<PAGE>
Registration No. 333-________
As filed with the Securities and Exchange
Commission on February ___, 1998
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
MASSACHUSETTS ELECTRIC COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MASSACHUSETTS 04-1988940
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
25 RESEARCH DRIVE,
WESTBOROUGH, MASSACHUSETTS 01582
508-389-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)
MICHAEL E. JESANIS KIRK L. RAMSAUER
TREASURER ASSOCIATE GENERAL COUNSEL
25 RESEARCH DRIVE 25 RESEARCH DRIVE
WESTBOROUGH, MASSACHUSETTS 01582 WESTBOROUGH, MASSACHUSETTS 01582
508-389-2000 508-389-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENTS FOR SERVICE)
------------------------
PLEASE SEND COPIES OF ALL COMMUNICATIONS TO:
ROBERT W. MULLEN, JR., ESQ.
MILBANK, TWEED, HADLEY & MCCLOY
1 CHASE MANHATTAN PLAZA
NEW YORK, NEW YORK 10005
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: to be
determined by market conditions after the effective date of this Registration
Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
=============================================================================
TITLE
OF EACH PROPOSED PROPOSED
CLASS OF MAXIMUM MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
BEING BEING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER UNIT* PRICE* FEE
First Mortgage $60,000,000 100% $60,000,000 $17,700
Bonds
=============================================================================
*Used only for the purpose of calculating the amount of registration fee.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
The total number of pages contained in this Registration Statement is 19.
The Exhibit Index appears on page 19.
<PAGE>
##################################################
# SUBJECT TO COMPLETION, DATED FEBRUARY , 1998#
##################################################
PROSPECTUS
(LOGO)
MASSACHUSETTS ELECTRIC COMPANY
(A SUBSIDIARY OF NEW ENGLAND ELECTRIC SYSTEM)
$60,000,000
FIRST MORTGAGE BONDS
BOND INTEREST WILL BE PAYABLE SEMIANNUALLY.
THE BONDS WILL BE ISSUED ONLY AS FULLY REGISTERED BONDS
IN DENOMINATIONS OF $1,000 OR ANY INTEGRAL MULTIPLE THEREOF.
Massachusetts Electric Company (the Company) intends to offer, from time
to time, not exceeding $60 million aggregate principal amount of its First
Mortgage Bonds (the New Bonds). The New Bonds will be issued under a
supplement to the Company's First Mortgage Indenture and Deed of Trust dated
as of July 1, 1949. The New Bonds may be offered as one or more series and/or
issues, and each series and/or issue of New Bonds will bear interest at a
fixed rate, which, together with the series designation, principal amount,
purchase price, maturity, interest payment dates, redemption terms, and any
other specific provisions, will be established at the time of issuance and set
forth in a prospectus supplement (Prospectus Supplement) for that series
and/or issue. Interest on the New Bonds will be payable semiannually, and
upon maturity or earlier redemption. The New Bonds will be secured by a
direct first mortgage lien on substantially all of the Company's properties.
See "Description of the New Bonds".
The Company may sell the New Bonds by publicly inviting bids for the
purchase of the New Bonds, through negotiation with one or more underwriters,
through agents designated from time to time, or directly to other purchasers.
See "Plan of Distribution". The names of the purchasers, underwriters or
agents, the initial public offering price, any applicable discounts or
commissions and the proceeds to the Company with respect to the New Bonds will
be set forth in a Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION
WITH THE OFFER CONTAINED HEREIN. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
IN ANY STATE IN WHICH SUCH OFFER MAY NOT LAWFULLY BE MADE.
###############################################################################
# A registration statement relating to these securities has been filed #
# with the Securities and Exchange Commission but has not yet become #
# effective. Information contained herein is subject to completion or #
# amendment. These securities may not be sold nor may offers to buy be #
# accepted prior to the time the registration statement becomes effective. #
# This prospectus shall not constitute an offer to sell or the solicitation #
# of an offer to buy nor shall there be any sale of these securities in any #
# state in which such offer, solicitation or sale would be unlawful prior to #
# registration or qualification under the securities laws of any such state. #
###############################################################################
THE DATE OF THIS PROSPECTUS IS __________, 1998
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
AND ADDITIONAL INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 and, in accordance therewith, files reports and other
information with the Securities and Exchange Commission (SEC). Certain
information, as of particular dates, with respect to the Company's directors
and officers, their remuneration, and their material interest in transactions
with the Company, if any, is disclosed in the Company's Annual Report on Form
10-K.
The following documents, which have heretofore been filed by the Company
with the SEC pursuant to the Securities Exchange Act of 1934, are incorporated
by reference in this prospectus and shall be deemed to be a part hereof:
(1) Annual Report on Form 10-K for the year ended December 31, 1996
which contains financial statements of the Company as of December 31,
1996, and for the three years ended December 31, 1996 and incorporates by
reference or includes the related reports of Coopers & Lybrand L.L.P.,
independent accountants.
(2) Quarterly Reports on Form 10-Q for the quarters ended March 31,
1997, June 30, 1997, and September 30, 1997.
(3) Current Reports on Form 8-K dated July 14, 1997, August 7, 1997,
December 1, 1997, December 18, 1997, December 30, 1997, and January 7,
1998.
All documents filed by the Company with the SEC pursuant to section 13(a),
13(c), 14, or 15(d) of the Securities Exchange Act of 1934 subsequent to the
date of this prospectus and prior to the termination of the offering made by
this prospectus shall be incorporated herein by reference and shall be deemed
to be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part
hereof.
Such documents and other information can be inspected and copied at the
public reference facilities maintained by the SEC at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549; and at the SEC's regional offices
located at Citicorp Center, Suite 1400, 500 West Madison Street, Chicago,
Illinois 60661 and at Seven World Trade Center, Suite 1300, New York, New York
10048. Copies of such material can also be obtained from the SEC at
prescribed rates through its Public Reference Section at 450 Fifth Street,
N.W., Washington, D.C. 20549. The SEC also maintains a site on the World Wide
Web at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the SEC.
The Company has filed with the SEC a Registration Statement on Form S-3
(Reg. No. 333-______) under the Securities Act with respect to the New Bonds
offered hereby (including all amendments and supplements thereto, the
Registration Statement). This Prospectus, which forms a part of the
Registration Statement, does not contain all of the information set forth in
the Registration Statement, certain parts of which have been omitted in
accordance with the rules and regulations of the SEC. Statements contained
herein concerning the provisions of certain documents are not necessarily
complete and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Registration Statement or otherwise filed with the
SEC. Each such statement is qualified in its entirety by such reference. The
Registration Statement and the exhibits thereto can be inspected and copied at
the public reference facilities and regional offices of the SEC referred to
above.
<PAGE>
THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON,
INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN
DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR
ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED
BY REFERENCE IN THIS PROSPECTUS, OTHER THAN EXHIBITS TO SUCH DOCUMENTS.
WRITTEN OR ORAL REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO THE TREASURER,
MASSACHUSETTS ELECTRIC COMPANY, 25 RESEARCH DRIVE, WESTBOROUGH, MASSACHUSETTS
01582 (TELEPHONE 508-389-2000).
SUMMARY INFORMATION
The following material is qualified in its entirety by the information and
financial statements appearing elsewhere in this prospectus and in the
documents and information incorporated herein by reference.
Company......................... Massachusetts Electric Company.
Parent.......................... New England Electric System.
Business........................ Retail electric utility.
Power Supply.................... New England Power Company, an affiliated
wholesale generation company.
Service Area.................... Covers approximately 43% of Massachusetts
with Worcester, Massachusetts, the largest
city served.
Customers....................... Approximately 960,000 as of December 31,
1996.
Revenue Distribution............ For the 12 months ended December 31, 1996,
the Company's revenues from the delivery
of electricity were derived 41% from
residential customers, 37% from commercial
customers, 21% from industrial customers,
and 1% from others.
Securities Offered.............. Not exceeding $60,000,000 principal amount
of First Mortgage Bonds, in one or more
series.
Payment of Interest............. Semiannually on dates to be determined.
Maturity........................ To be determined.
Security Interest............... Secured, together with all other
outstanding First Mortgage Bonds, by a
mortgage on substantially all of the
Company's properties.
Replacement Fund................ For all the Company's First Mortgage
Bonds, the Company will make mandatory
annual replacement fund payments equal to
2.4% of the average investment in
depreciable property during the preceding
year, to be satisfied by First Mortgage
Bonds of any issue or series (including
the New Bonds), cash, or additional
property. See "Description of the New
Bonds -- Replacement Fund".
Redemption...................... To be determined for each series and/or
issue of New Bonds. See "Description of
the New Bonds -- Redemption".
<PAGE>
<TABLE>
MASSACHUSETTS ELECTRIC COMPANY
SELECTED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
<CAPTION>
Years Ended December 31,
--------------------------------------------------------
12 Months Ended
September 30, 1997
(Unaudited) 1996 1995 1994 1993 1992
--------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Operating Revenue................ $1,570,747 $1,538,537$1,505,676$1,482,070$1,468,540$1,412,948
Net Income....................... $ 48,992 $ 37,926$ 29,101$ 34,726$ 23,779$ 34,905
Ratio of Earnings to
Fixed Charges: (1) 3.21 2.82 2.45 3.06 2.29 3.15
Utility Plant, net (end of
period) (2)....................... $1,115,651 $1,088,430$1,041,476$ 995,995$ 945,285$ 906,293
AS OF SEPTEMBER 30, 1997
(UNAUDITED)
------------------------
AMOUNT RATIO
-------- -------
CAPITAL STRUCTURE:
First Mortgage Bonds (3) ....... $343,457 41.3%
Cumulative Preferred Stock (4).. 50,000 6.0
Common Stock Equity............. 437,679 52.7
-------- ------
Total...................... $831,136 100.0%
======== ======
- ---------------
<FN>
(1) In determining the ratios of earnings to fixed charges, earnings were arrived at by adding to net income
all income taxes and fixed charges. Fixed charges consist of interest and amortization of debt
premiums, discounts and expense on all indebtedness.
(2) Includes construction work in progress.
(3) Includes $10 million of long-term debt due within one year.
(4) On December 19, 1997, NEES purchased, pursuant to a tender offer, $34 million par value of the Company's
Preferred Stock.
The Company had $21,275,000 of short-term indebtedness outstanding as of September 30, 1997.
</FN>
</TABLE>
<PAGE>
THE COMPANY
The Company, incorporated in Massachusetts in 1887, is a retail electric
utility subsidiary of New England Electric System (NEES), a registered holding
company under the Public Utility Holding Company Act of 1935 (the 1935 Act).
NEES owns all of the Company's common stock. The executive offices of the
Company are at 25 Research Drive, Westborough, Massachusetts 01582 (telephone
508-389-2000).
USE OF PROCEEDS
The proceeds from the sale of the New Bonds will be applied to the cost
of, or the reimbursement of the treasury for, or to the payment of short-term
borrowings incurred for (i) capitalizable additions and improvements to the
plant and property of the Company, (ii) other capitalizable expenditures, or
(iii) if market conditions warrant, the redemption of or the retirement of
outstanding First Mortgage Bonds of the Company. The Company has $56 million
of First Mortgage Bonds maturing in 1998-2000.
CONSTRUCTION AND FINANCING
The Company's construction expenditures, excluding allowance for funds
used during construction, were approximately $88 million in 1997, and are
estimated to be approximately $90 million in each of the years 1998 through
2000. These construction expenditures are incurred principally for
improvements and additions to the Company's distribution system. The Company
conducts a continuing review of its construction program. This program and
the above estimates relating thereto are subject to revisions based upon
changes in assumptions concerning, among other things, load growth and rates
of inflation.
The funds needed to pay for the Company's construction expenditures and
maturing debt will be provided from internal sources and from external
financing. The Company estimates that substantially all of its 1998-2000
construction requirements will be provided from internal sources. The balance
of the funds needed will be provided initially from short-term borrowings, to
be repaid from the proceeds of the sale of long-term securities (First
Mortgage Bonds, including the New Bonds, or preferred stock sold to the
public, common stock sold to NEES, or capital contributions received from
NEES).
Under its Articles of Organization and By-Laws, the Company may issue
additional preferred stock, absent a vote of a majority of the holders of
preferred stock, (a) in the case of a refunding issue, or (b) when (i) gross
income, as defined therein, for any twelve consecutive calendar months within
the preceding fifteen months available for interest on indebtedness and
dividends on its preferred stock is at least 1-1/2 times the annual interest
charges and dividend requirements on all interest bearing indebtedness and all
preferred stock including the new issue, (ii) the aggregate outstanding par
value of all series of preferred stock, including the new issue, does not
exceed $120 million, and (iii) the equity of stock junior to the preferred
stock is at least equal to the par value of the preferred stock. Under the
provision that is currently the most restrictive (the aggregate par value
provision), as of September 30, 1997, the Company could issue $70 million of
new preferred stock. On December 19, 1997, NEES purchased, pursuant to a
tender offer, $34 million par value of the Company's preferred stock.
Including the effect of this transaction, the Company could issue $104 million
of new preferred stock.
For information on limitations on the Company's ability to issue First
Mortgage Bonds, see "Description of the New Bonds -- Additional First Mortgage
Bonds" in this prospectus.
DESCRIPTION OF THE NEW BONDS
GENERAL
The New Bonds will be issued under and secured by a First Mortgage
Indenture and Deed of Trust dated as of July 1, 1949, from the Company to
State Street Bank and Trust Company (formerly Second Bank -- State Street
<PAGE>
Trust Company, successor to The Second National Bank of Boston), Boston,
Massachusetts, as Trustee, and indentures supplemental thereto, including a
Twenty-First Supplemental Indenture to State Street Bank and Trust Company, as
Trustee, with respect to the New Bonds (collectively, the Indenture). Each
series and/or issue of the New Bonds will mature in the year shown in its
title, and will bear interest beginning from the date as of which such issue
of New Bonds is first certified and delivered, at the rate per annum shown in
its title. Interest will be payable semiannually. Principal and premium, if
any, will be payable at the office of the Trustee. Interest will be payable
at the office of the Trustee or, at the Company's option, by mailing checks to
registered owners at their addresses set forth in the bond register. It is
the Company's general practice to mail interest checks to registered owners.
The designation and principal amount of the New Bonds, the date of
maturity (which date will not be more than thirty years from the date on which
such New Bonds were first certified and delivered), the interest rate, the
interest payment dates, and the provisions for redemption (including any
premium or premiums payable thereon) will be separately established for each
series and/or issue and set forth in the applicable prospectus supplement.
The New Bonds will be issued only in the form of fully registered bonds
without coupons in denominations of $1,000 or any integral multiple thereof.
Any of the New Bonds may be presented at the office of the Trustee for
exchange for a like aggregate principal amount of New Bonds of the same series
and/or issue of other authorized denominations or for transfer, without
payment in either case of any charge other than stamp taxes or other
governmental charges, if any, required to be paid by the Company.
The brief summary herein of certain provisions of the Indenture is merely
an outline and does not purport to be complete. It uses defined terms and is
qualified in its entirety by reference to the Indenture which is filed as an
exhibit to the Registration Statement.
REDEMPTION
The redemption provisions of each series and/or issue of the New Bonds
will be described in the prospectus supplement relating thereto.
SECURITY AND PRIORITY
The New Bonds, when duly issued, will be secured, together with all other
outstanding First Mortgage Bonds, by a direct first mortgage lien on
substantially all the properties and franchises then owned by the Company,
subject only to liens permitted by the Indenture. Certain types of property
are excepted from the lien of the Indenture, including consumable property,
fuel, automotive and office equipment, merchandise held for sale, supplies,
cash, receivables, and securities. The after-acquired property clause of the
Indenture, by its terms and to the extent permitted by law, applies the lien
of the Indenture to property subsequently acquired by the Company. The
Indenture provides for the release or substitution of property subject to the
lien of the Indenture under certain circumstances provided that specific
conditions are met.
No other securities may be issued ranking prior to or on a parity with the
New Bonds with respect to the security provided by the Indenture, except
additional First Mortgage Bonds issued in the manner summarized below under
"Additional First Mortgage Bonds" and obligations existing or created in
connection with the acquisition of after-acquired property, which may not
exceed 60% of the cost or fair value, whichever is less, of such property.
REPLACEMENT FUND
There is a replacement fund applicable to all outstanding Bonds of the
Company with an annual requirement, payable August 1, computed on the basis of
2.4% of the average gross plant investment in depreciable electric utility
property at the beginning and end of each month during the preceding calendar
year. The annual replacement fund requirement may be satisfied in cash or
First Mortgage Bonds (including the New Bonds) of any series or by the
allocation of an amount of additional property (as defined in the Indenture).
The aggregate amount of additional property used to satisfy the replacement
<PAGE>
fund requirement may be used to offset net retirements in computing the net
amount of additional property.
Any series and/or issue of New Bonds may be redeemed at special redemption
prices to satisfy the annual replacement fund requirement. However, the use
of cash for redemptions of New Bonds may be restricted by any noncallability
or nonrefundability provisions that may be established for that series and/or
issue of New Bonds.
ADDITIONAL FIRST MORTGAGE BONDS
Additional Bonds of any series may be issued as follows:
(A) against 60% of the net amount of additional property (70% after
the Series R and S First Mortgage Bonds are retired);
(B) to refund a like amount of First Mortgage Bonds of any series
which are not then funded; or
(C) against the deposit of cash (to a limit of $10 million held by
the Trustee at any one time).
When the Series R First Mortgage Bonds are retired, there will be no limit
on the amount of cash that may be deposited with the Trustee. Cash so
deposited with the Trustee may be withdrawn in amounts equal to the principal
amount of First Mortgage Bonds otherwise issuable against additional property
or retired First Mortgage Bonds.
In connection with the issue of First Mortgage Bonds against additional
property or cash (other than cash provided for the retirement of First
Mortgage Bonds) the Company must demonstrate that net earnings for any 12
consecutive calendar months within the preceding 15 months are at least twice
the annual interest charges on all First Mortgage Bonds outstanding and
applied for and on all equal or prior lien indebtedness. For the twelve
months ended September 30, 1997, the ratio of net earnings to annual interest
charges on all Bonds outstanding was 4.26. Except under limited
circumstances, no earnings test is required in connection with the refunding
of a like amount of First Mortgage Bonds.
The Company has the option of using a two-step process in connection with
an issuance of additional First Mortgage Bonds against additional property. In
exercising such option, the Company first must demonstrate to the satisfaction
of the Trustee that the requirements for such an issue (described in clause
(A) immediately above) have been satisfied and then, subject to further
demonstrations in accordance with the Indenture, the Company may later request
the issuance of such additional Bonds from time to time.
The New Bonds will be issued against additional property or against First
Mortgage Bonds theretofore retired. As of September 30, 1997, the Company had
approximately $360 million net amount of additional property against which
$215 million of additional First Mortgage Bonds could be issued. In addition,
the Company has approximately $55 million of retired Bonds against which First
Mortgage Bonds could be issued.
Pursuant to the limitations described above (the Additional Property and
retired bonds requirement being most restrictive), the Company, as of
September 30, 1997, could have issued approximately $270 million of additional
First Mortgage Bonds.
DIVIDEND RESTRICTION
The Twenty-First Supplemental Indenture for the New Bonds does not contain
provisions restricting the payment of dividends on common stock by the
Company. Dividend restrictions dependent upon earned surplus are binding on
the Company so long as certain prior series of the Company's First Mortgage
Bonds are outstanding. The most restrictive provisions currently binding on
the Company are set forth in the supplemental indenture relating to the Series
R First Mortgage Bonds. Under these provisions, which are applicable so long
as any Series R First Mortgage Bonds are outstanding, approximately $20
<PAGE>
million of the Company's retained earnings were unavailable for dividends on
common stock at September 30, 1997.
So long as any preferred stock is outstanding, certain restrictions on
payment of dividends on the common stock would come into effect if the junior
stock equity were, or by reason of payment of such dividends became, less
than 25% of total capitalization. However, the junior stock equity at
September 30, 1997, was approximately 53% of total capitalization and,
accordingly, none of the Company's retained earnings at September 30, 1997,
was restricted as to dividends on common stock under the foregoing
restrictions.
PERIODIC INSPECTION OF PROPERTY
Inspection by an independent engineer is required at least once every five
years or more often if requested by the holders of not less than 25% of the
aggregate principal amount of the Bonds at the time outstanding. The Company
is to make good any maintenance deficiency and to record retirements as called
for by the engineer's report.
MODIFICATION OF THE INDENTURE
Any provision of the Indenture may be modified with the consent of the
holders of not less than 66-2/3% of the aggregate principal amount of the
Bonds at the time outstanding (and, if one or more series of Bonds are
differently affected, with the consent of the holders of 66-2/3% of the
aggregate principal amount of the Bonds of each series so affected). No such
modification may (a) affect certain provisions protecting the Trustee without
the Trustee's assent, (b) affect the payment of principal, premium, or
interest on any Bonds, or extend the maturity or time of payment, without the
consent of the Bondholders affected, (c) permit the creation by the Company of
any lien ranking prior to or on a parity with the lien of the Indenture except
as expressly authorized in the Indenture, (d) reduce the above specified
percentages of Bondholders, or (e) permit, in the opinion of the Trustee, a
substantial impairment of the benefits or lien of the Indenture. No such
modification may be made which would conflict with the Trust Indenture Act of
1939, as at the time in effect.
THE TRUSTEE
The Trustee acts as trustee for affiliates' mortgage bonds. The Trustee
also participates in a line of credit of the parent and an affiliate of the
Company. Through a joint venture the Trustee is also dividend paying and
transfer agent for the Company's and affiliates' preferred stock.
The Trustee may become the owner or pledgee of First Mortgage Bonds with
the same rights as if it were not the Trustee. The holders of a majority in
aggregate principal amount of the First Mortgage Bonds outstanding may require
the Trustee to take certain action, except when the action would be unlawful,
would involve the Trustee in personal liability, or would be unjustifiably
prejudicial to the nonassenting Bondholders, or when the Trustee would not be
sufficiently indemnified for any expenditures in the action.
DEFAULTS
The following are defaults under the Indenture: (a) failure to pay
principal when due; (b) failure for 30 days to pay interest after due;
(c) failure to pay any installment of the sinking, replacement, or other
analogous fund for 60 days after due; (d) the expiration of 60 days following
the bankruptcy of, the reorganization of, or the appointment of a receiver
for, the Company; (e) certain other acts of bankruptcy, insolvency, or
reorganization; and (f) failure to perform other provisions of the Indenture
for 60 days following a demand by the Trustee to the Company to cure such
failure. The Trustee may withhold notice to the Bondholders of any default,
except default in the payment of principal, interest, or any sinking fund or
replacement fund installment, if certain officers and directors of the Trustee
determine in good faith that withholding such notice is in the interest of the
Bondholders.
<PAGE>
EVIDENCE TO BE FURNISHED TO TRUSTEE
The Company must periodically furnish to the Trustee evidence as to the
absence of default in connection with certain annual sinking fund and
replacement fund requirements and as to compliance with certain other terms of
the Indenture. Furthermore, prior to issuance of additional First Mortgage
Bonds, release of property, withdrawal of cash, and various other actions
under the Indenture, evidence must be furnished as to the absence of default
and as to compliance with certain terms of the Indenture. Whenever all
indebtedness secured by the Indenture shall have been paid, or adequate
provision therefor made, the Trustee shall, upon request of the Company and
receipt by the Trustee of evidence as to compliance with conditions precedent
under the Indenture, cancel and discharge the lien of the Indenture.
EXPERTS
The balance sheets of the Company as of December 31, 1996 and 1995 and the
related statements of income, retained earnings, and cash flows for each of
the three years in the period ended December 31, 1996, all incorporated by
reference in Massachusetts Electric Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996, incorporated by reference in this
prospectus, have been incorporated herein in reliance on the reports of
Coopers & Lybrand L.L.P., independent accountants, given on the authority of
that firm as experts in accounting and auditing.
The statements of law and legal conclusions made in this prospectus, not
otherwise attributed, have been reviewed by Kirk L. Ramsauer and/or Robert
King Wulff and are made upon their authority as experts.
LEGAL MATTERS
Legal matters in connection with the securities offered hereby will be
passed upon for the Company by Kirk L. Ramsauer, Associate General Counsel,
and/or Robert King Wulff, Corporation Counsel, 25 Research Drive, Westborough,
Massachusetts, and will be passed upon for the underwriter(s), purchaser(s),
or agent(s) by Milbank, Tweed, Hadley & McCloy, 1 Chase Manhattan Plaza, New
York, New York. The opinion of Robert King Wulff and/or Kirk L. Ramsauer as
to legal matters in connection with the securities offered hereby is filed as
an exhibit to the registration statement.
PLAN OF DISTRIBUTION
The Company may sell the New Bonds in any of the following ways:
(i) through competitive bidding; (ii) through negotiation with one or more
underwriters; (iii) through one or more agents designated from time to time;
(iv) directly to other purchasers; or (v) any combination of the above. The
terms of any offering of the New Bonds, including the name or names of any
underwriters or agents with whom the Company has entered into arrangements
with respect to the sale of such New Bonds, the proceeds to the Company, any
underwriting discounts or commissions and other terms constituting
underwriters' compensation, the initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers, will be set
forth in the prospectus supplement relating to such offering. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
If an underwriter or underwriters are involved in the sale of any New
Bonds, the Company will execute an underwriting or purchase agreement with
such underwriters at the time of sale, and the names of the underwriters, the
principal amount of New Bonds to be purchased thereby and the other terms and
conditions of the transaction will be set forth in the prospectus supplement
relating to such sale. The New Bonds will be acquired by the underwriters for
their own account and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of the sale. Unless
otherwise indicated in the prospectus supplement, the underwriting or purchase
agreement will provide that the underwriter or underwriters are obligated to
purchase all of an issue of the New Bonds offered in the prospectus supplement
if any are purchased.
<PAGE>
If any New Bonds are sold through an agent or agents designated by the
Company from time to time, the prospectus supplement will name any such agent,
set forth any commissions payable by the Company to any such agent and the
obligations of such agent with respect to such New Bonds. Unless otherwise
indicated in the prospectus supplement, any such agent will be acting on a
best efforts basis for the period of its appointment.
In connection with the sale of the New Bonds, any purchasers,
underwriters, or agents may receive compensation from the Company or from
purchasers in the form of concessions or commissions. The underwriters will
be, and any agents and any dealers participating in the distribution of the
New Bonds may be, deemed to be underwriters within the meaning of the
Securities Act of 1933. The agreement between the Company and any purchasers,
underwriters, or agents will contain reciprocal covenants of indemnity between
the Company and the purchasers, underwriters, or agents against certain
liabilities, including liabilities under the Securities Act of 1933.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Filing fees:
Securities and Exchange Commission: Registration Statement . $ 17,700
Massachusetts Department of Public Utilities. . . . . . . . . . .9,600
*Services of New England Power Service Company
(including counsel) . . . . . . . . . . . . . . . . . . . . . . 30,000
*Accountant's fees-Coopers & Lybrand L.L.P.. . . . . . . . . . . . 35,000
*Trustee's fees (including counsel). . . . . . . . . . . . . . . . 20,000
*Printing and engraving costs. . . . . . . . . . . . . . . . . . . 10,000
*Rating agency fees. . . . . . . . . . . . . . . . . . . . . . . . 48,000
*Miscellaneous (including recording and blue sky
expenses, and compensation and
disbursements of Agents' counsel) . . . . . . . . . . . . . . . 35,000
*Total expenses . . . . . . . . . . . . . . . . . . . . . . . $205,300
========
- ----------
*Estimated
Milbank, Tweed, Hadley & McCloy of New York, New York has been selected by
the Company as independent counsel for the purchasers, underwriters, or
agents, who will pay their compensation and disbursements except as provided
in the purchase, underwriting, and distribution agreements. The above
expenses include such compensations and disbursements.
New England Power Service Company is an affiliated service company
operating pursuant to the provisions of the Public Utility Holding Company Act
of 1935 and the SEC's rules thereunder. The services of New England Power
Service Company are performed at the actual cost thereof.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 67 of Chapter 156B of the General Laws of Massachusetts permits a
corporation to indemnify its directors and officers for good faith actions to
the extent such indemnification is authorized by the corporation's Articles of
Organization, By-Laws, or a vote of a majority of the corporation's
shareholders entitled to elect directors. M.G.L. c. 156B, Sec. 67 is
applicable to the Company by virtue of M.G.L. c. 164, Sec. 4(a). Under the
provisions of the Articles of Organization and By-Laws of the Company, as
amended, the Company will indemnify its directors and officers against
liabilities and expenses, including counsel fees reasonably incurred,
resulting from litigation or threatened litigation in which the director or
officer may be involved by reason of his or her position. Indemnification is
withheld whenever the director or officer is adjudicated "not to have acted in
good faith in the reasonable belief that his action was in the best interests"
of the Company. The Agreement and Declaration of Trust of New England
Electric System (NEES) contains similar provisions for the indemnification by
NEES of the Company's directors and officers. Officers' and directors'
insurance is also provided.
<PAGE>
ITEM 16. EXHIBIT INDEX
EXHIBIT PREVIOUSLY FILED
- ------- ----------------
WITH
REGISTRATION
NUMBER AS EXHIBIT
------------ ----------
1-A 33-59145 1-A - Form of Confirmation of Bid with schedules
constituting the form of Purchase Agreement
1-B 33-59145 1-B - Form of Underwriting Agreement
1-C - Form of Distribution Agreement
4-A 1-8019 7-A - First Mortgage Indenture and Deed of Trust
dated as of July 1, 1949
4-B - Supplemental Indentures to First Mortgage
NUMBER DATE
------ ----
2-8836 7-B First March 1, 1951
2-9593 4-C Second May 1, 1952
WITH
1980 FORM 10-K
--------------
2-8019 4 Third October 1, 1955
2-8019 4 Fourth December 1, 1959
2-8019 4 Fifth July 1, 1961
2-8019 4 Sixth September 1, 1962
2-8019 4 Seventh December 1, 1963
2-8019 4 Eighth March 1, 1966
2-8019 4 Ninth April 1, 1968
2-8019 4 Tenth May 1, 1969
2-8019 4 Eleventh October 1, 1970
2-8019 4 Twelfth October 1, 1972
2-8019 4 Thirteenth October 1, 1975
WITH
1982 FORM 10-K
--------------
0-5464 4 Fourteenth October 1, 1982
WITH
1986 FORM 10-K
--------------
0-5464 4 Fifteenth June 1, 1986
WITH
1988 FORM 10-K
--------------
0-5464 4 Sixteenth December 1, 1988
WITH
1989 NEES FORM 10-K
-------------------
1-3446 4(a) Seventeenth July 1, 1989
<PAGE>
WITH
1992 NEES FORM 10-K
-------------------
1-3446 4(a) Eighteenth March 1, 1992
1-3446 4(a) Nineteenth January 1, 1993
WITH
1993 NEES FORM 10-K
-------------------
1-3446 4(a) Twentieth September 1, 1993
WITH
1995 NEES FORM 10-K
-------------------
1-3446 4(a) Twenty-First April 1, 1995
WITH
REGISTRATION
NUMBER AS EXHIBIT
------------ ----------
4-C 33-59145 4-C - Form of Supplemental Indenture
4-D 33-59145 4-D - Certificate as to Form
5 - Opinion of Kirk L. Ramsauer, Esq. and/or
Robert King Wulff, Esq. with respect to the
legality of the securities being
registered, containing consent
WITH
SEPTEMBER 30, 1997
FORM 10-Q
------------------
12 0-5464 12 - Statement re: computation of ratios
23 - Consent of Coopers & Lybrand L.L.P.
- Consent of counsel: See Exhibit 5
24-A - Certified copy of vote of Board of
Directors, containing power of attorney
24-B - Power of Attorney
25 - Statement of eligibility and qualification
of State Street Bank and Trust Company
(Form T-1)
WITH
REGISTRATION
NUMBER AS EXHIBIT
------------ ----------
26 33-59145 4-D - Form of Public Invitation for bids
WITH
SEPTEMBER 30, 1997
FORM 10-Q
------------------
27 0-5464 27 - Financial Data Schedule
<PAGE>
UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement;
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the SEC pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by these paragraphs is contained in periodic reports
filed by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this registration statement shall be deemed to be
a new registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(5) (a) To use its best efforts to distribute prior to the opening of
bids, to prospective bidders, underwriters, and dealers, a reasonable number
of copies of a prospectus which at that time meets the requirements of section
10(a) of the Securities Act of 1933, and relating to the securities offered at
competitive bidding, as contained in this registration statement, together
with any supplements thereto and (b) to file an amendment to the registration
statement reflecting the results of bidding, the terms of the reoffering and
related matters to the extent required by the applicable form, not later than
the first use, authorized by the issuer after the opening of bids, of a
prospectus relating to the securities offered at competitive bidding, unless
no further public offering of such securities by the issuer and no reoffering
of such securities by the purchasers is proposed to be made.
<PAGE>
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons
of the Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer,
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act, and will be governed by the final adjudication
of such issue.
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE TOWN OF NORTHBOROUGH, THE COMMONWEALTH OF MASSACHUSETTS, ON
THE SEVENTEENTH DAY OF FEBRUARY, 1998.
MASSACHUSETTS ELECTRIC COMPANY
s/Lawrence J. Reilly
By:
LAWRENCE J. REILLY, PRESIDENT
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
WE, THE UNDERSIGNED OFFICERS AND DIRECTORS OF MASSACHUSETTS ELECTRIC
COMPANY, HEREBY AUTHORIZE AND DIRECT ROBERT K. WULFF, JOHN G. COCHRANE, AND
JENNIFER L. KENNEY OR SEVERAL OF THEM, AS ATTORNEYS-IN-FACT, TO EXECUTE IN THE
NAME AND ON BEHALF OF EACH OF THE UNDERSIGNED PERSONS, IN THE RESPECTIVE
CAPACITIES INDICATED BELOW, ANY AMENDMENT OR AMENDMENTS TO THIS REGISTRATION
STATEMENT OF MASSACHUSETTS ELECTRIC COMPANY UNDER THE SECURITIES ACT OF 1933.
SIGNATURE AND TITLE
(I) PRINCIPAL EXECUTIVE OFFICER:
s/Lawrence J. Reilly
LAWRENCE J. REILLY, PRESIDENT
(II) PRINCIPAL FINANCIAL OFFICER:
s/Michael E. Jesanis
MICHAEL E. JESANIS, TREASURER
(III) PRINCIPAL ACCOUNTING OFFICER:
s/Howard W. McDowell
HOWARD W. MCDOWELL, CONTROLLER
(IV) DIRECTORS: (A MAJORITY)
CHERYL A. LAFLEUR
ROBERT L. MCCABE
LYDIA M. PASTUSZEK
LAWRENCE J. REILLY
CHRISTOPHER E. ROOT ALL BY: s/John G. Cochrane
RICHARD P. SERGEL
DENNIS E. SNAY JOHN G. COCHRANE
ATTORNEY-IN-FACT
DATE (AS TO ALL SIGNATURES ON THIS PAGE)
February 17, 1998
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
- ------- ----------- ----
1-C Form of Distribution Agreement Filed herewith
5 Opinion of Counsel Filed herewith
23 Consent of Coopers & Lybrand L.L.P. Filed herewith
24-A Certified copy of vote of Board of Filed herewith
Directors, containing power of attorney
24-B Power of Attorney Filed herewith
25 Statement of eligibility and Filed herewith
qualification of State Street Bank
and Trust Company (Form T-1)
<PAGE>
MTHM Draft
2/11/98
Exhibit 1-C
to Form S-3
$60,000,000
MASSACHUSETTS ELECTRIC COMPANY
(a Massachusetts corporation)
First Mortgage Bonds, Series V
Due from 9 Months to 30 Years from Date of Issue
DISTRIBUTION AGREEMENT
February __, 1998
[Name of Agent]
[Address of Agent]
Dear Agent:
Massachusetts Electric Company (the Company) agrees
with you with respect to the issue and sale by the Company of up
to $60,000,000 aggregate principal amount of its First Mortgage
Bonds, Series V (the Bonds). The Bonds are to be issued pursuant
to an indenture supplemental (the Supplemental Indenture) to the
First Mortgage Indenture and Deed of Trust dated as of July 1,
1949 (the Original Indenture) between the Company and State
Street Bank and Trust Company (the Trustee), formerly Second Bank
- - State Street Trust Company, successor to The Second National
Bank of Boston (such Original Indenture as heretofore and
hereafter supplemented, the Indenture).
Subject to the terms and conditions stated herein, the
Company hereby (i) appoints you as agent of the Company for the
purpose of soliciting purchases of the Bonds from the Company by
others and (ii) agrees that whenever the Company determines to
sell Bonds directly to you as principal for resale to others, it
will enter into a Terms Agreement relating to such sale in
accordance with the provisions of Section 2(b) hereof. The Bonds
shall have the maturities, interest rates, redemption provisions,
and other terms set forth in the Prospectus referred to below, as
it may be supplemented from time to time.
The Company has filed with the Securities and Exchange
Commission (the SEC) a registration statement on Form S-3
(No. 333-___) for the registration of First Mortgage Bonds,
including the Bonds, and the offering thereof from time to time
<PAGE>
in accordance with Rule 415 under the Securities Act of 1933, as
amended (the Securities Act). Such registration statement has
been declared effective by the SEC, and the Indenture has been
qualified under the Trust Indenture Act of 1939 (the Trust
Indenture Act). Such registration statement and the prospectus
filed pursuant to Rule 424 under the Securities Act, including
all documents incorporated therein by reference, as from time to
time amended or supplemented by the filing of documents pursuant
to the Securities Exchange Act of 1934 (the Exchange Act), the
Securities Act, or otherwise, are referred to herein as the
Registration Statement and the Prospectus, respectively.
The Company may from time to time appoint one or more
other persons as agents for soliciting purchases of the Bonds
from the Company by entering into distribution agreements
substantially similar to this Agreement. The Company will notify
you prior to making any such appointment and will notify you of
any proposed additions, modifications, amendments, waivers, or
changes of any nature with respect to any such distribution
agreement. The Company reserves the right to sell, and may
accept offers to purchase, Bonds directly on its own behalf.
As used herein, Commencement Date shall have the
meaning set out in Section 2(d) hereof and Settlement Date shall
mean the time and date for the delivery of and payment for Bonds,
whether sold under Section 2(b) hereof and the applicable Terms
Agreement or under Section 2(a) hereof and the Administrative
Procedures set out in Exhibit B hereto.
SECTION 1. Representations and Warranties. (a) The
Company represents and warrants to you, as of the Commencement
Date and each Settlement Date with respect to any applicable
Terms Agreement, and as of the times referred to in Sections 6(a)
and 6(b) hereof (in each case the Representation Date), as
follows:
(i) The Registration Statement and the Prospectus, at
the time the Registration Statement became effective,
complied, and as of the applicable Representation Date will
comply, in all material respects with the requirements of
the Securities Act and the rules and regulations thereunder
(the Regulations) and the Trust Indenture Act. The
Registration Statement, at the time the Registration
Statement became effective did not, and as of the applicable
Representation Date will not, contain any untrue statement
of a material fact or omit to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus, at the
time the Registration Statement became effective did not,
and as of the applicable Representation Date will not,
contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however,
that the representations and warranties in this subsection
<PAGE>
shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon
information furnished to the Company in writing by you for
use in the Registration Statement or Prospectus or to that
part of the Registration Statement which shall constitute
the Statement of Eligibility and Qualification under the
Trust Indenture Act (Form T-1) of the Trustee.
(ii) The documents incorporated by reference in the
Prospectus, at the time they were or hereafter are filed
with the SEC, complied and will comply in all material
respects with the requirements of the Exchange Act and the
rules and regulations thereunder (the Exchange Act
Regulations), and, when read together and with the other
information in the Prospectus, at the time the Registration
Statement became, and any amendments thereto become,
effective, did not and will not contain an untrue statement
of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they
were or are made, not misleading.
(iii) Coopers & Lybrand L.L.P., who have certified
certain financial statements included or incorporated by
reference in the Prospectus, are independent public
accountants as required by the Securities Act and the
Regulations.
(iv) The financial statements of the Company included
or incorporated by reference in the Registration Statement
will be correct and complete and will truly present the
financial position of the Company as at the dates stated
therein and the results of the operations of the Company for
the periods stated therein. The Company had, on the date of
the latest financial statements included or incorporated by
reference in the Registration Statement, no material
liabilities or obligations, fixed or contingent, other than
those disclosed in the Prospectus or such financial
statements, and since that date the Company has not incurred
any material liabilities or obligations still outstanding,
fixed or contingent, other than (i) in the ordinary course
of business, (ii) as a result of transactions disclosed in
the Prospectus, or (iii) short-term borrowings which result
in short-term note indebtedness of not exceeding, in the
aggregate at any one time outstanding, the limitations then
authorized for the Company by the SEC under the Public
Utility Holding Company Act of 1935 (the 1935 Act). Since
the date of the latest financial statements included or
incorporated by reference in the Registration Statement,
there has not been any material adverse change in the
financial condition of the Company not disclosed in the
Prospectus. Except as disclosed in said Prospectus, there
are no proceedings at law or in equity or before any Federal
or state commission or other public authority the result of
which might have a material adverse effect upon the
financial condition of the Company.
<PAGE>
(v) The consummation of the transactions herein
contemplated and the performance by the Company of the terms
of this Distribution Agreement and each applicable Terms
Agreement will not violate any of the terms, conditions, or
provisions of, or constitute a default under, any franchise,
indenture or other contract or agreement to which the
Company is now a party or by which the Company or its
property may be bound or affected, or the Company's articles
of organization, by-laws, or preferred stock provisions, or
any order of any court or administrative agency by which the
Company is bound.
(vi) The issue and sale of the Bonds are solely for
the purpose of financing the business of the Company.
(b) Any certificate signed by any officer of the
Company and delivered to you or to your counsel in connection
with an offering of Bonds shall be deemed a representation and
warranty of and by the Company to you as to the matters covered
thereby.
SECTION 2. Solicitations as Agent; Purchases as
Principal.
(a) Solicitations as Agent. On the basis of the
representations and warranties herein contained, but subject to
the terms and conditions herein set forth, you agree, as agent of
the Company to use your reasonable best efforts to solicit offers
to purchase the Bonds upon the terms and conditions set forth in
the Prospectus. You are hereinafter sometimes referred to, in
your capacity as agent, as the Agent.
The Company reserves the right, in its sole discretion,
to suspend solicitation of purchases of the Bonds commencing at
any time for any period of time or permanently. Upon receipt of
instructions from the Company, you will forthwith suspend
solicitation of purchases from the Company until such time as the
Company has advised you that such solicitation may be resumed.
The Company agrees to pay you a commission, in the form
of a discount, equal to the percentage of the principal amount of
each Bond sold by the Company as a result of a solicitation made
by you as set forth in Schedule A hereto.
As Agent, you are authorized to solicit orders for the
Bonds only in denominations of $1,000 or any integral multiple
thereof. You shall communicate to the Company, orally or in
writing, each reasonable offer to purchase Bonds received by you
as Agent. The Company shall have the sole right to accept offers
to purchase the Bonds and may reject any such offer in whole or
in part. You shall have the right, in your discretion reasonably
exercised, to reject any offer to purchase the Bonds received by
you in whole or in part, and any such rejection shall not be
deemed a breach of your agreement contained herein. The Company
<PAGE>
reserves the right to sell, and may solicit and accept offers to
purchase, Bonds directly on its own behalf, and, in the case of
any such sale not resulting from a solicitation made by you, no
commission will be payable with respect to such sale.
(b) Purchases as Principal. Each sale of Bonds to you
as principal shall be made in accordance with the terms of this
Agreement and a separate agreement which will provide for the
sale of such Bonds to, and the purchase by, you. Each such
separate agreement (which shall be substantially in the form of
Exhibit A hereto and which may take the form of an exchange of
any standard form of written telecommunication between you and
the Company) is herein referred to as a Terms Agreement. Your
commitment to purchase Bonds pursuant to any Terms Agreement
shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained
and shall be subject to the terms and conditions herein set
forth. Each Terms Agreement shall specify the principal amount
of Bonds to be purchased by you pursuant thereto, the price to be
paid to the Company for such Bonds, the initial public offering
price, if any, at which the Bonds are proposed to be reoffered,
the Settlement Date, the place of delivery of and payment for
such Bonds, and any other particular terms of the Bonds. Such
Terms Agreement shall also specify any requirements for opinions
of counsel, letters from Coopers & Lybrand L.L.P., and
certificates of officers of the Company pursuant to Section 5
hereof.
(c) Procedures. Procedural details relating to the
issue and delivery of Bonds, and solicitation of offers to
purchase Bonds, and the payment in each case therefor, shall be
as set forth in the Administrative Procedures attached hereto as
Exhibit B (the Procedures). You and the Company agree to perform
the respective duties and obligations specifically provided to be
performed by each of us herein and in the Procedures, as amended
from time to time. The Procedures may be amended only by written
agreement of you and the Company.
(d) Delivery. The documents required to be delivered
by Section 5 hereof shall be delivered at the office of Peabody &
Arnold, counsel for State Street Bank and Trust Company, on the
date hereof, or at such other time as you and the Company may
agree upon in writing. Such time and date are herein called the
Commencement Date.
SECTION 3. Covenants of the Company. The Company
covenants with you as follows:
(a) If, at any time when the Prospectus is required by
the Securities Act to be delivered in connection with sales of
the Bonds, any event shall occur or condition exist as a result
of which it is necessary, in the reasonable opinion of your
counsel or counsel for the Company, to further amend or
supplement the Prospectus in order that the Prospectus will not
include an untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements
<PAGE>
therein not misleading in the light of the circumstances existing
at the time it is delivered to a purchaser, or if it shall be
necessary, in the reasonable opinion of either such counsel, at
any such time to amend or supplement the Registration Statement
or the Prospectus in order to comply with the requirements of the
Securities Act or the Regulations, immediate notice shall be
given, and confirmed in writing, to you to cease the solicitation
of offers to purchase the Bonds in your capacity as Agent and to
cease sales of any Bonds you may then own as principal, and the
Company will promptly prepare and file with the SEC such
amendment or supplement, whether by filing documents pursuant to
the Exchange Act or the Securities Act or otherwise, as may be
necessary to correct such untrue statement or omission or to make
the Registration Statement comply with such requirements.
(b) On or prior to the date on which there shall be
released to the general public interim financial statement
information related to the Company with respect to each of the
first three quarters of any fiscal year or preliminary financial
statement information with respect to any fiscal year, the
Company shall furnish such information to you, confirmed in
writing, and shall cause the Prospectus to be amended or
supplemented to include or incorporate by reference full or
capsule financial information with respect to the results of
operations of the Company for the period between the end of the
preceding fiscal year and the end of such quarter or for such
fiscal year, as the case may be, and corresponding information
for the comparable period of the preceding fiscal year, as well
as such other information and explanations as shall be necessary
for an understanding of such financial information or as shall be
required by the Securities Act or the Regulations; provided,
however, that if on the date of such release you shall have
suspended solicitation of purchases of the Bonds in your capacity
as Agent pursuant to a request from the Company and shall not
then hold any Bonds as principal, the Company shall not be
obligated so to amend or supplement the Prospectus until such
time as the Company shall determine that solicitation of
purchases of the Bonds should be resumed or shall subsequently
enter into a new Terms Agreement with you.
(c) On or prior to the date on which there shall be
released to the general public financial information included in
or derived from the audited financial statements of the Company
for the preceding fiscal year, the Company shall cause the
Registration Statement and the Prospectus to be amended, whether
by the filing of documents pursuant to the Exchange Act or the
Securities Act or otherwise, to include or incorporate by
reference such audited financial statements and the report or
reports, and consent or consents to such inclusion or
incorporation by reference, of the independent accountants with
respect thereto, as well as such other information and
explanations as shall be necessary for an understanding of such
financial statements or as shall be required by the Securities
Act or the Regulations; provided, however, that if on the date of
such release you shall have suspended solicitation of purchases
of the Bonds in your capacity as Agent pursuant to a request from
<PAGE>
the Company, and shall not then hold any Bonds as principal, the
Company shall not be obligated so to amend or supplement the
Prospectus until such time as the Company shall determine that
solicitation of purchases of the Bonds should be resumed or shall
subsequently enter into a new Terms Agreement with you.
(d) The Company will make generally available to its
security holders as soon as practicable, but not later than 18
months after the effective date of the Registration Statement and
of each post-effective amendment thereto and after the date of
each Terms Agreement, an earnings statement of the Company (which
need not be audited) complying with Section 11(a) of the
Securities Act and the Regulations (including, at the option of
the Company, Rule 158 under the Act).
(e) The Company will give to you notice of its
intention to file any amendment to the Registration Statement or
any amendment or supplement to the Prospectus, whether by the
filing of documents pursuant to the Exchange Act or the
Securities Act or otherwise (other than by the filing of an
amendment or supplement relating solely to the terms of an issue
of Bonds, a change in the principal amount of Bonds remaining to
be sold, or similar changes) and will furnish your counsel with
copies of any such amendment or supplement or other documents
proposed to be filed, other than a current report on Form 8-K, a
reasonable time in advance of filing, and will afford your
counsel a reasonable opportunity to examine such amendment or
supplement or other document and to make objections of substance
thereto.
(f) The Company will advise you immediately, (i) of
the effectiveness of any amendment to the Registration Statement,
(ii) of the filing with the SEC of any supplement to the
Prospectus or any document to be filed pursuant to the Exchange
Act or the Securities Act which will be incorporated by reference
in the Prospectus, (iii) of the receipt of any comments from the
SEC with respect to the Registration Statement or the Prospectus,
(iv) of any request by the SEC for any amendment to the
Registration Statement or any amendment or supplement to the
Prospectus or for additional information, (v) of the issuance by
the SEC of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for
that purpose, (vi) of the issuance by the Massachusetts
Department of Public Utilities (MDPU) of any order altering,
suspending, supplementing, or otherwise affecting any of its
order permitting the issuance and sale of the Bonds, (vii) of any
action by the SEC which has the effect of eliminating the
exemption from the requirement of obtaining an order under the
1935 Act pursuant to Rule 52 promulgated thereunder, and (viii)
of the commencement of any litigation in connection with the
Bonds against the Company or any of its directors or any signer
of the Registration Statement.
(g) The Company will promptly deliver to you a
certified copy of the Registration Statement, as originally
filed, and of all amendments thereto heretofore or hereafter
<PAGE>
made, including a copy of each consent included or incorporated
by reference therein or filed as an exhibit thereto (but
excluding any other exhibit thereto unless specifically requested
by you) all to the extent not previously delivered. The Company
will deliver to you in New York or Boston, as requested, as many
unsigned copies of the Prospectus (as supplemented or amended, if
the Company shall have made any supplements or amendments
thereto) and any documents incorporated by reference therein as
you may reasonably request so long as you are required to deliver
a Prospectus in connection with the sale or solicitation of
offers to purchase the Bonds.
(h) The Company will furnish to you, at the earliest
time the Company makes the same available to others, copies of
its annual reports and other financial reports furnished or made
available to the public generally.
(i) The Company will endeavor, in cooperation with
you, to qualify the Bonds for offering and sale under the
applicable securities laws of such states and other jurisdictions
of the United States as you may designate, and will maintain such
qualifications in effect for as long as may be required for the
distribution of the Bonds; provided, however, that the Company
shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified. The Company will
file such statements and reports as may be required by the laws
of each jurisdiction in which the Bonds have been qualified as
above provided.
(j) The Company, during the period when the Prospectus
is required to be delivered under the Securities Act, will file
promptly all documents required to be filed with the SEC pursuant
to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act.
(k) Between the date of any Terms Agreement and the
Settlement Date with respect to such Terms Agreement, the Company
will not, without your prior consent, offer or sell, or enter
into any agreement to sell, any debt securities of the Company
(other than the Bonds) of the same or substantially similar
maturity to the Bonds, except as may otherwise be provided in any
such Terms Agreement.
SECTION 4. Payment of Expenses. The Company covenants
and agrees with you that the Company will pay or cause to be paid
expenses incident to its performance of its obligations under
this Agreement, including the following: (i) the preparation and
filing of the Registration Statement and all amendments thereto,
(ii) the preparation, issuance, and delivery of the Bonds if in
certificated form, (iii) the fees and disbursements of the
Company's accountants and of the Trustee and its counsel, (iv)
the qualification of the Bonds under securities laws in
accordance with the provisions of Section 3(i), including filing
fees and the reasonable fees and disbursements of your counsel in
connection therewith and in connection with the preparation of
any Blue Sky Survey and any Legal Investment Survey, (v) the
<PAGE>
printing and delivery to you in quantities as hereinabove stated
of copies of the Registration Statement and all amendments
thereto, and of the Prospectus and any amendments or supplements
thereto, (vi) the printing and delivery to you of copies of the
Indenture and any Blue Sky Survey and any Legal Investment
Survey, (vii) any fees charged by rating agencies for the rating
of the Bonds, (viii) the fees and expenses, if any, incurred with
respect to any filing with the National Association of Securities
Dealers, Inc., and (ix) all other costs and expenses incident to
the performance of its obligations hereunder which are not
otherwise specifically provided in this subsection.
The Company shall also reimburse you for the reasonable
fees and disbursements of your counsel and any out-of-pocket
expenses, including advertising expenses, incurred with the
approval of the Company.
SECTION 5. Conditions of Obligations. Your
obligations to solicit offers to purchase the Bonds as agent of
the Company and your obligations to purchase Bonds pursuant to
any Terms Agreement will be subject to the accuracy of the
representations and warranties on the part of the Company herein,
to the accuracy of the statements of the Company's officers made
in any certificate furnished pursuant to the provisions hereof,
to the performance and observance by the Company of all covenants
and agreements herein contained on its part to be performed and
observed and to the following additional conditions precedent:
(a) Prior to the Commencement Date, the Indenture
shall have been qualified under the Trust Indenture Act; there
shall have been issued an order of the MDPU, to the extent that
it has jurisdiction, permitting the issuance and sale of the
Bonds, and at such time and at each Settlement Date with respect
to any applicable Terms Agreement such order shall not contain
any provision which, in your opinion or the opinion of the
Company, is unduly burdensome to the Company.
(b) At the Commencement Date and at each Settlement
Date with respect to any applicable Terms Agreement, if called
for by such Terms Agreement, you shall have received:
(i) The opinion, dated as of such date, of Robert King
Wulff, Esquire, and/or Kirk L. Ramsauer, Esquire, Counsel
for the Company, in form and substance satisfactory to you
and your counsel, to the effect that:
(A) The Company is a corporation validly
organized and duly existing under the laws of The
Commonwealth of Massachusetts, has the corporate power
to transact the electric business in which it is now
engaged, and has franchises adequate for carrying on
such business.
<PAGE>
(B) This Agreement (and, if the opinion is being
given pursuant to Section 6(c) hereof on account of the
Company having entered into a Terms Agreement, the
applicable Terms Agreement) has been duly authorized,
executed, and delivered by the Company.
(C) The Company had corporate power proper and
adequate for making the Indenture which was duly
executed and delivered in accordance with proper
authority from the stockholders and directors of the
Company.
(D) The Supplemental Indenture, including
Schedule A thereto, contains a correct and adequate
description of the real estate, rights or interests in
real estate, and fixed property of the Company acquired
up to April 1, 1995, and not included in the Original
Indenture or the previous supplemental indentures, and
then owned of record, except for the properties
expressly excluded from the Indenture.
(E) All filings and recordings of or in respect
of the Indenture have been duly made where such filings
and recordings are necessary for the preservation or
protection of the lien thereof, and the Indenture is a
valid, binding, and enforceable instrument subject to
laws of general application affecting the rights and
remedies of mortgagees and creditors.
(F) The Company has corporate power proper and
adequate for the execution and issuance of the Bonds
under the Indenture in the aggregate principal amount
of $60,000,000, and, in accordance with due
authorization from the stockholders and directors of
the Company, when executed and certified as specified
in the Indenture and delivered against payment therefor
in accordance with this Agreement, will be duly issued
and valid and binding obligations of the Company and
entitled to the benefits and security of the Indenture.
(G) The Bonds are secured by a direct first
mortgage lien on substantially all the properties and
franchises now owned by the Company, subject to the
property specifically excepted in the granting clauses
of, and to the liens permitted by, the Indenture,
including the prior lien of the Trustee for
compensation, expenses, and liabilities; and, except as
disclosed in the Prospectus, there is no existing
indebtedness secured by lien on the property securing
such Bonds ranking prior to or on a parity with the
lien securing the Bonds.
(H) The property specifically described as
mortgaged property in the Indenture constitutes
substantially all of the property owned by the Company
<PAGE>
and used by, or useful to, it in its business, except
for the property expressly excepted from the Indenture.
None of the real estate and rights in real estate
described in the schedules to the Indenture and which
constitute the principal properties of the Company is
excluded from the lien of the Indenture by virtue of
the provisions of clause (c) of the paragraph in the
Original Indenture beginning "But Specifically
Reserving, Excepting and Excluding," and as to the
remainder of the properties described in said schedules
the exclusions, if any, by virtue of said clause (c)
are minor.
(I) The principal substations of the Company are
in general on land owned by the Company, the balance
being upon land of others pursuant to lease or other
arrangements. The electric lines and related equipment
of the Company are in general on land of others, being
in substantial part located upon, over, or under public
streets or highways and in part upon, over, or under
private ways or other property not owned by the
Company, such occupation of private property being in
general pursuant to easements, licenses, or permits
from owners thereof, but without examination of titles,
or pursuant to long user, a majority of the poles being
owned jointly with others, principally telephone
companies.
(J) With respect to the issue and sale of the
Bonds, an appropriate order has been issued by the
MDPU, to the extent it has jurisdiction, authorizing
the issue and sale of the Bonds; the Company is
exempted by Rule 52 under the 1935 Act from the
requirement of an order of the SEC; the Indenture has
been qualified under the Trust Indenture Act of 1939;
the Registration Statement has become effective under
the Securities Act; said order and said Registration
Statement remain, to the best of such counsel's
knowledge, in effect at this date; and no other
approval, consent, or action of any governmental or
regulatory authority is required for the issue and sale
of the Bonds or the carrying out of the provisions of
this Agreement (except that such counsel need express
no opinion concerning the applicability of the blue-sky
or securities laws of the several states in connection
with sales by you and others of the Bonds).
(K) The statements upon such counsel's authority
made or incorporated by reference in the Registration
Statement and in the Prospectus, relating to the Bonds
are correct; the Registration Statement and the
Prospectus, including all documents incorporated by
reference therein in accordance with the requirements
of Form S-3 under the Securities Act (except for the
financial statements contained or incorporated by
<PAGE>
reference therein, as to which such counsel need
express no opinion), comply as to form in all material
respects with the relevant requirements of the
Securities Act and the Exchange Act, as amended, and of
the applicable rules, regulations, and releases of the
SEC thereunder; and the Bonds conform to the
description thereof in the Registration Statement and
Prospectus.
(L) Nothing has come to the attention of such
counsel which leads them to believe that either the
Registration Statement, or the documents incorporated
by reference therein, contains an untrue statement of a
material fact or omits to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading or that the
Prospectus, as amended or supplemented at the
Commencement Date or said Settlement Date, as the case
may be, contains an untrue statement of a material fact
or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances
in which they were made, not misleading.
(ii) The opinion of Milbank, Tweed, Hadley & McCloy,
counsel to the Agent, with respect to the validity of the
Indenture, the Bonds, the Registration Statement, the
Prospectus, and other related matters as you may reasonably
request.
(c) At the Commencement Date and at each Settlement
Date with respect to any Terms Agreement,
(i) no stop order suspending the effectiveness of the
Registration Statement shall have been entered and be in
effect, no proceeding for that purpose shall be pending, and
any request on the part of the SEC for amendments or
additional information shall have been complied with to its
satisfaction;
(ii) the order of the MDPU referred to in paragraph
(a) of this Section shall remain in force and effect; and
(iii) the representations and warranties of the
Company herein shall be true and correct;
and you shall have received a certificate of an officer of the
Company, dated as of the Commencement Date or such Settlement
Date, if called for by the applicable Terms Agreement, to such
effect to the best of his knowledge, information and belief.
(d) At the Commencement Date and at each Settlement
Date with respect to any Terms Agreement, if called for by such
Terms Agreement, you shall have received from Coopers & Lybrand
L.L.P., a letter, dated as of the Commencement Date or such
Settlement Date, in form and substance satisfactory to you, to
the effect that:
<PAGE>
(i) They are independent certified public accountants
with respect to the Company within the meaning of the
Securities Act and the applicable published rules and
regulations thereunder;
(ii) In their opinion the financial statements and
financial schedules (included or incorporated by reference
in the Registration Statement) examined by them as stated in
their report (incorporated by reference in the Registration
Statement) comply as to form in all material respects with
the applicable accounting requirements of the Securities Act
and the Exchange Act and of the published rules and
regulations thereunder;
(iii) On the basis of reading the minutes of the
meetings of the stockholders and the Board of Directors of
the Company held during any period subsequent to 1996, and
not covered by the financial statements referred to in
paragraph (ii) of this clause, as set forth in the minute
books through a specified date not more than five business
days prior to the date of their letter, a reading of the
unaudited financial statements of the Company included or
incorporated by reference in the Registration Statement, and
inquiries of officials of the Company who have
responsibility for financial and accounting matters (which
procedures do not constitute an examination made in
accordance with generally accepted standards), they agree
that if any unaudited amounts of total operating revenue and
net income are set forth or incorporated by reference in the
Registration Statement, including amounts set forth under
"Selected Financial Information", they agree with the
corresponding amounts set forth in the unaudited financial
statements for that period. Those officials of the Company
who have responsibility for financial and accounting matters
stated:
(A) that the unaudited financial statements
included or incorporated by reference in the
Registration Statement comply as to form in all
material respects with the applicable accounting
requirements of the Exchange Act and the published
rules and regulations thereunder, and that said
financial statements are in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited
financial statements included or incorporated by
reference in the Registration Statement;
(B) that, during the period from the date of the
latest financial statements included or incorporated by
reference in the Registration Statement through a
specified date not more than five business days prior
to the date of their letter, there was no change in the
capital stock and no increase in long-term debt of the
Company; and
<PAGE>
(iv) That they have compared the dollar amounts
contained in Exhibit 12 (Computation of Ratio of Earnings to
Fixed Charges) to the Registration Statement with such
dollar amounts derived from the general accounting records
of the Company or from schedules prepared by the Company or
derived directly from such records or schedules by analysis
or computation, and have found such dollar amounts to be in
agreement, and have recalculated the ratios contained in
Exhibit 12 and have found the calculation of such ratios to
be mathematically correct, except in each case as otherwise
stated in said letter.
(e) At the Commencement Date and at each Settlement
Date with respect to any applicable Terms Agreement, your counsel
shall have been furnished with such documents and opinions as
they may reasonably require for the purpose of enabling them to
pass upon the issuance and sale of the Bonds as herein
contemplated and related proceedings, or in order to evidence the
accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein
contained and all proceedings taken by the Company in connection
with the issuance and sale of the Bonds as herein contemplated
shall be satisfactory in form and substance to you and your
counsel.
(f) Your obligations to purchase Bonds pursuant to any
Terms Agreement will be subject to the following further
conditions: (i) the rating assigned by any nationally recognized
securities rating agency to any debt securities of the Company as
of the date of the applicable Terms Agreement shall not have been
lowered since that date; (ii) there shall not have occurred,
since the date of the applicable Terms Agreement or since the
respective dates as of which information is given in the
Registration Statement, any material adverse change in the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the
ordinary course of business; (iii) there shall not have come to
your attention any facts that would cause you to believe that the
Prospectus, at the time it was required to be delivered to a
purchaser of the Bonds, contained an untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements therein, in light of the
circumstances existing at such time, not misleading; (iv) there
shall not have occurred any suspension or limitation of trading
in securities generally on the New York Stock Exchange, or any
setting of minimum prices for trading on such exchange, or any
suspension of trading of any securities of the Company on any
exchange or in the over-the-counter market; (v) there shall not
have occurred any banking moratorium declared by Federal or New
York authorities; or (vi) there shall not have occurred any
outbreak or escalation of major hostilities in which the United
States is involved, any declaration of war by Congress, or any
other substantial national or international calamity or emergency
if, in the judgment of the Agent, the effect of such outbreak,
<PAGE>
escalation, declaration, calamity, or emergency makes it
impracticable or inadvisable to proceed.
If any condition specified in this Section shall not
have been fulfilled, this Agreement (and, at your option, any
Terms Agreement) may be terminated by you by notice to the
Company at any time at or prior to the applicable Settlement
Date, and such termination shall be without liability of any
party to any other party, except that the covenants set forth in
Section 3(d) hereof, the provisions of Section 4 hereof, the
indemnity and contribution agreement set forth in Section 7
hereof, and the provisions of Sections 8 and 12 hereof shall
remain in effect.
SECTION 6. Additional Covenants of the Company. The
Company covenants and agrees that:
(a) Each acceptance by it of an offer for the purchase
of Bonds, and each sale of Bonds to you pursuant to a Terms
Agreement, shall be deemed to be an affirmation that the
representations and warranties of the Company contained in this
Agreement and in any certificate theretofore delivered to you
pursuant hereto are true and correct at the time of such
acceptance or sale, as the case may be, and an undertaking that
such representations and warranties will be true and correct at
the time of delivery to the purchaser or his agent, or you, of
the Bond or Bonds relating to such acceptance or sale, as the
case may be, as though made at and as of each such time (and it
is understood that such representations and warranties shall
relate to the Registration Statement and the Prospectus as
amended and supplemented to each such time);
(b) Within five business days after the Registration
Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement relating solely to the
terms of an issue of Bonds, a change in the principal amount of
Bonds remaining to be sold, or similar changes) or there is filed
with the SEC any document incorporated by reference into the
Prospectus, and, if so indicated in the applicable Terms
Agreement, each time the Company sells Bonds to you pursuant to a
Terms Agreement, the Company shall furnish or cause to be
furnished to you forthwith (but only upon your request in the
event of the filing with the SEC of, or an amendment or
supplement to the Registration Statement or the Prospectus solely
by, a report on Form 8-K) a certificate in form satisfactory to
you to the effect that the statements contained in the
certificate referred to in Section 5(c) hereof which were last
furnished to you are true and correct at the time of such
amendment or supplement or filing or sale, as the case may be, as
though made at and as of such time (except that such statements
shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such time) or, in lieu
of such certificate, certificates of the same tenor as the
certificates referred to in said Section 5(c), modified as
necessary to relate to the Registration Statement and the
<PAGE>
Prospectus as amended and supplemented to the time of delivery of
such certificates;
(c) Within five business days after the Registration
Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement (i) relating solely to
the terms of an issue of Bonds, a change in the principal amount
of Bonds remaining to be sold, or similar changes or (ii) setting
forth or incorporating by reference financial statements or other
information as of and for a fiscal quarter) or there is filed
with the SEC any document (other than a document setting forth or
incorporating by reference only financial statements or other
financial information) incorporated by reference into the
Prospectus, and, if so indicated in the applicable Terms
Agreement, each time the Company sells Bonds to you pursuant to a
Terms Agreement, the Company shall furnish or cause to be
furnished to you and your counsel forthwith (but only upon your
request in the event of the filing with the SEC of, or an
amendment or supplement to the Registration Statement or the
Prospectus solely by, a report on Form 8-K) a written opinion of
Robert King Wulff and/or Kirk L. Ramsauer, Counsel for the
Company, or other counsel satisfactory to you, dated the date of
delivery of such opinion, in form satisfactory to you, of the
same tenor as the opinion referred to in paragraphs (K) and (L)
of Section 5(b)(i) hereof and as to such other matters referred
to in Section 5(b)(i) hereof as you may request but modified, as
necessary, to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of
such opinion or, in lieu of such opinion, counsel last furnishing
such opinion to you shall furnish you with a letter to the effect
that you may rely on such last opinion to the same extent as
though it was dated the date of such letter authorizing reliance
(except that statements in such last opinion shall be deemed to
relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of delivery of such letter
authorizing reliance); and
(d) Within five business days after the filing with
the SEC of each of the Company's annual report on Form 10-K, the
Company's quarterly reports on Form 10-Q, and any of the
Company's current reports on Form 8-K which contain financial
information, and each other time that the Registration Statement
or the Prospectus shall be amended or supplemented to include
additional financial information or there is filed with the SEC
any document incorporated by reference into the Prospectus which
contains additional financial information or, if so indicated in
the applicable Terms Agreement, the Company sells Bonds to you
pursuant to a Terms Agreement, the Company shall cause Coopers &
Lybrand L.L.P. to furnish to you forthwith (but only upon your
request in the event of the filing with the SEC of, or an
amendment or supplement to the Registration Statement or the
Prospectus solely by, a report on Form 8-K) a letter, dated no
earlier than the date of filing of such amendment, supplement or
document with the SEC, or the date of such sale, as the case may
be, in form satisfactory to you, of the same tenor as the
<PAGE>
portions of the letter referred to in clauses (i) and (ii) of
Section 5(d) hereof but modified to relate to the Registration
Statement and Prospectus, as amended and supplemented to the date
of such letter, and of the same general tenor as the portions of
the letter referred to in clauses (iii) and (iv) of said Section
5(d) with such changes as may be necessary to reflect changes in
the financial statements and other information derived from the
accounting records of the Company; provided, however, that if the
Registration Statement or the Prospectus is amended or
supplemented solely to include financial information as of and
for a fiscal quarter, Coopers & Lybrand L.L.P. may limit the
scope of such letter to the unaudited financial statements
included in such amendment or supplement unless any other
information included therein of an accounting, financial or
statistical nature is of such a nature that, in your reasonable
judgment, such letter should cover such other information;
provided, further, that with respect to the filing of any of the
Company's reports on Form 8-K containing only financial
information which does not in any way reflect any material change
in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, the Company may
provide you with a certificate of its Treasurer, Assistant
Treasurer, or a principal accounting officer to such effect in
lieu of the letter from Coopers & Lybrand referred to above in
this paragraph (d).
SECTION 7. Indemnification. (a) The Company will
indemnify and hold harmless you and each person, if any, who
controls you within the meaning of Section 15 of the Securities
Act against any loss, claim, or liability, joint or several
(including the reasonable cost of investigating or defending any
such alleged loss, claim, or liability and reasonable counsel
fees incurred in connection therewith), arising by reason of any
person acquiring any of the Bonds, on the ground that the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, includes or included an untrue statement of a
material fact or omits or omitted to state a material fact which
(in the case of the Registration Statement, or any amendment
thereto) is or was required to be stated therein or is or was
necessary to make the statements therein not misleading or which
(in the case of the Prospectus, or any amendment or supplement
thereto) is or was necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, unless such statement or omission was made in
reliance upon written information furnished to the Company by
you, for use therein, or unless such statement or omission shall
occur in the Statement of Eligibility and Qualification under the
Trust Indenture Act (Form T-1) of the Trustee under the
Indenture. Upon commencement of any such suit, if you or any
controlling person wish to make a claim in respect thereof
against the Company under its agreement herein contained, you or
such controlling person, as the case may be, shall, within thirty
days after the summons or other first legal process giving
information of the nature of the claim shall have been served
<PAGE>
upon you or upon such controlling person (or after he shall have
received notice of such service on any designated agent), give
notice in writing of such suit to the Company; but failure so to
notify the Company shall not relieve it from any liability which
it may have to the person against whom such suit is brought,
otherwise than on account of its indemnity agreement contained in
this paragraph. The Company will be entitled to participate at
its own expense in the defense or, if it so elects, to assume the
defense of any such suit, and, if the Company elects to assume
the defense, the defendant or defendants therein will be entitled
to participate in the defense but shall bear the fees and
expenses of any additional counsel retained by them, unless the
indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel. The indemnifying party
shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or
if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
No indemnity by the Company hereunder shall apply in respect of
(i) any Prospectus used at a time not authorized under the
Securities Act or this Agreement, (ii) any Prospectus used in
unamended or unsupplemented form after the same has been amended
or supplemented, provided the Company has supplied such amendment
or supplement to you, or (iii) you, or any person controlling
you, on account of any loss, claim, or liability arising by
reason of any person acquiring any of the Bonds, if a copy of the
Prospectus has not been sent or given by you or a securities
dealer to such person with or prior to the written confirmation
of the sale involved.
(b) You will indemnify and hold harmless the Company
and each of its officers and directors and each person, if any,
who controls the Company within the meaning of Section 15 of the
Securities Act, to the same extent as the Company in the
foregoing paragraph (a) agrees to indemnify and hold harmless
you, but only with respect to any written information furnished
to the Company by you for use in the Prospectus, or any amendment
or supplement thereto. If any action shall be brought hereunder
against the Company or any such officer, director, or controlling
person, you shall have the rights and duties given to the Company
by paragraph (a), and the Company or such officer, director, or
controlling person shall have the rights and duties given to you
by said paragraph.
(c) If the indemnification provided for in this
Section 7 is unavailable to an indemnified party, each
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, or liability,
in such proportion as is appropriate to reflect not only the
relative benefits received by the Company on the one hand and by
you on the other but also the relative fault of the Company on
the one hand and of you on the other in connection with the
statement or omission that resulted in such loss, claim, or
<PAGE>
liability, as well as any other relevant equitable
considerations. The relative benefits received by the Company on
the one hand and you on the other in connection with the sale of
the Bonds shall be deemed to be in the same proportion as the
total sales price received by the Company from the sale of the
Bonds to the date of liability, before deducting expenses, bear
to the total discounts or commissions, if any, received by you to
the date of such liability. The relative fault of the Company on
the one hand and of you on the other shall be determined by
reference to, among other things, whether the untrue or allegedly
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied
by the Company or by you and the parties' relative intent,
knowledge, access to information, and opportunity to correct or
prevent such statement or omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
SECTION 8. Status of the Agent. In soliciting
purchases of the Bonds from the Company, you are acting solely as
agent for the Company and not as principal. You will make
reasonable efforts to assist the Company in obtaining performance
by each purchaser whose offer to purchase Bonds from the Company
has been solicited by you and accepted by the Company but you
shall not have any liability to the Company in the event any such
purchase is not consummated for any reason.
SECTION 9. Representations, Warranties and Agreement
to Survive Delivery. All representations, warranties and
agreements contained in this Agreement or any Terms Agreement, or
contained in certificates of officers of the Company submitted
pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of
you or any controlling person, or by or on behalf of the Company,
and shall survive each delivery of and payment for any of the
Bonds.
SECTION 10. Termination. This Agreement may be
terminated for any reason, at any time by either party hereto
upon the giving of 30 days' written notice of such termination to
the other party hereto. In the event of any such termination,
neither party will have any liability to the other party hereto,
except that (i) you shall be entitled to any commissions earned
in accordance with the third paragraph of Section 2(a) hereof,
(ii) if at the time of termination (A) you shall own any of the
Bonds with the intention of reselling them or (B) an offer to
purchase any of the Bonds has been accepted by the Company but
the time of delivery to the purchaser or his agent of the Bond or
Bonds relating thereto has not occurred, the covenants set forth
in Sections 3 and 6 hereof shall remain in effect until such
Bonds are so resold or delivered, as the case may be, and (iii)
the covenant set forth in Section 3(d) hereof, the provisions of
Section 4 hereof, the indemnity agreement set forth in Section 7
hereof, and the provisions of Sections 8 and 12 hereof shall
remain in effect.
<PAGE>
SECTION 11. Notices. Any request, consent, notice, or
other communication on your behalf shall be given in writing
addressed to the Treasurer of the Company at 25 Research Drive,
Westborough, Massachusetts 01582, and any notice or other
communications by the Company to you shall be given in writing
addressed to [Name and Address of Agent].
SECTION 12. Parties. This Agreement and any Terms
Agreement shall inure to the benefit of and be binding on the
Agent and the Company and their respective successors. Nothing
expressed or mentioned in this Agreement or any Terms Agreement
is intended or shall be construed to give any person, firm, or
corporation, other than the parties hereto and their respective
successors and the controlling persons, officers, and directors
referred to in Section 7, and their heirs and legal
representatives, any legal or equitable right, remedy, or claim
under or in respect of this Agreement or any Terms Agreement or
any provision herein or therein contained. This Agreement and
any Terms Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of
the parties hereto and their respective successors and said
controlling persons, officers, directors, and their heirs and
legal representatives, and for the benefit of no other person,
firm, or corporation. No purchaser of Bonds shall be deemed to
be a successor by reason merely of such purchase.
SECTION 13. Governing Law. This Agreement and the
rights and obligations of the parties created hereby shall be
governed by the laws of The Commonwealth of Massachusetts.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to the
Company a counterpart hereof, whereupon this instrument along
with all counterparts will become a binding agreement between you
and the Company in accordance with its terms.
Very truly yours,
MASSACHUSETTS ELECTRIC COMPANY
By____________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date
first above written:
[NAME OF AGENT]
By_______________________
Name:
Title:
<PAGE>
EXHIBIT A
MASSACHUSETTS ELECTRIC COMPANY
(A Massachusetts corporation)
First Mortgage Bonds, Series V
TERMS AGREEMENT
__________________, 19__
Massachusetts Electric Company
25 Research Drive
Westborough, Massachusetts 01582
Attention: Treasurer
Re: Distribution Agreement dated ________, 19__
Subject to the terms and conditions of the Distribution
Agreement dated ______________, 19__, between Massachusetts
Electric Company (the Company) and the undersigned, the
undersigned agrees to purchase the following Bonds: $
Original Issue Date:
Principal Amount:
Purchase Price: %
Original Issue Discount, if any:
Maturity Date:
Interest Rate: %
Redemption Provisions:
Method of and Specified Funds for Payment of
Purchase Price:
[By certified or official bank check or checks,
payable to the order of the Company in Boston
Federal Reserve Bank (same day) Funds.] [By wire
to a bank account specified by the Company in
immediately available funds.]
<PAGE>
Settlement Date:
Exceptions, if any, to Section 3(k) of the
Distribution Agreement:
[The following documents referred to in the
Distribution Agreement shall be delivered as
a condition to the Closing:
[The certificate referred to in Section
[5(c)][6(b)].]
[The opinion referred to in Section
[5(b)(i)][6(c)].]
[The opinion referred to in Section
5(b)(ii).]
[The accountants' letter referred to in
Section [5(d)][6(d)].]]
Syndicate Provisions:
[Set forth any provisions relating to underwriters'
default and step-up of amounts to be purchased by
underwriters acting with [Agent]].
[NAME OF AGENT]
By___________________________
Name:
Title:
Accepted:
MASSACHUSETTS ELECTRIC COMPANY
By___________________________
Name:
Title:
<PAGE>
Schedule A
Medium Term Note Programs
--------------------------
Fee Schedule
-------------
[Name of [Name of
MTN Maturity Agent] Agent]
------------ -------- --------
9 months to less than 12 months 0.125 0.125
12 months to less than 18 months 0.150 0.150
18 months to less than 24 months 0.200 0.200
24 months to less than 30 months 0.250 0.250
30 months to less than 3 years 0.300 0.300
3 years to less than 4 years 0.350 0.350
4 years to less than 5 years 0.450 0.450
5 years to less than 6 years 0.500 0.500
6 years to less than 7 years 0.500 0.500
7 years to less than 8 years 0.550 0.550
8 years to less than 9 years 0.550 0.550
9 years to less than 10 years 0.550 0.550
10 years to less than 15 years 0.600 0.600
15 years to less than 20 years 0.600 0.600
20 years to less than 30 years 0.750 0.750
<PAGE>
EXHIBIT B
MASSACHUSETTS ELECTRIC COMPANY
First Mortgage Bonds, Series V
Administrative Procedures
First Mortgage Bonds, Series V (the Bonds) in the
aggregate principal amount of up to $60,000,000 are to be offered
from time to time by Massachusetts Electric Company (the
Company). [Name of Agent] as agent (the Agent) has agreed to use
its reasonable best efforts to solicit purchases of the Bonds
directly from the Company, and may also purchase Bonds, as
principal, for resale. The Bonds are being offered and sold
pursuant to a Distribution Agreement between the Company and the
Agent, dated [__________] 1998 (the Distribution Agreement). The
Bonds have been registered with the Securities and Exchange
Commission (the SEC). The Bonds will be issued pursuant to an
indenture supplemental to the First Mortgage Indenture and Deed
of Trust dated as of July 1, 1949 (the Indenture) between the
Company and State Street Bank and Trust Company (formerly Second
Bank - State Street Trust Company, successor to The Second
National Bank of Boston), as trustee (in its capacity as trustee
under the Indenture and otherwise, referred to herein as State
Street).
Each Bond will be represented by either a Global
Security (as defined hereinafter) delivered to State Street, as
agent for the Depository Trust Company (DTC), and recorded in the
book-entry system maintained by DTC (a Book-Entry Bond) or a
certificate delivered to the holder thereof or a person
designated by such holder (a Certificated Bond). In the event
that Book-Entry certificates are to be delivered to other
depositaries or their agents, the administrative procedures will
be appropriately amended or supplemented at that time. An owner
of a Book-Entry Bond will not be entitled to receive a
certificate representing such Bond. Book-Entry Bonds will be
issued in accordance with the administrative procedures set forth
in Part I hereof and Certificated Bonds will be issued in
accordance with the administrative procedures set forth in Part
II hereof.
To the extent the procedures set forth below conflict
with the provisions of the Bonds, the Indenture, or the
Distribution Agreement, the relevant provisions of the Bonds, the
Indenture, and the Distribution Agreement shall control. Unless
otherwise defined herein, terms defined in the Indenture shall be
used herein as therein defined.
<PAGE>
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK ENTRY BONDS
In connection with the qualification of the Book-Entry
Bonds for eligibility in the book-entry system maintained by DTC,
State Street will perform the custodial, document control, and
administrative functions described below, in accordance with its
respective obligations under a Letter of Representations from the
Company and State Street to DTC, dated as of [__________], and a
Medium-Term Note Certificate Agreement between State Street and
DTC, dated as of August 21, 1989, and its obligations as a
participant in DTC, including DTC's Same-Day Funds Settlement
System (SDFS).
Issuance: On any date of settlement (as defined
under Settlement below) for one or more
Book-Entry Bonds, the Company will issue
a single global security in fully
registered form without coupons (a
Global Security) representing up to
$60,000,000 principal amount of all such
Bonds that have the same maturity,
interest rate, redemption, and, in the
case of original issue discount Bonds,
original issue discount provisions
(collectively, the Terms). Each Global
Security will be dated and issued as of
the date of its certification by State
Street. No Global Security will
represent any Certificated Bond.
CUSIP The Company has arranged with the CUSIP
Numbers: Service Bureau of Standard &
Poor's Corporation (the CUSIP Service
Bureau) for the reservation of one
series of CUSIP numbers (including
tranche numbers). This series consists
of approximately 900 CUSIP numbers and
relates to Global Securities
representing the Book-Entry Bonds. The
Company has delivered to State Street
and to DTC a written list of the numbers
in such series. State Street will
assign CUSIP numbers to Global
Securities as described below under
Settlement Procedure "B". DTC will
notify the CUSIP Service Bureau
periodically of the CUSIP numbers that
State Street has assigned. At any time
when fewer than 100 of the reserved
CUSIP numbers of the series remain
unassigned, and if it deems necessary,
the Company will reserve additional
CUSIP numbers for assignment to Global
<PAGE>
Securities. Upon obtaining such
additional CUSIP numbers, the Company
shall deliver a list thereof to State
Street and DTC.
Registration: Each Global Security will be registered
in the name of Cede & Co., as nominee
for DTC, on the transfer registry
maintained under the Indenture. The
beneficial owner of a Book-Entry Bond
(or one or more indirect participants in
DTC designated by such owner) will
designate one or more participants in
DTC (with respect to such Bond, the
Participant) to act as agent or agents
for such owner in connection with the
book-entry system maintained by DTC, and
DTC will record in book-entry form, in
accordance with instructions provided by
such Participant, a credit balance with
respect to such Bond in the account of
such Participant. The ownership
interest of such beneficial owner in
such Bond will be recorded through the
records of such Participant or through
the separate records of such Participant
and one or more indirect participants in
DTC.
Transfers: Transfers of a Book-Entry Bond will be
accomplished by book entries made by DTC
and, in turn, by the Participant (and in
certain cases, one or more indirect
participants in DTC) acting on behalf of
beneficial transferees and transferors
of such Bond.
Consolidations: State Street may deliver to DTC and the
CUSIP Service Bureau at any time, but at
least 30 days before the consolidation
is to be effective, a written notice of
consolidation specifying (i) the CUSIP
numbers of two or more outstanding
Global Securities that represent Book-
Entry Bonds having the same Terms and
for which interest has been paid to the
same date, (ii) a date, occurring at
least thirty days before the next
Interest Payment Date for such Book-
Entry Bonds, on which such Global
Securities shall be exchanged for a
single replacement Global Security, and
(iii) a new CUSIP number to be assigned
to such replacement Global Security.
Upon receipt of such a notice, DTC will
<PAGE>
send to each Participant (including
State Street) a written reorganization
notice to the effect that such exchange
will occur on such date. Prior to the
specified exchange date, State Street
will deliver to the CUSIP Service Bureau
a written notice setting forth such
exchange date and the new CUSIP number
and stating that, as of such exchange
date, the CUSIP numbers of the Global
Securities to be exchanged will no
longer be valid. On the specified
exchange date, State Street will
exchange such Global Securities for a
single Global Security bearing the new
CUSIP number, and the CUSIP numbers of
the exchanged Global Securities will be
cancelled and not immediately
reassigned.
Denominations: Book-Entry Bonds will be issued in
principal amounts of $1,000 or any
integral multiple thereof.
Interest: Each Book-Entry Bond will bear interest
from the date as of which the Global
Security representing such Book-Entry
Bond was first certified, at the annual
rate stated on the face thereof, payable
on May 1 and November 1 of each year
(the Interest Payment Dates) and at
maturity or, upon earlier redemption,
the date of redemption. Each payment of
interest shall include interest accrued
to but excluding the Interest Payment
Date.
Calculation of Interest (including payments for partial
Interest: periods) will be calculated on the basis
of a 360-day year of twelve 30-day
months. Interest will not accrue on the
31st day of any month.
Payments of Promptly after the close of business on
Interest: April 15 or October 15 (the Record
Dates), State Street will deliver to the
Company and DTC a written notice
specifying by CUSIP number the amount of
interest to be paid on each Global
Security on the following Interest
Payment Date (other than an Interest
Payment Date coinciding with a maturity
date or a redemption date) and the total
of such amounts. Standard & Poor's
Corporation will use the information
<PAGE>
received in the pending deposit message
described under Settlement Procedure "C"
below in order to include the amount of
any interest payment and certain other
information regarding the related Global
Security in the appropriate daily bond
report published by Standard & Poor's
Corporation. DTC will confirm the
amount payable on each Global Security
on such Interest Payment Date by
reference to the appropriate bond
reports published by Standard & Poor's
Corporation. The Company will pay to
State Street the total amount of
interest due on such Interest Payment
Date (other than on a maturity date or a
redemption date), and State Street will
pay such amount to DTC at the times and
in the manner set forth below. If any
Interest Payment Date for a Book-Entry
Bond is not a Business Day, the payment
due on such day shall be made on the
next succeeding Business Day and no
interest shall accrue on such payment
for the period from and after such
Interest Payment Date. On each Interest
Payment Date, interest payments shall be
made to DTC in same day funds in
accordance with existing arrangements
between State Street and DTC.
Thereafter, on each such date, DTC will
pay, in accordance with its SDFS
operating procedures then in effect,
such amounts in funds available for
immediate use to the respective
Participants in whose names the Book-
Entry Bonds represented by such Global
Securities are recorded in the book-
entry system maintained by DTC. Neither
the Company, nor State Street, nor the
Agent shall have any direct
responsibility or liability for the
payment by DTC to such Participants of
the principal of and interest on the
Book-Entry Bonds.
The amount of any taxes required under
applicable law to be withheld from any
interest payment on a Book-Entry Bond
will be determined and withheld by the
Participant, indirect participant in
DTC, or other person responsible for
forwarding payments and materials
directly to the beneficial owner of such
Bond.
<PAGE>
The first payment of interest on any
Bond originally issued between a Record
Date and an Interest Payment Date will
be made on the Interest Payment Date
following the next succeeding Record
Date.
Payment at Maturity On or about the first Business Day of
and Redemption: each month, State Street will deliver to
the Company and DTC a written list of
principal and interest to be paid on
each Global Security maturing either on
a maturity date or any redemption date
in the following month. The Company and
DTC will confirm with State Street the
amounts of such principal and interest
payments with respect to each such
Global Security on or about the fifth
Business Day preceding any such maturity
date or redemption date, as the case may
be, of such Global Security. The
Company will pay to State Street the
principal amount of such Global
Security, together with interest due on
such maturity date or redemption date.
State Street will pay such amounts to
DTC at the times and in the manner set
forth below. If the maturity date or
the redemption date of a Global Security
representing Book-Entry Bonds is not a
Business Day, the payment due on such
day shall be made on the next succeeding
Business Day and no interest shall
accrue on such payment for the period
from and after such maturity date or the
redemption date. Promptly after payment
to DTC of the principal and interest due
on the maturity date or the redemption
date of such Global Security and its
return by DTC, State Street will cancel
such Global Security in accordance with
the terms of the Indenture.
The total amount of any principal and
interest due on Global Securities on any
Interest Payment Date or on the maturity
date or a redemption date shall be paid
by the Company to State Street in
immediately available funds for use by
State Street on such date. Prior to 10
A.M. (New York City time) on each
maturity date or redemption date or as
soon as possible thereafter, State
Street will pay by separate wire
transfer (using Fedwire message entry
<PAGE>
instructions in a form previously agreed
to with DTC) to an account at the
Federal Reserve Bank of New York
previously agreed to with DTC, in funds
available for immediate use by DTC, each
payment of principal (together with
interest thereon) due on Global
Securities on any maturity date or
redemption date.
Rate Setting and The Company and the Agent will discuss
Posting: from time to time the aggregate
principal amount of, the issuance price
of, and the interest rates to be borne
by, Bonds that may be sold as a result
of the solicitation of offers by the
Agents. If the Company decides to set
prices of, and rates borne by, any Bonds
in respect of which the Agent is to
solicit offers (the setting of such
prices and rates to be referred to
herein as "posting") or if the Company
decides to change prices or rates
previously posted, it will promptly
advise the Agent of the prices and rates
to be posted.
The Bonds will be sold at a price,
exclusive of accrued interest, which
will be not less than 95% nor more than
100% of the principal amount and at an
interest rate which will be a multiple
of 1/8 of 1%. Any discount will not be
greater than 1/4 of 1% for each year to
maturity.
Acceptance and The Company shall have the sole right to
Rejection of accept offers to purchase Bonds from the
Offers: Company and may reject any such offer in
whole or in part. The Agent shall
communicate to the Company, orally or in
writing, each reasonable offer to
purchase Bonds from the Company received
by it, other than those rejected by such
Agent. The Agent shall have the right,
in its discretion reasonably exercised,
to reject any offer in whole or in part.
Settlement: The receipt of immediately available
funds by the Company in payment for a
Book-Entry Bond and the certification
and issuance of the Global Security
representing such Bond shall, with
respect to such Bond, constitute
settlement. The date of such settlement
<PAGE>
is herein referred to as the Settlement
Date. All offers accepted by the
Company will be settled on the third
business day next succeeding the date of
acceptance unless otherwise agreed by
the purchaser and the Company. The
Settlement Date shall be specified upon
acceptance of an offer.
Settlement In the event of a purchase of Bonds by
Procedures: the Agent, as principal, appropriate
settlement details will be set forth in
the applicable Terms Agreement to be
entered into between the Agent and the
Company pursuant to the Distribution
Agreement.
Settlement Procedures with regard to
each Book-Entry Bond sold by the Agent,
as agent, shall be as follows:
A. The Agent will advise the Company of
the following settlement
information:
1. Principal Amount.
2. Price of the Bonds.
3. Original Issue Discount, if any.
4. Maturity Date.
5. Interest Rate.
6. Redemption Provisions.
7. Agent's Commission.
8. Settlement Date.
B. The Company will notify State Street
by telephone of the information set
forth in Settlement Procedure "A"
above and the original issue date of
the Bond. State Street will assign
a CUSIP number to the Global
Security representing such Bond.
State Street will also notify the
Company and the Agent of such CUSIP
number by telephone as soon as
practicable.
<PAGE>
C. State Street will enter a pending
deposit message through DTC's
Participant Terminal System,
providing the following settlement
information to DTC, such information
will be routed to Standard & Poor's
Corporation through DTC:
1. The information set forth in
Settlement Procedure "A".
2. Initial Interest Payment Date
for such Bond, number of days by
which such date succeeds the
related Record Date and amount
of interest payable on such
Interest Payment Date.
3. CUSIP number of the Global
Security representing such Bond.
4. Whether such Global Security
will represent any other Book-
Entry Bond (to the extent known
at such time).
D. The Company shall telecopy (promptly
followed by the original) to State
Street the certificate as to form
relating to the Global Security
representing such Bonds. As soon as
practicable thereafter, the Company
will provide State Street with any
additional information set forth
above.
E. The Company will prepare the Global
Security in the form set forth in
the Indenture, with specific terms
as pre-approved by the Company, the
Agent, and State Street.
F. The Company will cause State Street
to issue, certify, and deliver the
Global Security representing such
Bonds. State Street will hold the
Global Security as DTC's agent.
G. DTC will credit such Bond to the
participant account of State Street,
acting as DTC's agent, at DTC.
H. State Street will enter an SDFS
deliver order through DTC's
Participant Terminal System
<PAGE>
instructing DTC to (i) debit such
Bond to State Street's participant
account and credit such Bond to the
Agent's participant account and (ii)
debit the Agent's settlement account
and credit State Street's settlement
account for an amount equal to the
price of such Bond less the Agent's
commission. The entry of such a
deliver order shall constitute a
representation and warranty by State
Street to DTC that (a) the Global
Security representing such Book-
Entry Bond has been issued and
certified and (b) State Street is
holding such Global Security
pursuant to the Medium-Term Note
Certificate Agreement between State
Street and DTC.
I. The Agent will enter an SDFS deliver
order through DTC's Participation
Terminal System instructing DTC (i)
to debit such Bond to the Agent's
participant account and credit such
Bond to the participant accounts of
the Participant with respect to such
Bond and (ii) to debit the
settlement accounts of such
Participant and credit the
settlement account of the Agent for
an amount equal to the price of such
Bond.
J. State Street will transfer to the
account of the Company maintained at
the Bank of Boston in Boston,
Massachusetts in immediately
available funds in the amount
transferred to State Street in
accordance with Settlement Procedure
"H".
K. The Agent will confirm the purchase
of such Bond to the purchaser either
by transmitting to the Participants
with respect to such Bond a
confirmation order or orders through
DTC's institutional delivery system
or by mailing a written confirmation
to such purchaser.
L. Transfers of funds in accordance
with SDFS deliver orders described
in Settlement Procedures "H" and "I"
<PAGE>
will be settled in accordance with
SDFS operating procedures in effect
on the Settlement Date.
M. Upon written request by the Company,
State Street will send to the
Company a statement setting forth
the principal amount of the Bonds
outstanding as of that date, after
giving effect to such transaction
and all other orders of which the
Company has advised State Street but
which have not yet been settled.
Settlement Procedures For offers of Book-Entry Bonds solicited
Timetable: by the Agent and accepted by the
Company, Settlement Procedures "A"
through "M" set forth above shall be
completed on or before the respective
times set forth below:
Settlement
Procedure Time
---------- ----
A 11:00 A.M. on the
acceptance date
B 12:00 Noon on the
acceptance date
C 2:00 P.M. on the
acceptance date
D-E 9:00 A.M. on the
Settlement Date
F-G 11:00 A.M. on the
Settlement Date
H-I 2:00 P.M. on the
Settlement Date
J-K 4:45 P.M. on the
Settlement Date
L-M 5:00 P.M. on the
Settlement Date
If a sale is to be settled more than one
Business Day after the sale, Settlement
Procedures "A", "B" and "C" shall be
completed as soon as practicable, but
not later than 11:00 A.M., 12:00 Noon
and 2:00 P.M., respectively, on the
first Business Day after the acceptance
date. Settlement Procedures "J" and "L"
are subject to extension in accordance
with any extension of Fedwire closing
deadlines and in the other events
specified in the SDFS operating
procedures in effect on the Settlement
Date.
<PAGE>
If a sale is to be settled on a date
after the third Business Day next
succeeding the date of acceptance,
Settlement Procedures "A" through "C"
shall be completed no later than the
third Business Day immediately preceding
the Settlement Date.
If settlement of a Book-Entry Bond is
rescheduled or cancelled, the Company
will instruct State Street to deliver to
DTC a cancellation message to such
effect by no later than 12:00 Noon on
the Business Day immediately preceding
the scheduled Settlement Date and State
Street will enter such order by 2:00
P.M. through DTC's Participation
Terminal System.
Failure to If after entry of a deliver order under
Settle: Settlement Procedure "H" or "I", a trade
does not settle, State Street may
deliver to DTC, through DTC's
Participant Terminal System, as soon as
practicable, a withdrawal message
instructing DTC to debit such Bond to
State Street's participant account,
provided that State Street's participant
account contains a principal amount of
the Global Security representing such
Bond that is at least equal to the
principal amount to be debited. If a
withdrawal message is processed with
respect to all the Book-Entry Bonds
represented by Global Security, State
Street will mark such Global Security
"cancelled", make appropriate entries in
State Street's records and send such
cancelled Global Security to the
Company. The CUSIP number assigned to
such Global Security shall be cancelled
and not immediately reassigned. If a
withdrawal message is processed with
respect to one or more, but not all, of
the Book-Entry Bonds represented by a
Global Security, State Street will
exchange such Global Security for
another Global Security, which shall
represent the Book-Entry Bonds
previously represented by the
surrendered Global Security with respect
to which a withdrawal message has not
been processed and shall bear the CUSIP
number of the surrendered Global
Security.
<PAGE>
If the purchase price for any Book-Entry
Bond is not timely paid to the
Participant with respect to such Bond by
the beneficial purchaser thereof (or a
person, including an indirect
participant in DTC, acting on behalf of
such purchaser), such Participant and,
in turn, the Agent for such Bond may
enter SDFS deliver orders through DTC's
Participant Terminal System reversing
the orders entered pursuant to
Settlement Procedures "I" and "H",
respectively. Thereafter, State Street
will deliver the withdrawal message and
take the related actions described in
the preceding paragraph.
Notwithstanding the foregoing, upon any
failure to settle with respect to a
Book-Entry Bond, DTC may take any
actions in accordance with its SDFS
operating procedures then in effect. In
the event of a failure to settle with
respect to one or more, but not all, of
the Book-Entry Bonds to have been
represented by a Global Security, State
Street will provide, in accordance with
Settlement Procedure "F", for the
certification and issuance of a Global
Security representing the other Book-
Entry Bonds to have been represented by
such Global Security and will make
appropriate entries in its records.
Suspension of Subject to its representations,
Solicitation; warranties and covenants contained in
Amendment or the Distribution Agreement, the Company
Supplement: may instruct the Agent to suspend
solicitation of purchases at any time.
Upon receipt of such instructions the
Agent will forthwith suspend
solicitation of purchases from the
Company until such time as the Company
has advised them that solicitation of
purchases may be resumed. If the
Company decides to amend or supplement
the Registration Statement or the
Prospectus relating to the Bonds (other
than by the filing of an amendment or
supplement relating solely to the terms
of an issue of Bonds, a change in the
principal amount of Bonds remaining to
be sold, or similar changes) it will
<PAGE>
promptly advise the Agent and State
Street and will furnish counsel to the
Agent with copies of the proposed
amendment or supplement, other than a
current report on Form 8-K.
In the event that at the time the
solicitation of purchases from the
Company is suspended there shall be any
offers outstanding which have not been
settled, the Company will promptly
advise the Agent and State Street
whether such offers may be settled and
whether copies of the Prospectus as
theretofore amended and/or supplemented
as in effect at the time of the
suspension may be delivered in
connection with the settlement of such
offers. The Company will have the sole
responsibility for such decision and for
any arrangements which may be made in
the event that the Company determines
that such offers may not be settled or
that copies of such Prospectus may not
be so delivered.
Preparation of If any offer to purchase a Bond is
Pricing Supplement: accepted by or Company, the Company,
with the approval of the Agent, will
prepare a pricing supplement (a Pricing
Supplement) reflecting the terms of such
Bond and will arrange to file the
Pricing Supplement with the Securities
and Exchange Commission in accordance
with the applicable paragraph of Rule
424(b) under the Act and will supply at
least 10 copies thereof (or additional
copies if requested) to the Agent. The
Agent will cause a Prospectus and the
appropriate Pricing Supplement to
accompany or precede each written
confirmation of a sale sent to each
purchaser or his agent.
In each instance that a Pricing
Supplement is prepared, the Agent will
affix the Pricing Supplement to
Prospectuses prior to their use.
Outdated Pricing Supplements (other than
those retained for files) will be
destroyed.
State Street not to Nothing herein shall be deemed to
risk own funds: require State Street to risk its own
funds in connection with any payment to
<PAGE>
the Company, or the Agent, or the
purchaser, it being understood by all
parties that payments made by State
Street to either the Company, the Agent
or the purchaser shall be made only to
the extent that funds are provided to
State Street for such purpose.
Duties of State Street: State Street, in its capacity as trustee
and otherwise, undertakes to perform
such duties and only such duties as are
specifically set forth in these
Administrative Procedures and in the
Indenture, as they may from time to time
be supplemented, and no implied
covenants or obligations shall be read
into these Administrative Procedures
against it. Nothing herein shall
diminish any right or immunity that
State Street shall have in its capacity
as trustee under the Indenture.
Advertising Cost: The Company will determine and approve,
with the Agent, the amount of
advertising, if any, that is appropriate
in offering the Bonds. Any advertising
expenses which are approved by the
Company will be paid by the Company.
<PAGE>
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED BONDS
Date of Issuance: Each Bond will initially be dated and
issued as of the date of its
certification by State Street.
Registration: Bonds will be issued only in fully
registered form.
Denominations: Bonds will be issued in principal
amounts of $1,000 or any integral
multiple thereof.
Interest: Each Bond will bear interest from its
original issue date, at the annual
rate stated on the face thereof,
payable on May 1 and November 1 of
each year (the Interest Payment Dates)
and at maturity or, upon earlier
redemption, the date of redemption.
Each payment of interest shall include
interest accrued to but excluding the
Interest Payment Date.
Calculation of Interest: Interest (including payments for
partial periods) will be calculated on
the basis of a 360-day year of twelve
30-day months. Interest will not
accrue on the 31st day of any month.
Payments of Interest: Interest will be payable to the person
in whose name the Bond is registered
at the close of business on April 15
or October 15 (the Record Dates) next
preceding the Interest Payment Date;
provided, however, that interest
payable on a maturity date or a
redemption date will be payable to the
person to whom principal shall be
payable.
State Street, as paying agent, will be
responsible for withholding taxes on
interest paid as required by law.
The first payment of interest on any
Bond originally issued between a
Record Date and an Interest Payment
Date will be made on the Interest
Payment Date following the next
succeeding Record Date.
Payment at Maturity and Upon presentation of each Bond at
Redemption: maturity or upon maturity or upon
redemption, State Street will pay the
<PAGE>
principal amount thereof, together
with accrued interest due at maturity
or the date of such redemption, as the
case may be. Such payment shall be
made in immediately available funds,
provided that the Bond is presented to
State Street in time for State Street
to make payments in such funds in
accordance with its normal procedures.
The Company will provide State Street
with funds available for immediate use
for such purpose. Bonds presented at
maturity or upon redemption will be
cancelled by State Street as provided
in the Indenture.
Rate Setting and Posting: The Company and the Agent will discuss
from time to time the aggregate
principal amount of, the issuance
price of, and the interest rates to be
borne by, Bonds that may be sold as a
result of the solicitation of offers
by the Agents. If the Company decides
to set prices of, and rates borne by,
any Bonds in respect of which the
Agent is to solicit offers (the
setting of such prices and rates to be
referred to herein as "posting") or if
the Company decides to change prices
or rates previously posted, it will
promptly advise the Agent of the
prices and rates to be posted.
The Bonds will be sold at a price,
exclusive of accrued interest, which
will be not less than 95% nor more
than 100% of the principal amount and
at an interest rate which will be a
multiple of 1/8 of 1%. Any discount
will not be greater than 1/4 of 1% for
each year to maturity.
Acceptance and The Company shall have the sole right
Rejection of Offers: to accept offers to purchase Bonds
from the Company and may reject any
such offer in whole or in part. The
Agent shall communicate to the
Company, orally or in writing, each
reasonable offer to purchase Bonds
from the Company received by it, other
than those rejected by such Agent.
The Agent shall have the right, in its
discretion reasonably exercised, to
reject any order in whole or in part.
<PAGE>
Settlement: The receipt of immediately available
funds by the Company in payment for a
Bond and the certification and
issuance of such Bond shall, with
respect to such Bond, constitute
settlement. The date of such
settlement is herein referred to as
the Settlement Date. All offers
accepted by the Company will be
settled on the third business day next
succeeding the date of acceptance
unless otherwise agreed by the
purchaser and the Company. The
Settlement Date shall be specified
upon acceptance of an offer.
Settlement Procedures: In the event of a purchase of Bonds by
the Agent, as principal, appropriate
settlement details will be set forth
in the applicable Terms Agreement to
be entered into between the Agent and
the Company pursuant to the
Distribution Agreement.
Settlement Procedures with regard to
each Bond sold by the Agent, as agent,
shall be as follows:
A. The Agent will advise the Company
of the following settlement
information:
1. Principal Amount.
2. Exact name in which the
Bonds are to be registered
(Registered Owner).
3. Exact address of the
Registered Owner and address
for payment of principal and
interest.
4. Taxpayer identification
number of the Registered
Owner (if available).
5. Principal amount of each
Bond to be delivered to the
Registered Owner.
6. Price of the Bonds.
7. Original Issue Discount, if
any.
<PAGE>
8. Maturity Date.
9. Interest Rate.
10. Redemption Provisions.
11. Agent's Commission.
12. Settlement Date.
B. The Company shall telecopy
(promptly followed by the
original) to State Street the
certificate as to form relating
to the Bonds. As soon as
practicable thereafter, the
Company will provide State Street
with any additional information
set forth above.
C. The Company will prepare the
Bonds in the form set forth in
the Indenture, with specific
terms as pre-approved by the
Company, the Agent, and State
Street.
D. The Company will cause State
Street to issue, certify, and
deliver Bonds.
E. State Street will deliver the
Bonds in accordance with the
Company's instructions provided
in the settlement information
(with confirmation) to the Agent
against written evidence of
receipt by the Agent.
F. The Agent will deliver the Bonds
(with confirmation) to the
purchaser against payment in
immediately available funds.
G. The Agent will deposit, in funds
available for immediate use, an
amount equal to the price of the
Bond, less the applicable
commission, received under
Settlement Procedure "F", into
the Company's account at Bank of
Boston, Boston, Massachusetts.
H. The Agent will obtain a written
acknowledgement of receipt of the
Bonds by the purchaser.
<PAGE>
I. Upon written request by the
Company, State Street will send
to the Company a statement
setting forth the principal
amount of the Bonds outstanding
as of that date, after giving
effect to such transaction and
all other orders of which the
Company has advised State Street
but which have not yet been
settled.
Settlement Procedures For offers accepted by the Company,
Timetable: Settlement Procedures "A" through "I"
set forth above shall be completed on
or before the respective times set
forth below:
Settlement
Procedure Time
---------- ----
A 11:00 A.M. on the
first Business
Day after the
acceptance date.
B 3:00 P.M. on the
first Business
Day after the
acceptance date.
C-E 11:00 A.M. on the
Settlement Date.
F-I 4:00 P.M. on the
Settlement Date.
If a sale is to be settled on a date
after the third Business Day next
succeeding the date of acceptance,
Settlement Procedures "A" through "B"
shall be completed no later than the
third Business Day immediately
preceding the settlement date.
Failure to Settle: In the event that a purchaser of a
Bond from the Company shall fail to
accept delivery of a Bond on the
Settlement Date, the Agent will
forthwith notify State Street and the
Company by telephone, confirmed in
writing, of such failure, and return
the Bond to State Street. Upon
receipt by State Street of the Bond
<PAGE>
from the Agent, State Street will
immediately advise the Company of such
receipt and the Company will promptly
arrange to credit the account of the
Agent in an amount of immediately
available funds equal to the amount
previously paid by the Agent in
respect of the Bond. Such debits and
credits will be made on the Settlement
Date, if possible, and in any event
not later than the business day
following the Settlement Date.
Upon receipt of the Bond in respect of
which the default occurred, State
Street will cancel the Bond in
accordance with the Indenture.
Use of Funds: If after payment for a Bond having
been made by the Agent to the
Company's account, a failure occurs
for any reason other than default by
the Agent in the performance of its
obligations hereunder or under the
Distribution Agreement, the Company
will reimburse the Agent on an
equitable basis for its loss of the
use of the funds during the period
when the funds were credited to the
account of the Company. If the Agent
fails to perform its obligations
hereunder or under the Distribution
Agreement, which results in the
Company's loss of the use of funds,
including, without limitation, failure
to credit to the Company's account the
appropriate amount of the payment of a
Bond in funds available for immediate
use in accordance with the above
specified timetable, the Agent will
reimburse the Company on an equitable
basis for its loss of the use of the
funds resulting from such default by
the Agent.
Suspension of Subject to its representations,
Solicitation; warranties and covenants contained in
Amendment or the Distribution Agreement, the
Supplement: Company may instruct the Agent to
suspend solicitation of purchases at
any time. Upon receipt of such
instructions the Agent will forthwith
suspend solicitation of purchases from
the Company until such time as the
Company has advised them that
solicitation of purchases may be
<PAGE>
resumed. If the Company decides to
amend or supplement the Registration
Statement or the Prospectus relating
to the Bonds (other than by the filing
of an amendment or supplement relating
solely to the terms of an issue of
Bonds, a change in the principal
amount of Bonds remaining to be sold,
or similar changes), it will promptly
advise the Agent and State Street and
will furnish counsel to the Agent with
copies of the proposed amendment or
supplement, other than a Current
Report on Form 8-K.
In the event that at the time the
solicitation of purchases from the
Company is suspended there shall be
any offers outstanding which have not
been settled, the Company will
promptly advise the Agent and State
Street whether such offers may be
settled and whether copies of the
Prospectus as theretofore amended
and/or supplemented as in effect at
the time of the suspension may be
delivered in connection with the
settlement of such offers. The
Company will have the sole
responsibility for such decision and
for any arrangements which may be made
in the event that the Company
determines that such offers may not be
settled or that copies of such
Prospectus may not be so delivered.
Preparation of Pricing If any offer to purchase a Bond is
Supplement; Delivery accepted by or on behalf of the
of Prospectus: Company, the Company, with the
approval of the Agent, will prepare a
pricing supplement (a Pricing
Supplement) reflecting the terms of
such Bond and will arrange to file the
Pricing Supplement with the Securities
and Exchange Commission in accordance
with the applicable paragraph of Rule
424(b) under the Act and will supply
at least 10 copies thereof (or
additional copies if requested) to the
Presenting Agent. The Agent will
cause a Prospectus and the appropriate
Pricing Supplement to accompany or
precede (a) each written confirmation
of a sale sent to a purchaser or his
agent and (b) each Bond delivered to a
customer or his agent.
<PAGE>
In each instance that a Pricing
Supplement is prepared, the Agent will
affix the Pricing Supplement to
Prospectuses prior to their use.
Outdated Pricing Supplements (other
than those retained for files) will be
destroyed.
State Street not Nothing herein shall be deemed to
to risk own funds: require State Street to risk its own
funds in connection with any payment
to the Company, or the Agent, or the
purchaser, it being understood by all
parties that payments made by State
Street to either the Company, the
Agent or the purchaser shall be made
only to the extent that funds are
provided to State Street for such
purpose.
Duties of State Street: State Street, in its capacity as
trustee and otherwise, undertakes to
perform such duties and only such
duties as are specifically set forth
in these Administrative Procedures and
in the Indenture, as they may from
time to time be supplemented, and no
implied covenants or obligations shall
be read into these Administrative
Procedures against it. Nothing herein
shall diminish any right or immunity
that State Street shall have in its
capacity as trustee under the
Indenture.
Advertising Cost: The Company will determine and
approve, with the Agent, the amount of
advertising, if any, that is
appropriate in offering the Bonds.
Any advertising expenses which are
approved by the Company will be paid
by the Company.
<PAGE>
EXHIBIT 5
25 Research Drive, Westborough, Massachusetts 01582
===================================================
February 17, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Massachusetts Electric Company
First Mortgage Bonds
Dear Commissioners:
We have acted as counsel for Massachusetts Electric Company (the
Company) in connection with the proposed issuance, from time to time, of one
or more series of First Mortgage Bonds in an aggregate principal amount not
exceeding $60,000,000 (the New Bonds). We have reviewed the various documents
and proceedings relating to the New Bonds, including the registration
statement on Form S-3 (and all documents incorporated by reference therein and
the exhibits thereto), the prospectus, and the Twenty-first Supplemental
Indenture supplementing the Company's First Mortgage Indenture and Deed of
Trust (as so supplemented and as previously amended and supplemented,
collectively, the Indenture). We have also reviewed the corporate and
regulatory authority for the issuance of the New Bonds, and have examined such
other documents and records and have made such other examination of law as we
deem relevant and necessary in order to give this opinion.
Based on the foregoing, and subject to the additional actions yet to be
taken indicated below, it is our opinion:
1. That the Company is a corporation duly organized, existing, and in
good standing under the laws of The Commonwealth of Massachusetts;
2. That the Company has proper and adequate powers for executing and
issuing the New Bonds under the Indenture; and for mortgaging under the
Indenture the property therein described;
3. That the issuance of the New Bonds has been duly authorized by the
board of directors of the Company, subject to approval of governmental
authorities having jurisdiction; and that the authority to establish
particular terms for each issue of New Bonds is properly delegated to the
officers of the Company;
4. That the Company has obtained an order from the Massachusetts
Department of Telecommunications and Energy approving the proposed issuance of
bonds and related matters;
5. That the Company is exempted by Rule 52 under the Public Utility
Holding Company Act of 1935 (the 1935 Act) from the requirement of obtaining
an order of the Commission; and that the sale of the New Bonds is subject to
the registration statement with respect thereto becoming effective under the
Securities Act of 1933, as amended; and
<PAGE>
6. That, when the New Bonds issued have been duly executed, certified,
and delivered against payment therefor, and subject to the continuation of the
above described corporate and regulatory authority, such New Bonds will be
legally issued, fully paid and non-assessable binding obligations of the
Company, subject to laws of general application affecting the rights and
remedies of mortgagees and creditors.
We have reviewed the statements made upon our authority in the
registration statement and in the prospectus with respect to the New Bonds,
and in our opinion such statements are correct. We hereby consent to the use
of our names in the registration statement and each related prospectus of the
Company with respect to the New Bonds and to the use of this opinion in
connection therewith.
Very truly yours,
s/Robert King Wulff
Robert King Wulff
Corporation Counsel
s/Kirk L. Ramsauer
Kirk L. Ramsauer
Associate General Counsel
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We consent to the incorporation by reference in this registration statement on
Form S-3 to register $60,000,000 of First Mortgage Bonds of our report dated
February 28, 1997, on our audits of the financial statements of Massachusetts
Electric Company. We also consent to the reference to our firm under the
caption "Experts".
s/Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 17, 1998
<PAGE>
EXHIBIT 24-A
MASSACHUSETTS ELECTRIC COMPANY
-------------------------------
ACTION TAKEN BY UNANIMOUS WRITTEN CONSENT
------------------------------------------
We, the undersigned, being all of the Directors of Massachusetts
Electric Company, hereby consent to the following actions:
VOTED: That this Company execute one or more registration
statements under the Securities Act of 1933, as amended,
with reference to the proposed issue and sale of $60
million of the New Bonds authorized by vote of this Board
December 18, 1996; that the officers of this Company, and
John G. Cochrane, Jennifer L. Kenney, and Robert King
Wulff, as attorneys-in-fact for the Company, are severally
authorized, in the name and on behalf of the Company, to
execute and file such registration statements and to
execute and file such amendments or supplements thereto as
the officer or officers or the attorney-in-fact so acting
deem advisable; and that the principal executive officer or
officers, the principal financial officer, and the
principal accounting officer are authorized to execute such
registration statements and any amendment or amendments, or
supplement or supplements thereto.
s/Cheryl A. LaFleur s/Christopher E. Root
Cheryl A. LaFleur Christopher E. Root
s/Robert L. McCabe s/Richard P. Sergel
Robert L. McCabe Richard P. Sergel
s/Lydia M. Pastuszek s/Dennis E. Snay
Lydia M. Pastuszek Dennis E. Snay
s/Lawrence J. Reilly
Lawrence J. Reilly
DATED AS OF: February 17, 1998
Filed with the records of the meetings of Directors.
s/Robert King Wulff
Clerk
<PAGE>
EXHIBIT 24-B
POWER OF ATTORNEY
Each of the undersigned directors of Massachusetts Electric Company (the
Company) individually as a director of the Company, hereby constitutes and
appoints John G. Cochrane, Jennifer L. Kenney, and Robert King Wulff,
individually, as attorneys-in-fact to execute on behalf of the undersigned the
Company's registration statement on Form S-3 for the issue and sale of up to
$60 million of the Company's First Mortgage Bonds, to be filed with the
Securities and Exchange Commission, and to execute any appropriate amendment
or amendments to such registration statement as may be required by law.
Dated this 17th day of February, 1998.
s/Cheryl A. LaFleur s/Christopher E. Root
Cheryl A. LaFleur Christopher E. Root
s/Robert L. McCabe s/Richard P. Sergel
Robert L. McCabe Richard P. Sergel
s/Lydia M. Pastuszek s/Dennis E. Snay
Lydia M. Pastuszek Dennis E. Snay
s/Lawrence J. Reilly
Lawrence J. Reilly
<PAGE>
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
_________
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) __
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation (I.R.S. Employer
or organization if not a U.S. Identification No.)
national bank)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Maureen Scannell Bateman, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 664-3253
(Name, address and telephone number of agent for service)
MASSACHUSETTS ELECTRIC COMPANY
(Exact name of obligor as specified in its charter)
MASSACHUSETTS 04-1988940
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
25 Research Drive
Westborough, Massachusetts 01582
(Address of principal executive offices) (Zip Code)
First Mortgage Bonds
(Title of indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to which
it is subject.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington,
D.C., Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the Obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee or of its parent,
State Street Corporation.
(See note on page 2.)
Item 3. through Item 15. Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
1. A copy of the articles of association of the trustee as now in effect.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission as
Exhibit 1 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the Registration
Statement of Morse Shoe, Inc. (File No. 22-17940) and is
incorporated herein by reference thereto.
2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the articles of association.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee to
commence business was necessary or issued is on file with the
Securities and Exchange Commission as Exhibit 2 to Amendment No. 1
to the Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Morse Shoe, Inc.
(File No. 22-17940) and is incorporated herein by reference
thereto.
3. A copy of the authorization of the trustee to exercise corporate trust
powers, if such authorization is not contained in the documents
specified in paragraph (1) or (2), above.
A copy of the authorization of the trustee to exercise corporate
trust powers is on file with the Securities and Exchange
Commission as Exhibit 3 to Amendment No. 1 to the Statement of
<PAGE>
Eligibility and Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No. 22-17940) and
is incorporated herein by reference thereto.
4. A copy of the existing by-laws of the trustee, or instruments
corresponding thereto.
A copy of the by-laws of the trustee, as now in effect, is on file
with the Securities and Exchange Commission as Exhibit 4 to the
Statement of Eligibility and Qualification of Trustee (Form T-1)
filed with the Registration Statement of Eastern Edison Company
(File No. 33-37823) and is incorporated herein by reference
thereto.
5. A copy of each indenture referred to in Item 4. if the obligor is in
default.
Not applicable.
6. The consents of United States institutional trustees required by
Section 321(b) of the Act.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority is annexed hereto as Exhibit 7 and made a part
hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 17th day of February 1998.
STATE STREET BANK AND TRUST COMPANY
s/Daniel Golden
By: _________________________________
Daniel Golden
Assistant Vice President
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, as amended, in connection with the proposed issuance by Massachusetts
Electric Company of its First Mortgage Bonds, we hereby consent that reports
of examination by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
STATE STREET BANK AND TRUST COMPANY
s/Daniel Golden
By: _________________________________
Daniel Golden
Assistant Vice President
Dated: February 17, 1998
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking institution
organized and operating under the banking laws of this commonwealth and a member
of the Federal Reserve System, at the close of business September 30, 1997,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act and in accordance
with a call made by the Commissioner of Banks under General Laws, Chapter 172,
Section 22(a).
<PAGE>
<TABLE>
<CAPTION>
Thousands of
Dollars
------------
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin 1,380,475
Interest-bearing balances 8,821,855
Securities 10,461,989
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary 6,085,138
Loans and lease financing receivables:
Loans and leases, net of unearned income 5,597,831
Allowance for loan and lease losses 79,416
Allocated transfer risk reserve 0
Loans and leases, net of unearned income and
allowances 5,518,415
Assets held in trading accounts 917,895
Premises and fixed assets 390,028
Other real estate owned 779
Investments in unconsolidated subsidiaries 34,278
Customers' liability to this bank on acceptances outstanding 83,470
Intangible assets 227,659
Other assets 1,969,514
----------
Total assets 35,891,495
==========
LIABILITIES
Deposits:
In domestic offices 8,095,559
Noninterest-bearing 5,962,025
Interest-bearing 2,133,534
In foreign offices and Edge subsidiary 14,399,173
Noninterest-bearing 86,798
Interest-bearing 14,312,375
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices
of the bank and of its Edge subsidiary 7,660,881
Demand notes issued to the U.S. Treasury and Trading
Liabilities 1,107,552
Other borrowed money 589,733
Subordinated notes and debentures 0
Bank's liability on acceptances executed and
outstanding 85,600
Other liabilities 1,830,593
Total liabilities 33,769,091
----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock 29,931
Surplus 437,183
Undivided profits and capital reserves/Net
unrealized holding gains (losses) 1,660,158
Cumulative foreign currency translation adjustments (4,868)
Total equity capital 2,122,404
----------
Total liabilities and equity capital 35,891,495
</TABLE>
<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
