cash equal to 101% of the principal amount of such Bond,
PLUS accrued and unpaid interest to but excluding the date of purchase (subject
to the right of Holders of record on a Regular Record Date to receive interest
due on the relevant Scheduled Payment Date in accordance with the terms of this
First Supplemental Indenture); (2) the
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circumstances and relevant facts regarding such Change of Control (including if
such Change of Control results from any event subject to Section 5.11 of the
Original Indenture, information with respect to pro forma historical income,
cash flow and capitalization, each after giving effect to such Change of
Control); (3) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and (4) the
instructions determined by the Issuer, consistent with this Section 6.1, that a
Holder must follow in order to have its Bonds or any portion thereof purchased.
(c) The Issuer shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Bonds pursuant to this
Section 6.1. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 6.1, the Issuer shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached their obligations described above by virtue thereof.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. EXECUTION OF SUPPLEMENTAL INDENTURE. This First
Supplemental Indenture is executed and shall be construed as an indenture
supplemental to the Original Indenture and, as provided in the Original
Indenture, this First Supplemental Indenture forms a part thereof.
SECTION 7.2. CONCERNING THE TRUSTEE. The recitals contained
herein and in the Bonds of each series created hereby, except with respect to
the Trustee's certificates of authentication, shall be taken as the statements
of the Issuer and the Trustee assumes no responsibility for the correctness of
same. The Trustee makes no representations as to the validity or sufficiency of
this First Supplemental Indenture or of the Bonds of each series created hereby.
SECTION 7.3. COUNTERPARTS. This First Supplemental Indenture
may be executed in any number of counterparts, each of which when so executed
shall be deemed to be an original, but all such counterparts shall together
constitute but one of the same instrument.
SECTION 7.4. GOVERNING LAW. THIS FIRST SUPPLEMENTAL INDENTURE
AND EACH BOND OF A SERIES CREATED HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW THEREOF TO THE EXTENT THE APPLICATION OF SUCH
PRINCIPLES WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
Northeast Generation Supplemental Indenture
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IN WITNESS WHEREOF, the parties have caused this First
Supplemental Indenture to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.
NORTHEAST GENERATION COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
THE BANK OF NEW YORK,
as Trustee
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
THE BANK OF NEW YORK,
as Securities Intermediary
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Northeast Generation Supplemental Indenture
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EXHIBIT A
[FORM OF ACCEPTABLE GUARANTEE]
This GUARANTEE AGREEMENT (this "GUARANTEE"), dated as of
___________ between [Northeast Utilities/Affiliate of Northeast
Utilities/Acceptable Bank], a corporation duly organized and validly existing
under the laws of _____________ (the "GUARANTOR") and The Bank of New York, as
Trustee (the "TRUSTEE") on behalf of the Secured Parties (as defined in the
Security Agreement).
RECITALS
1. Northeast Generation Company (the "ISSUER") has entered
into the Indenture dated as of October 18, 2001 with the Trustee (the
"Indenture") and the First Supplemental Indenture dated as of October 18, 2001
with the Trustee (the "FIRST SUPPLEMENTAL INDENTURE").
2. In order to fund the Debt Service Reserve Account, and for
other good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the Guarantor has agreed to guarantee the payment of the
Guaranteed Obligation (as defined below).
Accordingly, the Guarantor agrees with the Trustee as follows:
ARTICLE 1
DEFINITIONS
Unless otherwise defined, all capitalized terms used in this
Guarantee shall have the meanings given in the Indenture. The rules of
interpretation set forth in Article 1 of the Indenture shall apply to this
Guarantee.
ARTICLE 2
GUARANTEE
2.01 THE GUARANTEE. The Guarantor absolutely,
unconditionally and irrevocably guarantees to the Trustee for itself and on
behalf of the Holders of the Bonds and their respective successors and
assigns the prompt payment of up to US$ _________(as such amount may be
reduced or increased from time to time, the "GUARANTEED OBLIGATION") upon
receipt of a written request from the Issuer therefor.
The Guarantor further agrees that it will promptly pay the
amount specified in such written notice, but in no event more than the
Guaranteed Obligation, on the date of receipt of such written notice. The
delivery of such notice by the Issuer to the Guarantor shall in accordance with
Article 4 of the First Supplemental Indenture constitute sufficient demand on
the Guarantor to make the payment specified in such notice.
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2.02 OBLIGATIONS UNCONDITIONAL. The obligations of the
Guarantor under Section 2.01 are absolute, unconditional and irrevocable,
irrespective of any actual or asserted lack of value, genuineness, validity,
regularity or enforceability of the obligations of the Issuer under the
Indenture, any other Transaction Document or any other agreement or instrument
referred to therein, or any substitution, release or exchange of any other
guarantee of or security for the Guaranteed Obligations, and, to the fullest
extent permitted by applicable Law, irrespective of any other circumstance
whatsoever that might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor, it being the intent of this Article 2 that the
obligations of the Guarantor under this Guarantee shall be absolute and
unconditional, under any and all circumstances.
Subject to Section 2.01 and Section 4 of the First
Supplemental Indenture, the Guarantor expressly waives diligence, presentment,
demand of payment, protest and all notices whatsoever, and any requirement that
the Trustee or any Holder exhaust any right, power or remedy or proceed against
the Issuer under the Indenture or any other Transaction Document or any other
agreement or instrument referred to therein, or against any other Person under
any other guarantee of, or security for, any of the Guaranteed Obligation.
2.03 INSTRUMENT FOR THE PAYMENT OF MONEY. The Guarantor
acknowledges that this guarantee constitutes an instrument for the payment of
money only, and consents and agrees that the Trustee or any Holder, at its sole
option, in the event of a dispute by such Guarantor in the payment of any moneys
due hereunder, shall have the right to bring motion-action under New York CPLR
Section 3213.
2.04 REDUCTION OF GUARANTEED OBLIGATION. (a) The Guaranteed
Obligations shall be reduced in accordance with clause 4.1(d)(i) of the First
Supplemental Indenture and the Trustee shall promptly provide to the Guarantor
notice of such reduction. Contemporaneous with the giving of such notice, the
Trustee shall annotate this Guarantee to reflect the Guaranteed Obligation as so
reduced.
(b) The Guaranteed Obligation shall be reduced and/or released
upon receipt by the Trustee of a written request from the Issuer for such
reduction or release so long as the Debt Service Reserve Requirement is
otherwise met by the deposit into the Debt Service Reserve Account of cash,
Permitted Investments, a Debt Service Reserve Letter of Credit, another Debt
Service Reserve Guarantee or any combination thereof.
Northeast Generation Supplemental Indenture
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
The Guarantor represents and warrants that:
3.01 POWER AND AUTHORITY. The Guarantor has the power and
authority to (i) execute and deliver this Guarantee and perform its obligations
hereunder, (ii) to conduct its business as currently conducted and (iii) to own
its property.
3.02 VALID EXISTENCE. The Guarantor is duly organized and is
validly existing under and pursuant to the laws of the jurisdiction of its
organization and is qualified to do business and is in good standing in all
jurisdictions necessary for it to conduct its business and own its property
except where the failure to so qualify or be in good standing could not
reasonably be expected to have a Material Adverse Effect.
3.03 DUE AUTHORIZATION. The execution, delivery and
performance by the Guarantor of this Guarantee have been duly authorized by all
necessary corporate action, and do not and shall not require any further
consents or approvals which have not been obtained, or violate any provision of
any Law or breach any agreement presently in effect with respect to or binding
on the Guarantor or its properties except where such violations or breach could
not reasonably be expected to have a Material Adverse Effect.
3.04 BINDING OBLIGATION. This Guarantee is a legal, valid and
binding obligation of the Guarantor, enforceable against it in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
affecting the enforceability of creditors' rights generally (and to the possible
judicial application of foreign laws or governmental action affecting the rights
of creditors generally) and except as such enforceability is subject to the
application of general principles of equity (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law), including
without limitation (i) the possible unavailability of specific performance,
injunctive relief or any other equitable remedy and (ii) concepts of
materiality, reasonableness, good faith and fair dealing.
ARTICLE 4
MISCELLANEOUS
4.01 NOTICES. All notices required or permitted under the
terms and provisions of this Guarantee shall be in writing (including by telex
or fax) in the English language delivered to the intended recipient. Any such
notice shall be effective when received if given in accordance with the
provisions of Section 1.4 of the Indenture to the address set out beneath such
party's signature to this Guarantee.
4.02 SEVERABILITY. If any provision hereof is invalid, illegal
or unenforceable in any jurisdiction, then to the fullest extent permitted by
law, (i) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in favor of the Trustee and
the Secured Parties in order to carry out the intentions of the parties hereto
as nearly as
Northeast Generation Supplemental Indenture
-------------------------------------------
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may be possible and (ii) the invalidity, illegality or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity, legality or
enforceability of such provision in any other jurisdiction.
4.03 BENEFIT OF GUARANTEE. This Guarantee shall be binding
upon and inure to the benefit of the Guarantor and the Trustee and their
respective successors, transferees and assigns.
4.04 LANGUAGE. The language of this Guarantee is the English
language and no translation made or to be made hereof shall have any legal
validity.
4.05 GOVERNING LAW. This Guarantee shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
agreements made and to be performed entirely within the State of New York,
without regard to principles of conflicts of law thereof to the extent the
application of such principles could cause the application of the laws of any
other jurisdiction.
4.06 FURTHER ASSURANCES. The Guarantor shall execute and
deliver all such instruments and take all such actions as may be reasonably
necessary to effectuate fully the purposes of this Guarantee.
4.07 TERM. Subject to Section 2.04, this Guarantee shall
terminate upon the earlier to occur of indefeasible payment in full of the
Guaranteed Obligation and reduction of the Guaranteed Obligation to zero.
4.08 AMENDMENTS. Except as otherwise expressly provided in
this Guarantee, any provision of this Guarantee may be amended or modified only
by an instrument in writing signed by the parties hereto.
4.09 SUBMISSION TO JURISDICTION AND VENUE. Any legal action or
proceeding against the Guarantor with respect to this Guarantee may be brought
and enforced in the U.S. state or federal courts located in the Borough of
Manhattan, The City of New York, New York, and, by execution and delivery of
this Guarantee, the Guarantor irrevocably accepts for itself and in respect of
its property, generally, irrevocably and unconditionally, the jurisdiction of
the aforesaid courts. A judgment, after exhaustion of all available appeals, in
any such action or proceeding shall be conclusive and binding upon the Guarantor
and may be enforced in any other jurisdiction by a suit upon such judgment, a
certified copy of which shall be conclusive evidence of the judgment.
4.10 LIMITATION OF LIABILITY. No shareholder or trustee of
Northeast Utilities shall be held to any liability whatever for the payment of
any sum of money or for damages or otherwise under this Guarantee, and this
Guarantee shall not be enforceable against any such trustee in their or his or
her individual capacities or capacity and this Guarantee shall be enforceable
against the trustees of Northeast Utilities only as such, and every person,
firm, association, trust or corporation having any claim or demand arising under
this Guarantee and relating to Northeast Utilities, its shareholders or trustees
shall look solely to the trust estate of Northeast Utilities for the payment or
satisfaction thereof.
Northeast Generation Supplemental Indenture
-------------------------------------------
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IN WITNESS WHEREOF, each party has caused this Guarantee to be
duly executed and delivered by its officer thereto duly authorized as of the
date first above written.
[Northeast Utilities/Affiliate of Northeast Utilities/Acceptable Bank]
as Guarantor
By: ....................................
Title: ....................................
Address: ____________________
____________________
____________________
Attention: ____________________
Telephone: ____________________
Telecopy: ____________________
[ ],
not in its individual capacity, but solely
as Trustee
By: ....................................
Title: ....................................
Address: [ ]
Attention: [ ]
Telephone: [ ]
Telecopy: [ ]
Northeast Generation Supplemental Indenture
-------------------------------------------
EXHIBIT B
SUBORDINATION PROVISIONS
Section 1. [Northeast Generation Company, a Delaware
corporation] (the "COMPANY"), hereby covenants and agrees, and [NAME OF
SUBORDINATED LENDER] (the "SUBORDINATED LENDER"), likewise agrees, that, to the
extent and in the manner set forth in this Agreement, [DESCRIBE SUBORDINATED
INDEBTEDNESS] (the "SUBORDINATED INDEBTEDNESS"), and the payment from whatever
source of the principal of, and interest and premium (if any) on, the
Subordinated Indebtedness, are hereby expressly made subordinate and subject in
right of payment to the prior payment in full in cash of all Senior Indebtedness
(as hereinafter defined). All capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed thereto, whether directly or by
reference to another agreement or document, in the Indenture dated as of October
18, 2001 between the Company and Bank of New York, as trustee (in such capacity,
together with its successors and assigns, the "TRUSTEE") for the Holders, as
amended by the First Supplemental Indenture dated as of October 18, 2001 (the
"FIRST SUPPLEMENTAL INDENTURE") between the Company and the Trustee (the
"INDENTURE").
For purposes hereof, "SENIOR INDEBTEDNESS" shall mean all
indebtedness, liabilities and other obligations of the Company (including, but
not limited to, all such obligations in respect of principal, premiums,
interest, fees, reimbursement obligations, penalties, indemnities, legal
expenses, costs and other expenses, whether due after acceleration or otherwise)
to the Secured Parties (as defined in the Security Agreement) (of whatsoever
nature and howsoever evidenced) under or pursuant to the Collateral Documents
and the other Financing Documents, in each case, direct or indirect, primary or
secondary, fixed or contingent, now or hereafter arising out of or relating to
any such agreement or document. The term "Senior Indebtedness" shall include any
interest accruing after the date of any filing by the Company of any petition in
bankruptcy or the commencing of any bankruptcy, insolvency or similar
proceedings with respect to the Company, whether or not such interest is
allowable as a claim in any such proceeding.
Section 2. The Subordinated Lender further agrees that: (a)
(i) Unless and until the Senior Indebtedness shall have been paid or otherwise
satisfied in full, the Subordinated Lender shall not ask, demand, ▇▇▇ for, take
or receive from the Company, directly or indirectly, in cash or other property
or by set-off or in any other manner (including, without limitation, from or by
way of the Collateral or any guaranty of payment or performance), payment of all
or any of the Subordinated Indebtedness, except as permitted under the Indenture
and the Subordinated Indebtedness shall be paid solely from cash that may be
applied to Restricted Payments under Section 5.4 of the First Supplemental
Indenture. For the purposes of these provisions, the Senior Indebtedness shall
not be deemed to have been paid or satisfied in full until the Senior
Indebtedness shall have been indefeasibly so paid in cash to the Secured Parties
(after the passage of any relevant preference periods).
(ii) Upon any distribution of all or any of the assets of the
Company to creditors of the Company upon the dissolution, winding up,
liquidation, arrangement, reorganization or composition of the Company,
whether in any bankruptcy, insolvency, arrangement, reorganization,
receivership or similar proceedings or upon an assignment for the
benefit of creditors or any other marshalling of the assets and
liabilities of the Company or otherwise, any payment or distribution of
any kind (whether in cash,
Northeast Generation Supplemental Indenture
-------------------------------------------
2
property or securities) which otherwise could be payable or deliverable
upon or with respect to the Subordinated Indebtedness but for the
provisions of this Agreement, including, without limitation, any such
payment or distribution that may be payable or deliverable by reason of
the payment of any other indebtedness of the Company being subordinated
to the payment of the Subordinated Indebtedness shall be paid or
delivered directly to the Trustee for application (in the case of cash)
to or as Collateral (in the case of non-cash property or securities)
for the payment or prepayment of the Senior Indebtedness until the
Senior Indebtedness has been paid or otherwise satisfied in full in
cash.
(iii) Each of the Secured Parties may demand specific performance
of these terms of subordination, whether or not the Company shall have
complied with any of the provisions hereof applicable to them at any
time when the Subordinated Lender shall have failed to comply with any
of such provisions applicable to it. The Subordinated Lender hereby
irrevocably waives any defense based on the adequacy of a remedy at
law, which might be asserted as a bar to such remedy of specific
performance.
(iv) So long as any of the Senior Indebtedness shall remain
unpaid or otherwise unsatisfied, the Subordinated Lender shall not
commence or join with any creditor other than the Trustee in commencing
any proceeding referred to in subsection (ii) above for the payment of
any amounts which otherwise could be payable or deliverable upon or
with respect to the Subordinated Indebtedness.
(v) In the event that, notwithstanding the foregoing provisions
of this Section 2, the Subordinated Lender shall have received, before
all Senior Indebtedness is paid in full in cash or payment thereof is
otherwise provided for, any such payment or distribution of assets of
the Company of any kind or character, whether in cash, property or
securities, including any such payment or distribution arising out of
the exercise by the Subordinated Lender of a right of set-off or
counterclaim and any such payment or distribution received by reason of
any other indebtedness of the Company being subordinated to the
Subordinated Indebtedness, then, and in such event, such payment or
distribution shall be held in trust for the benefit of the Secured
Parties, and shall be immediately paid over to the Trustee, to the
extent necessary to make payment in full in cash of all Senior
Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to the Secured Parties.
The foregoing provisions regarding subordination are for the
benefit of the Secured Parties and shall be enforceable by them directly against
the Subordinated Lender, and no Secured Party shall be prejudiced in its right
to enforce subordination of any of the Subordinated Indebtedness by any act or
failure to act by the Company or anyone in custody of its assets or property.
Notwithstanding anything to the contrary contained in the foregoing provisions,
the Subordinated Lender may receive and retain payments in respect of the
Subordinated Indebtedness from the Company to the extent that such payments are
permitted by the Indenture.
(b) So long as any Senior Indebtedness remains outstanding,
the following provisions shall apply:
Northeast Generation Supplemental Indenture
-------------------------------------------
3
(i) If an Event of Default shall have occurred and be
continuing, the Trustee, on behalf of the Secured Parties, shall be
permitted to take any and all actions to exercise any and all rights,
remedies and options which it may have under the Security Documents.
(ii) The Subordinated Lender shall not, without the prior written
consent of the Secured Parties, (A) exercise any rights or enforce any
remedies or assert any claim with respect to the Collateral, (B) seek
to foreclose any Lien or sell the Collateral, or (C) take any action,
directly or indirectly, or institute any proceedings, directly or
indirectly, with respect to any of the foregoing.
(iii) The Subordinated Lender hereby waives: (A) notice of the
existence, creation or non-payment of all or any of the Senior
Indebtedness and (B) to the fullest extent permitted by law, any right
it may have to require the Trustee to marshal assets.
(c) The Secured Parties may, at any time and from time to
time, without any consent of or notice to the Subordinated Lender and without
impairing or releasing the obligations of the Subordinated Lender: (A) amend,
modify, extend, renew, waive or consent to in any manner, any provision of any
agreement under which any of the Senior Indebtedness is outstanding in
accordance with the terms thereof; (B) sell, exchange, release, not perfect and
otherwise deal with any property at any time pledged, assigned or mortgaged to
secure the Senior Indebtedness in accordance with the Security Documents; (C)
release anyone liable in any manner under or in respect of the Senior
Indebtedness; (D) exercise or refrain from exercising any rights against the
Company and others; and (E) apply any sums from time to time received to payment
or satisfaction of the Senior Indebtedness.
Section 3. SUBROGATION. After the payment in full of all
amounts due in respect of the Senior Indebtedness, the holder or holders of the
Subordinated Indebtedness shall be subrogated to the rights of the holders of
the Senior Indebtedness to receive payments or distributions of cash, property
or securities of the Company applicable to the Senior Indebtedness until the
principal of, premium, if any, interest on and all other amounts due or to
become due with respect to the Subordinated Indebtedness shall be paid in full;
and, for the purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or securities to which
the holder or holders of the Subordinated Indebtedness could be entitled but for
the provisions hereof, and no payment pursuant to these provisions to the
holders of the Senior Indebtedness by any holder of the Subordinated
Indebtedness shall, as among the Company, its creditors other than holders of
the Senior Indebtedness and the holder or holders of the Subordinated
Indebtedness, be deemed to be a payment by the Company to or on account of the
Senior Indebtedness. No payment or distributions to the holders of the Senior
Indebtedness which such holder or holders of the Subordinated Indebtedness shall
be entitled to receive pursuant to such subrogation shall, as among the Company,
its creditors other than holders of the Senior Indebtedness and the holder or
holders of the Subordinated Indebtedness be deemed to be a payment by the
Company or on account of the Subordinated Indebtedness.
Nothing contained in this instrument is intended to or shall
impair as among the Company, its creditors other than the holders of the Senior
Indebtedness, and the holders of the
Northeast Generation Supplemental Indenture
-------------------------------------------
4
Subordinated Indebtedness, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Subordinated Indebtedness as and
when the same shall become due and payable in accordance with its terms, or to
affect the relative rights of the holders of the Subordinated Indebtedness and
creditors of the Company other than the holders of the Senior Indebtedness.
Section 4. The Subordinated Lender agrees not to take any
action in respect of or to enforce any right of subrogation arising as a result
of the Subordinated Lender paying over amounts to the holders of the Senior
Indebtedness as provided herein, prior to payment in full in cash of the Senior
Indebtedness.
Section 5. The Subordinated Lender agrees that, if it shall
fail to file claims or proofs of claim with respect to the Subordinated
Indebtedness at least 30 days prior to the expiration of the period in which
such claims or proofs of claim shall be required to be filed, the holders of the
Senior Indebtedness are authorized to file such claims or proofs of claim on
behalf of the Subordinated Lender as its attorney-in-fact.
Northeast Generation Supplemental Indenture
-------------------------------------------
EXHIBIT C
[Form of Transferor Certificate]
CERTIFICATE TO NORTHEAST GENERATION COMPANY
AND TRUSTEE
__% SERIES [ ] BONDS DUE [ ]
This is to certify that as of the date hereof with respect to
U.S. $ ______________________ principal amount of the above-captioned securities
presented or surrendered on the date hereof (the "SURRENDERED BONDS") for
registration of transfer or for exchange where the securities issuable upon such
exchange are to be registered in a name other than that of the undersigned
Holder (each such transaction being a "TRANSFER"), the undersigned Holder (as
defined in the Indenture) of the Surrendered Bonds represents and certifies for
the benefit of Northeast Generation Company and The Bank of New York, as
Trustee, that the transfer of Surrendered Bonds associated with such transfer
complies with the restrictive legend set forth on the face of the Surrendered
Bonds for the reason checked below:
/_/ The Surrendered Bonds are being transferred to a person whom we
reasonably believe is a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act of 1933) (a "QIB") that purchases
for its own account or for the account of a QIB to whom notice is given
that the resale, pledge or transfer is being made in reliance on Rule
144A under the Securities Act; or
/_/ The Surrendered Bonds are being transferred to an institution that is
an "accredited investor" meeting the requirements of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act that is acquiring the
Surrendered Bonds for investment purposes and not for distribution;1 or
/_/ The transfer of the Surrendered Bonds complies with Rule 144 under the
Securities Act;2 or
/_/ The transfer of the Surrendered Bonds complies with another applicable
exemption from the registration requirements of the Securities Act.2
Capitalized terms used herein, but not defined herein, shall have the meaning
assigned to such terms in the Indenture dated as of October 18, 2001 between the
Company and The Bank of New York, as trustee (in such capacity, together with
its successors and assigns, the "TRUSTEE") for the Holders, as amended by the
First Supplemental Indenture dated as of October 18, 2001 (the "FIRST
SUPPLEMENTAL INDENTURE") between the Company and the Trustee (the "INDENTURE").
-----------------------------
[Name of Holder]
Dated: __________, ____
[TO BE DATED THE DATE OF PRESENTATION OR SURRENDER]
Northeast Generation Supplemental Indenture
-------------------------------------------
2
1. These transfers require that the transferee deliver a letter
substantially in the form of Exhibit B to the First Supplemental
Indenture dated as of October 18, 2001 and may also require an opinion
of counsel.
2. These transfers may require an opinion of counsel.
Northeast Generation Supplemental Indenture
-------------------------------------------
EXHIBIT D
[Form of Institutional Accredited
Investor Transferee Compliance Letter]
Northeast Generation Company
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: [_________]
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Dear Ladies and Gentlemen:
In connection with our proposed purchase of $__________
aggregate principal amount of ____ % Series ____ Senior Secured Bonds Due
_______ (the "BONDS") of Northeast Generation Company, a Connecticut corporation
(the "ISSUER"), we confirm that
1. We understand that the Bonds have not been registered under
the Securities Act of 1933 (the "SECURITIES ACT") and may not be sold
except as permitted in the following sentence. We agree, on our own
behalf and on behalf of any accounts for which we are acting as
hereinafter stated, to offer, sell, pledge or otherwise transfer such
Bonds prior to the date which is two years after the later of the
original issue date of the Bonds and the last date on which the Issuer
or any affiliate of the Issuer was the owner of the Bond (or any
predecessor of such Bond), only (i) to the Issuer, (ii) so long as such
Bonds are eligible for resale pursuant to Rule 144A under the
Securities Act ("RULE 144A"), to a person whom we reasonably believe is
a "qualified institutional buyer" (as defined in Rule 144A) (a "QIB")
that purchases for its own account or for the account of a QIB to whom
notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A (as indicated by the box checked by the
transferor on the Transferor Certificate, a form of which is attached
as Exhibit C to the First Supplemental Indenture relating to the Bonds,
dated as of October 18, 2001), (iii) to an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act (as indicated by the box checked by the
transferor on the Transferor Certificate, a form of which is attached
as Exhibit C to the First Supplemental Indenture relating to the Bonds,
dated as of October 18, 2001) that is acquiring the Bonds in a minimum
amount of $250,000 for investment purposes and not for distribution and
an Institutional Accredited Investor Transferee Compliance Letter in
the form hereof is delivered to the Issuer and to the Trustee under the
Indenture relating to the Bonds by such accredited investor, (iv)
pursuant to any other available exemption from registration under the
Securities Act, or (v) pursuant to an effective registration statement
under the
Northeast Generation Supplemental Indenture
-------------------------------------------
2
Securities Act, in each case in accordance with any applicable
securities laws of any state of the United States, and we will notify
any purchaser of the Bonds from us of the above resale restrictions, if
then applicable. We further understand that in connection with any
transfer of the Bonds by us that the Issuer and the Trustee may
request, and if so requested we will furnish, such opinions of counsel,
certificates and/or other information as they may reasonably require to
confirm that any such transfer complies with the foregoing
restrictions.
2. We are an institutional investor and are an "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) and we have such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and
risks of our investment in the Bonds, and we and any accounts for which
we are acting are each able to bear the economic risk of our or its
investment.
3. We understand that the Bonds will be issued solely in
physical certificated form (and not in the form of interests in
securities deposited with The Depository Trust Company) and the minimum
principal amount of Bonds that may be purchased by an institutional
accredited investor is $250,000.
4. We are acquiring the Bonds purchased by us for our own
account or for one or more accounts as to each of which we exercise
sole investment discretion.
5. You are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
Very truly yours,
--------------------------
(Name of Purchaser)
By:
----------------------
Date:
--------------------
Northeast Generation Supplemental Indenture
-------------------------------------------
EXHIBIT E
[Form of Regulation S Transfer Certificate]
[date]
Northeast Generation Company
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: [_________]
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Dear Ladies and Gentlemen:
In connection with our proposed purchase of $__________
aggregate principal amount of ____ % Series ____ Senior Secured Bonds Due
_______ (the "BONDS") of Northeast Generation Company, a Connecticut corporation
(the "ISSUER"), we confirm that:
(a) the offer of the Bonds was not made to a person in the United
States;
(b) either (i) at the time the buy order was originated, the
transferee was outside the United States or we and any person
acting on our behalf reasonably believed that the transferee
was outside the United States or (ii) the transaction was
executed in, on or through the facilities of a designated
off-shore securities market and neither we nor any person
acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(c) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or
Rule 904(b) of Regulation S, as applicable; and
(d) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
In addition, if the sale is made during a Distribution
Compliance Period and the provisions of Rule 903(c)(3) or Rule 904(c)(1) of
Regulation S are applicable thereto, we confirm that such sale has been made in
accordance with the applicable provisions of Rule 903(c)(3) or Rule 904(c)(1),
as the case may be.
Northeast Generation Supplemental Indenture
-------------------------------------------
2
The Issuer and the Trustee are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
------------------------------- --------------------------------
Authorized Signature Signature Medallion Guaranteed
Northeast Generation Supplemental Indenture
-------------------------------------------
Schedule 1-A to First
Supplemental Indenture to
Northeast Generation Company Indenture
[Form of face of definitive
4.998% Series A Senior Secured Bonds Due 2005]
NORTHEAST GENERATION COMPANY
4.998% SERIES A SENIOR SECURED BOND DUE 2005
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM
PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
ISSUER'S AND THE TRUSTEE'S RIGHTS PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
Northeast Generation Supplemental Indenture
-------------------------------------------
No. CUSIP NUMBER
[ ]
PRINCIPAL AMOUNT FINAL SCHEDULED PAYMENT DATE ISSUE DATE
---------------- ---------------------------- ----------
$[___________] October 15, 2005 October 18, 2001
REGISTERED HOLDER: [_______________]
PRINCIPAL AMOUNT: [_______________] Dollars
INTEREST RATE: 4.998%
NORTHEAST GENERATION COMPANY, a Connecticut corporation
(hereinafter called the "ISSUER", which term includes any successor or assign
under the Indenture referred to below), for value received hereby promises to
pay to [____________], or its registered assigns, the outstanding Principal
Amount hereof, such payment to be made in semiannual installments on April 15
and October 15 of each year (commencing April 15, 2002) and ending on the final
Scheduled Payment Date set forth above, each such installment to be in the
amount and payable on the date set forth on Annex A attached hereto (PROVIDED
that the portion of the Principal Amount remaining unpaid on the final Scheduled
Payment Date, together with all interest accrued thereon, shall in any and all
cases be due and payable on the final Scheduled Payment Date), and to pay
interest on the unpaid portion of the Principal Amount at the interest rate set
forth above (subject to the fourteenth paragraph set forth on the reverse of
this Bond, which refers to a Registration Default) from the most recent
Scheduled Payment Date to which interest has been paid or duly provided for or,
if no interest has been paid or duly provided for, from the issue date set forth
above, semiannually on April 15 and October 15 in each year (commencing April
15, 2002), until the Principal Amount is paid in full or payment thereof is duly
provided for. Any installment of principal and, to the extent permitted by
applicable law, any payment of interest not punctually paid or duly provided for
shall continue to bear interest at a rate equal to the interest rate set forth
above. The principal and interest so payable, and punctually paid or duly
provided for, at any Scheduled Payment Date shall, as provided in the Indenture,
be paid to the Person in whose name this Bond (or one or more Predecessor Bonds)
is registered in the Security Register at the close of business on the Regular
Record Date for such payment of principal and interest, which shall be March 31
or September 30, as the case may be (whether or not a Business Day), next
preceding such Scheduled Payment Date. Any such principal and interest that is
payable, but is not so punctually paid or duly provided for at any Scheduled
Payment Date, shall forthwith cease to be payable to the Holder hereof on such
Regular Record Date, and may be paid to the Person in whose name this Bond (or
one or more Predecessor Bonds) is registered at the close of business on a
Special Record Date for the payment of such defaulted principal and interest
(together with any other amounts payable with respect to such principal and
interest), to be fixed by the Trustee, notice of which shall be given to the
Holder hereof not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which this Bond may be listed, and
upon such notice
Northeast Generation Supplemental Indenture
-------------------------------------------
as may be required by such exchange, all as more fully provided in the
Indenture. Payments of principal of and interest on this Bond shall be made (i)
if the Issuer so elects, by check mailed to the Holder at his or her registered
address or (ii) otherwise, at the Place of Payment; PROVIDED, that the final
installment of principal payable with respect to this Bond shall be made as
provided in Section 6.5 of the Original Indenture (in the event this Bond is
redeemed) or shall be made upon presentation and surrender of this Bond at the
Place of Payment. All payments in respect of this Bond 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 debts.
Whenever any amount to be paid hereunder is stated to be due
on a day that is not a Business Day, such amount shall be payable on the next
succeeding Business Day and if such payment is timely made, no interest shall
accrue for the period from and after the day on which such payment was due.
Interest payments for this Bond will be computed and paid on the basis of a
360-day year consisting of twelve 30-day months.
Reference is made to the further provisions of this Bond set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Bond shall not be entitled to
any benefit under the Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be duly executed.
NORTHEAST GENERATION COMPANY
By
--------------------------
Name:
Title:
Northeast Generation Supplemental Indenture
-------------------------------------------
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds referred to in the
within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By:
----------------------------------
Authorized Signatory
Northeast Generation Supplemental Indenture
-------------------------------------------
[Form of reverse of definitive
4.998% Series A Senior Secured Bonds Due 2005]
NORTHEAST GENERATION COMPANY
4.998% SERIES A SENIOR SECURED BOND DUE 2005
This bond is one of an authorized issue of Bonds of the Issuer
known as its 4.998% Series A Senior Secured Bonds Due 2005 (the "BONDS"). The
Bonds are issued under the Indenture dated as of October 18, 2001 (the "ORIGINAL
INDENTURE") among the Issuer and The Bank of New York, a New York banking
corporation, as trustee (in such capacity, together with its successors in such
capacity, the "TRUSTEE"), as supplemented by the First Supplemental Indenture
dated as of October 18, 2001 (the "FIRST SUPPLEMENTAL INDENTURE") among the
Issuer and the Trustee (the Original Indenture, as so supplemented, and as the
same may be amended, modified and further supplemented, the "INDENTURE"). All
capitalized terms used herein, unless otherwise defined herein, shall have the
meanings ascribed to them in the Indenture.
All Bonds of any series issued and Outstanding under the
Indenture rank on a parity with each other Bond of the same series and with all
Bonds of each other series. Reference is hereby made to the Indenture for a
description of the nature and extent of the Bonds and the respective rights,
limitations of rights, duties and immunities thereunder of the Holders and of
the Trustee and the Issuer in respect of the Bonds and the terms upon which the
Bonds are made and are to be authenticated and delivered.
The principal of and interest on this Bond are secured by
assets subject to the Lien of the Collateral Documents, and all payments of
principal and interest shall be made in accordance with the terms of the
Indenture. Each Holder, by acceptance of this Bond, hereby acknowledges and
agrees that (a) subject to the terms of Section 8.2 of the Original Indenture,
it will look solely to the revenues of the Issuer, the Collateral and the income
and proceeds received by the Trustee therefrom to the extent available for
distribution to such Holder as herein provided or provided in the Collateral
Documents, (b) neither the Shareholder, nor any of its past, present or future
officers, partners, directors or shareholders or other Related Persons, nor the
Trustee shall be personally or otherwise liable to any Holder, nor shall the
Shareholder, nor any of its past, present or future officers, partners,
directors or shareholders or other Related Persons, be personally or otherwise
liable to the Trustee for any amounts payable under any Bond or for any
liability under the Indenture or any other Transaction Document, except as
provided in the Original Indenture and (c) recourse for any such amounts payable
shall be otherwise limited in accordance with Section 2.14 and Section 16.1 of
the Original Indenture.
The obligations of the Issuer to pay the principal of and
interest on the Bonds when due as herein prescribed are absolute and
unconditional and no provision of this Bond or the Indenture shall alter or
impair such obligations.
The Bonds are subject to and have the benefits of the
Collateral Documents pursuant to which the rights of the parties in respect of
the Collateral will be exercised by the Trustee in accordance with the
Collateral Documents.
Northeast Generation Supplemental Indenture
-------------------------------------------
The Indenture permits, with certain exceptions, as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holder under the Indenture at
any time by the Issuer with the consent of the Holders of more than 50% in
aggregate principal amount of the Bonds of all series then Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Bonds of all series then
Outstanding, on behalf of the Holders of all the Bonds, to waive compliance by
the Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any Act (as such term is defined in
the Indenture), including, but not limited to, such a consent, waiver or
direction by the Holder of this Bond shall be conclusive and binding upon the
Holder and upon all future Holders of this Bond and the Holder of every Bond
issued upon the transfer hereof or the exchange herefor or in lieu hereof
whether or not notation of such Act is made upon this Bond.
This Bond is one of the series designated on the face hereof,
limited to $120,000,000 in aggregate principal amount as provided in the First
Supplemental Indenture.
This Bond and all Bonds issued or to be issued in a series
created under the First Supplemental Indenture are redeemable in whole or in
part at the option of the Issuer in accordance with Section 6.1 of the Original
Indenture, on not less than 30 nor more than 60 days' notice, at a redemption
price equal to the principal amount thereof plus unpaid and accrued interest
plus the Make-Whole Premium.
The Bonds are, under certain conditions, subject to mandatory
redemption in whole or in part as set forth in Section 6.2 of the Original
Indenture. Notice of any redemption of Bonds will be given at least 30 days but
not more than 60 days before the Redemption Date to each Holder at its address
as it appears in the Security Register.
Bonds (or portions thereof as aforesaid) for the redemption of
which provision is made in accordance with the Indenture shall cease to bear
interest from and after any Redemption Date.
The Indenture contains provisions for, upon compliance by the
Issuer with certain conditions set forth in the Indenture, the defeasance of (a)
the entire indebtedness of this Bond and (b) certain restrictive covenants and
agreements.
The unpaid portion of the Principal Amount, together with any
interest accrued and unpaid thereon and all other amounts due hereunder, if any,
may become due and payable upon the occurrence and continuation of any Event of
Default, but only as provided in the Indenture.
The Issuer has entered into a Registration Rights Agreement
dated October 12, 2001 (the "REGISTRATION RIGHTS AGREEMENT") with the Initial
Purchasers described therein. Pursuant to such Registration Rights Agreement,
the Issuer has agreed to file with the SEC a registration statement under the
Securities Act ("REGISTRATION STATEMENT") for an offer to exchange the Bonds for
a like aggregate principal amount of Bonds issued pursuant to the Indenture that
are in all material respects identical to the Bonds except that such Exchange
Bonds shall be issued pursuant to an effective Registration Statement.
Northeast Generation Supplemental Indenture
-------------------------------------------
From and after the date on which a Registration Default (as
defined in the Registration Rights Agreement) occurs, the interest rate payable
on this Bond shall increase (in addition to the interest rate set forth above)
and additional interest reflecting such increase shall accrue with respect to
this Bond, until but not including the date on which such Registration Default
shall cease to exist (and provided no other Registration Default with respect to
this Bond shall then be continuing), at the rate of one half of one percent
(0.50%) per annum, which additional interest shall be payable hereon at the
times, in the manner and subject to the same terms and conditions set forth
herein and in the Indenture, as though the interest rate set forth above had
been increased by one half of one percent (0.50%) per annum.
The Bonds are issuable only as registered Bonds without
coupons in minimum denominations of $100,000 and any integral multiple of $1,000
in excess thereof. As provided in, and subject to the provisions of, the
Indenture, Bonds are exchangeable at the option of the Holder thereof for other
Bonds of the same series, of authorized denomination and of like tenor,
maturity, interest rate and aggregate principal amount, to be registered in the
name of such Holder, upon surrender thereof by such Holder at any office or
agency maintained for such purpose pursuant to the Indenture.
No service charge will be required of any Holder participating
in any such transfer or exchange of Bonds in respect of such transfer or
exchange, but the Security Registrar may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The person in whose name this Bond is registered shall be
deemed to be the owner and holder hereof for the purpose of receiving payment as
herein provided and for all other purposes whether or not this Bond be overdue
regardless of any notice to anyone to the contrary.
THIS BOND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW THEREOF TO THE EXTENT THE APPLICATION OF SUCH PRINCIPLES WOULD
CAUSE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
Northeast Generation Supplemental Indenture
-------------------------------------------
ANNEX A TO
4.998% SERIES A SENIOR SECURED BOND DUE 2005
The following table sets forth the date of each semiannual
installment of the aggregate principal to be paid on all Bonds of this series on
each such date:
PRINCIPAL PRINCIPAL
PAYMENT AMOUNT
DATES PAYABLE
----- ON SERIES
A BONDS
-------
April 15, 2002 $ 12,000,000
October 15, 2002 12,000,000
April 15, 2003 13,500,000
October 15, 2003 13,500,000
April 15, 2004 15,750,000
October 15, 2004 15,750,000
April 15, 2005 18,750,000
October 15, 2005 18,750,000
TOTAL $120,000,000
Northeast Generation Supplemental Indenture
-------------------------------------------
ABBREVIATIONS
The following abbreviations when used in the inscription on
the face of this instrument shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of
survivorship and not as tenants in
common
UNIF GIFT MIN ACT
--------------------------------------
(Cust) (Minor)
under Uniform Gift to Minors Act
--------------------------------------
(State)
Additional abbreviations may also be used though
not in the above list
-------------------
Northeast Generation Supplemental Indenture
-------------------------------------------
FOR VALUE-RECEIVED the undersigned hereby sell(s), assign(s)
and transfer(s) unto
Identifying Number of Assignee
--------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address,
including zip code of Assignee)
the within Bond and all rights thereunder, hereby irrevocably constituting and
appointing _____________ attorney to transfer said Bond on the books of the
Company, with full power of substitution in the premises.
Dated:
-------------------
------------------------------
NAME:
NOTICE: The signature to this assignment must correspond with the name as
written upon the first page of the within instrument in every
particular, without alteration or enlargement or any change whatsoever.
Northeast Generation Supplemental Indenture
-------------------------------------------
Schedule 1-B to First
Supplemental Indenture
[Form of face of Global Bond
for 4.998% Series A Senior Secured Bonds Due 2005]
NORTHEAST GENERATION COMPANY
4.998% SERIES A SENIOR SECURED BOND DUE 2005
[Insert in Rule 144A Global Bonds -- THIS SECURITY HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM
PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
ISSUER'S AND THE TRUSTEE'S RIGHTS PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF
Northeast Generation Supplemental Indenture
-------------------------------------------
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER
THE RESALE RESTRICTION TERMINATION DATE.]
[Insert in Regulation S Global Bonds -- THIS SECURITY HAS NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION, (2) BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION
DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND
THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER
OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER,
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL INVESTOR
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF
THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR
FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE
TRUSTEE'S RIGHTS PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES
(D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND IN THE CASE OF THE
FOREGOING CLAUSE (E), A CERTIFICATE OF TRANSFER (A FORM OF WHICH MAY BE OBTAINED
FROM THE ISSUER OR THE TRUSTEE) COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
ISSUER AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED AFTER 40 CONSECUTIVE DAYS
BEGINNING ON AND INCLUDING THE LATER OF (A) THE DAY ON WHICH THE SECURITIES ARE
OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN REGULATION S) AND (B)
THE DATE OF THE CLOSING OF THE ORIGINAL OFFERING. AS USED HEREIN, THE TERMS
Northeast Generation Supplemental Indenture
-------------------------------------------
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.]
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC") TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER REPRESENTATIVE OF DTC AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL BOND SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL BOND SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE.
Northeast Generation Supplemental Indenture
-------------------------------------------
No. [CUSIP] [CINS] [ISIN] NUMBER
[ ]
PRINCIPAL AMOUNT FINAL SCHEDULED PAYMENT DATE ISSUE DATE
---------------- ---------------------------- ----------
$120,000,000 October 15, 2005 October 18, 2001
REGISTERED HOLDER: CEDE & CO.
PRINCIPAL AMOUNT: 120,000,000 Dollars
INTEREST RATE: 4.998%
NORTHEAST GENERATION COMPANY, a Connecticut corporation
(hereinafter called the "ISSUER", which term includes any successor or assign
under the Indenture referred to below), for value received hereby promises to
pay to Cede & Co., or its registered assigns, the outstanding Principal Amount
hereof after subtracting the aggregate principal amount of any definitive Bonds
issued in exchange for a portion or portions hereof, such payment to be made in
semiannual installments on April 15 and October 15 of each year (commencing
April 15, 2002) and ending on the final Scheduled Payment Date set forth above,
each such installment to be in the amount and payable on the date set forth on
Annex A attached hereto (PROVIDED that the portion of the Principal Amount
remaining unpaid on the final Scheduled Payment Date, together with all interest
accrued thereon, shall in any and all cases be due and payable on the final
Scheduled Payment Date), and to pay interest on the unpaid portion of the
Principal Amount at the interest rate set forth above (subject to the fourteenth
paragraph set forth on the reverse of this Bond, which refers to a Registration
Default) from the most recent Scheduled Payment Date to which interest has been
paid or duly provided for or, if no interest has been paid or duly provided for,
from the issue date set forth above, semiannually on April 15 and October 15 in
each year (commencing April 15, 2002), until the Principal Amount is paid in
full or payment thereof is duly provided for. Any installment of principal and,
to the extent permitted by applicable law, any payment of interest not
punctually paid or duly provided for shall continue to bear interest at a rate
equal to the interest rate set forth above. The principal and interest so
payable, and punctually paid or duly provided for, at any Scheduled Payment Date
shall, as provided in the Indenture, be paid to the Person in whose name this
Bond (or one or more Predecessor Bonds) is registered in the Security Register
at the close of business on the Regular Record Date for such payment of
principal and interest, which shall be March 31 or September 30, as the case may
be (whether or not a Business Day), next preceding such Scheduled Payment Date.
Any such principal and interest that is payable, but is not so punctually paid
or duly provided for at any Scheduled Payment Date, shall forthwith cease to be
payable to the Holder hereof on such Regular Record Date, and may be paid to the
Person in whose name this Bond (or one or more Predecessor Bonds) is registered
at the close of business on a Special Record Date for the payment of such
defaulted principal and interest (together with any other amounts payable with
respect to such principal and interest), to be fixed by the Trustee, notice of
which shall be given to the Holder hereof not less than 10 days prior to such
Special
Northeast Generation Supplemental Indenture
-------------------------------------------
Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which this Bond
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in the Indenture. This being a Global Bond (as that term is
defined in the Indenture) deposited with DTC acting as depository, and
registered in the name of Cede & Co. a nominee of DTC, Cede & Co., as holder of
record of this Bond shall be entitled to receive payment of principal and
interest, other than principal and interest due at the final Scheduled Payment
Date, by wire transfer of immediately available funds. Payment of the final
installment of principal payable with respect to this Bond shall be made as
provided in Section 6.5 of the Original Indenture (in the event this Bond is
redeemed) or shall be made upon presentation and surrender of this Bond at the
Place of Payment. All payments in respect of this Bond 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 debts.
Whenever any amount to be paid hereunder is stated to be due
on a day that is not a Business Day, such amount shall be payable on the next
succeeding Business Day and if such payment is timely made, no interest shall
accrue for the period from and after the day on which such payment was due.
Interest payments for this Bond will be computed and paid on the basis of a
360-day year consisting of twelve 30-day months.
Reference is made to the further provisions of this Bond set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Bond shall not be entitled to
any benefit under the Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be duly executed.
NORTHEAST GENERATION COMPANY
By
------------------------------
Name:
Title:
Northeast Generation Supplemental Indenture
-------------------------------------------
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds referred to in the
within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By:
----------------------------------
Authorized Signatory
Northeast Generation Supplemental Indenture
-------------------------------------------
[Form of reverse of Global Bond for
4.998% Series A Senior Secured Bonds Due 2005]
NORTHEAST GENERATION COMPANY
4.998% SERIES A SENIOR SECURED BOND DUE 2005
This bond is one of an authorized issue of Bonds of the Issuer
known as its 4.998% Series A Senior Secured Bonds Due 2005 (the "BONDS"). The
Bonds are issued under the Indenture dated as of October 18, 2001 (the "ORIGINAL
INDENTURE") among the Issuer and The Bank of New York, a New York banking
corporation, as trustee (in such capacity, together with its successors in such
capacity, the "TRUSTEE"), as supplemented by the First Supplemental Indenture
dated as of October 18, 2001 (the "FIRST SUPPLEMENTAL INDENTURE") among the
Issuer and the Trustee (the Original Indenture, as so supplemented, and as the
same may be amended, modified and further supplemented, the "INDENTURE"). All
capitalized terms used herein, unless otherwise defined herein, shall have the
meanings ascribed to them in the Indenture.
All Bonds of any series issued and Outstanding under the
Indenture rank on a parity with each other Bond of the same series and with all
Bonds of each other series. Reference is hereby made to the Indenture for a
description of the nature and extent of the Bonds and the respective rights,
limitations of rights, duties and immunities thereunder of the Holders and of
the Trustee and the Issuer in respect of the Bonds and the terms upon which the
Bonds are made and are to be authenticated and delivered.
The principal of and interest on this Bond are secured by
assets subject to the Lien of the Collateral Documents, and all payments of
principal and interest shall be made in accordance with the terms of the
Indenture. Each Holder, by acceptance of this Bond, hereby acknowledges and
agrees that (a) subject to the terms of Section 8.2 of the Original Indenture,
it will look solely to the revenues of the Issuer, the Collateral and the income
and proceeds received by the Trustee therefrom to the extent available for
distribution to such Holder as herein provided or provided in the Collateral
Documents, (b) neither the Shareholder, nor any of its past, present or future
officers, partners, directors or shareholders or other Related Persons, nor the
Trustee shall be personally or otherwise liable to any Holder, nor shall the
Shareholder, nor any of its past, present or future officers, partners,
directors or shareholders or other Related Persons, be personally or otherwise
liable to the Trustee for any amounts payable under any Bond or for any
liability under the Indenture or any other Transaction Document, except as
provided in the Original Indenture and (c) recourse for any such amounts payable
shall be otherwise limited in accordance with Section 2.14 and Section 16.1 of
the Original Indenture.
The obligations of the Issuer to pay the principal of and
interest on the Bonds when due as herein prescribed are absolute and
unconditional and no provision of this Bond or the Indenture shall alter or
impair such obligations.
The Bonds are subject to and have the benefits of the
Collateral Documents pursuant to which the rights of the parties in respect of
the Collateral will be exercised by the Trustee in accordance with the
Collateral Documents.
Northeast Generation Supplemental Indenture
-------------------------------------------
The Indenture permits, with certain exceptions, as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holder under the Indenture at
any time by the Issuer with the consent of the Holders of more than 50% in
aggregate principal amount of the Bonds of all series then Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Bonds of all series then
Outstanding, on behalf of the Holders of all the Bonds, to waive compliance by
the Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any Act (as such term is defined in
the Indenture), including, but not limited to, such a consent, waiver or
direction by the Holder of this Bond shall be conclusive and binding upon the
Holder and upon all future Holders of this Bond and the Holder of every Bond
issued upon the transfer hereof or the exchange herefor or in lieu hereof
whether or not notation of such Act is made upon this Bond.
This Bond is one of the series designated on the face hereof,
limited to $120,000,000 in aggregate principal amount as provided in the First
Supplemental Indenture.
This Bond and all Bonds issued or to be issued in a series
created under the First Supplemental Indenture are redeemable in whole or in
part at the option of the Issuer in accordance with Section 6.1 of the Original
Indenture, on not less than 30 nor more than 60 days' notice, at a redemption
price equal to the principal amount thereof plus unpaid and accrued interest
plus the Make-Whole Premium.
The Bonds are, under certain conditions, subject to mandatory
redemption in whole or in part as set forth in Section 6.2 of the Original
Indenture. Notice of any redemption of Bonds will be given at least 30 days but
not more than 60 days before the Redemption Date to each Holder at its address
as it appears in the Security Register.
Bonds (or portions thereof as aforesaid) for the redemption of
which provision is made in accordance with the Indenture shall cease to bear
interest from and after any Redemption Date.
The Indenture contains provisions for, upon compliance by the
Issuer with certain conditions set forth in the Indenture, the defeasance of (a)
the entire indebtedness of this Bond and (b) certain restrictive covenants and
agreements.
The unpaid portion of the Principal Amount, together with any
interest accrued and unpaid thereon and all other amounts due hereunder, if any,
may become due and payable upon the occurrence and continuation of any Event of
Default, but only as provided in the Indenture.
The Issuer has entered into a Registration Rights Agreement
dated October 12, 2001 (the "REGISTRATION RIGHTS AGREEMENT") with the Initial
Purchasers described therein. Pursuant to such Registration Rights Agreement,
the Issuer has agreed to file with the SEC a registration statement under the
Securities Act ("REGISTRATION STATEMENT") for an offer to exchange the Bonds for
a like aggregate principal amount of Bonds issued pursuant to the Indenture that
are in all material respects identical to the Bonds except that such Exchange
Bonds shall be issued pursuant to an effective Registration Statement.
Northeast Generation Supplemental Indenture
-------------------------------------------
From and after the date on which a Registration Default (as
defined in the Registration Rights Agreement) occurs, the interest rate payable
on this Bond shall increase (in addition to the interest rate set forth above)
and additional interest reflecting such increase shall accrue with respect to
this Bond, until but not including the date on which such Registration Default
shall cease to exist (and provided no other Registration Default with respect to
this Bond shall then be continuing), at the rate of one half of one percent
(0.50%) per annum, which additional interest shall be payable hereon at the
times, in the manner and subject to the same terms and conditions set forth
herein and in the Indenture, as though the interest rate set forth above had
been increased by one half of one percent (0.50%) per annum.
The Bonds are issuable only as registered Bonds without
coupons in minimum denominations of $100,000 and any integral multiple of $1,000
in excess thereof. As provided in, and subject to the provisions of, the
Indenture, Bonds are exchangeable at the option of the Holder thereof for other
Bonds of the same series, of authorized denomination and of like tenor,
maturity, interest rate and aggregate principal amount, to be registered in the
name of such Holder, upon surrender thereof by such Holder at any office or
agency maintained for such purpose pursuant to the Indenture.
No service charge will be required of any Holder participating
in any such transfer or exchange of Bonds in respect of such transfer or
exchange, but the Security Registrar may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The person in whose name this Bond is registered shall be
deemed to be the owner and holder hereof for the purpose of receiving payment as
herein provided and for all other purposes whether or not this Bond be overdue
regardless of any notice to anyone to the contrary.
THIS BOND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW THEREOF TO THE EXTENT THE APPLICATION OF SUCH PRINCIPLES WOULD
CAUSE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
Northeast Generation Supplemental Indenture
-------------------------------------------
ABBREVIATIONS
The following abbreviations when used in the inscription on
the face of this instrument shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of
survivorship and not as tenants in
common
UNIF GIFT MIN ACT
-----------------------------------------------
(Cust) (Minor)
under Uniform Gift to Minors Act
-----------------------------------------------
(State)
Additional abbreviations may also be used though
not in the above list
-------------------
Northeast Generation Supplemental Indenture
-------------------------------------------
FOR VALUE-RECEIVED the undersigned hereby sell(s),
assign(s) and transfer(s) unto
Social Security Number or Other
Identifying Number of Assignee
--------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address,
including zip code of Assignee)
the within Security and all rights thereunder, hereby irrevocably
constituting and appointing ________ attorney to transfer said Security on
the books of the Company, with full power of substitution in the premises.
Dated:
----------------------
------------------------------
NAME:
NOTICE: The signature to this assignment must correspond with the name as
written upon the first page of the within instrument in every
particular, without alteration or enlargement or any change whatsoever.
Northeast Generation Supplemental Indenture
-------------------------------------------
ANNEX A TO
4.998% SERIES A SENIOR SECURED BOND DUE 2005
The following table sets forth the date of each semiannual
installment of the aggregate principal to be paid on all Bonds of this series on
each such date:
PRINCIPAL PRINCIPAL
PAYMENT AMOUNT
DATES PAYABLE
----- ON SERIES
A BONDS
-------
April 15, 2002 $ 12,000,000
October 15, 2002 12,000,000
April 15, 2003 13,500,000
October 15, 2003 13,500,000
April 15, 2004 15,750,000
October 15, 2004 15,750,000
April 15, 2005 18,750,000
October 15, 2005 18,750,000
TOTAL $120,000,000
Northeast Generation Supplemental Indenture
-------------------------------------------
ANNEX B TO
4.998% SERIES A SENIOR SECURED BOND DUE 2005
Exchanges of portions of this Global Bond for definitive Bonds:
=============================================================================================================
PRINCIPAL AMOUNT OF DEFINITIVE
SECURITIES ISSUED IN EXCHANGE FOR A REMAINING PRINCIPAL AMOUNT NOTATION MADE BY
DATE PORTION OF THIS GLOBAL SECURITY OF THIS GLOBAL SECURITY
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
=============================================================================================================
Northeast Generation Supplemental Indenture
-------------------------------------------
Schedule 2-A to First
Supplemental Indenture to
Northeast Generation Company Indenture
[Form of face of definitive
8.812% Series B Senior Secured Bonds Due 2026]
NORTHEAST GENERATION COMPANY
8.812% SERIES B SENIOR SECURED BOND DUE 2026
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM
PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
ISSUER'S AND THE TRUSTEE'S RIGHTS PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.
THIS LEGEND WILL BE REMOVED UPON THE
Northeast Generation Supplemental Indenture
-------------------------------------------
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
Northeast Generation Supplemental Indenture
-------------------------------------------
No. CUSIP NUMBER
[ ]
PRINCIPAL AMOUNT FINAL SCHEDULED PAYMENT DATE ISSUE DATE
---------------- ---------------------------- ----------
$[___________] October 15, 2026 October 18, 2001
REGISTERED HOLDER: [_______________]
PRINCIPAL AMOUNT: [_______________] Dollars
INTEREST RATE: 8.812%
NORTHEAST GENERATION COMPANY, a Connecticut corporation
(hereinafter called the "ISSUER", which term includes any successor or assign
under the Indenture referred to below), for value received hereby promises to
pay to [____________], or its registered assigns, the outstanding Principal
Amount hereof, such payment to be made in semiannual installments on April 15
and October 15 of each year (commencing April 15, 2007) and ending on the final
Scheduled Payment Date set forth above, each such installment to be in the
amount and payable on the date set forth on Annex A attached hereto (PROVIDED
that the portion of the Principal Amount remaining unpaid on the final Scheduled
Payment Date, together with all interest accrued thereon, shall in any and all
cases be due and payable on the final Scheduled Payment Date), and to pay
interest on the unpaid portion of the Principal Amount at the interest rate set
forth above (subject to the fourteenth paragraph set forth on the reverse of
this Bond, which refers to a Registration Default) from the most recent
Scheduled Payment Date to which interest has been paid or duly provided for or,
if no interest has been paid or duly provided for, from the issue date set forth
above, semiannually on April 15 and October 15 in each year (commencing April
15, 2007), until the Principal Amount is paid in full or payment thereof is duly
provided for. Any installment of principal and, to the extent permitted by
applicable law, any payment of interest not punctually paid or duly provided for
shall continue to bear interest at a rate equal to the interest rate set forth
above. The principal and interest so payable, and punctually paid or duly
provided for, at any Scheduled Payment Date shall, as provided in the Indenture,
be paid to the Person in whose name this Bond (or one or more Predecessor Bonds)
is registered in the Security Register at the close of business on the Regular
Record Date for such payment of principal and interest, which shall be March 31
or September 30, as the case may be (whether or not a Business Day), next
preceding such Scheduled Payment Date. Any such principal and interest that is
payable, but is not so punctually paid or duly provided for at any Scheduled
Payment Date, shall forthwith cease to be payable to the Holder hereof on such
Regular Record Date, and may be paid to the Person in whose name this Bond (or
one or more Predecessor Bonds) is registered at the close of business on a
Special Record Date for the payment of such defaulted principal and interest
(together with any other amounts payable with respect to such principal and
interest), to be fixed by the Trustee, notice of which shall be given to the
Holder hereof not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which this Bond may be listed, and
upon such notice as may be required
by such exchange, all as more fully provided in the Indenture. Payments of
principal of and interest on this Bond shall be made (i) if the Issuer so
elects, by check mailed to the Holder at his or her registered address or (ii)
otherwise, at the Place of Payment; PROVIDED, that the final installment of
principal payable with respect to this Bond shall be made as provided in Section
6.5 of the Original Indenture (in the event this Bond is redeemed) or shall be
made upon presentation and surrender of this Bond at the Place of Payment. All
payments in respect of this Bond 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 debts.
Whenever any amount to be paid hereunder is stated to be due
on a day that is not a Business Day, such amount shall be payable on the next
succeeding Business Day and if such payment is timely made, no interest shall
accrue for the period from and after the day on which such payment was due.
Interest payments for this Bond will be computed and paid on the basis of a
360-day year consisting of twelve 30-day months.
Reference is made to the further provisions of this Bond set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Bond shall not be entitled to
any benefit under the Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be duly executed.
NORTHEAST GENERATION COMPANY
By
----------------------------
Name:
Title:
Northeast Generation Supplemental Indenture
-------------------------------------------
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds referred to in the
within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By:
-------------------------------
Authorized Signatory
Northeast Generation Supplemental Indenture
-------------------------------------------
[Form of reverse of definitive
8.812% Series B Senior Secured Bonds Due 2026]
NORTHEAST GENERATION COMPANY
8.812% SERIES B SENIOR SECURED BOND DUE 2026
This bond is one of an authorized issue of Bonds of the Issuer
known as its 8.812% Series B Senior Secured Bonds Due 2026 (the "BONDS"). The
Bonds are issued under the Indenture dated as of October 18, 2001 (the "ORIGINAL
INDENTURE") among the Issuer and The Bank of New York, a New York banking
corporation, as trustee (in such capacity, together with its successors in such
capacity, the "TRUSTEE"), as supplemented by the First Supplemental Indenture
dated as of October 18, 2001 (the "FIRST SUPPLEMENTAL INDENTURE") among the
Issuer and the Trustee (the Original Indenture, as so supplemented, and as the
same may be amended, modified and further supplemented, the "INDENTURE"). All
capitalized terms used herein, unless otherwise defined herein, shall have the
meanings ascribed to them in the Indenture.
All Bonds of any series issued and Outstanding under the
Indenture rank on a parity with each other Bond of the same series and with all
Bonds of each other series. Reference is hereby made to the Indenture for a
description of the nature and extent of the Bonds and the respective rights,
limitations of rights, duties and immunities thereunder of the Holders and of
the Trustee and the Issuer in respect of the Bonds and the terms upon which the
Bonds are made and are to be authenticated and delivered.
The principal of and interest on this Bond are secured by
assets subject to the Lien of the Collateral Documents, and all payments of
principal and interest shall be made in accordance with the terms of the
Indenture. Each Holder, by acceptance of this Bond, hereby acknowledges and
agrees that (a) subject to the terms of Section 8.2 of the Original Indenture,
it will look solely to the revenues of the Issuer, the Collateral and the income
and proceeds received by the Trustee therefrom to the extent available for
distribution to such Holder as herein provided or provided in the Collateral
Documents, (b) neither the Shareholder, nor any of its past, present or future
officers, partners, directors or shareholders or other Related Persons, nor the
Trustee shall be personally or otherwise liable to any Holder, nor shall the
Shareholder, nor any of its past, present or future officers, partners,
directors or shareholders or other Related Persons, be personally or otherwise
liable to the Trustee for any amounts payable under any Bond or for any
liability under the Indenture or any other Transaction Document, except as
provided in the Original Indenture and (c) recourse for any such amounts payable
shall be otherwise limited in accordance with Section 2.14 and Section 16.1 of
the Original Indenture.
The obligations of the Issuer to pay the principal of and
interest on the Bonds when due as herein prescribed are absolute and
unconditional and no provision of this Bond or the Indenture shall alter or
impair such obligations.
The Bonds are subject to and have the benefits of the
Collateral Documents pursuant to which the rights of the parties in respect of
the Collateral will be exercised by the Trustee in accordance with the
Collateral Documents.
Northeast Generation Supplemental Indenture
-------------------------------------------
The Indenture permits, with certain exceptions, as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holder under the Indenture at
any time by the Issuer with the consent of the Holders of more than 50% in
aggregate principal amount of the Bonds of all series then Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Bonds of all series then
Outstanding, on behalf of the Holders of all the Bonds, to waive compliance by
the Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any Act (as such term is defined in
the Indenture), including, but not limited to, such a consent, waiver or
direction by the Holder of this Bond shall be conclusive and binding upon the
Holder and upon all future Holders of this Bond and the Holder of every Bond
issued upon the transfer hereof or the exchange herefor or in lieu hereof
whether or not notation of such Act is made upon this Bond.
This Bond is one of the series designated on the face hereof,
limited to $320,000,000 in aggregate principal amount as provided in the First
Supplemental Indenture.
This Bond and all Bonds issued or to be issued in a series
created under the First Supplemental Indenture are redeemable in whole or in
part at the option of the Issuer in accordance with Section 6.1 of the Original
Indenture, on not less than 30 nor more than 60 days' notice, at a redemption
price equal to the principal amount thereof plus unpaid and accrued interest
plus the Make-Whole Premium.
The Bonds are, under certain conditions, subject to mandatory
redemption in whole or in part as set forth in Section 6.2 of the Original
Indenture. Notice of any redemption of Bonds will be given at least 30 days but
not more than 60 days before the Redemption Date to each Holder at its address
as it appears in the Security Register.
Bonds (or portions thereof as aforesaid) for the redemption of
which provision is made in accordance with the Indenture shall cease to bear
interest from and after any Redemption Date.
The Indenture contains provisions for, upon compliance by the
Issuer with certain conditions set forth in the Indenture, the defeasance of (a)
the entire indebtedness of this Bond and (b) certain restrictive covenants and
agreements.
The unpaid portion of the Principal Amount, together with any
interest accrued and unpaid thereon and all other amounts due hereunder, if any,
may become due and payable upon the occurrence and continuation of any Event of
Default, but only as provided in the Indenture.
The Issuer has entered into an Registration Rights Agreement
dated October 12, 2001 (the "REGISTRATION RIGHTS AGREEMENT") with the Initial
Purchasers described therein. Pursuant to such Registration Rights Agreement,
the Issuer has agreed to file with the SEC a registration statement under the
Securities Act ("REGISTRATION STATEMENT") for an offer to exchange the Bonds for
a like aggregate principal amount of Bonds issued pursuant to the Indenture that
are in all material respects identical to the Bonds except that such Exchange
Bonds shall be issued pursuant to an effective Registration Statement.
Northeast Generation Supplemental Indenture
-------------------------------------------
From and after the date on which a Registration Default (as
defined in the Registration Rights Agreement) occurs, the interest rate payable
on this Bond shall increase (in addition to the interest rate set forth above)
and additional interest reflecting such increase shall accrue with respect to
this Bond, until but not including the date on which such Registration Default
shall cease to exist (and provided no other Registration Default with respect to
this Bond shall then be continuing), at the rate of one half of one percent
(0.50%) per annum, which additional interest shall be payable hereon at the
times, in the manner and subject to the same terms and conditions set forth
herein and in the Indenture, as though the interest rate set forth above had
been increased by one half of one percent (0.50%) per annum.
The Bonds are issuable only as registered Bonds without
coupons in minimum denominations of $100,000 and any integral multiple of $1,000
in excess thereof. As provided in, and subject to the provisions of, the
Indenture, Bonds are exchangeable at the option of the Holder thereof for other
Bonds of the same series, of authorized denomination and of like tenor,
maturity, interest rate and aggregate principal amount, to be registered in the
name of such Holder, upon surrender thereof by such Holder at any office or
agency maintained for such purpose pursuant to the Indenture.
No service charge will be required of any Holder participating
in any such transfer or exchange of Bonds in respect of such transfer or
exchange, but the Security Registrar may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The person in whose name this Bond is registered shall be
deemed to be the owner and holder hereof for the purpose of receiving payment as
herein provided and for all other purposes whether or not this Bond be overdue
regardless of any notice to anyone to the contrary.
THIS BOND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW THEREOF TO THE EXTENT THE APPLICATION OF SUCH PRINCIPLES WOULD
CAUSE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
Northeast Generation Supplemental Indenture
-------------------------------------------
ANNEX A TO
8.812% SERIES B SENIOR SECURED BOND DUE 2026
The following table sets forth the date of each semiannual
installment of the aggregate principal to be paid on all Bonds of this series on
each such date:
PRINCIPAL PRINCIPAL
PAYMENT AMOUNT
DATES PAYABLE
----- ON SERIES
B BONDS
-------
April 15, 2007 $ 1,750,000
October 15, 2007 1,750,000
April 15, 2008 2,625,000
October 15, 2008 2,625,000
April 15, 2009 3,250,000
October 15, 2009 3,250,000
April 15, 2010 4,000,000
October 15, 2010 4,000,000
April 15, 2011 4,875,000
October 15, 2011 4,875,000
April 15, 2012 5,375,000
October 15, 2012 5,375,000
April 15, 2013 2,500,000
October 15, 2013 2,500,000
April 15, 2014 3,125,000
October 15, 2014 3,125,000
April 15, 2015 2,250,000
October 15, 2015 2,250,000
Northeast Generation Supplemental Indenture
-------------------------------------------
April 15, 2016 3,000,000
October 15, 2016 3,000,000
April 15, 2017 7,500,000
October 15, 2017 7,500,000
April 15, 2018 8,000,000
October 15, 2018 8,000,000
April 15, 2019 9,500,000
October 15, 2019 9,500,000
April 15, 2020 10,500,000
October 15, 2020 10,500,000
April 15, 2021 12,000,000
October 15, 2021 12,000,000
April 15, 2022 13,000,000
October 15, 2022 13,000,000
April 15, 2023 14,250,000
October 15, 2023 14,250,000
April 15, 2024 16,000,000
October 15, 2024 16,000,000
April 15, 2025 17,500,000
October 15, 2025 17,500,000
April 15, 2026 19,000,000
October 15, 2026 19,000,000
TOTAL $320,000,000
Northeast Generation Supplemental Indenture
-------------------------------------------
ABBREVIATIONS
The following abbreviations when used in the inscription on
the face of this instrument shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of
survivorship and not as tenants in
common
UNIF GIFT MIN ACT
-----------------------------------------------
(Cust) (Minor)
under Uniform Gift to Minors Act
-----------------------------------------------
(State)
Additional abbreviations may also be used though
not in the above list
-------------------
Northeast Generation Supplemental Indenture
-------------------------------------------
FOR VALUE-RECEIVED the undersigned hereby sell(s), assign(s)
and transfer(s) unto
Identifying Number of Assignee
--------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address,
including zip code of Assignee)
the within Bond and all rights thereunder, hereby irrevocably constituting and
appointing _________ attorney to transfer said Bond on the books of the Company,
with full power of substitution in the premises.
Dated:
-----------------
------------------------------
NAME:
NOTICE: The signature to this assignment must correspond with the name as
written upon the first page of the within instrument in every
particular, without alteration or enlargement or any change whatsoever.
Northeast Generation Supplemental Indenture
-------------------------------------------
Schedule 2-B to First
Supplemental Indenture
[Form of face of Global Bond
for 8.812% Series B Senior Secured Bonds Due 2026]
NORTHEAST GENERATION COMPANY
8.812% SERIES B SENIOR SECURED BOND DUE 2026
[Insert in Rule 144A Global Bonds -- THIS SECURITY HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM
PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
ISSUER'S AND THE TRUSTEE'S RIGHTS PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF
Northeast Generation Supplemental Indenture
-------------------------------------------
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER
THE RESALE RESTRICTION TERMINATION DATE.]
[Insert in Regulation S Global Bonds -- THIS SECURITY HAS NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION, (2) BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION
DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND
THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER
OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER,
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL INVESTOR
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF
THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR
FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE
TRUSTEE'S RIGHTS PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES
(D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND IN THE CASE OF THE
FOREGOING CLAUSE (E), A CERTIFICATE OF TRANSFER (A FORM OF WHICH MAY BE OBTAINED
FROM THE ISSUER OR THE TRUSTEE) COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
ISSUER AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED AFTER 40 CONSECUTIVE DAYS
BEGINNING ON AND INCLUDING THE LATER OF (A) THE DAY ON WHICH THE SECURITIES ARE
OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN REGULATION S) AND (B)
THE DATE OF THE CLOSING OF THE ORIGINAL OFFERING. AS USED HEREIN, THE TERMS
Northeast Generation Supplemental Indenture
-------------------------------------------
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.]
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC") TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER REPRESENTATIVE OF DTC AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL BOND SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL BOND SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE.
Northeast Generation Supplemental Indenture
-------------------------------------------
No. [CUSIP] [CINS] [ISIN] NUMBER
[ ]
PRINCIPAL AMOUNT FINAL SCHEDULED PAYMENT DATE ISSUE DATE
---------------- ---------------------------- ----------
$320,000,000 October 15, 2026 October 18, 2001
REGISTERED HOLDER: CEDE & CO.
PRINCIPAL AMOUNT: 320,000,000 Dollars
INTEREST RATE: 8.812%
NORTHEAST GENERATION COMPANY, a Connecticut corporation
(hereinafter called the "ISSUER", which term includes any successor or assign
under the Indenture referred to below), for value received hereby promises to
pay to Cede & Co., or its registered assigns, the outstanding Principal Amount
hereof after subtracting the aggregate principal amount of any definitive Bonds
issued in exchange for a portion or portions hereof, such payment to be made in
semiannual installments on April 15 and October 15 of each year (commencing
April 15, 2007) and ending on the final Scheduled Payment Date set forth above,
each such installment to be in the amount and payable on the date set forth on
Annex A attached hereto (PROVIDED that the portion of the Principal Amount
remaining unpaid on the final Scheduled Payment Date, together with all interest
accrued thereon, shall in any and all cases be due and payable on the final
Scheduled Payment Date), and to pay interest on the unpaid portion of the
Principal Amount at the interest rate set forth above (subject to the fourteenth
paragraph set forth on the reverse of this Bond, which refers to a Registration
Default) from the most recent Scheduled Payment Date to which interest has been
paid or duly provided for or, if no interest has been paid or duly provided for,
from the issue date set forth above, semiannually on April 15 and October 15 in
each year (commencing April 15, 2007), until the Principal Amount is paid in
full or payment thereof is duly provided for. Any installment of principal and,
to the extent permitted by applicable law, any payment of interest not
punctually paid or duly provided for shall continue to bear interest at a rate
equal to the interest rate set forth above. The principal and interest so
payable, and punctually paid or duly provided for, at any Scheduled Payment Date
shall, as provided in the Indenture, be paid to the Person in whose name this
Bond (or one or more Predecessor Bonds) is registered in the Security Register
at the close of business on the Regular Record Date for such payment of
principal and interest, which shall be March 31 or September 30, as the case may
be (whether or not a Business Day), next preceding such Scheduled Payment Date.
Any such principal and interest that is payable, but is not so punctually paid
or duly provided for at any Scheduled Payment Date, shall forthwith cease to be
payable to the Holder hereof on such Regular Record Date, and may be paid to the
Person in whose name this Bond (or one or more Predecessor Bonds) is registered
at the close of business on a Special Record Date for the payment of such
defaulted principal and interest (together with any other amounts payable with
respect to such principal and interest), to be fixed by the Trustee, notice of
which shall be given to the Holder hereof not less than 10 days prior to such
Special
Northeast Generation Supplemental Indenture
-------------------------------------------
Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which this Bond
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in the Indenture. This being a Global Bond (as that term is
defined in the Indenture) deposited with DTC acting as depository, and
registered in the name of Cede & Co. a nominee of DTC, Cede & Co., as holder of
record of this Bond shall be entitled to receive payment of principal and
interest, other than principal and interest due at the final Scheduled Payment
Date, by wire transfer of immediately available funds. Payment of the final
installment of principal payable with respect to this Bond shall be made as
provided in Section 6.5 of the Original Indenture (in the event this Bond is
redeemed) or shall be made upon presentation and surrender of this Bond at the
Place of Payment. All payments in respect of this Bond 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 debts.
Whenever any amount to be paid hereunder is stated to be due
on a day that is not a Business Day, such amount shall be payable on the next
succeeding Business Day and if such payment is timely made, no interest shall
accrue for the period from and after the day on which such payment was due.
Interest payments for this Bond will be computed and paid on the basis of a
360-day year consisting of twelve 30-day months.
Reference is made to the further provisions of this Bond set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Bond shall not be entitled to
any benefit under the Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be duly executed.
NORTHEAST GENERATION COMPANY
By
---------------------------------
Name:
Title:
Northeast Generation Supplemental Indenture
-------------------------------------------
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds referred to in the
within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By:
------------------------------
Authorized Signatory
Northeast Generation Supplemental Indenture
-------------------------------------------
[Form of reverse of Global Bond for
8.812% Series B Senior Secured Bonds Due 2026]
NORTHEAST GENERATION COMPANY
8.812% SERIES B SENIOR SECURED BOND DUE 2026
This bond is one of an authorized issue of Bonds of the Issuer
known as its 8.812% Series B Senior Secured Bonds Due 2026 (the "BONDS"). The
Bonds are issued under the Indenture dated as of October 18, 2001 (the "ORIGINAL
INDENTURE") among the Issuer and The Bank of New York, a New York banking
corporation, as trustee (in such capacity, together with its successors in such
capacity, the "TRUSTEE"), as supplemented by the First Supplemental Indenture
dated as of October 18, 2001 (the "FIRST SUPPLEMENTAL INDENTURE") among the
Issuer and the Trustee (the Original Indenture, as so supplemented, and as the
same may be amended, modified and further supplemented, the "INDENTURE"). All
capitalized terms used herein, unless otherwise defined herein, shall have the
meanings ascribed to them in the Indenture.
All Bonds of any series issued and Outstanding under the
Indenture rank on a parity with each other Bond of the same series and with all
Bonds of each other series. Reference is hereby made to the Indenture for a
description of the nature and extent of the Bonds and the respective rights,
limitations of rights, duties and immunities thereunder of the Holders and of
the Trustee and the Issuer in respect of the Bonds and the terms upon which the
Bonds are made and are to be authenticated and delivered.
The principal of and interest on this Bond are secured by
assets subject to the Lien of the Collateral Documents, and all payments of
principal and interest shall be made in accordance with the terms of the
Indenture. Each Holder, by acceptance of this Bond, hereby acknowledges and
agrees that (a) subject to the terms of Section 8.2 of the Original Indenture,
it will look solely to the revenues of the Issuer, the Collateral and the income
and proceeds received by the Trustee therefrom to the extent available for
distribution to such Holder as herein provided or provided in the Collateral
Documents, (b) neither the Shareholder, nor any of its past, present or future
officers, partners, directors or shareholders or other Related Persons, nor the
Trustee shall be personally or otherwise liable to any Holder, nor shall the
Shareholder, nor any of its past, present or future officers, partners,
directors or shareholders or other Related Persons, be personally or otherwise
liable to the Trustee for any amounts payable under any Bond or for any
liability under the Indenture or any other Transaction Document, except as
provided in the Original Indenture and (c) recourse for any such amounts payable
shall be otherwise limited in accordance with Section 2.14 and Section 16.1 of
the Original Indenture.
The obligations of the Issuer to pay the principal of and
interest on the Bonds when due as herein prescribed are absolute and
unconditional and no provision of this Bond or the Indenture shall alter or
impair such obligations.
The Bonds are subject to and have the benefits of the
Collateral Documents pursuant to which the rights of the parties in respect of
the Collateral will be exercised by the Trustee in accordance with the
Collateral Documents.
Northeast Generation Supplemental Indenture
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The Indenture permits, with certain exceptions, as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holder under the Indenture at
any time by the Issuer with the consent of the Holders of more than 50% in
aggregate principal amount of the Bonds of all series then Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Bonds of all series then
Outstanding, on behalf of the Holders of all the Bonds, to waive compliance by
the Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any Act (as such term is defined in
the Indenture), including, but not limited to, such a consent, waiver or
direction by the Holder of this Bond shall be conclusive and binding upon the
Holder and upon all future Holders of this Bond and the Holder of every Bond
issued upon the transfer hereof or the exchange herefor or in lieu hereof
whether or not notation of such Act is made upon this Bond.
This Bond is one of the series designated on the face hereof,
limited to $320,000,000 in aggregate principal amount as provided in the First
Supplemental Indenture.
This Bond and all Bonds issued or to be issued in a series
created under the First Supplemental Indenture are redeemable in whole or in
part at the option of the Issuer in accordance with Section 6.1 of the Original
Indenture, on not less than 30 nor more than 60 days' notice, at a redemption
price equal to the principal amount thereof plus unpaid and accrued interest
plus the Make-Whole Premium.
The Bonds are, under certain conditions, subject to mandatory
redemption in whole or in part as set forth in Section 6.2 of the Original
Indenture. Notice of any redemption of Bonds will be given at least 30 days but
not more than 60 days before the Redemption Date to each Holder at its address
as it appears in the Security Register.
Bonds (or portions thereof as aforesaid) for the redemption of
which provision is made in accordance with the Indenture shall cease to bear
interest from and after any Redemption Date.
The Indenture contains provisions for, upon compliance by the
Issuer with certain conditions set forth in the Indenture, the defeasance of (a)
the entire indebtedness of this Bond and (b) certain restrictive covenants and
agreements.
The unpaid portion of the Principal Amount, together with any
interest accrued and unpaid thereon and all other amounts due hereunder, if any,
may become due and payable upon the occurrence and continuation of any Event of
Default, but only as provided in the Indenture.
The Issuer has entered into an Registration Rights Agreement
dated October 12, 2001 (the "REGISTRATION RIGHTS AGREEMENT") with the Initial
Purchasers described therein. Pursuant to such Registration Rights Agreement,
the Issuer has agreed to file with the SEC a registration statement under the
Securities Act ("REGISTRATION STATEMENT") for an offer to exchange the Bonds for
a like aggregate principal amount of Bonds issued pursuant to the Indenture that
are in all material respects identical to the Bonds except that such Exchange
Bonds shall be issued pursuant to an effective Registration Statement.
Northeast Generation Supplemental Indenture
-------------------------------------------
From and after the date on which a Registration Default (as
defined in the Registration Rights Agreement) occurs, the interest rate payable
on this Bond shall increase (in addition to the interest rate set forth above)
and additional interest reflecting such increase shall accrue with respect to
this Bond, until but not including the date on which such Registration Default
shall cease to exist (and provided no other Registration Default with respect to
this Bond shall then be continuing), at the rate of one half of one percent
(0.50%) per annum, which additional interest shall be payable hereon at the
times, in the manner and subject to the same terms and conditions set forth
herein and in the Indenture, as though the interest rate set forth above had
been increased by one half of one percent (0.50%) per annum.
The Bonds are issuable only as registered Bonds without
coupons in minimum denominations of $100,000 and any integral multiple of $1,000
in excess thereof. As provided in, and subject to the provisions of, the
Indenture, Bonds are exchangeable at the option of the Holder thereof for other
Bonds of the same series, of authorized denomination and of like tenor,
maturity, interest rate and aggregate principal amount, to be registered in the
name of such Holder, upon surrender thereof by such Holder at any office or
agency maintained for such purpose pursuant to the Indenture.
No service charge will be required of any Holder participating
in any such transfer or exchange of Bonds in respect of such transfer or
exchange, but the Security Registrar may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The person in whose name this Bond is registered shall be
deemed to be the owner and holder hereof for the purpose of receiving payment as
herein provided and for all other purposes whether or not this Bond be overdue
regardless of any notice to anyone to the contrary.
THIS BOND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW THEREOF TO THE EXTENT THE APPLICATION OF SUCH PRINCIPLES WOULD
CAUSE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
Northeast Generation Supplemental Indenture
-------------------------------------------
ABBREVIATIONS
The following abbreviations when used in the inscription on
the face of this instrument shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of
survivorship and not as tenants in
common
UNIF GIFT MIN ACT
-------------------------------------------------
(Cust) (Minor)
under Uniform Gift to Minors Act
-------------------------------------------------
(State)
Additional abbreviations may also be used though
not in the above list
-------------------
Northeast Generation Supplemental Indenture
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FOR VALUE-RECEIVED the undersigned hereby sell(s),
assign(s) and transfer(s) unto
Social Security Number or Other
Identifying Number of Assignee
--------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address,
including zip code of Assignee)
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing ________ attorney to transfer said Security on the books of the
Company, with full power of substitution in the premises.
Dated:
----------------------
------------------------------
NAME:
NOTICE: The signature to this assignment must correspond with the name as
written upon the first page of the within instrument in every
particular, without alteration or enlargement or any change whatsoever.
Northeast Generation Supplemental Indenture
-------------------------------------------
ANNEX A TO
8.812% SERIES B SENIOR SECURED BOND DUE 2026
The following table sets forth the date of each semiannual
installment of the aggregate principal to be paid on all Bonds of this series on
each such date:
PRINCIPAL PRINCIPAL
PAYMENT AMOUNT
DATES PAYABLE
----- ON SERIES
B BONDS
-------
April 15, 2007 $ 1,750,000
October 15, 2007 1,750,000
April 15, 2008 2,625,000
October 15, 2008 2,625,000
April 15, 2009 3,250,000
October 15, 2009 3,250,000
April 15, 2010 4,000,000
October 15, 2010 4,000,000
April 15, 2011 4,875,000
October 15, 2011 4,875,000
April 15, 2012 5,375,000
October 15, 2012 5,375,000
April 15, 2013 2,500,000
October 15, 2013 2,500,000
April 15, 2014 3,125,000
October 15, 2014 3,125,000
April 15, 2015 2,250,000
October 15, 2015 2,250,000
Northeast Generation Supplemental Indenture
-------------------------------------------
April 15, 2016 3,000,000
October 15, 2016 3,000,000
April 15, 2017 7,500,000
October 15, 2017 7,500,000
April 15, 2018 8,000,000
October 15, 2018 8,000,000
April 15, 2019 9,500,000
October 15, 2019 9,500,000
April 15, 2020 10,500,000
October 15, 2020 10,500,000
April 15, 2021 12,000,000
October 15, 2021 12,000,000
April 15, 2022 13,000,000
October 15, 2022 13,000,000
April 15, 2023 14,250,000
October 15, 2023 14,250,000
April 15, 2024 16,000,000
October 15, 2024 16,000,000
April 15, 2025 17,500,000
October 15, 2025 17,500,000
April 15, 2026 19,000,000
October 15, 2026 19,000,000
TOTAL $320,000,000
Northeast Generation Supplemental Indenture
-------------------------------------------
ANNEX B TO
8.812% SERIES B SENIOR SECURED BOND DUE 2026
Exchanges of portions of this Global Bond for definitive Bonds:
============================================================================================================
PRINCIPAL AMOUNT OF DEFINITIVE
SECURITIES ISSUED IN EXCHANGE FOR A REMAINING PRINCIPAL AMOUNT NOTATION MADE BY
DATE PORTION OF THIS GLOBAL SECURITY OF THIS GLOBAL SECURITY
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Northeast Generation Supplemental Indenture
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SCHEDULE 3: OUTSTANDING INVESTMENTS
-----------------------------------
1. ▇▇▇▇▇▇▇ Sachs
FS Prime Obligations Fund
Administration Class (463)
2. Blackrock Provident Institutional Funds
Tempfund (Temp Inv Fund) Institutional
Northeast Generation Supplemental Indenture
-------------------------------------------