uil_exh4-4.htm




EXHIBIT 4.4








	

Execution Version














 


 


 


 


 


The United Illuminating Company


 


 


 



	
$100,000,000 6.09% Senior Notes due July 27, 2040







 


 


 


 




 


 


Note Purchase Agreement


 


 


 


 


 


 


Dated as of May 13, 2010


 



	  



















  





  











  








Table of Contents


 








	
Section

	
Heading

	
Page


	
Section 1.

	
Authorization of Notes

	
  1


	
Section 2.

	
Sale and Purchase of Notes

	
  1


	
Section 3.

	
Execution Date; Closing

	
  1


	
Section 4.

	
Conditions to Closing

	
  2


	
Section 4.1.

	
Representations and Warranties

	
  2


	
Section 4.2.

	
Performance; No Default

	
  2


	
Section 4.3.

	
Compliance Certificates

	
  2


	
Section 4.4.

	
Opinions of Counsel

	
  3


	
Section 4.5.

	
Purchase Permitted by Applicable Law, Etc.

	
  3


	
Section 4.6.

	
Payment of Special Counsel Fees

	
  3


	
Section 4.7.

	
Private Placement Number

	
  3


	
Section 4.8.

	
Changes in Corporate Structure

	
  3


	
Section 4.9.

	
Proceedings and Documents

	
  3


	
Section 4.10.

	
Sale of Notes to Purchasers

	
  4


	
Section 4.11.

	
Funding Instructions

	
  4


	
Section 4.12.

	
Governmental Authorizations, Etc.

	
  4


	
Section 5.

	
Representations and Warranties of the Company

	
  4


	
Section 5.1.

	
Organization; Power and Authority

	
  4


	
Section 5.2.

	
Authorization, Etc.

	
  4


	
Section 5.3.

	
Disclosure

	
  4


	
Section 5.4.

	
Organization and Ownership of Shares of Subsidiaries; Affiliates

	
  5


	
Section 5.5.

	
Financial Statements

	
  5


	
Section 5.6.

	
Compliance with Laws, Other Instruments, Etc.

	
  6


	
Section 5.7.

	
Governmental Authorizations, Etc.

	
  6


	
Section 5.8.

	
Litigation; Observance of Agreements, Statutes and Orders

	
  6


	
Section 5.9.

	
Taxes

	
  6


	
Section 5.10.

	
Title of Property; Leases

	
  7


	
Section 5.11.

	
Licenses, Permits, Etc.

	
  7


	
Section 5.12.

	
Compliance with ERISA

	
  7


	
Section 5.13.

	
Private Offering by the Company

	
  8


	
Section 5.14.

	
Use of Proceeds; Margin Regulations

	
  8


	
Section 5.15.

	
Existing Indebtedness

	
  9


	
Section 5.16.

	
Foreign Assets Control Regulations, Etc.

	
  9

















 




  





-i-











  














	
Section 5.17.

	
Status Under Certain Statutes

	
10


	
Section 5.18.

	
Environmental Matters

	
10


	
Section 6.

	
Representations of the Purchaser

	
10


	
Section 6.1.

	
Purchase of Notes

	
10


	
Section 6.2.

	
Source of Funds

	
11


	
Section 6.3.

	
Accredited Investor

	
12


	
Section 7.

	
Information as to Company

	
12


	
Section 7.1.

	
Financial and Business Information

	
12


	
Section 7.2.

	
Officer’s Certificate

	
15


	
Section 7.3.

	
Inspection

	
15


	
Section 8.

	
Prepayment of the Notes

	
16


	
Section 8.1.

	
Optional Prepayments with Make-Whole Amount

	
16


	
Section 8.2.

	
Notice of Prepayment

	
16


	
Section 8.3.

	
Allocation of Partial Prepayments

	
16


	
Section 8.4.

	
Maturity; Surrender, Etc.

	
16


	
Section 8.5.

	
Purchase of Notes

	
17


	
Section 8.6.

	
Make-Whole Amount

	
17


	
Section 9.

	
Affirmative Covenants

	
18


	
Section 9.1.

	
Compliance with Law

	
18


	
Section 9.2.

	
Insurance

	
18


	
Section 9.3.

	
Maintenance of Properties

	
19


	
Section 9.4.

	
Payment of Taxes and Claims

	
19


	
Section 9.5.

	
Corporate Existence, Etc.

	
19


	
Section 10.

	
Negative Covenants

	
19


	
Section 10.1.

	
Maintenance of Consolidated Indebtedness

	
19


	
Section 10.2.

	
Subsidiary Indebtedness

	
19


	
Section 10.3.

	
Liens

	
20


	
Section 10.4.

	
Limitation on Sale and Leaseback Transactions

	
22


	
Section 10.5.

	
Disposition of Assets

	
22


	
Section 10.6.

	
Merger, Consolidation, Etc.

	
23


	
Section 10.7.

	
Transactions with Affiliates

	
24


	
Section 10.8.

	
Terrorism Sanctions Regulations

	
24


	
Section 11.

	
Events of Default

	
24


	
Section 12.

	
Remedies on Default, Etc.

	
26


	
Section 12.1.

	
Acceleration

	
26


	
Section 12.2.

	
Other Remedies

	
27

















 




  





-ii-











  














	
Section 12.3.

	
Rescission

	
27


	
Section 12.4.

	
No Waivers or Election of Remedies, Expenses, Etc.

	
27


	
Section 13.

	
Registration; Exchange; Substitution of Notes

	
28


	
Section 13.1.

	
Registration of Notes

	
28


	
Section 13.2.

	
Transfer and Exchange of Notes

	
28


	
Section 13.3.

	
Replacement of Notes

	
28


	
Section 14.

	
Payments on Notes

	
29


	
Section 14.1.

	
Place of Payment

	
29


	
Section 14.2.

	
Home Office Payment

	
29


	
Section 15.

	
Expenses, Etc.

	
29


	
Section 15.1.

	
Transaction Expenses

	
29


	
Section 15.2.

	
Survival

	
30


	
Section 16.

	
Survival of Representations and Warranties; Entire Agreement

	
30


	
Section 17.

	
Amendment and Waiver

	
30


	
Section 17.1.

	
Requirements

	
30


	
Section 17.2.

	
Solicitation of Holders of Notes

	
31


	
Section 17.3.

	
Binding Effect, Etc.

	
31


	
Section 17.4.

	
Notes Held by Company, Etc.

	
31





	
Section 18.

	
Notices

	
32


	
Section 19.

	
Reproduction of Documents

	
32


	
Section 20.

	
Confidential Information

	
33


	
Section 21.

	
Substitution of Purchaser

	
34


	
Section 22.

	
Miscellaneous

	
34


	
Section 22.1.

	
Successors and Assigns

	
34


	
Section 22.2.

	
Construction

	
34


	
Section 22.3.

	
Consent to Jurisdiction; Service of Process; Waiver of Jury Trial

	
34


	
Section 22.4.

	
Payments Due on Non-Business Days

	
35


	
Section 22.5.

	
Severability

	
35


	
Section 22.6.

	
Accounting Terms

	
35

















 




  





-iii-











  














	
Section 22.7.

	
Counterparts

	
36


	
Section 22.8.

	
Governing Law

	
36












 




  





-iv-











  
















	
Schedule A

	
—

	
Names and Addresses of Purchasers


	
Schedule B

	
—

	
Defined Terms


	
Exhibit 1

	
—

	
Form of 6.09% Senior Note due July 27, 2040


	
Exhibit 2

	
—

	
Form of Funds Delivery Instruction Letter


	
Exhibit 4.4(a)

	
—

	
Form of Opinion of Counsel for the Company


	
Exhibit 4.4(b)

	
—

	
Form of Opinion of Special Counsel for the Purchasers


	
Schedule 5.3

	
—

	
Disclosure Documents


	
Schedule 5.4

	
—

	
Subsidiaries


	
Schedule 5.5

	
—

	
Financial Statements


	
Schedule 5.14

	
—

	
Use of Proceeds


	
Schedule 5.15

	
—

	
Existing Indebtedness – Execution Date


	
Annex A

	
—

	
Existing Indebtedness – Closing

















 




  





-v-











  








The United Illuminating Company


157 Church Street


PO Box 1564


New Haven, CT 06506-0901








	
$100,000,000 6.09% Senior Notes due July 27, 2040

















As of May 13, 2010







To the Several Purchasers Listed 


  in the Attached Schedule A:







Ladies and Gentlemen:


 


The United Illuminating Company, a specially chartered Connecticut corporation (the “Company”), agrees with each of you (sometimes individually a “Purchaser” and collectively the “Purchasers”) as follows:


 



	
Section 1.    Authorization of Notes.







 


The Company has duly authorized the issue and sale of $100,000,000 aggregate principal amount of its 6.09% Senior Notes due July 27, 2040 (the “Notes”), such notes to be substantially in the form set out in Exhibit 1.  As used herein, the term “Notes” shall mean all notes originally delivered pursuant to this Agreement and all notes delivered in substitution or exchange for any such note and, where applicable, shall include the singular number as well as the plural.  Certain capitalized and other terms used in this Agreement are defined in Schedule B; references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement.


 



	
Section 2.    Sale and Purchase of Notes.







 


Subject to the terms and conditions of this Agreement, the Company will issue and sell to you and you will severally purchase from the Company, at the Closing provided for in Section 3, Notes in the principal amount or amounts specified opposite your name in Schedule A at the purchase price of 100% of the principal amount thereof.  Your obligations hereunder are several and not joint obligations and no Purchaser shall have any liability to any Person for the performance or non-performance by any other Purchaser hereunder.


 



	
Section 3.    Execution Date; Closing.







 


The execution and delivery of this Agreement will be made at the offices of Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois 60603 on May 13, 2010 (the “Execution Date”).






  





  











  








 


The sale and purchase of the Notes will be made at the offices of Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois 60603, at 10:00 A.M. Chicago time, at a Closing (the “Closing”) to be held on July 27, 2010.  At the Closing, the Company will deliver to you each of the Notes to be purchased by you at the Closing, as set forth opposite your name on Schedule A, in the form of a single Note to be purchased by you (or such greater number of Notes in denominations of at least $100,000 as you may request prior to the Closing), dated the date of the Closing and registered in your name (or in the name of your nominee), against delivery by you to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds to the Company’s account in accordance with Exhibit 2.


 


If at the Closing the Company shall fail to tender such Notes to you as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to your satisfaction, you shall, at your election, be relieved of all further obligations under this Agreement, without thereby waiving any rights you may have by reason of such failure or such nonfulfillment.


 



	
Section 4.    Conditions to Closing.







 


Your obligation to execute and deliver this Agreement on the Execution Date and your several obligations to purchase and pay for the Notes to be sold to you at the Closing are subject to the fulfillment to your satisfaction, prior to or at the Closing, of the following conditions:


 


Section 4.1. Representations and Warranties.  The representations and warranties of the Company in this Agreement shall be correct when made on the Execution Date and at the time of the Closing.


 


Section 4.2. Performance; No Default.  The Company shall have performed and complied in all material respects with all agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or at the Closing and after giving effect to the issue and sale of the Notes (and the concurrent application of the proceeds thereof as contemplated by Section 5.14) no Default or Event of Default shall have occurred and be continuing.  Neither the Company nor any Subsidiary shall have entered into any transaction since the date of the Memorandum that would have been prohibited by Sections 10.1 to 10.8, inclusive, had such Sections applied since such date.


 


Section 4.3. Compliance Certificates.


 


(a)Officer’s Certificate.  The Company shall have delivered to you an Officer’s Certificate, dated the Execution Date certifying that the conditions specified in Section 4.1 have been fulfilled and shall have delivered to you an Officer’s Certificate, dated the date of the Closing, certifying that the conditions specified in Sections 4.1, 4.2 and 4.8 have been fulfilled.


 


(b)Secretary’s Certificate.  The Company shall have delivered to you a certificate of the Secretary or an Assistant Secretary of the Company, dated the date of the Closing, certifying 







 




  





-2-











  








 


as to the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes and this Agreement.


 


Section 4.4. Opinions of Counsel.  You shall have received opinions in form and substance satisfactory to you, dated the date of the Closing (a) from Wiggin and Dana LLP, independent counsel of the Company, substantially in the form set forth in Exhibit 4.4(a) and covering such other matters incident to the transactions contemplated hereby as you or your counsel may reasonably request (and the Company hereby instructs its counsel to deliver such opinion to you) and (b) from Chapman and Cutler LLP, your special counsel in connection with such transactions, substantially in the form set forth in Exhibit 4.4(b) and covering such other matters incident to such transactions as you may reasonably request.


 


Section 4.5. Purchase Permitted by Applicable Law, Etc.  On the date of the Closing your purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which you are subject, without recourse to provisions (such as section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including without limitation Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject you to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof.  If requested by you, you shall have received an Officer’s Certificate certifying as to such matters of fact as you may reasonably specify to enable you to determine whether such purchase is so permitted.


 


Section 4.6. Payment of Special Counsel Fees.  Without limiting the provisions of Section 15.1, the Company shall have paid on or before the Execution Date and the date of the Closing the fees, charges and disbursements of your special counsel referred to in Section 4.4 to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to the Closing.


 


Section 4.7. Private Placement Number.  A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the Securities Valuation Office of the National Association of Insurance Commissioners) shall have been obtained for the Notes.


 


Section 4.8. Changes in Corporate Structure.  The Company shall not have changed its jurisdiction of incorporation or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity at any time following the date of the most recent financial statements referred to in Schedule 5.5, except as permitted pursuant to Section 10.6.


 


Section 4.9. Proceedings and Documents.  All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory to you and your special counsel, and you and your special counsel shall have received all such counterpart originals or certified or other copies of such documents as you or they may reasonably request.







 




  





-3-











  








 


Section 4.10. Sale of Notes to Purchasers.  Contemporaneously with the Closing, the Company shall sell to each of the Purchasers and each of the Purchasers shall purchase the Notes to be purchased by them at the Closing as specified in Schedule A.


 


Section 4.11. Funding Instructions.  At least three Business Days prior to the date of the Closing, each Purchaser shall have received written instructions signed by a Responsible Officer on letterhead of the Company confirming the information specified in Section 3 in the form of Exhibit 2.


 


Section 4.12. Governmental Authorizations, Etc.  All consents, approvals and authorizations of, notices to, and registrations, filings and declarations with, or other actions by, any Governmental Authority required for the valid execution, delivery or performance by the Company of this Agreement or the Notes, including the final approval of the Connecticut Department of Public Utility Control (the “Final Approval”), shall have been obtained and the Final Approval shall be in full force and effect on or before the date of the Closing and all periods of appeal and rehearing by third parties which have not stipulated to such approval as issued shall have expired and all conditions contained in any such authorization or waiver which are to be fulfilled on or prior to the date of the Closing shall have been fulfilled.


 



	
Section 5.    Representations and Warranties of the Company.







 


The Company represents and warrants to you on the Execution Date and the date of the Closing that:


 


Section 5.1. Organization; Power and Authority.  The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Notes and to perform the provisions hereof and thereof.


 


Section 5.2. Authorization, Etc.  This Agreement and the Notes have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).


 


Section 5.3. Disclosure.  The Company, through its agent, J.P. Morgan, has delivered to you a copy of a Private Placement Memorandum dated April 19, 2010 (together with the documents incorporated therein by reference, the “Memorandum”), relating to the transactions 







 




  





-4-











  








 


contemplated hereby.  This Agreement, the Memorandum, the documents, certificates or other writings delivered to you by or on behalf of the Company in connection with the transactions contemplated hereby and described in Schedule 5.3 (together with the Memorandum, the “Disclosure Documents”), and the financial statements listed in Schedule 5.5, taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made.  Except as disclosed in the Memorandum, since December 31, 2009, there has been no change in the financial condition, operations, business, properties or prospects of the Company or any Subsidiary other than changes that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect.  There is no fact known to the Company that could reasonably be expected to have a Material Adverse Effect.


 


Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.  (a) Schedule 5.4 contains (except as noted therein) complete and correct lists (i) of the Company’s Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary, (ii) of the Company’s Affiliates, other than Subsidiaries, and (iii) of the Company’s directors and senior officers.


 


(b)All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company and its Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in Schedule 5.4).


 


(c)Each Subsidiary identified in Schedule 5.4 is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Each such Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact.


 


(d)No Subsidiary is a party to, or otherwise subject to any legal restriction or any agreement (other than this Agreement, the agreements listed in Schedule 5.4 and customary limitations imposed by corporate law statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Company or any of its Subsidiaries that owns outstanding shares of capital stock or similar equity interests of such Subsidiary.


 


Section 5.5. Financial Statements.  The Company has delivered to you copies of the consolidated financial statements of the Company and its Subsidiaries listed in Schedule 5.5.  All of said financial statements (including in each case the related schedules and notes) fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of their operations







 




  





-5-











  








 


and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments).


 


Section 5.6. Compliance with Laws, Other Instruments, Etc.  The execution, delivery and performance by the Company of this Agreement and the Notes will not (a) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other agreement or instrument to which the Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of their respective properties may be bound or affected, (b) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Subsidiary or (c) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary.


 


Section 5.7. Governmental Authorizations, Etc.  No consent, approval or authorization of, notice to, or registration, filing or declaration with, or other action by, any Governmental Authority is required for the valid execution, delivery or performance by the Company of this Agreement or the Notes, except for the Connecticut Department of Public Utility Control, whose final approval shall have been obtained on or before the date of the Closing.


 


Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.  (a) There are no actions, suits or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or any Subsidiary or any property of the Company or any Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.


 


(b)Neither the Company nor any Subsidiary is in default under any term of any agreement or instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in violation of any applicable law, ordinance, rule or regulation (including without limitation Environmental Laws) of any Governmental Authority, which default or violation, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.


 


Section 5.9. Taxes.  The Company and its Subsidiaries have filed all tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon them or their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (a) the amount of which is not individually or in the aggregate Material or (b) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP.  The Company knows of no basis for any other tax or assessment that could reasonably be expected to have a Material Adverse Effect.  The charges, accruals and reserves on the books of the Company and its Subsidiaries in respect of United 







 




  





-6-











  








 


States federal, state or other taxes for all fiscal periods are adequate.  The United States federal income tax liabilities of the Company and its Subsidiaries have been determined by the Internal Revenue Service and paid for all fiscal years up to and including the fiscal year ended December 31, 2007.  The United States federal income tax liabilities of the Company and its Subsidiaries have been included in the consolidated tax return of UIL Holdings beginning with the fiscal year ended December 31, 2000.


 


Section 5.10. Title to Property; Leases.  The Company and its Subsidiaries have good and sufficient title to their respective properties that individually or in the aggregate are Material, including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by the Company or any Subsidiary after said date (except as sold or otherwise disposed of in the ordinary course of business and except as described in Section 10.5(b)), in each case free and clear of Liens prohibited by this Agreement.  All leases that individually or in the aggregate are Material are valid and subsisting and are in full force and effect in all material respects.


 


Section 5.11. Licenses, Permits, Etc.  (a) The Company and its Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are Material, without known conflict with the rights of others.


 


(b)To the best knowledge of the Company, no product of the Company infringes in any material respect any license, permit, franchise, authorization, patent, copyright, proprietary software, service mark, trademark, trade name or other right owned by any other Person.


 


(c)To the best knowledge of the Company, there is no Material violation by any Person of any right of the Company or any of its Subsidiaries with respect to any patent, copyright, proprietary software, service mark, trademark, trade name or other right owned or used by the Company or any of its Subsidiaries.


 


Section 5.12. Compliance with ERISA.  (a) The Company and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA), and no event, transaction or condition has occurred or exists that could reasonably be expected to result in the incurrence of any such liability by the Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions or to section 401(a)(29) or 412 of the Code, other than such liabilities or Liens as would not be individually or in the aggregate Material.


 


(b) The aggregate current value of the assets under the Plan subject to Title IV of ERISA, as disclosed in the valuation report for the 2009 plan year, is less than the present value of the accumulated plan benefits under such Plan, as calculated under Financial Accounting 







 




  





-7-











  








 


Standards No. 35 for such year, by $55,635,005.  The terms “current value” and “present value” have the meanings specified in section 3 of ERISA.


 


(c)The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggregate are Material.


 


(d)The expected post retirement benefit obligation (determined as of the last day of the Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of the Company and its Subsidiaries is not expected to have a Material Adverse Effect.


 


(e)With respect to each employee benefit plan, if any, disclosed by you in writing to the Company in accordance with Section 6.2(c), neither the Company nor any “affiliate” of the Company (as defined in section V(c) of the QPAM Exemption) has at this time, nor has exercised at any time during the immediately preceding year, the authority to appoint or terminate the “QPAM” (as defined in Part V of the QPAM Exemption) disclosed by you to the Company pursuant to Section 6.2(c) as manager of any of the assets of any such plan or to negotiate the terms of any management agreement with such QPAM on behalf of any such plan, and the Company is not an “affiliate” (as so defined) of such QPAM.  The Company is not a party in interest with respect to any employee benefit plan disclosed by you in accordance with Section 6.2(b) or 6.2(e).  The execution and delivery of this Agreement and the issuance and sale of the Notes at the Closing hereunder will not involve any prohibited transaction (as such term is defined in section 406(a) of ERISA and section 4975(c)(1)(A)-(D) of the Code), that could subject the Company or any holder of a Note to any tax or penalty on prohibited transactions imposed under said section 4975 of the Code or by section 502(i) of ERISA.  The representation by the Company in the preceding sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy of your representation in Section 6.2 as to the source of the funds used to pay the purchase price of the Notes to be purchased by you.


 


Section 5.13. Private Offering by the Company.  Neither the Company nor anyone acting on its behalf has offered the Notes or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchasers and not more than 20 Institutional Investors (including each Purchaser), each of which has been offered the Notes at a private sale for investment.  Neither the Company nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of section 5 of the Securities Act.


 


Section 5.14. Use of Proceeds; Margin Regulations.  The Company will apply the net proceeds of the sale of the Notes as set forth in Schedule 5.14.  No part of the proceeds from the sale of the Notes hereunder will be used, and no part of the proceeds of Indebtedness being repaid was used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any securities under such 







 




  





-8-











  








 


circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220).  Margin stock does not constitute more than 1% of the value of the consolidated assets of the Company and its Subsidiaries and the Company does not have any present intention that margin stock will constitute more than 25% of the value of such assets.  As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said Regulation U.


 


Section 5.15. Existing Indebtedness.  Schedule 5.15 sets forth a complete and correct list of all outstanding Indebtedness of the Company and its Subsidiaries as of the Execution Date.  Neither the Company nor any Subsidiary is in default, and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Company or such Subsidiary, and no event or condition exists with respect to any Indebtedness of the Company or any Subsidiary that would permit (or that with the giving of notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.  Annex A to be attached hereto on the date of the Closing will correctly describe all outstanding Indebtedness and any Liens secured thereby of the Company and its Subsidiaries as of the date of the Closing.  Since the Execution Date, no Indebtedness has been created, assumed, incurred or guaranteed in violation of Sections 10.1 through 10.4.


 


Except as disclosed in Schedule 5.15, neither the Company nor any Subsidiary has agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien that would not be permitted by Section 10.3.


 


Section 5.16. Foreign Assets Control Regulations, Etc.  (a) Neither the sale of the Notes by the Company hereunder nor its use of the proceeds thereof will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto.


 


(b)Neither the Company nor any Subsidiary (i) is, or will become, a Person described or designated in the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or in section 1 of the Anti-Terrorism Order or (ii) knowingly engages or will engage in any dealings or transactions, or knowingly is or will be otherwise associated, with any such Person.  The Company and its Subsidiaries are, to their knowledge, in compliance, in all material respects, with the USA Patriot Act.  Neither the Company nor any Subsidiary (i) is or will become a blocked person described in section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) or (ii) knowingly engages or will engage in any dealings or transactions, or be otherwise associated, with any such blocked person.


 


(c)No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in 







 




  





-9-











  








 


order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.


 


Section 5.17. Status Under Certain Statutes.  Neither the Company nor any Subsidiary is subject to regulation under the Investment Company Act of 1940, as amended, or the ICC Termination Act of 1995, as amended, nor is the Company subject to regulation under the Federal Power Act, as amended, with respect to the execution, delivery or performance of this Agreement or the Notes or the issuance of other securities.


 


Section 5.18. Environmental Matters.  Neither the Company nor any Subsidiary has knowledge of any claim or has received any notice of any claim, and no proceeding has been instituted raising any claim against the Company or any of its Subsidiaries or any of their respective real properties now or formerly owned, leased or operated by any of them or other assets, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect.  Without limiting the foregoing,


 


(a)neither the Company nor any Subsidiary has knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by any of them or to other assets or their use, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect;


 


(b)neither the Company nor any of its Subsidiaries has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them and has not disposed of any Hazardous Materials in a manner contrary to any Environmental Laws in each case in any manner that could reasonably be expected to result in a Material Adverse Effect; and


 


(c)all buildings on all real properties now owned, leased or operated by the Company or any of its Subsidiaries are in compliance with applicable Environmental Laws, except where failure to comply could not reasonably be expected to result in a Material Adverse Effect.


 



	
Section 6.    Representations of the Purchaser.







 


Each of you severally represents and warrants to the Company as follows:


 


Section 6.1. Purchase of Notes.  You represent that you are purchasing the Notes for your own account or for one or more separate accounts maintained by you or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of your or their property shall at all times be within your or their control.  You understand that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from 


 












 




  





-10-











  








 


registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes.


 


Section 6.2. Source of Funds.  You represent that at least one of the following statements is an accurate representation as to each source of funds (a “Source”) to be used by you to pay the purchase price of the Notes to be purchased by you hereunder:


 


(a)the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the National Association of Insurance Commissioners (the “NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed ten percent (10%) of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or


 


(b)the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or 


 


(c)the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1, or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 and, except as have been disclosed by such Purchaser to the Company in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or


 


(d)the Source constitutes assets of an “investment fund” (within the meaning of Part V of the QPAM Exemption) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part V of the QPAM Exemption), no employee benefit plan’s assets that are included in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of section V(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, exceed 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, as of the last day of its most recent calendar quarter, the QPAM does not own a 10% or more interest in the Company and no Person controlling or controlled by the QPAM (applying the definition







 




  





-11-











  








 


of “control” in section V(e) of the QPAM Exemption) owns a 20% or more interest in the Company (or less than 20% but greater than 10%, if such Person exercises control over the management or policies of the Company by reason of its ownership interest) and (i) the identity of such QPAM and (ii) the names of all employee benefit plans whose assets are included in such investment fund have been disclosed to the Company in writing pursuant to this clause (d); or


 


(e)the Source constitutes assets of a “plan(s)” (within the meaning of section IV of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a Person controlling or controlled by the INHAM (applying the definition of “control” in section IV(d) of the INHAM Exemption) owns a 5% or more interest in the Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (e); or


 


(f)the Source is a governmental plan; or


 


(g)the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (g); or


 


(h)the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.


 


As used in this Section 6.2, the terms “employee benefit plan”, “governmental plan” and “separate account” shall have the respective meanings assigned to such terms in section 3 of ERISA.


 


Section 6.3. Accredited Investor.  You are an “accredited investor” as such term is defined in Regulation D promulgated pursuant to the Securities Act.


 



	
Section 7.    Information as to Company.







 


Section 7.1. Financial and Business Information.  The Company shall deliver to each holder of Notes that is an Institutional Investor:


 


(a)Quarterly Statements -- within 60 days after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), copies of


 


(i)a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, and







 




  





-12-











  








 


(ii)consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries, for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter,


 


setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year-end adjustments, provided that delivery within the time period specified above of copies of the Company’s Quarterly Report on Form 10-Q prepared in compliance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 7.1(a);


 


(b)Annual Statements -- within 105 days after the end of each fiscal year of the Company, copies of,


 


(i)a consolidated balance sheet of the Company and its Subsidiaries as at the end of such year, and


 


(ii)consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries for such year,


 


setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion thereon of independent public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances, provided that the delivery within the time period specified above of the Company’s Annual Report on Form 10-K for such fiscal year (together with the Company’s annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 7.1(b);


 


(c)SEC and Other Reports -- promptly upon their becoming available, one copy of (i) each financial statement, report, notice or proxy statement sent by UIL Holdings, the Company or any Subsidiary to public securities holders generally or its lending banks, (ii) each regular or periodic report, each registration statement (without exhibits except as expressly requested by such holder), and each prospectus and all amendments thereto filed by UIL Holdings, the Company or any Subsidiary with the Securities and Exchange Commission and (iii) all press releases and other statements 







 




  





-13-











  








 


made available generally by UIL Holdings, the Company or any Subsidiary to the public concerning developments that are Material;


 


(d)Notice of Default or Event of Default -- promptly, and in any event within five days after a Responsible Officer becoming aware of the existence of any Default or Event of Default or that any Person has given any notice or taken any action with respect to a claimed default hereunder or that any Person has given any notice or taken any action with respect to a claimed default of the type referred to in Section 11(f), a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto;


 


(e)ERISA Matters -- promptly, and in any event within five days after a Responsible Officer becoming aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with respect thereto:


 


(i)with respect to any Plan, any reportable event, as defined in section 4043(b) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date hereof; 


 


(ii)the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; or


 


(iii)any event, transaction or condition that could result in the incurrence of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then existing, could reasonably be expected to have a Material Adverse Effect;


 


(f)Notices from Governmental Authority -- promptly, and in any event within 30 days of receipt thereof, copies of any notice to the Company or any Subsidiary from any United States federal or state Governmental Authority relating to any order, ruling, statute or other law or regulation that could reasonably be expected to have a Material Adverse Effect; and


 


(g)Requested Information -- with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Company or any of its Subsidiaries or relating to the ability of the 


 












 




  





-14-











  








 


Company to perform its obligations hereunder and under the Notes as from time to time may be reasonably requested by any such holder of Notes.


 


Section 7.2. Officer’s Certificate.  Each set of financial statements delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a Senior Financial Officer setting forth:


 


(a)Covenant Compliance -- the information (including detailed calculations) required in order to establish whether the Company was in compliance with the requirements of Sections 10.1 through 10.6, inclusive, during the quarterly or annual period covered by the statements then being furnished (including with respect to each such Section, where applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Sections, and the calculation of the amount, ratio or percentage then in existence); and


 


(b)Default -- a statement that such Senior Financial Officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists (including without limitation any such event or condition resulting from the failure of the Company or any Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Company shall have taken or proposes to take with respect thereto.


 


Section 7.3. Inspection.  The Company shall permit the representatives of each holder of Notes that is an Institutional Investor:


 


(a)No Default -- if no Default or Event of Default then exists, at the expense of such holder and upon reasonable prior notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and accounts of the Company and its Subsidiaries with the Company’s officers, and (with the consent of the Company, which consent will not be unreasonably withheld) its independent public accountants, and (with the consent of the Company, which consent will not be unreasonably withheld) to visit the other offices and properties of the Company and each Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing; and


 


(b)Default -- if a Default or Event of Default then exists, at the expense of the Company, to visit and inspect any of the offices or properties of the Company or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers, employees and independent public accountants (and by this provision the Company authorizes said accountants to discuss 







 




  





-15-











  








 


the affairs, finances and accounts of the Company and its Subsidiaries), all at such times and as often as may be requested.


 



	
Section 8.    Prepayment of the Notes.







 


In addition to the payment of the entire unpaid principal amount of the Notes at the final maturity thereof, the Company may make optional prepayments in respect of the Notes as hereinafter provided.


 


Section 8.1. Optional Prepayments with Make-Whole Amount.  The Company may, at its option and upon notice as provided in Section 8.2, prepay at any time all, or from time to time any part of, the Notes in proportion to the aggregate principal amount outstanding of the Notes (in a minimum amount of $2,000,000 and otherwise in multiples of $100,000) at the principal amount so prepaid, together with interest accrued thereon to the date of such prepayment, plus the Make-Whole Amount determined for the prepayment date with respect to the respective principal amounts.


 


Section 8.2. Notice of Prepayment.  The Company will give each holder of Notes written notice of each optional prepayment under Section 8.1 not less than 30 days and not more than 60 days prior to the date fixed for such prepayment.  Each such notice shall specify the date fixed for such prepayment (which shall be a Business Day), the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of Notes held by such holder to be prepaid (determined in accordance with Section 8.3) and the interest to be paid on the prepayment date with respect to such principal amount being prepaid.


 


Each such notice of prepayment shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation.  Two Business Days prior to such prepayment, the Company shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date.


 


Section 8.3. Allocation of Partial Prepayments.  In the case of each partial prepayment of the Notes pursuant to Section 8.1, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof.


 


Section 8.4. Maturity; Surrender, Etc.  In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any.  From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue.  Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.







 




  





-16-











  








 


Section 8.5. Purchase of Notes.  The Company will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes or (b) pursuant to an offer to purchase made by the Company or an Affiliate pro rata to the holders of all Notes at the time outstanding upon the same terms and conditions.  Any such offer shall provide each holder with sufficient information to enable it to make an informed decision with respect to such offer, and shall remain open for at least fifteen (15) Business Days.  If the holders of more than 10% of the principal amount of the Notes then outstanding accept such offer, the Company shall promptly notify the remaining holders of such fact and the expiration date for the acceptance by holders of Notes of such offer shall be extended by the number of days necessary to give each such remaining holder at least five (5) Business Days from its receipt of such notice to accept such offer.  The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes.


 


Section 8.6. Make-Whole Amount.  The term “Make-Whole Amount” means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero.  For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:


 


“Called Principal” means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.1 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.


 


“Discounted Value” means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.


 


“Reinvestment Yield” means, with respect to the Called Principal of any Note, .50% (50 basis points) over the yield to maturity implied by (i) the yields reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on the run U.S. Treasury securities having a maturity equal to the remaining life of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable (including by way of interpolation), the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any comparable successor 







 




  





-17-











  








 


publication) for actively traded U.S. Treasury securities having a constant maturity equal to the remaining life of such Called Principal as of such Settlement Date.  Such implied yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the actively traded U.S. Treasury security with a maturity closest to and greater than the remaining life and (2) the actively traded U.S. Treasury security with a maturity closest to and less than the remaining life.  The Reinvestment Yield will be rounded to two decimal places.


 


“Remaining Scheduled Payments” means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.1 or 12.1.


 


“Settlement Date” means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.1 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.


 



	
Section 9.    Affirmative Covenants.







 


The Company covenants that so long as any of the Notes are outstanding:


 


Section 9.1. Compliance with Law.  The Company will and will cause each of its Subsidiaries to comply with all laws, ordinances or governmental rules or regulations to which each of them is subject, including without limitation the USA Patriot Act and Environmental Laws, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


Section 9.2. Insurance.  The Company will and will cause each of its Subsidiaries to maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated.







 




  





-18-











  








Section 9.3. Maintenance of Properties.  The Company will and will cause each of its Subsidiaries to maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times, provided that this Section shall not prevent the Company or any Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and the Company has concluded that such discontinuance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


Section 9.4. Payment of Taxes and Claims.  The Company will and will cause each of its Subsidiaries to file all tax returns (whether filed directly by the Company or its Subsidiaries or as part of the consolidated tax return of UIL Holdings) required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies imposed on them or any of their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent and all claims for which sums have become due and payable that have or might become a Lien on properties or assets of the Company or any Subsidiary, provided that neither the Company nor any Subsidiary need pay any such tax or assessment or claims if (i) the amount, applicability or validity thereof is contested by the Company or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary or (ii) the nonpayment of all such taxes and assessments in the aggregate could not reasonably be expected to have a Material Adverse Effect.


 


Section 9.5. Corporate Existence, Etc.  The Company will at all times preserve and keep in full force and effect its corporate existence.  Subject to Section 10.6, the Company will at all times preserve and keep in full force and effect the corporate existence of each of its Subsidiaries (unless merged into the Company or a Subsidiary) and all rights and franchises of the Company and its Subsidiaries unless, in the good faith judgment of the Company, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.


 



	
Section 10.    Negative Covenants.







 


The Company covenants that so long as any of the Notes are outstanding:


 


Section 10.1. Maintenance of Consolidated Indebtedness.   The Company will not at any time permit Consolidated Indebtedness to be greater than 65% of Consolidated Capitalization.


 


Section 10.2. Subsidiary Indebtedness.  The Company will not permit any Subsidiary to create, assume, incur, guarantee or otherwise become liable in respect of any Indebtedness other than:


 


(a)Indebtedness outstanding on the Execution Date as specified on Schedule 5.15 and any extension, renewal, refunding or refinancing of any such 


 












 




  





-19-











  








 


Indebtedness, provided that the principal amount thereof outstanding immediately before giving effect to such extension, renewal, refunding or refinancing is not increased;


 


(b)Indebtedness of any Person existing at the time such Person becomes a Subsidiary (and not incurred in anticipation thereof) and any extension, renewal, refunding or refinancing of any such Indebtedness, provided that the principal amount thereof outstanding immediately before giving effect to such extension, renewal, refunding or refinancing is not increased and neither the Company nor any other Subsidiary shall assume or otherwise be directly or indirectly liable for such Indebtedness;


 


(c)Indebtedness owing to the Company or a Wholly-Owned Subsidiary; and


 


(d)Indebtedness not otherwise permitted by clauses (a) through (c) above, provided that Priority Debt (as defined below) does not exceed 10% of Consolidated Capitalization.


 


For purposes of this Section 10.2, a Subsidiary shall be deemed to have incurred Indebtedness previously owed to the Company or another Subsidiary at the time the obligee ceases for any reason to be the Company or a Wholly-Owned Subsidiary.


 


Section 10.3. Liens.  The Company will not and will not permit any Subsidiary to create, assume, incur or suffer to exist any Lien upon or with respect to any property or assets, whether now owned or hereafter acquired, without making effective provision (pursuant to documentation in form and substance reasonably satisfactory to the Required Holders) whereby the Notes shall be secured by such Lien equally and ratably with or prior to any and all Indebtedness and other obligations to be secured thereby, provided that nothing in this Section 10.3 shall prohibit:


 


(a)Liens in respect of property of the Company or a Subsidiary existing on the Execution Date and described in Schedule 5.15;


 


(b)Liens in respect of property acquired or constructed by the Company or a Subsidiary after the Execution Date, which are created at the time of or within 120 days after acquisition or completion of construction of such property to secure Indebtedness assumed or incurred to finance all or any part of the purchase price or cost of construction of such property, provided that in any such case


 


(i)no such Lien shall extend to or cover any other property of the Company or such Subsidiary, as the case may be, and


 


(ii)the aggregate principal amount of Indebtedness secured by all such Liens in respect of any such property shall not exceed the cost of such property and any improvements then being financed;







 




  





-20-











  








(c)Liens in respect of property acquired by the Company or a Subsidiary after the Execution Date, existing on such property at the time of acquisition thereof (and not created in anticipation thereof), or in the case of any Person that after the Execution Date becomes a Subsidiary or is consolidated with or merged with or into the Company or a Subsidiary or sells, leases or otherwise disposes of all or substantially all of its property to the Company or a Subsidiary, Liens existing at the time such Person becomes a Subsidiary or is so consolidated or merged or effects such sale, lease or other disposition of property (and not created in anticipation thereof), provided that in any such case no such Lien shall extend to or cover any other property of the Company or such Subsidiary, as the case may be;


 


(d)Liens securing Indebtedness owed by a Subsidiary to the Company or to a Subsidiary;


 


(e)extensions, renewals or replacements of any Liens permitted by clause (a), (b) or (c) above (including successive extensions, renewals and replacements), provided in each case that the principal amount of Indebtedness (or the maximum commitment therefor) secured by any such Lien is not increased and such Lien does not extend to or cover any property other than the property covered by such Lien on the date of such extension, renewal or replacement;


 


(f)Liens (i) for taxes or assessments or other governmental charges or levies, either not yet delinquent, or which are being contested in good faith by appropriate proceedings provided that the Company has established adequate reserves therefor in accordance with GAAP, (ii) created by or resulting from litigation or legal proceedings which are currently being contested in good faith by appropriate proceedings and do not involve amounts that in the aggregate would exceed $10,000,000 and (iii) incidental to the normal conduct of the business of the Company or any Subsidiary or the ownership of its property which are not incurred in connection with the incurrence of Indebtedness and which do not in the aggregate materially impair the use of such property in the operation of the business of the Company and its Subsidiaries taken as a whole or the value of such property for the purposes of such business; or


 


(g)Liens which would otherwise not be permitted by clauses (a) through (f) above, securing additional Indebtedness of the Company or a Subsidiary, provided that Priority Debt does not exceed 10% of Consolidated Capitalization; and provided, further, that, notwithstanding the foregoing, in the event that at any time the Company or any Subsidiary provides a Lien to or for the benefit of the lenders under the Bank Credit Agreement or the administrative agent on their behalf, then the Company will (if the Company has provided such Lien), and will cause each of its Subsidiaries that has provided such Lien to concurrently grant to and for the benefit of the holders of the Notes a similar first priority Lien (subject only to Liens otherwise permitted by the Bank Credit Agreement and this Section 10.3, and ranking pari passu with the Lien provided to or for the benefit of the lenders and/or the administrative agent, as the case may be, under such Bank Credit Agreement), over the same assets, property and undertaking of the Company and the Subsidiary as those encumbered in respect of the Bank Credit Agreement in form 







 




  





-21-











  








 


and substance satisfactory to the Required Holders with such security to be the subject of an intercreditor agreement among the lenders under the Bank Credit Agreement and/or the administrative agent, as the case may be, under the Bank Credit Agreement or the administrative agent on their behalf, as the case may be, and the holders of Notes, which shall be satisfactory in form and substance to the Required Holders.


 


As used in this Agreement the term “Priority Debt” means, at any date, the sum (without duplication) of (A) the aggregate unpaid principal amount of Indebtedness (including Capitalized Lease Obligations) of the Company and its Subsidiaries secured by Liens (other than Liens permitted by clauses (a) through (f) of this Section 10.3) plus (B) the aggregate Attributable Debt in connection with all Sale and Leaseback Transactions of the Company and its Subsidiaries entered into after the Execution Date, in accordance with the provisions of Section 10.4(c) plus (C) the aggregate unpaid principal amount of Indebtedness of all Subsidiaries (other than Indebtedness permitted by Section 10.2(b) and (c)).


 


Section 10.4. Limitation on Sale and Leaseback Transactions.  The Company will not and will not permit any Subsidiary to enter into any arrangement, directly or indirectly, with any Person whereby the Company or such Subsidiary shall sell, lease or transfer any asset, whether now owned or hereafter acquired, and then or thereafter rent or lease as lessee such asset or any part thereof or any other asset that the Company or such Subsidiary, as the case may be, intends to use for substantially the same purposes as the asset being sold, leased or transferred (any such sale, lease or transfer and rent or lease, a “Sale and Leaseback Transaction”), unless:


 


(a)such Sale and Leaseback Transaction involves an asset upon which a Lien would at the time be permitted by Section 10.3(b) without equally and ratably securing the Notes or such Sale and Leaseback Transaction is between the Company and a Subsidiary as lessee and involves an asset subject to a Lien permitted by Section 10.3(d);


 


(b)such lease is for a period not exceeding one year, at the expiration of which it is intended that the use of such asset by the lessee will be discontinued; or


 


(c)Priority Debt (which includes the Attributable Debt resulting from such Sale and Leaseback Transaction) does not exceed 10% of Consolidated Capitalization.


 


Section 10.5. Disposition of Assets.  The Company will not and will not permit any Subsidiary to, directly or indirectly, sell, lease, transfer or otherwise dispose of (collectively a “Disposition”) any of its assets, whether now owned or hereafter acquired, unless after giving effect to any proposed Disposition, the aggregate net book value of all assets of the Company and its Subsidiaries that were the subject of a Disposition during the period (x) commencing on January 1, 2010 and ending on the date of such proposed Disposition does not exceed 10% of Consolidated Total Assets and (y) commencing on the first day of the then current fiscal year of the Company and ending on the date of such proposed Disposition does not exceed 5% of Consolidated Total Assets (Consolidated Total Assets in each case to be determined as at the end of the immediately preceding fiscal year), provided that the following Dispositions shall not be taken into account for purposes of this Section 10.5:







 




  





-22-











  








(a)any Disposition in the ordinary course of business;


 


(b)the Disposition of the Company’s Electric Systems Work Center Facility located in Shelton, Connecticut;


 


(c)Sale and Leaseback Transactions permitted by Section 10.4; and


 


(d)any other Disposition for fair value to the extent that the Net Proceeds Amount of such Disposition is applied within 360 days after the date thereof to the acquisition of other assets for use in the business of the Company or any Subsidiary (such assets not to include cash or marketable securities) or to reduce outstanding unsubordinated Indebtedness of the Company or any Subsidiary (any such reduction to include either (i) prepayment of Notes pursuant to Section 8.1 in an aggregate unpaid principal amount that bears the same relation to the amount then being applied to reduce such Indebtedness as the aggregate unpaid principal amount of the Notes bears to the aggregate unpaid principal amount of outstanding unsubordinated Indebtedness of the Company and its Subsidiaries, or (ii) an offer by the Company to all holders of Notes to purchase, at not less than par on the same terms and conditions and which offer shall remain outstanding for at least 30 days, Notes in an aggregate unpaid principal amount at least equal to such pro rata portion of such unsubordinated Indebtedness being so reduced, allocated pro rata among all Notes tendered, and the requirements of this subclause (d) with respect to prepayment of Notes shall be deemed to be satisfied with respect to such Disposition if such offer is made and, if accepted, consummated).


 


For purposes of this Section 10.5 any shares of Voting Stock of a Subsidiary that are the subject of a Disposition (including without limitation pursuant to an issuance of shares by such Subsidiary) shall be valued at the aggregate net book value of the assets of such Subsidiary multiplied by a fraction of which the numerator is the aggregate number of shares of Voting Stock of such Subsidiary issued or disposed of in such Disposition and the denominator is the aggregate number of shares of Voting Stock of such Subsidiary outstanding immediately prior to such Disposition.


 


Section 10.6. Merger, Consolidation, Etc.  The Company will not consolidate with or merge with any other corporation or convey, transfer or lease all or substantially all of its assets in a single transaction or series of transactions to any Person unless:


 


(a)the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer or lease substantially all of the assets of the Company as an entirety, as the case may be, shall be a solvent corporation organized and existing under the laws of the United States or any State thereof (including the District of Columbia), and, if the Company is not such successor corporation, (i) such corporation shall have executed and delivered to each holder of any Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement and the Notes in form and substance reasonably satisfactory to the Required Holders and (ii) shall have caused to be delivered to each holder of any Notes an opinion of nationally recognized independent counsel, or other independent counsel 







 




  





-23-











  








 


reasonably satisfactory to the Required Holders, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms hereof; and


 


(b)immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing.


 


No such conveyance, transfer or lease of all or substantially all of the assets of the Company shall have the effect of releasing the Company or any successor corporation that shall theretofore have become such in the manner prescribed in this Section 10.6 from its liability under this Agreement or the Notes.


 


Section 10.7. Transactions with Affiliates.  The Company will not and will not permit any Subsidiary to enter into directly or indirectly any transaction or group of related transactions (including without limitation the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate (other than the Company or another Subsidiary), except in the ordinary course and pursuant to the reasonable requirements of the Company’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would be obtainable in a comparable arm’s-length transaction with a Person not an Affiliate.


 


Section 10.8. Terrorism Sanctions Regulations.  The Company will not and will not permit any Subsidiary to (a) become a Person described or designated in the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or (b) knowingly engage in any dealings or transactions with any such Person.


 



	
Section 11.    Events of Default.







 


An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:


 


(a)the Company defaults in the payment of any principal or Make-Whole Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or


 


(b)the Company defaults in the payment of any interest on any Note for more than five days after the same becomes due and payable; or


 


(c)the Company defaults in the performance of or compliance with any term contained in Section 7.1(d) (provided that if the Default, Event of Default or claimed default giving rise to the requirement for a notice in respect thereof, the non-delivery of which has caused the occurrence of an Event of Default hereunder, has been cured or otherwise remedied, such that it is not a Default or Event of Default under Section 11(d), then no Event of Default hereunder by virtue of such breach of Section 7.1(d) shall constitute an Event of Default hereunder) or Sections 10.1 to 10.6, inclusive; or


 




  





-24-











  




 




(d)the Company defaults in the performance of or compliance with any term contained herein (other than those referred to in paragraphs (a), (b) and (c) of this Section 11) and such default is not remedied within 30 days after a Responsible Officer obtains knowledge of such default; or


 


(e)any representation or warranty made in writing by or on behalf of the Company or any officer of the Company in this Agreement or in any writing furnished in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on the date as of which made; or


 


(f)(i) the Company or any Significant Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Indebtedness (other than the Notes) that is outstanding in an aggregate principal amount of at least $10,000,000 beyond any period of grace provided with respect thereto, or (ii) the Company or any Significant Subsidiary is in default in the performance of or compliance with any term of any evidence of any Indebtedness outstanding in an aggregate principal amount of at least $10,000,000 or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Indebtedness has become, or has been declared (or one or more Persons are entitled to declare such Indebtedness to be), due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iii) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Indebtedness to convert such Indebtedness into equity interests), (x) the Company or any Subsidiary has become obligated to purchase or repay Indebtedness before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least $10,000,000, or (y) one or more Persons have the right to require the Company or any Subsidiary so to purchase or repay such Indebtedness; or


 


(g)the Company or any Significant Subsidiary (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or


 


(h)a court or other Governmental Authority of competent jurisdiction enters an order appointing, without consent by the Company or any Significant Subsidiary, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, 


 


 




  





-25-











  






 


or ordering the dissolution, winding-up or liquidation of the Company or any such Significant Subsidiary, or any such petition shall be filed against the Company or any such Significant Subsidiary and such petition shall not be dismissed within 60 days; or


 


(i)a final judgment or judgments for the payment of money aggregating in excess of $10,000,000 are rendered against one or more of the Company and its Significant Subsidiaries which judgments are not, within 60 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of such stay; or


 


(j)if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards or extension of any amortization period is sought or granted under section 412 of the Code, (ii) a notice of intent to terminate any Plan shall have been or is reasonably expected to be filed with the PBGC or the PBGC shall have instituted proceedings under ERISA section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified the Company or any ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) the Company or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, (iv) the Company or any ERISA Affiliate withdraws from any Multiemployer Plan and withdrawal liability exceeds $5,000,000, or (v) the Company or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in any manner that would increase the liability of the Company or any Subsidiary thereunder by more than $5,000,000; and any such event or events described in clauses (i) through (v) above, either individually or together with any other such event or events, could reasonably be expected to have a Material Adverse Effect.


 


As used in Section 11(j), the terms “employee benefit plan” and “employee welfare benefit plan” shall have the respective meanings assigned to such terms in section 3 of ERISA.


 



	
Section 12.    Remedies on Default, Etc.







 


Section 12.1. Acceleration.  (a)  If an Event of Default with respect to the Company described in paragraph (g) or (h) of Section 11 (other than an Event of Default described in clause (i) of paragraph (g) or described in clause (vi) of paragraph (g) by virtue of the fact that such clause encompasses clause (i) of paragraph (g)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.


 


(b)If any other Event of Default has occurred and is continuing, the Required Holders may at any time at its or their option, by notice or notices to the Company, declare all the Notes at the time outstanding to be immediately due and payable.


 


(c)If any Event of Default described in paragraph (a) or (b) of Section 11 has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event 


 












 




  





-26-











  








of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable.


 


Upon any Note becoming due and payable under this Section 12.1, whether automatically or by declaration, such Note will forthwith mature and the entire unpaid principal amount of such Note, plus (x) all accrued and unpaid interest thereon and (y) the Make-Whole Amount determined in respect of such principal amount, shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived.  The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided) and that the provision for payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.


 


Section 12.2. Other Remedies.  If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.


 


Section 12.3. Rescission.  At any time after any Notes have been declared due and payable pursuant to paragraph (b) or (c) of Section 12.1, the Required Holders, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and any overdue interest in respect of the Notes, at the Default Rate, (b) all Events of Default and Defaults, other than the non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (c) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes.  No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.


 


Section 12.4. No Waivers or Election of Remedies, Expenses, Etc.  No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies.  No right, power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.  Without limiting the obligations of the Company under Section 15, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including without limitation reasonable attorneys’ fees, expenses and disbursements.







 




  





-27-











  









	
Section 13.    Registration; Exchange; Substitution of Notes.







 


Section 13.1. Registration of Notes.  The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes.  The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register.  Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary.  The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.


 


Section 13.2 Transfer and Exchange of Notes.  Upon surrender of any Note at the principal executive office of the Company for registration of transfer or exchange (and in the case of a surrender for registration of transfer, duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or his attorney duly authorized in writing and accompanied by the address for notices of each transferee of such Note or part thereof), within five Business Days thereafter the Company shall execute and deliver, at the Company’s expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note.  Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form set out in Exhibit 1.  Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon.  The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes.  Notes shall not be transferred in denominations of less than $100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $100,000.  Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representations set forth in Section 6.


 


Section 13.3. Replacement of Notes.  Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and


 


(a)in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or any other Institutional Investor, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or


 


(b)in the case of mutilation, upon surrender and cancellation thereof,


 


within five Business Days thereafter the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have 







 




  





-28-











  








 


been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.


 



	
Section 14.    Payments on Notes.







 


Section 14.1. Place of Payment.  Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made at the principal office of Citibank, N.A. in New York City.  The Company may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be the principal office of a bank or trust company in New York City or Chicago.


 


Section 14.2. Home Office Payment.  So long as you or your nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, and interest by the method and at the address specified for such purpose below your name in Schedule A, or by such other method or at such other address as you shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, you shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 14.1.  Prior to any sale or other disposition of any Note held by you or your nominee you will, at your election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2.  The Company will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by you under this Agreement and that has made the same agreement relating to such Note as you have made in this Section 14.2.


 



	
Section 15.    Expenses, Etc.







 


Section 15.1. Transaction Expenses.  Whether or not the transactions contemplated hereby are consummated, the Company will pay all costs and expenses (including reasonable attorneys’ fees of your special counsel and, if reasonably required, local or other counsel) incurred by you and each other Purchaser or holder of a Note in connection with such transactions and in connection with any amendments, waivers or consents under or in respect of this Agreement or the Notes (whether or not such amendment, waiver or consent becomes effective), including without limitation:  (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement or the Notes, or by reason of being a holder of any Note; (b) the costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information and all subsequent annual and interim filings of documents and financial information related to this Agreement, with the 







 




  





-29-











  








 


Securities Valuation Office of the National Association of Insurance Commissioners or any successor organization succeeding to the authority thereof; and (c) the costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby and by the Notes.  The Company will pay, and will save you and each other holder of a Note harmless from, all claims in respect of any fees, costs or expenses if any, of brokers and finders (other than those retained by you).


 


In furtherance of the foregoing, on the date of the Closing the Company will pay or cause to be paid the fees and disbursements and other charges (including estimated unposted disbursements and other charges as of the date of the Closing) of your special counsel which are reflected in the statement of such special counsel submitted to the Company at least one Business Day prior to the date of the Closing.  The Company will also pay, promptly upon receipt of supplemental statements therefor, reasonable additional fees, if any, and disbursements and charges of such special counsel in connection with the transactions hereby contemplated (including disbursements and other charges unposted as of the date of the Closing to the extent such disbursements and other charges exceed estimated amounts paid as aforesaid).


 


Section 15.2. Survival.  The obligations of the Company under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement or the Notes, and the termination of this Agreement.


 



	
Section 16.    Survival of Representations and Warranties; Entire Agreement.







 


All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by you of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of you or any other holder of a Note.  All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations and warranties of the Company under this Agreement.  Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between you and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.


 



	
Section 17.    Amendment and Waiver.







 


Section 17.1. Requirements.  This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Company and the Required Holders, except that (a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21, or any defined term (as it is used therein), will be effective as to you unless consented to by you in writing, and (b) no such amendment or waiver may, without the written consent of the holder of each Note at the time outstanding, (i) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest or of 







 




  





-30-











  








 


the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.


 


Section 17.2. Solicitation of Holders of Notes.


 


(a)Solicitation.  The Company will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes.  The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 17 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.


 


(b)Payment.  The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security, to any holder of Notes as consideration for or as an inducement to such holder’s consideration of or entering into of any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted, on the same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver or amendment.


 


(c)Consent in Contemplation of Transfer.  Any consent made pursuant to this Section 17.2 by the holder of any Note that has transferred or has agreed to transfer such Note to the Company, any Subsidiary or any Affiliate of the Company and has provided or has agreed to provide such written consent as a condition to such transfer shall be void and of no force or effect except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such transferring holder.


 


Section 17.3. Binding Effect, Etc.  Any amendment or waiver consented to as provided in this Section 17 applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver.  No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon.  No course of dealing between the Company and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note.  As used herein, the term “this Agreement” and references thereto shall mean this Agreement as it may from time to time be amended or supplemented.


 


Section 17.4. Notes Held by Company, Etc.  Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then 







 




  





-31-











  








 


outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or the Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.


 



	
Section 18.    Notices.







 


All notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by United States mail, postage prepaid, or (c) by a recognized United States based overnight delivery service (with charges prepaid).  Any such notice must be sent:


 


(a)if to you or your nominee, to you or it at the address specified for such communications in Schedule A, or at such other address as you or it shall have specified to the Company in writing,


 


(b)if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing, or


 


(c) if to the Company, to the Company at its address set forth at the beginning hereof to the attention of the Treasurer, or at such other address as the Company shall have specified to the holder of each Note in writing.


 


Notices under this Section 18 will be deemed given only when actually received.  The information required to be sent to holders of Notes pursuant to Sections 7.1(a), (b) or (c) or Section 7.2 may be sent by any of the methods listed above or by electronic mail at such address as such holder shall have specified to the Company in writing.


 



	
Section 19.    Reproduction of Documents.







 


This Agreement and all documents relating thereto, except the Notes themselves, but including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by you at the Closing, and (c) financial statements, certificates and other information previously or hereafter furnished to you, may be reproduced by you by any photographic, photostatic, electronic, digital, microfilm, microcard, miniature photographic or other similar process and you may destroy any original document so reproduced.  The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by you in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.  This Section 19 shall not prohibit the Company or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.


 




  





-32-











  




 




Section 20.    Confidential Information.


 


For the purposes of this Section 20, “Confidential Information” means information delivered to you by or on behalf of the Company, any Subsidiary or UIL Holdings in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by you as being confidential information of the Company, such Subsidiary or UIL Holdings, provided that such term does not include information that (a) was publicly known or otherwise known to you prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by you or any Person acting on your behalf, (c) otherwise becomes known to you other than through disclosure by the Company, any Subsidiary or UIL Holdings, (d) constitutes financial statements delivered to you under Section 7.1 that are otherwise publicly available or (e) involves the tax treatment and tax structure of the transactions as defined in United States Treasury Regulation section 1.6011-4(c) and all materials of any kind (including opinions or other tax analyses) that are provided relating to such tax treatment and tax structure.  You will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by you in good faith to protect confidential information of third parties delivered to you, provided that you may deliver or disclose Confidential Information to (i) your directors, officers, trustees, employees, agents, attorneys and Affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by your Notes), (ii) your financial advisors and other professional advisors who agree, or whose duties require them, to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which you sell or offer to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (v) any Person from which you offer to purchase any security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (vi) any federal or state regulatory authority having jurisdiction over you, (vii) the National Association of Insurance Commissioners or any similar organization, or any nationally recognized rating agency that requires access to information about your investment portfolio or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to you, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which you are a party or (z) if an Event of Default has occurred and is continuing, to the extent you may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under your Notes and this Agreement.  Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement.  On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying the provisions of this Section 20.







 




  





-33-











  









	
Section 21.    Substitution of Purchaser.







 


You shall have the right to substitute any one of your Affiliates as the purchaser of the Notes that you have agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both you and such Affiliate, shall contain such Affiliate’s agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations set forth in Section 6.  Upon receipt of such notice, wherever the word “you” is used in this Agreement (other than in this Section 21), such word shall be deemed to refer to such Affiliate in lieu of you.  In the event that such Affiliate is so substituted as a purchaser hereunder and such Affiliate thereafter transfers to you all of the Notes then held by such Affiliate, upon receipt by the Company of notice of such transfer, wherever the word “you” is used in this Agreement (other than in this Section 21), such word shall no longer be deemed to refer to such Affiliate, but shall refer to you, and you shall have all the rights of an original holder of the Notes under this Agreement.


 



	
Section 22.    Miscellaneous.







 


Section 22.1. Successors and Assigns.  All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including without limitation any subsequent holder of a Note) whether so expressed or not.


 


Section 22.2. Construction.  Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant.  Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.


 


For the avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall be deemed to be a part hereof.


 


Section 22.3. Consent to Jurisdiction; Service of Process; Waiver of Jury Trial.  (a)  The Company irrevocably submits to the non-exclusive in personam jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement or the Notes.  To the fullest extent it may effectively do so under applicable law, the Company irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the in personam jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.


 


(b)The Company consents to process being served in any suit, action or proceeding of the nature referred to in paragraph (a) of this Section 22.3 by mailing a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to the address of the 







 




  





-34-











  








 


Company specified in Section 18 or at such other address of which you shall then have been notified pursuant to said Section.  The Company agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the full extent permitted by law, be taken and held to be valid personal service upon and personal delivery to the Company.  Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.


 


(c)Nothing in this Section 22.3 shall affect the right of any holder of Notes to serve process in any manner permitted by law, or limit any right that the holders of any of the Notes may have to bring proceedings against the Company in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.


 


(d)Each of the parties hereto waives trial by jury in any action brought on or with respect to this Agreement, the Notes or any other document executed in connection herewith or therewith.


 


Section 22.4. Payments Due on Non-Business Days.  Anything in this Agreement or the Notes to the contrary notwithstanding (but without limiting the requirement in Section 8.2 that notice of any optional prepayment specify a Business Day as the date fixed for such prepayment), any payment of principal of or Make-Whole Amount or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; provided that if the maturity date of any Note is a date other than a Business Day, the payment otherwise due on such maturity date shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.


 


Section 22.5. Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the fullest extent permitted by applicable law) not invalidate or render unenforceable such provision in any other jurisdiction.


 


Section 22.6. Accounting Terms.  All accounting terms used herein which are not expressly defined in this Agreement have the meanings respectively given to them in accordance with GAAP.  Except as otherwise specifically provided herein, all computations made pursuant to this Agreement shall be made in accordance with GAAP and all balance sheets and other financial statements with respect thereto shall be prepared in accordance with GAAP.


 


Each of the holders of the Notes by its acceptance thereof understands and agrees with the Company that in the event that a change in GAAP is the sole cause of the Company violating any of the covenants contained in Sections 10.1 through 10.5 hereof, or causes a Default or Event of Default to occur, at a time when no other Default or Event of Default exists, then and in such event, anything contained in this Agreement to the contrary notwithstanding, no Default or 







 




  





-35-











  








 


Event of Default will be caused by such change in GAAP for a period of 90 days following the event which would otherwise be treated as a Default or Event of Default and the Company shall have 90 days from and after the date of the occurrence of such event within which to enter into an amendment with the Required Holders and the holders and the Company shall undertake in good faith to amend any affected provisions of this Agreement so as to preserve the intent and purpose thereof and to accommodate such change in GAAP and to enter into an amendment hereof to reflect the same, such amendment to be in form and substance satisfactory to the Company and the Required Holders.


 


For purposes of determining compliance with the financial covenants contained in this Agreement, any election by the Company to measure an item of Indebtedness using an amount other than par (as permitted by FASB 159 or any similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.


 


Section 22.7. Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.  Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.


 


Section 22.8. Governing Law.  This Agreement and the Notes shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.


*    *    *    *    *







 




  





-36-











  








 


If you are in agreement with the foregoing, please sign the form of agreement in the space below provided on a counterpart of this Agreement and return it to the Company, whereupon the foregoing shall become a binding agreement between you and the Company.


 


    Very truly yours,


 







 



	  	
The United Illuminating Company























	  	
By     /s/ Susan E. Allen                                                    


	  	
Name: Susan E. Allen


	  	
Title:   Vice President Investor Relations


	  	
      and Treasurer







 












 




  





-37-











  








 


The foregoing is hereby agreed to as of the date thereof.







 



	  	
The Lincoln National Life Insurance Company


















	  	
By:  Delaware Investment Advisers, a series of Delaware Management Business Trust, Attorney in Fact























	  	
By     /s/ Nicole W. Tullo             


	  	
Name: Nicole W. Tullo


	  	
Title: Vice President












 




  





-38-











  








 


The foregoing is hereby agreed to as of the date thereof.







 



	  	
Metropolitan Life Insurance Company













	  	
MetLife Investors USA Insurance Company


	  	
MetLife Insurance Company of Connecticut













	  	
By:  Metropolitan Life Insurance Company, for itself and as investment manager for the above entities


















	  	
By     /s/ John A. Tanyeri                                                            


	  	
Name: John A. Tanyeri


	  	
Title: Director












 




  





-39-











  








 


The foregoing is hereby agreed to as of the date thereof.







 



	  	
Hartford Life and Annuity Insurance Company


	  	
Hartford Life Insurance Company


















	  	
By:   Hartford Investment Management Company


	  	
         Their Agent and Attorney-in-Fact























	  	
By     /s/ Dawn M. Crunden                                                            


	  	
Name: Dawn M. Crunden


	  	
Title:   Vice President












 




  





-40-











  








 


The foregoing is hereby agreed to as of the date thereof.







 



	  	
C.M. Life Insurance Company













	  	
By:    Babson Capital Management LLC as


Investment Adviser























	  	
By     /s/ Emeka Onukwugha                                                            


	  	
Name: Emeka Onukwugha


	  	
Title:  Managing Director



























 



	  	
Massachusetts Mutual Life Insurance Company


















	  	
By:     Babson Capital Management LLC as Investment Adviser























	  	
By      /s/ Emeka Onukwugha                                                            


	  	
Name: Emeka Onukwugha


	  	
Title:  Managing Director






















 




  





-41-











  








 


The foregoing is hereby agreed to as of the date thereof.








	  	
Thrivent Financial for Lutherans























	  	
By     /s/ Patricia Eitrheim                                                            


	  	
Name: Patricia Eitrheim


	  	
Title:  Director












 




  





-42-











  








 


The foregoing is hereby agreed to as of the date thereof.







 



	  	
Mutual of Omaha Insurance Company























	  	
By     /s/ Justin P. Kavan                                                            


	  	
Name: Justin P. Kavan


	  	
Title: Vice President



























 



	  	
United of Omaha Insurance Company























	  	
By     /s/ Justin P. Kavan                                                            


	  	
Name: Justin P. Kavan


	  	
Title: Vice President

















 




  





-43-











  








 


The foregoing is hereby agreed to as of the date thereof.







 



	  	
Jackson National Life Insurance Company


















	  	
By:    PPM America, Inc., as attorney in fact,


	  	
on behalf of Jackson National Life


	  	
Insurance Company























	  	
By     /s/ Brian Manczak                                                 


	  	
Name: Brian Manczak


	  	
Title:   Vice President












 




  





-44-











  








 


The foregoing is hereby agreed to as of the date thereof.







 



	  	
Connecticut General Life Insurance Company


















	  	
By:    CIGNA Investments, Inc., (authorized agent)























	  	
By     /s/ Robert W. Eccles                                                            


	  	
Name: Robert W. Eccles


	  	
Title: Senior Managing Director

















 




  





-45-











  








Defined Terms


 


As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:


 


“Affiliate” means, at any time, and with respect to any Person, (a) any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person, and (b) any Person beneficially owning or holding, directly or indirectly, 10% or more of any class of voting or equity interests of the Company or any Subsidiary or any corporation of which the Company and its Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly, 10% or more of any class of voting or equity interests.  As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.  Unless the context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Company.


 


“Anti-Terrorism Order” means Executive Order No. 13,224 of September 24, 2001, Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49,079 (2001), as amended.


 


“Attributable Debt” means, as to any particular lease relating to a Sale and Leaseback Transaction, the total amount of rent (discounted semiannually from the respective due dates thereof at the interest rate implicit in such lease) required to be paid by the lessee under such lease during the remaining term thereof.  The amount of rent required to be paid under any such lease for any such period shall be (a) the total amount of the rent payable by the lessee with respect to such period after excluding amounts required to be paid on account of maintenance and repairs, insurance, taxes, assessments, utilities, operating and labor costs and similar charges plus (b) without duplication, any guaranteed residual value in respect of such lease to the extent such guarantee would be included in indebtedness in accordance with GAAP.


 


“Bank Credit Agreement” means (a) that certain Credit Agreement dated December 22, 2006 among the Company, UIL Holdings, Citibank, N.A., as administrative agent, and the other commercial banks from time to time parties thereto, as the same may from time to time be amended, extended, renewed or replaced or (b) if for any reason whatsoever, the Bank Credit Agreement is not extended, renewed or replaced or otherwise ceases to be in full force and effect or otherwise falls-away, then and in such event Bank Credit Agreement means the credit, term loan or like commercial bank agreement between the Company and one or more commercial banks with the largest commitment from such bank or banks to extend credit thereunder to the Company as compared to any other credit, term loan or like commercial bank agreement then outstanding between any bank or banks and the Company.


 


“Business Day” means any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed.







Schedule B




  





  











  








“Capital Lease” means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP.


 


“Capitalized Lease Obligations” means with respect to any Person, all outstanding obligations of such Person in respect of Capital Leases, taken at the capitalized amount thereof accounted for as indebtedness in accordance with GAAP.


 


“Closing” is defined in Section 3.


 


“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.


 


“Company” means The United Illuminating Company, a specially chartered Connecticut corporation.


 


“Confidential Information” is defined in Section 20.


 


“Consolidated Capitalization” means, at any date, the sum of (a) Consolidated Indebtedness plus (b) shareholders’ equity of all classes of stock (except mandatorily redeemable Preferred Stock) of the Company and its Subsidiaries, all as determined on a consolidated basis in accordance with GAAP.


 


“Consolidated Indebtedness” means, at any date, all Indebtedness of the Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP.


 


“Consolidated Total Assets” means, as of any date, the total assets of the Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP.


 


“Default” means an event or condition the occurrence or existence of which would, with the giving of notice or the lapse of time, or both, become an Event of Default.


 


“Default Rate” means that rate of interest that is the greater of (i) 2% per annum above the stated interest rate for the Notes and (ii) 2% above the rate of interest publicly announced by Citibank, N.A. from time to time at its principal office in New York City as its prime or base rate.


 


“Disposition” is defined in Section 10.5.


 


“Environmental Laws” means any and all United States federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.







 




  





B-2











  








 


“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.


 


“ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under section 414 of the Code.


 


“Event of Default” is defined in Section 11.


 


“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.


 


“Execution Date” is defined in Section 3.


 


“GAAP” means generally accepted accounting principles as in effect from time to time in the United States of America.


 


“Governmental Authority” means


 


(a)the government of


 


(i)the United States of America or any State or other political subdivision thereof, or


 


(ii)any jurisdiction in which the Company or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company or any Subsidiary, or


 


(b)any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.


 


“Guaranty” means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including without limitation obligations incurred through an agreement, contingent or otherwise, by such Person:


 


(a)to purchase such indebtedness or obligation or any property constituting security therefor;


 


(b)to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation;







 




  





B-3











  








(c)to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of any other Person to make payment of the indebtedness or obligation; or


 


(d)otherwise to assure the owner of such indebtedness or obligation against loss in respect thereof.


 


In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor.


 


“Hazardous Materials” means any and all pollutants, toxic or hazardous wastes or any other substances that might pose a hazard to health or safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage, or filtration of which is or shall be restricted, prohibited or penalized by any applicable law (including without limitation asbestos, urea formaldehyde foam insulation and polychlorinated biphenyls).


 


“holder” means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 13.1.


 


“Indebtedness” with respect to any Person means, at any time, without duplication,


 


(a)its liabilities for borrowed money and its redemption obligations in respect of mandatorily redeemable Preferred Stock,


 


(b)its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business and not overdue but including all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property),


 


(c)its Capitalized Lease Obligations,


 


(d)all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities),


 


(e)all its liabilities in respect of letters of credit or instruments serving a similar function issued or accepted for its account by banks and other financial institutions (whether or not representing obligations for borrowed money),


 


(f)Swaps of such Person not entered into for the purpose of hedging in the ordinary course of business, and


 


(g)any Guaranty of such Person with respect to liabilities of a type described in any of clauses (a) through (f) above.







 




  





B-4











  








Indebtedness of any Person shall include all obligations of such Person of the character described in clauses (a) through (g) above to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP.


 


“Institutional Investor” means (a) any original purchaser of a Note, (b) any holder of a Note holding (together with one or more of its Affiliates) more than 2% of the aggregate principal amount of the Notes then outstanding, and (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form.


 


“Lien” means, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or Capital Lease, upon or with respect to any property or asset of such Person (including in the case of stock, stockholder agreements, voting trust agreements and all similar arrangements).


 


“Make-Whole Amount” is defined in Section 8.6.


 


“Material” means material in relation to the business, operations, affairs, financial condition, assets, properties or prospects of the Company and its Subsidiaries taken as a whole.


 


“Material Adverse Effect” means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole, (b) the ability of the Company to perform its obligations under this Agreement and the Notes or (c) the validity or enforceability of this Agreement or the Notes.


 


“Memorandum” is defined in Section 5.3.


 


“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).


 


“Net Proceeds Amount” means, with respect to any Disposition by any Person, an amount equal to the difference of


 


(a)the aggregate amount of cash received by such Person in respect of such Disposition at any time (including without limitation the payment of principal and interest on any promissory note issued to such Person as consideration for such Disposition or the cash proceeds received upon the disposition of non-cash consideration received for such Disposition), minus


 


(b)the sum of


 


(i)all ordinary and reasonable out-of-pocket costs and expenses actually paid in cash by such Person in connection with such Disposition;







 




  





B-5











  








 


(ii)all sales, transfer and income taxes attributable to such Disposition, it being understood that income taxes in respect of such Disposition (A) shall be determined on a consolidated basis for the Company and its Subsidiaries, (B) shall be calculated without regard to any credits, deductions, carryforwards or carrybacks (except to the extent that any such credits or deductions are attributable to such Disposition), and (C) shall be computed on the assumption that such Disposition was the only transaction in which the Company and its Subsidiaries engaged during the period in respect of which such income taxes are payable; and


 


(iii)the principal amount of Indebtedness (and premium thereon, if any) secured by such asset that is required to be paid, and is paid, by such Person, as a condition to the consummation of such Disposition.


 


“Notes” is defined in Section 1.


 


“Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate.


 


“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.


 


“Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, or a government or agency or political subdivision thereof.


 


“Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA) that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability.


 


“Preferred Stock” means any class of capital stock of a corporation that is preferred over any other class of capital stock of such corporation as to the payment of dividends or the payment of any amount upon liquidation or dissolution of such corporation.


 


 “Priority Debt” is defined in Section 10.3.


 


“property” or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, inchoate or otherwise.


 


“PTE” is defined in Section 6.2.


 


“Purchaser” is defined in the first paragraph of this Agreement.







 




  





B-6











  








 


“QPAM Exemption” means Prohibited Transaction Class Exemption 84-14 issued on March 13, 1984 by the United States Department of Labor, as amended.


 


“Required Holders” means, at any time, the holder or holders of at least 51% in unpaid principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).


 


“Responsible Officer” means any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of this Agreement.


 


“Sale and Leaseback Transaction” is defined in Section 10.4.


 


“Securities Act” means the Securities Act of 1933, as amended from time to time.


 


“Senior Financial Officer” means the chief financial officer, principal accounting officer, treasurer or comptroller of the Company.


 


“Significant Subsidiary” means, at any date, any Subsidiary that accounts for more than 5% of the consolidated assets of the Company and its Subsidiaries on such date or accounted for more than 5% of the consolidated revenue of the Company and its Subsidiaries for the fiscal year ending on or immediately prior to such date.


 


“Subsidiary” means, as to any Person, any corporation, association or other business entity in which such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such entity, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries (unless such partnership can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries).  Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.


 


“Swaps” means, with respect to any Person, payment obligations with respect to interest rate swaps, currency swaps and similar obligations obligating such Person to make payments, whether periodically or upon the happening of a contingency.  For the purposes of this Agreement, the amount of the obligation under any Swap shall be the amount determined in respect thereof as of the end of the then most recently ended fiscal quarter of such Person, based on the assumption that such Swap had terminated at the end of such fiscal quarter, and in making such determination, if any agreement relating to such Swap provides for the netting of amounts payable by and to such Person thereunder or if any such agreement provides for the simultaneous payment of amounts by and to such Person, then in each such case, the amount of such obligation shall be the net amount so determined.


 


“UIL Holdings” means UIL Holdings Corporation, a Connecticut corporation.







 




  





B-7











  








“USA Patriot Act” means United States Public Law 107-56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act) Act of 2001, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.


 


“Voting Stock” means, with respect to any Person, any shares of stock or other equity interests of any class or classes of such Person whose holders are entitled under ordinary circumstances (irrespective of whether at the time stock or other equity interests of any other class or classes shall have or might have voting power by reason of the happening of any contingency) to vote for the election of a majority of the directors, managers, trustees or other governing body of such Person.


 


“Wholly-Owned Subsidiary” means, at any time, any Subsidiary all of the equity interests (except directors’ qualifying shares) and voting interests of which are owned by any one or more of the Company and the Company’s other Wholly-Owned Subsidiaries at such time.












 




  





B-8











  








[Form of Note]







The United Illuminating Company


 


6.09% Senior Note due July 27, 2040


 


 



	 No. R[____________]	 	 New York, New York
	 $[_______]	 	 [Date]
	 	 	 PPN: 910637 R@8





 


For Value Received, the undersigned, The United Illuminating Company (the “Company”), a specially chartered Connecticut corporation, hereby promises to pay to _____________________, or registered assigns, the principal sum of ___________________ Dollars ($_________) on July 27, 2040, with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) from the date hereof on the unpaid balance thereof at the rate of 6.09% per annum, payable semiannually on February 1 and August 1 in each year, commencing with February 1, 2011, and with a final payment on July 27, 2040, and (b) on any overdue payment of principal, any overdue payment of interest and any overdue payment of any premium or Make-Whole Amount (as defined in the Note Purchase Agreement referred to below), payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand) at a rate per annum from time to time equal to the greater of (i) 8.09% and (ii) 2% above the rate of interest publicly announced by Citibank, N.A. from time to time at its principal office in New York, New York as its prime or base rate.


 


Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at said principal office of Citibank, N.A. in New York, New York or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.


 


This Note is one of the 6.09% Senior Notes due July 27, 2040 issued pursuant to a Note Purchase Agreement dated as of May 13, 2010 (as from time to time amended, the “Note Purchase Agreement”) between the Company and the several Purchasers named therein and is entitled to the benefits thereof.  Each holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) to have made the representations set forth in Section 6 of the Note Purchase Agreement.


 


This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer accompanied by a written instrument of transfer duly executed by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving 


 












Exhibit 1




  





  











  








payment and for all other purposes, and the Company will not be affected by any notice to the contrary.


 


This Note is subject to optional prepayments of principal in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.


 


If an Event of Default, as defined in the Note Purchase Agreement, occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable premium or Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.


 


This Note shall be construed and enforced in accordance with, and the rights of the holder hereof shall be governed by, the laws of the State of New York, excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.


 








	  	
The United Illuminating Company























	  	
By                                                                                    


	  	
Name:


	  	
Title:












1-2