<PAGE>
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE NARRAGANSETT ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
RHODE ISLAND
(State or other jurisdiction of
incorporation or organization)
05-0187805
(I.R.S. Employer
Identification No.)
280 MELROSE STREET, PROVIDENCE, RHODE ISLAND 02907
401-784-7000
(Address and telephone number of principal executive office)
ALFRED D. HOUSTON ROBERT KING WULFF
Vice President and Treasurer Corporation Counsel
25 Research Drive 25 Research Drive
Westborough, Massachusetts 01582 Westborough, Massachusetts 01582
508-389-2000 508-389-2000
(Name, address and telephone number of agents for service)
Please send copies of all communications to:
GEORGE J. FORSYTH, 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)
CALCULATION OF REGISTRATION FEE
=============================================================================
Title of
Each Class of Proposed Proposed
Securities Amount Maximum Maximum Amount of
Being Being Offering Price Aggregate Registration
Registered Registered Per Unit* Offering Price* Fee
- ------------------------------------------------------------------------------
First $50,000,000 100% $50,000,000 $17,241
Mortgage
Bonds
=============================================================================
*Used only for 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.
<PAGE>
###################################################
# SUBJECT TO COMPLETION, DATED #
###################################################
PROSPECTUS
(LOGO)
THE NARRAGANSETT ELECTRIC COMPANY
(A SUBSIDIARY OF NEW ENGLAND ELECTRIC SYSTEM)
$50,000,000
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.
The Narragansett Electric Company (the Company) intends to offer, from
time to time, not exceeding $50 million aggregate principal amount of its
First Mortgage Bonds (New Bonds). The New Bonds will be issued under one or
more supplements to the Company's First Mortgage Indenture and Deed of Trust
dated as of September 1, 1944. 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, and 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) with respect to each series and/or issue of New Bonds. 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 one or more agents, to one or more agents as principal for resale to
investors, or through negotiation directly with investors. 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 , 199 .
<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, 1994 which
incorporates by reference the financial statements of the Company as
of December 31, 1994 and 1993, and for the three years ended
December 31, 1994 and incorporates by reference the related report of
Coopers & Lybrand L.L.P., independent accountants.
(2) Quarterly Report on Form 10-Q for the quarter ended March 31, 1995.
(3) Current Reports on Form 8-K dated March 6, 1995 and July 5, 1995.
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 Room in the office of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. or at SEC Regional Offices at 7 World Trade Center, New York,
New York, and 500 West Madison Street, Chicago, Illinois. Copies of such
material can be obtained from the Public Reference Section of the SEC,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
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 SECRETARY,
THE NARRAGANSETT ELECTRIC COMPANY, 280 MELROSE STREET, PROVIDENCE, RHODE
ISLAND 02907 (TELEPHONE 401-784-7000).
<PAGE>
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.
THE COMPANY
Company . . . . . . . . . . . . .The Narragansett Electric Company.
Parent. . . . . . . . . . . . . .New England Electric System.
Business. . . . . . . . . . . . .Retail electric utility.
Power Supply. . . . . . . . . . .New England Power Company (NEP), an
affiliated wholesale generation company.
Service Area. . . . . . . . . . .Covers approximately 80% of Rhode
Island with Providence, Rhode Island, the
largest city served.
Customers . . . . . . . . . . . .Approximately 324,000 as of December 31,
1994.
Revenue Distribution. . . . . . .For the 12 months ended December 31, 1994,
the Company's revenues from the sale of
electricity were derived 43% from
residential customers, 40% from commercial
customers, 15% from industrial customers,
and 2% from others.
THE OFFERING
Securities Offered. . . . . . . .Not exceeding $50,000,000 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.
Improvement Fund. . . . . . . . .For all the Company's First Mortgage Bonds,
including the New Bonds, the Company will
make mandatory annual improvement fund
payments equal to 2-1/2% 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 - Improvement Fund".
Redemption. . . . . . . . . . . .To be determined for each series and/or
issue of New Bonds. See "Description of the
New Bonds - Redemption".
<PAGE>
<TABLE>
THE NARRAGANSETT ELECTRIC COMPANY
SELECTED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
<CAPTION>
12 Months Ended Years Ended December 31,
March 31, 1995 -----------------------------------------------------
(Unaudited) 1994 1993 1992 1991 1990
--------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Operating Revenue............ $481,228 $481,669 $483,028 $468,252 $457,510 $412,273
Net Income................... $ 16,040 $ 14,589 $ 14,274 $ 21,052 $ 16,820 $ 17,599
Ratio of Earnings to Fixed
Charges (1)................ 2.14 2.10 2.23 3.04 2.55 2.79
Utility Plant, net (end of
period) (2)................... $502,734 $491,915 $421,577 $375,210 $358,348 $340,046
<CAPTION>
AS OF MARCH 31, 1995
(Unaudited)
----------------------
ACTUAL RATIO
-------- -------
<S> <C> <C>
CAPITAL STRUCTURE:
Long-Term Debt-First Mortgage
Bonds ............................. $193,873 43.5%
Cumulative Preferred Stock........... 36,500 8.2
Common Equity........................ 215,014 48.3
-------- -----
Total........................... $445,387 100.0%
======== ======
- ---------------
<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.
The Company had $26,950,000 of short-term indebtedness outstanding as of March 31, 1995.
</FN>
</TABLE>
<PAGE>
THE COMPANY
The Company, incorporated by Special Act of the Rhode Island General
Assembly, 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 280 Melrose Street,
Providence, Rhode Island 02907 (telephone 401-784-7000).
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) the retirement or refunding of certain series of
outstanding First Mortgage Bonds, (ii) capitalizable additions and
improvements to the plant and property of the Company, or (iii) other
capitalizable expenditures.
CONSTRUCTION AND FINANCING
The Company's major construction project is the repowering of the
Manchester Street Station, a 140 megawatt electric generating station in
Providence, Rhode Island. Repowering will more than triple the power
generation capacity of Manchester Street Station and substantially increase
the plant's thermal efficiency. To facilitate financing this project, the
Company sold a 90 percent interest in the existing station to NEP effective
July 1, 1992. The total cost for the generating station, scheduled to be
placed in service in late 1995, is estimated to be approximately $520 million
including allowance for funds used during construction (AFDC). At March 31,
1995, $322 million, including AFDC, had been spent on the generating station
(including $30 million by the Company). In addition, related transmission
improvements were placed in service in September 1994 at a cost of
approximately $60 million (including approximately $45 million by the
Company).
The Company's construction expenditures, excluding AFDC but including the
Repowering Project, totaled $93 million in 1994, and are estimated to be
$55 million in 1995, $50 million in 1996, and $40 million in 1997. These
construction expenditures were and will be incurred principally for
improvements and additions to the Company's distribution and transmission
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.
Approximately 40% and 60% of the funds needed to pay for construction
expenditures during 1995 and 1996, respectively, are expected to be provided
from internal sources and the balance from additional financing. It is
expected that any such additional financing will be provided initially from
short-term borrowings to be repaid either from the proceeds of the sale of
additional First Mortgage Bonds or from capital contributions made by NEES.
The Company's preferred stock preference provisions (which are an exhibit
to the Registration Statement and which reference hereto shall include terms
as defined therein) limit the amount of short-term unsecured indebtedness
which may be outstanding to 10% of the sum of secured indebtedness, capital,
premiums, and retained earnings, unless a higher amount is authorized by vote
of the preferred stockholders. The preferred stockholders have voted to
increase this limit to 20% for debt issued through September 30, 1998. At
March 31, 1995, this limit was approximately $90 million.
<PAGE>
Without a vote of a majority (and 75% of the total number of shares
present or represented at the meeting, with respect to (b)(i) and (b)(iv), if
any of the 4-1/2% Series Cumulative Preferred Stock is outstanding) of the
outstanding Cumulative Preferred Stock and parity stock, voting together, the
Company shall not, pursuant to the preferred stock preference provisions:
(a) issue Cumulative Preferred Stock or any other stock ranking on a
parity therewith as to dividends or assets if after such issue the
aggregate combined outstanding par value of all series thereof would
exceed $60 million; or
(b) issue Cumulative Preferred Stock or any stock of prior or equal
rank as to dividends or assets unless (i) so long as any of the 4-1/2%
Series Cumulative Preferred Stock is outstanding, the par value of any
stock ranking junior to the Cumulative Preferred Stock as to dividends and
assets to be outstanding immediately after such issue shall at least equal
the greater of the aggregate par value of all preferred stock and of any
other such prior or parity stock or the aggregate amount payable upon
liquidation on all preferred stock and of any other such prior or parity
stock; (ii) immediately after such issue the Junior Stock Equity shall at
least equal the aggregate amount payable on liquidation or dissolution of
the Company to holders of Cumulative Preferred Stock and any other parity
stock; provided, however, that if for this purpose it shall have been
necessary to take into consideration any earned surplus of the Company,
the Company shall not (until such Junior Stock Equity exclusive of such
portion of earned surplus shall equal such aggregate) pay any dividends or
make any distribution on shares of its stock ranking junior to the
Preferred Stock as to dividends or assets which would result in reducing
such Junior Stock Equity to an amount less than such aggregate amount
payable on involuntary liquidation, dissolution or winding up of the
affairs of the Company; (iii) the gross income of the Company available
for interest on its indebtedness and for dividends on its Preferred Stock
and any other such prior or parity stock during a period of twelve
consecutive months in the preceding fifteen-month period is at least 1-1/2
times the annual interest charges and dividend requirements on all
interest bearing indebtedness and all Cumulative Preferred Stock and such
prior or parity stock to be outstanding immediately after the proposed
issue; and (iv) so long as any of the 4-1/2% Series Cumulative Preferred
Stock is outstanding, the net earnings of the Company available for
dividends are at least 2-1/2 times the annual dividend requirements of all
Cumulative Preferred Stock and any parity stock to be outstanding
immediately after the proposed issue. Under the most restrictive of these
issuance tests (the aggregate number of shares test), the Company could
issue approximately $24 million of new preferred stock at March 31, 1995.
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.
<PAGE>
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 September 1, 1944, from the Company to
Rhode Island Hospital Trust Company, Providence, Rhode Island, as Trustee, and
indentures supplemental thereto, including one or more supplemental indentures
relating to the New Bonds to Rhode Island Hospital Trust National Bank
(formerly Rhode Island Hospital 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 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, but not limited to,
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 and
<PAGE>
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.
IMPROVEMENT FUND
There is an improvement fund applicable to all outstanding bonds of the
Company with an annual requirement, payable July 1, computed on the basis of
2-1/2% of the average investment in depreciable property during the preceding
calendar year. The annual improvement 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 improvement
fund requirement may be used to offset net retirements in computing the net
amount of additional property. For 1994, the improvement fund requirement was
approximately $13 million.
Any series and/or issue of New Bonds may be redeemed at special redemption
prices to satisfy the annual improvement 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 First Mortgage Bonds of any series may be issued as follows:
(A) against 60% of the net amount of additional property (70% after the
Series S, T, and U First Mortgage Bonds are retired);
(B) to refund a like amount of First Mortgage Bonds of any series
theretofore retired or for which retirement the Company has made
provision; and
(C) against the deposit of cash (to a limit of $10 million or 25% of the
principal amount of all First Mortgage Bonds outstanding immediately
after such issue, whichever is less, held by 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 twelve
consecutive calendar months within the preceding fifteen 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 March 31, 1995, the ratio of net earnings to annual interest
charges on all Bonds outstanding was 2.28. Except under limited
circumstances, no earnings test is required in connection with the refunding
of a like amount of First Mortgage Bonds. The evidence of additional property
and net earnings may be demonstrated at a date prior to the actual issuance of
the First Mortgage Bonds.
The New Bonds will be issued against additional property or against First
Mortgage Bonds, which could include retired bonds or Unissued Bonds which have
been previously certified against additional property. At March 31, 1995, the
Company had approximately $135 million net amount of additional property
against which approximately $80 million of First Mortgage Bonds could be
issued.
<PAGE>
Pursuant to the limitations described above (the net earnings requirement
currently being the most restrictive), the Company as of March 31, 1995 could
have issued approximately $27 million of additional First Mortgage Bonds.
DIVIDEND RESTRICTION
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 March 31,
1995, was approximately 48% of total capitalization and, accordingly, none of
the Company's retained earnings at March 31, 1995, were 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 Bond holders. 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
First Mortgage Bonds at the time outstanding (and, if one or more series of
First Mortgage Bonds are differently affected, with the consent of the holders
of 66-2/3% of the aggregate principal amount of the First Mortgage 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 First Mortgage Bonds, or
extend the maturity or time of payment, without the consent of the Bond
holders 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
Bond holders, 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 Company has a demand deposit account and a line of credit with the
Trustee under which borrowings have been made. RIHT Financial Corporation,
the parent of the Trustee, is wholly owned by Bank of Boston Corporation.
John W. Rowe, a director of the Company and President and Chief Executive
Officer of NEES, is a director of Bank of Boston Corporation. William Watkins
Jr., an officer of the Company, is a director of the Trustee. If the Trustee
acquires any conflicting interest, it is required to either eliminate the
conflicting interest or resign. There are limitations on the rights of the
Trustee in respect of certain payments and property received by the Trustee
within four months prior to a default (as defined below).
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 actions, except when any such action would be
unlawful, would involve the Trustee in personal liability, or would be
unjustifiably prejudicial to the nonassenting Bond holders, or when the
Trustee would not be sufficiently indemnified for any expenditures in the
action.
<PAGE>
DEFAULT
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 improvement 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 Company must
pay interest on overdue installments of interest at the rate of 6% per annum;
further, interest must be paid, under certain conditions, on overdue principal
at the rate of 6% per annum. The Trustee may withhold notice to the Bond
holders of any default, except default in the payment of principal, interest,
or any improvement fund installment, if certain officers and directors of the
Trustee determine in good faith that withholding such notice is in the
interest of the Bond holders.
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 improvement fund requirements
and as to compliance with certain other terms of the Indenture. Further,
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.
HIGHLY LEVERAGED TRANSACTIONS
The provisions of the Indenture which provide holders of the Company's
outstanding First Mortgage Bonds with some protection in the event of a highly
leveraged transaction are described above under Security and Priority,
Additional First Mortgage Bonds, and Modification of the Indenture. The
restrictions on dividend payments provided in the preferred stock provisions
of the Company are described under Dividend Restriction. Restrictions on the
issuance of additional preferred stock and unsecured debt are described under
Construction and Financing. Further, the issuance of debt instruments or
additional common stock, the sale of significant assets, or any disposition of
the Company's stock by NEES, are regulated by the Rhode Island Public
Utilities Commission and/or the Securities Exchange Commission under the
Public Utility Holding Company Act of 1935, as amended.
The Indenture provides that no sale of the Company substantially as an
entity or merger of the Company shall be made on terms which impair the lien
or security of the Indenture. Any successor to the Company must expressly
assume the obligations of the Company under the Indenture.
EXPERTS
The balance sheets as of December 31, 1994 and 1993 and the statements of
income, retained earnings, and cash flows for each of the three years in the
period ended December 31, 1994, all incorporated by reference in The
Narragansett Electric Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994, incorporated by reference in this prospectus, have
been incorporated herein in reliance on the report of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that firm as
experts in accounting and auditing.
<PAGE>
The statements of law and legal conclusions made in this prospectus, not
otherwise attributed, have been reviewed by Robert King Wulff, Corporation
Counsel, and/or Kirk L. Ramsauer, Assistant General Counsel, 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 Robert King Wulff and/or Kirk L. Ramsauer,
25 Research Drive, Westborough, Massachusetts, and as to franchises, by
Edwards & Angell, One Hospital Trust Plaza, Providence, Rhode Island, and will
be passed upon for the purchasers by Milbank, Tweed, Hadley & McCloy, 1 Chase
Manhattan Plaza, New York, New York. The opinion of Messrs. Wulff and
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; (iv) to one or more agents as
principal for resale to investors; (v) through negotiation directly with
investors; or (vi) 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 of the
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 the 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 the New Bonds offered in the prospectus
supplement if any are purchased.
If any of the 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 the 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........................................ $ 17,241
#Services of New England Power Service Company (including
counsel)...................................................... 30,000
#Accountant's fees --Coopers & Lybrand L.L.P...................... 30,000
#Counsel fees --Edwards & Angell.................................. 1,000
#Trustee's fees (including counsel)............................... 27,750
#Printing and engraving costs..................................... 15,000
#Rating agency fees............................................... 48,000
#Miscellaneous (incl. recording and blue sky expenses)............ 17,625
--------
#Total expenses............................................... $186,616
========
#Estimated
Edwards & Angell of Providence, Rhode Island, have on various occasions
acted as counsel for the Company and some of its affiliates. The Company has
been advised by Edwards & Angell that they have no interest of a substantial
nature in the Company or any affiliate thereof but that certain partners hold
for investment, largely as fiduciaries, securities of the Company and of
various of its affiliates.
Milbank, Tweed, Hadley & McCloy of New York, New York have 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 agreement. The above expenses do not include such
compensation and disbursements.
New England Power Service Company is an affiliated service company
operating pursuant to the provisions of the 1935 Act and the SEC's rules
thereunder. The services of New England Power Service Company are performed
at the actual cost thereof.
<PAGE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 7-1.1-4.1 of the Rhode Island General Laws (R.I. Gen. Laws
S.7-1.1-4.1 (1985)), a corporation has the power to indemnify a director if
such director conducted himself in good faith, reasonably believed his conduct
was in the best interests of the corporation, and, if in a criminal
proceeding, had no reasonable cause to believe his conduct was unlawful.
Unless the articles of incorporation state otherwise, R.I. Gen. Laws
S.7-1.1-4.1 (1985) provide that a court can order a company to indemnify an
officer or director in certain circumstances. The statute also provides that
a company may provide officers and directors immunity, and that the
indemnification provided by the statute is not exclusive of any other
indemnification rights provided for under by-laws or other agreements. The
Company's charter provides that a director shall not be held liable to the
Company or the stockholders for breach of duty unless the liability is imposed
(i) under R.I. Gen. Laws S.7-1.1-43 (declaration of dividends), (ii) for a
breach of loyalty, (iii) for acts not in good faith or which involve
intentional misconduct, or (iv) due to the director deriving an improper
personal benefit. The Company does provide officers' and directors'
insurance. Under the provisions of the Agreement and Declaration of Trust of
New England Electric System, as amended, NEES will indemnify directors and
officers of the Company 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 NEES.
<PAGE>
ITEM 16. EXHIBIT INDEX
EXHIBIT PREVIOUSLY FILED
- ------- ----------------
1-A --Form of Confirmation of Bid with schedules
attached, constituting the form of Purchase
Agreement for the New Bonds
1-B --Form of Distribution Agreement
1-C --Form of Underwriting Agreement
WITH
REGISTRATION AS
NUMBER EXHIBIT
------------ -------
4-A 2-7042 7-1 --First Mortgage Indenture and Deed of Trust,
dated as of September 1, 1944
4-B --Supplemental Indentures to First Mortgage
NUMBER DATED AS OF
------ -----------
2-7490 7-B First.......... May 1, 1948
2-9423 4-C Second......... March 1, 1952
2-10056 4-D Third.......... March 1, 1953
WITH
1980 FORM 10-K
--------------
0-898 4(a) Fourth......... March 1, 1956
0-898 4(a) Fifth.......... January 1, 1964
0-898 4(a) Sixth.......... February 1, 1968
0-898 4(a) Seventh........ April 1, 1970
0-898 4(a) Eighth......... March 1, 1972
0-898 4(a) Ninth.......... March 1, 1974
0-898 4(a) Tenth.......... August 1, 1974
0-898 4(a) Eleventh....... March 1, 1975
0-898 4(a) Twelfth........ August 1, 1980
WITH
1982 FORM 10-K
--------------
0-898 4(a) Thirteenth..... February 1, 1982
WITH
1983 FORM 10-K
--------------
0-898 4(a) Fourteenth..... January 1, 1984
WITH
1985 FORM 10-K
--------------
0-898 4(a) Fifteenth..... January 1, 1986
<PAGE>
WITH
1986 FORM 10-K
--------------
0-898 4(a) Sixteenth..... June 1, 1986
WITH
1987 FORM 10-K
--------------
0-898 4(a) Seventeenth... November 1, 1987
WITH
1991 FORM 10-K
--------------
0-898 4(a) Eighteenth.... May 1, 1991
0-898 4(a) Nineteenth.... August 1, 1991
WITH
1992 FORM 10-K
--------------
0-898 4(a) Twentieth..... May 1, 1992
WITH
1993 FORM 10-K
--------------
0-898 4(a) Twenty-First.... October 1, 1993
4-C --Form of Supplemental Indenture
4-D --Certificate as to Form
4-E 33-49455 --Preferred stock provisions
5 --Opinion of Robert King Wulff, Esq., and/or
Kirk L. Ramsauer, Esq., with respect to the
legality of the securities being registered,
containing consent
WITH
MARCH 31, 1995
FORM 10-Q
--------------
12 0-898 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
Rhode Island Hospital Trust National Bank (Form
T-1)
26 --Form of Public Invitation for Bids
<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;
(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 therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(5) To use its best efforts to distribute prior to any 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 the registration statement, together with
any supplements thereto.
<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 CITY OF PROVIDENCE, THE STATE OF RHODE ISLAND, ON THE
NINETEENTH DAY OF JULY, 1995.
THE NARRAGANSETT ELECTRIC COMPANY
s/Robert L. McCabe
ROBERT L. MCCABE, 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 OF THE NARRAGANSETT ELECTRIC COMPANY, HEREBY
AUTHORIZE AND DIRECT ROBERT KING WULFF, JOHN G. COCHRANE, AND CRAIG L. EATON
OR ANY ONE 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 THE REGISTRATION STATEMENT OF THE
NARRAGANSETT ELECTRIC COMPANY UNDER THE SECURITIES ACT OF 1933 RELATING TO THE
PROPOSED ISSUE OF THE NEW BONDS.
SIGNATURE AND TITLE AS TO EACH SIGNATURE ON THIS PAGE, JULY 19, 1995.
(I) PRINCIPAL EXECUTIVE OFFICER:
s/Robert L. McCabe
ROBERT L. MCCABE, PRESIDENT
(II) PRINCIPAL FINANCIAL OFFICER:
s/Alfred D. Houston
ALFRED D. HOUSTON, VICE PRESIDENT
AND TREASURER
(III) PRINCIPAL ACCOUNTING OFFICER:
s/Howard W. McDowell
HOWARD W. MCDOWELL, CONTROLLER
(IV) DIRECTORS: (A MAJORITY)
STEPHEN A. CARDI
FRANCES H. GAMMELL s/John G. Cochrane
JOSEPH J. KIRBY
ROBERT L. MCCABE ALL BY:
RICHARD P. SERGEL JOHN G. COCHRANE
WILLIAM E. TRUEHEART ATTORNEY-IN-FACT
JOHN A. WILSON, JR.
DATE (AS TO ALL SIGNATURES ON THIS PAGE)
July 19, 1995
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
- ------- ----------- ----
1-A Form of Confirmation of Bid with schedules Filed herewith
constituting the form of Purchase Agreement
1-B Form of Distribution Agreement Filed herewith
1-C Form of Underwriting Agreement Filed herewith
4-C Form of Supplemental Indenture Filed herewith
4-D Certificate as to Form 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 Filed herewith
of Directors
24-B Power of Attorney Filed herewith
25 Statement of eligibility and Filed herewith
qualification of Rhode Island Hospital
Trust National Bank (Form T-1)
26 Form of Public Invitation for Bids Filed herewith
<PAGE>
DRAFT
CONFIRMATION OF BID
AND, IF BID ACCEPTED,
PURCHASE AGREEMENT
FOR PURCHASE OF $
*
FIRST MORTGAGE BONDS, SERIES *, *%, DUE *
OF
THE NARRAGANSETT ELECTRIC COMPANY
Date: , l9__
THE NARRAGANSETT ELECTRIC COMPANY
Ladies and Gentlemen:
In accordance with the Terms and Conditions referred to in the Public
Invitation for Bids, dated , 19 , for the purchase of $ * principal
amount of First Mortgage Bonds, Series *, **%, due * (New Bonds), of The
Narragansett Electric Company (the Company), the undersigned, acting for and
on behalf of the persons, firms, and corporations named in Schedule A hereto
(the Bidders), or in its own behalf (the Bidder) if no other person, firm, or
corporation is named in Schedule A, hereby confirms to the Company the
following bid:
I. Each of the Bidders severally, and not jointly and severally, or
the Bidder, if only one, hereby offers to purchase, subject to the conditions
and provisions set forth in the Terms of Purchase annexed as Schedule B
hereto, the principal amount of New Bonds set forth opposite its name in
Schedule A hereto, aggregating for all Bidders, or for the Bidder, if only
one, the principal amount of the offering, as specified by the Company in the
notice given pursuant to Section 1 of the Terms and Conditions,
WITH INTEREST AT THE RATE OF % PER ANNUM AND AT THE
PRICE OF % OF THE PRINCIPAL AMOUNT THEREOF.
Interest shall accrue from the Closing Date (see Section 6 of Schedule B
hereto).
II. In consideration of the agreements of the Company set forth in
the Terms and Conditions, each of the Bidders, or the Bidder, if only one,
agrees (a) that the offer of such Bidder included in this Confirmation of Bid
shall be irrevocable until four hours after the time designated for the
submission of bids, unless sooner rejected by the Company, and (b) if this bid
shall be accepted by the Company in the manner provided in the Terms and
Conditions, that this bid together with all schedules thereto shall thereupon
constitute a Purchase Agreement, effective as of the date of acceptance
written below, for the purchase and sale of the New Bonds, subject, however,
to such modification of the Purchase Agreement as is contemplated by the Terms
and Conditions.
______________________________
*The series designation, aggregate principal amount, and the year in
which the New Bonds mature are as specified by the Company in the notice given
pursuant to Section 1 of the Terms and Conditions.
** The percentage is the interest rate specified in the accepted bid.
<PAGE>
III. Unless earlier accepted or rejected, this bid will be deemed
rejected four hours after the time designated for submission of bids.
IV. Each of the Bidders, or the Bidder, if only one, acknowledges
receipt of a copy of a prospectus relating to the New Bonds, and if such
prospectus has been supplemented or amended, a copy of each supplement or
amendment.
Very truly yours,
By: ________________________________
Name:
Title:
On behalf of and as Representative(s) of
the persons, firms, and corporations
listed on Schedule A hereto (except in the
case of a single bidder).
Accepted:
THE NARRAGANSETT ELECTRIC COMPANY
By: ______________________________________
Date: , 19__
THIS CONFIRMATION OF BID MUST BE SIGNED AND SUBMITTED WITH
SCHEDULE A COMPLETED IN FULL.
<PAGE>
SCHEDULE A
PRINCIPAL
AMOUNT
NAME OF NEW BONDS
$
_______________________
TOTAL
_______________________
<PAGE>
SCHEDULE B
TERMS OF PURCHASE
RELATING TO
FIRST MORTGAGE BONDS, SERIES **, %, DUE
ORIGINAL ISSUE DATE***
OF
THE NARRAGANSETT ELECTRIC COMPANY
TERMS OF PURCHASE between The Narragansett Electric Company (the
Company), a Rhode Island corporation, and the several Purchasers named in
Schedule A to the confirmation of bid (the Confirmation of Bid) to which these
Terms of Purchase are attached as Schedule B, the Confirmation of Bid and said
Schedules A and B thereto constituting and hereinafter collectively called the
Purchase Agreement. (The words "herein" and "hereunder," unless specifically
limited, mean "in the Purchase Agreement" and "under the Purchase Agreement,"
respectively.)
1. Purchasers and Representative. The term Purchasers as used
herein shall mean the several persons, firms, or corporations named in
Schedule A to the Confirmation of Bid (including the Representative
hereinafter mentioned); and the term Representative as used herein shall be
deemed to mean the representative or representatives designated as
Representative by, or in the manner authorized by, the Purchasers and who, by
submitting the bid as such and by signing the Confirmation of Bid, represent
that it or they have been authorized by the Purchasers to enter into this
Purchase Agreement on their behalf and to act for them in the manner herein
provided. If there shall be only one person, firm, or corporation named in
said Schedule A, the term Purchasers and the term Representative as used
herein shall mean such person, firm, or corporation.
2. Description of the New Bonds. The Company proposes to issue and
sell $** principal amount of its First Mortgage Bonds, Series __, *%, due **
(New Bonds), to be issued under an indenture supplemental to the First
Mortgage Indenture and Deed of Trust dated as of September 1, 1944, (as
heretofore and hereafter supplemented, the Indenture), from the Company to
Rhode Island Hospital Trust National Bank (the Trustee), successor to Rhode
Island Hospital Trust Company. The terms and provisions of the New Bonds and
of the Indenture are summarized in the registration statement and in the
prospectus below mentioned.
3. Representations and Warranties of the Company. The Company
represents and warrants to each Purchaser as follows:
(a) With respect to the proposed issue and sale of the New
Bonds, the Company has filed a registration statement, including as a
part thereof a prospectus, under the Securities Act of 1933, as amended
(the Securities Act), with the Securities and Exchange Commission (the
__________________________
* The percentage is the interest rate specified in the accepted bid.
** The series designation, aggregate principal amount, and the year in
which the New Bonds mature are as specified by the Company in the notice given
pursuant to Section 1 of the Terms and Conditions.
*** Original Issue Date shall be the Closing Date.
<PAGE>
Commission). Said registration statement has become effective, and the
prospectus in the registration statement as now effective (the
Registration Statement) meets the requirements of section 10(a) of the
Securities Act. The Company will file a supplement to the prospectus
(the Supplement) with respect to the New Bonds to reflect the results of
the bidding pursuant to the rules and regulations under the Securities
Act, after giving the Representative an opportunity to examine and make
objections of substance to the Supplement. Such examination shall not
limit or affect the rights of any Purchaser in respect of any
representation, warranty, or covenant of indemnity by the Company herein
contained. Before filing any other supplement or amendment to the
Registration Statement or the Supplement with respect to the New Bonds,
the Company will afford the Representative an opportunity to examine it
and any documents incorporated therein and to make objections of
substance thereto. The Representative shall have the right to terminate
this Purchase Agreement, without liability on the part of any Purchaser,
if the Company shall file the Supplement or any other supplement or
amendment to the prospectus to which the Representative shall reasonably
so object in writing.
(b) Said prospectus and the Registration Statement have been,
and the Supplement and each other supplement or amendment thereto will
be, carefully prepared in conformity with the requirements of the
Securities Act and the rules, regulations, and releases of the
Commission thereunder; the Registration Statement contains all
statements which are required to be incorporated or stated therein in
accordance with the Securities Act and the rules, regulations, and
releases thereunder, and will in all material respects conform to the
requirements thereof; said prospectus, as supplemented when the
Supplement is filed (the Prospectus), will contain or incorporate
therein all statements made in the Registration Statement which the
Prospectus is required to contain and will in all material respects
conform to the requirements of the Securities Act and the rules,
regulations, and releases thereunder; wherever the terms prospectus,
Prospectus, registration statement, or Registration Statement are used
herein, they shall be deemed to include all documents incorporated by
reference therein pursuant to the requirements of Form S-3 under the
Securities Act, and such documents incorporated or to be incorporated by
reference therein have been or will be prepared and filed with the
Commission in a timely manner and in accordance with the provisions of
the Securities Exchange Act of 1934 (the Exchange Act) and applicable
rules, regulations, and releases thereunder; neither the Registration
Statement nor the Prospectus will include any untrue statement of a
material fact or omit to state a material fact which (in the case of the
Registration Statement) is required to be incorporated or stated therein
or is necessary to make the statements therein or incorporated therein
not misleading or which (in the case of the Prospectus) is necessary to
make the statements therein, in the light of the circumstances under
which they are made, not misleading; provided, however, that the
foregoing representations and warranties shall not apply to statements
or omissions made in reliance on written information furnished to the
Company by the Purchaser, or by and through the Representative on behalf
of any Purchaser, or to statements or omissions in the Statement of
Eligibility and Qualification of the Trustee under the Indenture.
(c) 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
Registration Statement or such financial statements, and since that date
the Company has not incurred any material liabilities or obligations
<PAGE>
still outstanding, fixed or contingent, other than (i) in the ordinary
course of business, (ii) as a result of transactions described in the
prospectus included in the Registration Statement, 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 Commission 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 included in the Registration Statement. Except as described
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.
(d) Coopers & Lybrand, who have certified certain of the
financial statements filed with the Commission, are independent
certified public accountants as required by the Securities Act and the
rules, regulations, and releases thereunder.
(e) The consummation of the transactions herein contemplated and
the performance by the Company of the terms of this Purchase 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 charter,
by-laws, or preferred stock provisions, or any order of any court or
administrative agency by which the Company is bound.
(f) The issue and sale of the New Bonds are solely for the
purpose of financing the business of the Company.
4. Information from and Warranties of the Purchasers. Each
Purchaser, in addition to other information furnished to the Company for use
in the Prospectus, is contemporaneously furnishing and will continue to
furnish to the Company through the Representative for use in the Prospectus
the information to be stated therein with regard to the public offering to be
made by the Purchasers, any further information regarding the Purchasers and
such public offering which may be required under the 1935 Act, and all other
information required by law in respect of the purchase and sale of the New
Bonds. Each Purchaser warrants and represents to the Company, each of the
officers and directors of the Company, each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act, and each other
Purchaser that all information furnished at any time in writing to the Company
by such Purchaser, or by or through the Representative on behalf of such
Purchaser, for use in the Prospectus, will not contain an untrue statement of
a material fact and will not omit to state any material fact which is
necessary to make the statements therein, in the light of the circumstances
under which they are made, not misleading.
5. Purchase and Sale of New Bonds. The Company will sell to each
Purchaser and each Purchaser will severally purchase from the Company, at the
price specified in paragraph I of the Confirmation of Bid, at the time and
place, in the manner, and upon the terms and conditions hereinafter set forth,
the principal amount of New Bonds set forth opposite its name in Schedule A to
the Confirmation of Bid, which amount may be increased in accordance with
paragraph (a) of Section 12 hereof and Section 5 of the Terms and Conditions.
All obligations of the Purchasers hereunder are several, and not joint
or joint and several, and nothing herein shall constitute the Purchasers
copartners of each other.
6. Time and Place of Closing; Delivery and Payment. The term Closing
Date wherever used herein shall mean the eighth day (or if such day is not a
<PAGE>
full business day, the next full business day thereafter) following the date
hereof, or such later date as shall be specified in the notice referred to in
Section 1 of the Terms and Conditions, or such other date as shall be agreed
in writing by the Company and the Representative (subject to postponement in
accordance with the provisions of Section 12 hereof).
Payment for the New Bonds, as provided in Section 5 hereof, shall be
made at the principal office of Rhode Island Trust National Bank at 10:00 a.m.
Providence time, on the Closing Date. Payment shall be made to the Company or
its order in immediately available current-day funds by certified check or
checks drawn on, or by official check or checks of, Rhode Island Hospital
Trust National Bank, or in Boston Federal Reserve Bank Funds. The Company
will reimburse the Purchasers for interest on the amount of such payment at
the Federal Reserve Bank Funds from the Closing Date until the next succeeding
day. Payment for the New Bonds may also be made by a FedWire electronic funds
transfer to The Narragansett Electric Company's bank account, Number 188292 at
Rhode Island Hospital Trust National Bank, Providence, Rhode Island, 02903,
Transit Routing Number 0115 00337. Such payment shall be made upon delivery
of the New Bonds to the Representative for the respective accounts of the
Purchasers, such delivery to be made at the offices of BancBoston Trust
Company of New York, 55 Broadway, 3rd Floor, New York, New York 10006. The
New Bonds will be delivered, at the option of the Company, either in temporary
or definitive form. If delivered in temporary form, each will be in the
denomination of $1,000, and an exchange of temporary New Bonds for
fully-registered New Bonds in definitive form will be made as soon as
practicable and without charge to the holders thereof. If delivered in
definitive form, the New Bonds will be in fully-registered form and will be
registered in such name or names and in such denominations of $1,000 or
integral multiples thereof as the Representative may request not later than 10
A.M., Providence time, on the third full business day prior to the Closing
Date. If no such direction is received, the New Bonds will be registered in
the names of the respective Purchasers in denominations selected by the
Company.
The Company will make such New Bonds available to the Representative for
examination at the place of delivery, not later than 2 P.M., Providence time,
on the first full business day prior to the Closing Date.
The Representative, individually and not as the Representative, may (but
shall not be obligated to) make payment to the Company for the New Bonds to be
purchased by any Purchaser whose funds shall not have been received by the
Representative as of the Closing Date, for the account of such Purchaser. Any
such payment by the Representative shall not relieve such Purchaser from any
of its obligations hereunder, but the Representative shall succeed to the
right of the Company to receive the amount of such payment from such
Purchaser.
7. Covenants of the Company. The Company agrees that:
(a) The Company will promptly deliver to the Representative a
copy of the registration statement with respect to the New Bonds, as
originally filed, and of all amendments thereto heretofore or hereafter
made, including a copy of each consent and certificate included or
incorporated by reference therein or filed as an exhibit thereto (but
excluding any other exhibit thereto unless specifically requested by the
Representative). The Company will deliver to the Representative in New
York or Providence, as requested, as soon as practicable after the
filing of the Supplement, and thereafter from time to time during the
nine-month period commencing on the date hereof, 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 the Representative may reasonably
request for purposes contemplated by the Securities Act.
<PAGE>
(b) The Company will advise the Representative immediately by
telegraph or other means of communication and confirm the advice in
writing:
(i) when the Supplement has been filed;
(ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement, or of
the initiation of any proceedings for that purpose, and agrees, if
any such stop order should be entered by the Commission, to make
every reasonable effort to obtain the lifting or removal thereof
as soon as possible;
(iii) of the issuance by the Commission or the Division of
Public Utilities and Carriers of the State of Rhode Island
(RIPUC), of any order altering, suspending, supplementing, or
otherwise affecting any of their orders permitting the issuance
and sale of the New Bonds;
(iv) of any action by the Commission 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
(v) of the commencement of any litigation in connection
with the New Bonds against the Company or any of its directors or
any signer of the Registration Statement.
(c) During the six-month period commencing on the effective date
of this Purchase Agreement, the Company will use its best efforts, when
and as requested by the Representative, to furnish information and
otherwise cooperate in qualifying the New Bonds for the purposes of any
public offering by the Purchasers under securities or "blue-sky" laws of
such states as the Representative may designate; provided that the
Company shall not be obligated to qualify as a foreign corporation in,
or consent to service of process under the laws of, any state, or to
meet other requirements deemed by it to be unduly burdensome. The
Company will pay or reimburse the Representative in an aggregate amount
not exceeding $3,000 for the filing fees and expenses in connection with
any qualification referred to in this paragraph.
(d) The Company will pay all expenses in connection with (i) the
preparation and filing by it of the Registration Statement and the
Prospectus and any supplement or amendment thereto, (ii) the issue and
delivery of the New Bonds, and (iii) the printing of the Prospectus and
any supplement or amendment thereto and the delivery of reasonable
quantities of copies thereof to Purchasers. The Company will pay all
federal and state taxes (except transfer taxes) on the issue of the New
Bonds. The Company shall not, however, be required to pay any amount
for the expenses of the Representative or of any Purchasers, except as
provided in paragraphs (c) and (e) of this Section. The fees and
disbursements of Milbank, Tweed, Hadley & McCloy (the Purchasers'
Counsel) shall be paid by the Purchasers, except as provided in
paragraph (e) of this Section; and in the event that the fees of
Purchasers' Counsel shall be reduced from the amount stated by such
counsel to the Representative, an amount equal to such reduction shall
be paid to the Company by or on behalf of the Purchasers.
(e) If the Purchase Agreement shall be terminated pursuant to
any of the provisions hereof, the Company will pay the reasonable fees
and disbursements of Purchasers' Counsel and the filing fees and
expenses referred to in paragraph (c) of this Section. If the
Purchasers shall not take up and pay for the New Bonds due to the
failure of the Company to comply with any of the conditions specified in
<PAGE>
Section 8 hereof, the Company will reimburse the Purchasers in an
aggregate amount not exceeding $2,000 for their reasonable out-of-pocket
expenses incurred in connection with the financing contemplated by this
Purchase Agreement. The Company shall not in any event be liable to any
of the Purchasers for damages on account of loss of anticipated profits.
(f) During the nine-month period commencing on the date hereof,
if any event known to the Company or of which the Company shall be
advised by the Representative shall occur which should be set forth in a
supplement to or an amendment of the Prospectus or in any document to be
incorporated by reference therein in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, the Company will so advise the Representative
and, upon request from the Representative, will forthwith at the
Company's expense, or at the expense of the Purchasers if the only event
occasioning the supplement or amendment is a change in the purchasing or
distribution arrangements, prepare and furnish to the Representative (in
form satisfactory to Purchasers' Counsel) a reasonable number of copies
of a supplemented or amended prospectus or the document incorporated
therein or, at the option of the Company, a reasonable number of
appropriate supplements to be attached to the Prospectus, so that the
Prospectus as supplemented or amended will not contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading. In case any
Purchaser is required to deliver a prospectus descriptive of the New
Bonds more than nine months after the date hereof, the Company, upon the
request of the Representative, will furnish to the Representative, at
the expense of such Purchaser, a reasonable quantity of copies of a
supplemented or amended prospectus meeting the requirements of section
10(a) of the Securities Act.
(g) The Company will make generally available to its security
holders, as soon as practicable, an earnings statement (which need not
be certified) covering a twelve-month period commencing subsequent to
the date hereof, which earnings statement shall satisfy the requirements
of Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder.
8. Conditions of Purchasers' Obligations. The obligations of the
several Purchasers to purchase and pay for the New Bonds shall be subject to
the performance by the Company of its obligations hereunder and the following
conditions:
(a) Prior to 7 P.M., Providence time, on the date hereof, the
Indenture shall have been qualified under the Trust Indenture Act of
1939, there shall have been issued an order of the RIPUC, to the extent
that it has jurisdiction, permitting the issuance and sale of the New
Bonds, and at such time and on the Closing Date such orders shall not
contain any provision which, in the opinion of the Representative or the
Company, is unduly burdensome to the Company, it being understood that
such orders as are now in effect do not contain any such unduly
burdensome provision.
(b) All legal proceedings to be taken and all legal opinions to
be rendered in connection with the issue and sale of the New Bonds shall
be satisfactory to Purchasers' Counsel. Prior to or concurrently with
the delivery of the New Bonds, the Representative shall have received
the following opinions and letter, with printed or duplicated copies
thereof for each of the Purchasers, with such changes therein as may be
agreed upon by the Company and the Representative with the approval of
Purchasers' Counsel:
(i) Opinion of Edwards & Angell, special counsel for the
Company, substantially in the form attached hereto as Exhibit 1;
<PAGE>
(ii) Opinion of Robert King Wulff, Esq. and/or Kirk L.
Ramsauer, Esq., counsel for the Company, substantially in the form
attached hereto as Exhibit 2;
(iii) Opinion of Purchasers' Counsel substantially in the
form attached hereto as Exhibit 3; and
(iv) Letter of Coopers & Lybrand, dated the Closing Date
and addressed to the Company and to the Representative, confirming
that 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, and
stating in effect:
(1) that in their opinion the financial statements
and financial statement 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
Exchange Act and of the published rules and regulations
thereunder;
(2) that 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 1992, and
not covered by the Financial Statements referred to in
paragraph (1) 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 auditing 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 that:
(A) that the unaudited financial statements included
or incorporated by reference in the Registration
Statement do not 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
incorporated by reference in the Registration
Statement,
(B) that, during the period from the date of the
latest financial statements 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
<PAGE>
increase in long-term debt of the Company,
except in all instances as set forth or
incorporated in or contemplated by the
Prospectus; and
(3) 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 unaudited financial
statements incorporated by reference in the Registration
Statement, 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.
(c) At the time of the delivery of the New Bonds:
(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 Commission for amendments or additional
information shall have been complied with to its satisfaction;
(ii) the orders 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 the Representative shall have received a certificate signed by an
officer of the Company to such effect, to the best of his knowledge,
information, and belief.
If any provision of this Section is not fulfilled at or prior to the
delivery of the New Bonds, this Purchase Agreement may be terminated by the
Representative (with the consent of Purchasers, including the Representative,
who have agreed to purchase in the aggregate 50% or more in principal amount
of the New Bonds) upon delivering written notice thereof to the Company. Any
such termination shall be without liability of any party to any other party,
except as otherwise provided in paragraph (e) of Section 7.
9. Conditions of the Company's Obligation. The obligation of the
Company to deliver the New Bonds is subject to the following conditions:
(a) The conditions set forth in paragraphs (a), (c)(i), and
(c)(iii) of Section 8 hereof.
(b) Concurrently with the delivery of the New Bonds, the Company
shall receive the full purchase price for all of the New Bonds.
If any provision of this Section is not fulfilled at or prior to the
delivery of the New Bonds, this Purchase Agreement may be terminated by the
Company, by written notice delivered to the Representative. Any such
termination shall be without liability of any party to any other party, except
as otherwise provided in paragraph (e) of Section 7.
10. Termination. This Purchase Agreement may be terminated at any
time prior to the Closing Date by the Representative (with the consent of
Purchasers including the Representative who have agreed to purchase in the
aggregate 50% or more in principal amount of the New Bonds), upon notice
thereof to the Company, if prior to such time (a) there shall have occurred
<PAGE>
any general suspension of trading in securities on the New York Stock Exchange
or there shall have been established by the New York Stock Exchange, the
Commission, or any Federal or state agency or by the decision of any court any
limitation on prices for such trading or any restrictions on the distribution
of securities, (b) a banking moratorium shall have been declared either by
Federal or New York State authorities, or (c) there shall have occurred the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in this clause (c) in the judgement of the
Representative makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the New Bonds on the terms and in the
manner contemplated by the Prospectus.
Any termination of this Purchase Agreement pursuant to this Section
shall be without liability of any party to any other party, except as
otherwise provided in paragraph (e) of Section 7.
11. Indemnification.
(a) The term Bidding Prospectus as used in this Section 11 shall
mean the prospectus included in the registration statement on the date
of its initial effectiveness and such prospectus as and if amended or
supplemented prior to the date this Purchase Agreement becomes effective
and shall also include all preliminary prospectuses. The terms
Registration Statement and Prospectus as used in this Section 11 shall
mean said documents as defined, respectively, in Sections 3(a) and 3(b)
hereof and shall also include each and every amendment of and supplement
to said documents, respectively, furnished by the Company to the
Purchasers or to the Representative for distribution to the Purchasers.
No indemnity by the Company hereunder shall apply in respect of (i) any
Prospectus or Bidding Prospectus used at a time not authorized under the
Securities Act or this Purchase Agreement, (ii) any Prospectus or
Bidding 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 the Purchasers or to the Representative
for distribution to the Purchasers, or (iii) any Purchaser, or any
person controlling such Purchaser, on account of any loss, claim, or
liability arising by reason of any person acquiring any of the New
Bonds, if a copy of the Prospectus has not been sent or given by a
Purchaser or a securities dealer to such person with or prior to the
written confirmation of the sale involved. No use of any Bidding
Prospectus is authorized after the acceptance by the Company of the bid.
(b) The Company will indemnify and hold harmless each Purchaser
and each person, if any, who controls any Purchaser 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 New Bonds, on the ground
that the Registration Statement, the Prospectus, or the Bidding
Prospectus 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 the registration statement as now effective)
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 the Bidding Prospectus) 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 any
Purchaser, or by and through the Representative on behalf of any
Purchaser, for use therein, or unless such statement or omission shall
occur in the Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of the Trustee under the Indenture. For purposes
of the foregoing, no Purchaser shall be deemed to be required to send or
<PAGE>
give a copy of documents incorporated by reference in the Prospectus to
any person with or prior to the written confirmation of the sale
involved in order to be entitled to the benefits of the indemnification
provided for herein. Upon commencement of any such suit, if any
Purchaser or any such controlling person wishes to make a claim in
respect thereof against the Company under its agreement herein
contained, such Purchaser 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 upon such Purchaser 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.
(c) Each Purchaser 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 (b)
agrees to indemnify and hold harmless each Purchaser, but only with
respect to any written information furnished to the Company by such
Purchaser, or by and through the Representative on behalf of such
Purchaser, for use in the Prospectus. If any action shall be brought
hereunder against the Company or any such officer, director, or
controlling person, such Purchaser shall have the rights and duties
given to the Company by paragraph (b), and the Company or such officer,
director, or controlling person shall have the rights and duties given
to such Purchaser by said paragraph.
(d) If the indemnification provided for in this Section 11 is
unavailable to an indemnified party, then 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 the Purchaser on the other but also the relative fault of
the Company on the one hand and of the Purchaser on the other in
connection with the statement or omission that resulted in such loss,
claim, or liability, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and by the Purchaser on the other in connection with the
offering shall be deemed to be in the same proportion as the total net
proceeds from the offering, before deducting expenses, received by the
Company bear to the total underwriting discounts or commissions, if any,
received by all of the Purchasers, in each case as set forth in the
table on the cover page of the Prospectus. If there are no such
underwriting discounts or commissions so set forth, the relative
benefits received by the Purchaser shall be the difference between the
price received by the Purchaser upon sale of the New Bonds and the price
paid for the New Bonds pursuant to this Purchase Agreement. The
relative fault of the Company on the one hand and of the Purchaser on
the other shall be determined by reference to, among other things,
<PAGE>
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 the Purchaser 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.
(e) The indemnities contained in this Section and all the
representations and warranties contained in this Purchase Agreement
shall survive the delivery of the New Bonds.
12. Substitution of Purchasers.
(a) If one or more Purchasers fail or refuse to take up and pay
for the entire principal amount of New Bonds that it or they agreed to
purchase under this Purchase Agreement and the aggregate principal
amount of New Bonds which all such defaulting Purchasers shall have
failed to purchase does not exceed ten percent of the aggregate
principal amount of the New Bonds, the nondefaulting Purchasers shall
have the right and are obligated severally to take up and pay for (in
addition to the principal amounts of New Bonds set forth opposite their
respective names in Schedule A to the Confirmation of Bid) the total
principal amount of New Bonds agreed to be purchased by all such
defaulting Purchasers in the respective proportions which the principal
amounts set forth opposite the names of the nondefaulting Purchasers in
Schedule A bear to the aggregate principal amount so set forth opposite
the names of all such nondefaulting Purchasers; provided, however, that
no New Bonds of denominations smaller than $1,000 are to be delivered
and, if New Bonds of smaller denominations would result from the
aforesaid proportions, such smaller denominations shall be combined and
the resulting $1,000 note or notes shall be delivered to, and shall be
purchased by, such Purchaser or Purchasers as the Representative shall
designate. In such event, the Representative, for the accounts of the
several nondefaulting Purchasers, may take up and pay for all or any
part of such principal amount of New Bonds to be purchased by each
remaining Purchaser under this paragraph and, in order to effect
necessary changes in the Registration Statement, Prospectus, and other
documents and arrangements, may postpone the Closing Date not more than
four full business days.
(b) If one or more of the Purchasers shall fail or refuse to
take up and pay for the entire principal amount of New Bonds which he or
they have agreed to purchase under this Purchase Agreement and the
aggregate principal amount of New Bonds which all such defaulting
Purchasers shall have failed to purchase exceeds ten percent of the
aggregate principal amount of the New Bonds, the nondefaulting
Purchasers, or any one or more of them, at 10 A.M., Providence time, on
the Closing Date or within 24 hours thereafter, shall have the right to
take up and pay for (in such proportion as may be agreed upon among them
so long as no New Bonds of denominations smaller than $1,000 are to be
delivered), or to substitute another Purchaser or Purchasers to take up
and pay for, the total principal amount of New Bonds agreed to be
purchased by all such defaulting Purchasers. In the event that the
nondefaulting Purchasers shall not take up and pay for all the New Bonds
which the defaulting Purchasers shall have agreed but failed to
purchase, or substitute another Purchaser or Purchasers, as aforesaid,
the Company shall have the privilege of finding and substituting within
a further 24-hour period another Purchaser or Purchasers to purchase the
principal amount of New Bonds which the defaulting Purchasers agreed but
failed to purchase. (The term Purchaser as used in this Purchase
Agreement shall refer to and include each Purchaser substituted under
this paragraph with the same effect as if said substituted Purchaser had
originally been named in Schedule A to the Confirmation of Bid.) In any
<PAGE>
such case, either the Company or the Representative shall have the right
to postpone the Closing Date not more than seven full business days, in
order that necessary changes in the Registration Statement, the
Prospectus, and any other documents and arrangements may be effected.
If said nondefaulting Purchasers shall not take up and pay for such
principal amount of New Bonds, or substitute another Purchaser or
Purchasers therefor, and the Company shall not substitute another
Purchaser or Purchasers therefor, all as aforesaid, then this Purchase
Agreement shall terminate without any liability on the part of the
Company (except as otherwise provided in paragraph (e) of Section 7) or
of any nondefaulting Purchaser. Nothing contained in this paragraph
shall obligate any Purchaser to purchase or find purchasers for any
principal amount of New Bonds in excess of the amount agreed to be
purchased by such Purchaser under the terms of Section 5, nor shall
anything in this paragraph relieve any defaulting Purchaser of any
liability to the Company which it might otherwise have.
13. Persons Entitled to Benefit of Purchase Agreement. This Purchase
Agreement shall inure to the benefit of the Company and the Purchasers (and,
as to the provisions of Section 11, the other persons indemnified thereunder)
and their respective successors and assigns. Nothing in this Purchase
Agreement is intended or shall be construed to give to any other person, firm,
or corporation any legal or equitable right, remedy, or claim under or in
respect of this Purchase Agreement or any provision herein contained. The
term "successors and assigns" as used in this Purchase Agreement shall not
include any purchaser, as such purchaser, of any of the New Bonds from any of
the Purchasers.
14. Notices. Any request, consent, notice, or other communication on
behalf of the Purchasers shall be given in writing by the Representative
addressed to the Treasurer of the Company at 25 Research Drive, Westborough,
Massachusetts 01582, and any notice or other communication by the Company to
the Purchasers shall be given in writing to the Representative, at its address
stated in the Questionnaire furnished pursuant to Section 2 of the Terms and
Conditions.
15. Effectiveness of Purchase Agreement. The date on which this
Purchase Agreement is effective is the date stated by the Company in the
written acceptance of the Bid.
16. Governing Law. This Purchase Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts.
17. Counterparts. This Purchase Agreement may be executed by one or
more of the parties hereto in any number of counterparts, each of which shall
be deemed an original, but all such counterparts shall together constitute one
and the same instrument.
<PAGE>
Exhibit 1 to Terms of Purchase
PROPOSED FORM OF OPINION
OF
EDWARDS & ANGELL
ONE HOSPITAL TRUST PLAZA
PROVIDENCE, RHODE ISLAND 02903
_________________ , 19__
As Representatives of the Several Purchasers
Re: THE NARRAGANSETT ELECTRIC COMPANY
First Mortgage Bonds Series __, ___ %, due ________
Dear Sirs:
At the request of The Narragansett Electric Company, we submit the
following opinion as to its franchises. The Narragansett Electric Company
(originally incorporated under the name of "United Electric Power Company")
acquired in 1927 all of the assets and franchises of The Narragansett Electric
Lighting Company. Since then it has acquired in 1936 all the property,
assets, plant and business of South County Public Service Company, Tiverton
Electric Light Company, Bristol County Gas and Electric Company, and East
Greenwich Electric Company and, in August, 1950, all the property, assets,
plant and business of Rhode Island Power Transmission Company. In connection
with such acquisitions, The Narragansett Electric Company became entitled to
exercise and enjoy all the rights, powers, easements, privileges and
franchises theretofore exercised and enjoyed by said corporations with respect
to the property, assets, plant and business acquired from them respectively.
It has also acquired certain other utility property, but the franchises, if
any, acquired in connection therewith are unimportant.
Article IX of the amendments to the Constitution of the State of Rhode
Island, adopted in November, 1892, limits the power of the General Assembly to
provide for the creation of corporations by general law so that no corporation
shall be created with the power to exercise the right of eminent domain or to
acquire franchises in the streets and highways of towns and cities except by
special act, on notice as required by law. The charters of The Narragansett
Electric Company and of the various corporations whose property, assets and
franchises were acquired by The Narragansett Electric Company as aforesaid,
were granted by special acts of the General Assembly, on such requisite
notice. Said charters and all amendments thereto we have duly examined. We
are of the opinion that The Narragansett Electric Company is now a duly
existing corporation.
We are familiar with the proceedings incident to the acquisition by The
Narragansett Electric Company of the property, assets and franchises of (1)
The Narragansett Electric Lighting Company in 1927, (2) the several other
corporations referred to above in 1936 and (3) Rhode Island Power Transmission
Company in 1950. We have examined certified copies of the orders by the
Division of Public Utilities, Department of Revenue and Regulation (originally
called "Department of Taxation and Regulation"), of the State of Rhode Island,
consenting to and approving the purchase and acquisition of the property,
assets, plant and business of South County Public Service Company, Bristol
County Gas and Electric Company, Tiverton Electric Light Company and East
Greenwich Electric Company and of the order by the Public Utility
Administrator, Department of Business Regulation (who succeeded to the powers
and authority of the Division of Public Utilities, Department of Revenue and
Regulation, as hereinafter set forth) consenting to and approving the purchase
from Rhode Island Power Transmission Company of all of its property, assets,
plant and business, in compliance with the provisions of Section 39-3-24 of
the General Laws (1956). We have been advised that the Federal Power
<PAGE>
Commission (now called the "Federal Energy Regulatory Commission") consented
to the acquisition by The Narragansett Electric Company of the facilities of
South County Public Service Company, Tiverton Electric Light Company and Rhode
Island Power Transmission Company and that no such consent was necessary in
connection with the transfers from Bristol County Gas and Electric Company and
East Greenwich Electric Company.
We are of the opinion, based on the foregoing information, that The
Narragansett Electric Company validly acquired the property, assets, plant and
business of the above-mentioned corporations and is entitled to exercise and
enjoy all of the right, powers, easements, privileges and franchises
theretofore exercised and enjoyed by said corporations with respect to the
property, assets, plant and business purchased from them respectively by The
Narragansett Electric Company and that The Narragansett Electric Company has
succeeded to the rights and obligations of said corporations with respect to
operation in the towns and cities in Rhode Island where said corporations
carried on business under and pursuant to their respective charters prior to
said acquisition.
The original and amended charters of The Narragansett Electric Lighting
Company and of said corporations, all the property, assets, plant and business
of which were acquired as aforesaid, contain, among other matters, provisions
substantially similar in effect purporting to grant rights, with the consent,
or under the direction of the respective town and city councils and subject to
their ordinances, to install and maintain in the several towns and cities in
Rhode Island in the case of The Narragansett Electric Lighting Company and in
certain specific towns and cities in the case of the others of said
corporations, wires and conductors of electricity under and over highways,
streets and sidewalks for the purpose of selling and distributing electricity
for lighting, heating and other purposes.
The charter, as amended, of Bristol County Gas and Electric Company
contained provisions, among other matters, purporting in effect to grant the
right to carry on an electrical business and, with the consent of town
councils, to install wires and poles in, under and over highways, streets,
bridges and sidewalks in towns where it operates, subject to ordinances,
regulations and orders of the respective town councils. By the charters of
certain corporations (the rights of which Bristol County Gas and Electric
Company subsequently acquired) similar rights were provided for in the Town of
Bristol, with the consent of the Town Council, as to wires for electricity.
The charter of Rhode Island Power Transmission Company provided, among
other matters, for the right to string and maintain its wires across highways,
streets, etc., subject to reasonable regulations required for public safety by
the city or town councils of the cities or towns where the same are located or
the State Board of Public Roads if a state highway. It also provided that the
corporation, with the consent of the city or town councils or the State Board
of Public Roads (as to state highways) might put up, lay, maintain, repair and
use poles, transmission lines, wires, conductors, conduits and other
appurtenances in, through, along, over and under highways, streets, bridges
and other public places, subject to reasonable regulations of the town and
city councils or, in case of state highways, the State Board of Public Roads.
Prior consent of the City of Providence is required before crossing highways,
streets or public places in the City of Providence. We are informed that
Rhode Island Power Transmission had no locations and crossed no highways
within the City of Providence; that wherever its wires crossed highways
elsewhere it had observed all applicable regulations of the regulatory body
having jurisdiction; that its locations were entirely on private rights of
way, except for (1) certain poles in streets in Lincoln and Pawtucket on its
main line between the former Hazel Street Substation and the North Providence
town line, and (2) a spare circuit line leased from another utility extending
along several Pawtucket streets from the Pawtucket No. 1 Station to the East
Providence town line; that said poles and spare circuit line referred to in
(2) above have been so used and operated for more than twenty years without
objection from the City of Pawtucket; that the aforesaid poles in streets on
<PAGE>
said main line may be relocated in part on property owned or controlled by The
Narragansett Electric Company, as successor to Rhode Island Power Transmission
Company, and in part on rights of way which it may acquire over other private
property so as to continue its present service; and that said spare circuit
line (transmitting current for distribution in East Providence) might, if
necessary, be discontinued without substantially interfering with such
distribution, other means therefor being available over other portions of the
company's lines and connections. Under these circumstances we have not deemed
it necessary to consider in detail whether any objection to these transmission
line locations on and along said Lincoln and Pawtucket streets, if hereafter
made by any public authority, would have any legal standing.
We have examined copies of various votes or special ordinances of, or
contracts with, cities or towns approved by the town and city councils from
time to time in principal towns and cities in Rhode Island within which The
Narragansett Electric Company now distributes electricity. These votes,
contracts or ordinances evidence either general express consent to operation
either by that company or by one or more of the companies, the property,
assets, plant and business of which have been acquired as aforesaid, within
such towns or cities and to the use of streets therein for the purposes of
such business or consent for specific street locations therein, or contain
provisions reciting due authority to operate and/or use the streets generally
as aforesaid, or otherwise indicate a general recognition of, and acquiescence
in, such operation and use. Furthermore, we are informed that The
Narragansett Electric Company secured in 1935 blanket consents from all of the
city and town councils in all towns and cities of the State (other than the
City of Providence where it was believed to be unnecessary because of specific
consents already obtained) in which it was doing business, approving its then
locations of all its poles, wires and conductors within such towns and cities.
We have not attempted to examine all of these consents, but have examined some
of them as to form, which we believe to be adequate.
We are informed that for a number of years it has been the practice of
The Narragansett Electric Lighting Company and the other predecessors in title
of The Narragansett Electric Company to apply for and obtain specific consents
(the form of which we have examined and believe to be adequate) from or under
the authority of all such town and city councils for additional locations in
streets as the need therefor arose to making openings in the public highways
for such purpose, and that this practice has been continued by The
Narragansett Electric Company down to the present time. We are further
informed that all cities and towns in Rhode Island wherein The Narragansett
Electric Company now operates, as aforesaid, have acquiesced in such operation
by it and/or by one or more of its predecessors and in the use by it or them
of streets and highways therein for the purposes of such operation without
objection for a number of years.
By a special act of the General Assembly of the State of Rhode Island,
approved on May 6, 1964, The Narragansett Electric Company was, by amendment
to its charter, granted the power of eminent domain in perpetuity for use with
respect to electric lines of 11,000 volts or more, subject to certain
conditions, limitations and exceptions specified in said special act.
We have duly examined the Rhode Island statutes affecting the rights,
privileges, franchises, elements and obligations of The Narragansett Electric
Company. By statute it is provided that in any town or city in Rhode Island
where a corporation created for the purpose of producing, selling and
distributing electricity for light, heat or motive-power is in actual use and
enjoyment of rights in streets and highways, the control of the town or city
council is so far limited that it may not grant an exclusive right or
franchise therein to any other corporation created for the same purpose, and
in such communities where more than one corporation is in such actual use and
enjoyment the council may not grant an exclusive franchise to either
corporation except with the consent of the other. (Section 39-17-2 of the
General Laws, 1956.) It is further provided that the location of all
transmission lines, poles, piers, abutments, conduits, manholes, vaults and
<PAGE>
other fixtures for electricity use by Rhode Island public utilities is
validated as of May 19, 1982. (Section 39-1-30.1 of the General Laws, 1956.)
It is also provided that no public utility may furnish or sell electricity
(except to another public utility) in any town or city in which it or a
utility to which it is a successor was not, on or prior to March 1, 1926,
furnishing such service to the public generally and in which any other utility
is furnishing such service, unless it shall first obtain from the Division of
Public Utilities (the powers and duties of which, as hereinafter stated, are
now vested in the Public Utilities Commission or, under certain circumstances,
the Administrator of the Division of Public Utilities and Carriers, Department
of Business Regulation) a certificate of public convenience and necessity.
(Section 39-3-1 of the General Laws, 1956.) We are informed that on and prior
to March 1, 1926, The Narragansett Electric Lighting Company, or one of the
other corporations above-named, the property, assets, plant and business of
which have been acquired by The Narragansett Electric Company, was actually
furnishing to the public generally electric service in the same towns and
cities now served by The Narragansett Electric Company.
We are of the opinion that under the provisions of the Administrative
Code Act adopted in 1935 (P.L. May Session, 1935, Chapter 2250) and the
Administrative Act of 1939 (P.L. 1939, Chapter 660), as amended, the
Department of Public Works succeeded to the powers of the State Board of
Public Roads under the provisions of the charter of the Rhode Island Power
Transmission Company above referred to and that pursuant to Section 2 of
Chapter 111, P.L. 1970, the powers of the Department of Public Works became
vested in the Department of Transportation, that by the Administrative Act of
1939, as amended (particularly by Sec. 2 of Chapter 2174, P.L. 1949) the
powers and duties of the Division of Public Utilities above referred to became
vested in the Public Utility Administrator, Department of Business Regulation,
and that by Section 1 of Chapter 240, P.L. 1969, the duties of the Public
Utility Administrator, Department of Business Regulation, are now vested in
the Public Utilities Commission or, under certain circumstances, the
Administrator of the Division of Public Utilities and Carriers, Department of
Business Regulation. The above-mentioned statutes do not purport to modify
the powers or regulation previously vested in the State Board of Public Roads
or the Division of Public Utilities, nor do they purport to modify substantive
rights or obligations.
<PAGE>
Based upon the examination made and the information received by us as
aforesaid and with the qualifications aforesaid, it is our opinion (1) that
the terms and requirements of all regulatory ordinances now in effect and
brought to our attention affecting The Narragansett Electric Company are
reasonable; (2) that so long as the charter of said corporation and the
statutes herein before referred to remain effective, said corporation may not
be excluded by ordinance or administrative regulation from operating within
the towns and cities within the State of Rhode Island where it now operates
under the authority of its charter, although it may be required to make
reasonable changes of location of wires, poles, and other apparatus located
in, on, over or across streets or highways; (3) that at the present time The
Narragansett Electric Company is free from burdensome restrictions affecting
franchises and has rights adequate to carry on the business now conducted by
it in said cities and towns; (4) that said business has been and is being
conducted with the consent, either express or implied, of the city and town
councils of said towns or cities where such consent is required under said
charter; (5) that The Narragansett Electric Company has indeterminate rights
adequate for the continued use of streets and highways in said cities and
towns for wires and conductors of electricity subject to reasonable
regulations; and (6) that the franchise situation of The Narragansett Electric
Company is satisfactory and that its said rights afford reasonable protection
to the holders of securities of The Narragansett Electric Company and to that
Company in operating its authorized business in Rhode Island.
Very truly yours,
EDWARDS & ANGELL
<PAGE>
Exhibit 2 to Terms of Purchase
PROPOSED FORM OF OPINION
OF
COUNSEL FOR THE COMPANY
_______________ , 19__
As Representative of the Several Purchasers
Re: THE NARRAGANSETT ELECTRIC COMPANY
First Mortgage Bonds Series __, ____ %, due ____
Dear Representatives:
We have acted as counsel for The Narragansett Electric Company (the
Company) in connection with the issue by it of $_________ principal amount of
First Mortgage Bonds, Series __, __%, due ____ (New Bonds), and are therefore
familiar with the proceedings taken in connection therewith. The Company is a
subsidiary of New England Electric System.
This opinion is furnished to you pursuant to Section 8(b)(ii) of the
Purchase Agreement which became effective on ________________, 19__, between
you as purchaser of the New Bonds and the Company and is being delivered on
the Closing Date referred to therein, concurrently with said issue of New
Bonds.
The New Bonds are being issued under a First Mortgage Indenture and Deed
of Trust dated as of September 1, 1944 (the Original Indenture), as
supplemented and amended by an __________ Supplemental Indenture dated as of
___________, 19__, and previous supplemental indentures (the Original
Indenture and all supplemental indentures being collectively referred to
herein as the Indenture).
We are of opinion that:
1. The Company is a corporation validly organized and duly existing
under special charter granted by the State of Rhode Island.
2. The Company had full power and authority to accept your bid for
the New Bonds, and the Purchase Agreement has been duly authorized, executed,
and delivered by the Company.
3. 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. The __________
Supplemental Indenture, including Schedule I 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 ____________, 19__, and not
included in the Original Indenture or the previous supplemental indentures,
and now owned of record, except for the properties expressly excluded from the
Indenture.
4. 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, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the enforcement of creditors' rights generally and to the effects of
general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
5. The Company has corporate power proper and adequate for the
execution and issuance of the New Bonds under the Indenture in the initial
aggregate principal amount of $____________, and in accordance with due
<PAGE>
authorization from the stockholders and directors of the Company and based in
part upon certificates by an officer of the Company and by an officer of the
Trustee under the Indenture as to execution, certification, and delivery, said
$____________ principal amount of New Bonds have been duly issued and are
valid and binding obligations of the Company and entitled to the benefits and
security of the Indenture.
6. Said New 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 aforesaid,
there is no existing indebtedness secured by lien on the property securing
such New Bonds ranking prior to or on a parity with the lien securing such New
Bonds.
7. The property specifically described as mortgaged property in the
Indenture constitutes substantially all of the property owned by the Company
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 (b) under "Reservations and
Exceptions" in the Original Indenture and the First through __________
Supplemental Indentures, and as to the remainder of the properties described
in said schedules the exclusions, if any, by virtue of said clause (b) are
minor.
8. Other than as described in the Prospectus, including all documents
incorporated therein by reference, the principal generating stations 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. As to the other
properties described in the schedules to the Indenture and indicated therein
as owned by the Company, being principally electric lines and related
equipment, they are in general not on land owned in fee, being in substantial
part located on, over, or under public streets or highways and in part on land
owned by others over which the Company has easements or rights of way. A
majority of the poles of the distribution system are owned jointly with
others, principally telephone companies. The Company's title to such
properties is free from any material defects of record except current taxes,
the mortgage of the Indenture, and such liens, encumbrances, and other defects
as are set forth or are referred to in the Indenture, and in respect to said
easement interests in real estate (which consist principally of transmission
and distribution line rights of way) such rights, with minor exceptions, are
perpetual or without limit of time.
9. With respect to the issue and sale of the New Bonds, an
appropriate order has been issued by the Division of Public Utilities and
Carriers of the State of Rhode Island, to the extent it has jurisdiction,
authorizing the issue and sale of the New Bonds and the mortgage by the
Company of its properties, and said order remains, to the best of our
knowledge, in effect at this date; the Company is exempted by Rule 52 under
the Public Utility Holding Company Act of l935 (the l935 Act) from the
requirement of an order of the Securities and Exchange Commission (the
Commission). The Indenture has been qualified under the Trust Indenture Act
of 1939; the Registration Statement referred to below has become effective
under the Securities Act of 1933, as amended (the Securities Act); said order
and said Registration Statement remain, to the best of our 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
New Bonds or the carrying out of the provisions of the Purchase Agreement
(except under the so-called blue-sky or securities laws of the several states
in connection with sales by you and others of the New Bonds, the applicability
of which we have not considered and as to which we express no opinion).
<PAGE>
10. The statements upon our authority made or incorporated by
reference in the registration statement, as amended by all amendments thereto,
filed with the Securities and Exchange Commission under the Securities Act
(the Registration Statement) and in the prospectus dated _____________, 19__,
as supplemented by the prospectus supplement dated _________________, 19__,
relating to the New Bonds (the Prospectus) 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 reference therein, as to which we express no opinion), comply as to form in
all material respects with the relevant requirements of the Securities Act and
the Securities Exchange Act of 1934, as amended, and of the applicable rules,
regulations, and releases of the Securities and Exchange Commission
thereunder; and the New Bonds conform to the description thereof in the
Registration Statement and Prospectus. While we have not made a detailed
review of the accuracy or completeness of other information in, or
incorporated in, the Registration Statement and Prospectus and assume no
responsibility therefor, nothing has come to our attention which leads us to
believe that either the Registration Statement or Prospectus, or the documents
incorporated by reference therein, contains any 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.
The above opinion, insofar as it relates to mortgaging of franchises,
relates to the mortgaging of secondary franchises and not to the mortgaging of
the Company's primary franchise to be a corporation. The above opinion
insofar as it relates to the execution and delivery of the Original Indenture
and certain supplemental indentures prior to the __________ Supplemental
Indenture is based upon opinions of other counsel for The Company. The above
opinion, insofar as it relates to titles, is based in part upon opinions of
local counsel and of counsel associated with us and in part upon examination
of titles of the Company to its principal properties by title examiners under
our direction, the direction of counsel associated with us, or the direction
of local counsel, or examination by local counsel and reviewed by us or
counsel associated with us, such title examiners and local counsel being, in
our opinion, of good standing and experienced in the examination of titles.
In the case of easements over lands of others, the title of the grantors of
the easements were not in all cases examined to the same extent as in the case
of fee ownership and in some instances such easements depend upon long user.
We are members of the bar of The Commonwealth of Massachusetts and we do
not express any opinion as to matters governed by any laws other than those of
The Commonwealth of Massachusetts, the State of Rhode Island, and the Federal
Law of the United States of America. We are not, however, members of the bar
of the State of Rhode Island.
Yours very truly,
DRAFT
Robert King Wulff*
Corporation Counsel
DRAFT
Kirk L. Ramsauer*
Assistant General Counsel
_________________________
* To be signed by Robert King Wulff and/or Kirk L. Ramsauer.
<PAGE>
Exhibit 3 to Terms of Purchase
PROPOSED FORM OF OPINION
of
MILBANK, TWEED, HADLEY & MCCLOY
1 CHASE MANHATTAN PLAZA
NEW YORK, NEW YORK 10005
_______________________, 19__
and the other several Purchasers
named in the Purchase Agreement
referred to below,
Re: THE NARRAGANSETT ELECTRIC COMPANY
First Mortgage Bonds Series __, ___%, due ____
Dear Sirs:
We have acted as your counsel in connection with your purchase from The
Narragansett Electric Company, a Rhode Island corporation (the Company),
pursuant to a Purchase Agreement dated ____________, 19__ (the Purchase
Agreement) made with the Company, of $______________ aggregate principal
amount of First Mortgage Bonds Series __, ___%, due ____ (New Bonds) of the
Company, issued under and pursuant to the First Mortgage Indenture and Deed of
Trust dated as of September 1, 1944, as supplemented and modified by
________________ supplemental indentures (collectively, the Mortgage), between
the Company and Rhode Island Hospital Trust National Bank, successor to Rhode
Island Hospital Trust Company, as Trustee (the Trustee). As such counsel we
have reviewed originals, or copies certified to our satisfaction, of all such
corporate records of the Company, indentures, agreements and other
instruments, certificates of public officials and of officers and
representatives of the Company and of the Trustee, and other documents, as we
have deemed necessary to require as a basis for the opinions hereinafter
expressed. In such examination we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as copies and
the authenticity of the originals of such later documents. As to various
questions of fact material to such opinions, we have, when relevant facts were
not independently established, relied upon certifications by officers of the
Company and other appropriate persons and statements contained in the
Registration Statement hereinafter mentioned.
In addition, we attended the closing held today at the principal office
of Rhode Island Hospital Trust National Bank, One Hospital Trust Plaza,
Providence, Rhode Island, in the course of which the Company caused to be
delivered to you $_____________ aggregate principal amount of Series __, New
Bonds against payment therefor.
Based upon the foregoing, and having regard to legal considerations
which we deem relevant, we are of the opinion that:
1. The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
2. The registration statement with respect to the Series __, New
Bonds filed with the Securities and Exchange Commission (the Commission)
pursuant to the Securities Act of 1933, as amended (the Act), as amended by
all amendments thereto (the Registration Statement), has become effective and,
to the best of our knowledge, remains in effect on the date hereof, and the
prospectus with respect to the Series __, New Bonds dated ____________, 19__,
as supplemented by the prospectus supplement dated ______________, 19__,
including all documents incorporated by reference therein pursuant to the
requirements of Form S-3 under the Act (the Prospectus), is lawful for use for
<PAGE>
the purposes specified in the Act in connection with the offer for sale and
the sale of the Series __, New Bonds in the manner specified therein, subject
to compliance with the provisions of securities or "blue sky" laws of certain
jurisdictions in connection with the offer and sale of the Series __, New
Bonds in such jurisdictions.
The Registration Statement and the Prospectus (except the financial
statements and other financial data included therein, as to which we express
no opinion) comply as to form in all material respects with the requirements
of the Act and with the applicable published rules and regulations of the
Commission under the Act.
As to the financial statements included in the Prospectus, we have made
no examination of the Company's books of account and we therefore express no
opinion. As to the statements under "Description of Series __, New Bonds,
(except the financial data included thereunder as to which we express no
opinion), subject to the concluding three paragraphs of this opinion, we are
of the opinion that the statements are accurate and do not omit any material
fact required to be stated therein or necessary to make such statements not
misleading. As to other matters, we have not undertaken to determine
independently the accuracy or completeness of the statements contained in the
Registration Statement or in the Prospectus. We have, however, participated
in conferences with representatives of the Company and of New England Power
Service Company in connection with the preparation of the Registration
Statement and the Prospectus and we have reviewed all documents incorporated
by reference in the Prospectus pursuant to the requirements of Form S-3 under
the Act and such of the corporate records of the Company as we deemed
advisable. None of the foregoing disclosed to us any information which gave
us reason to believe that the Registration Statement or the Prospectus (except
the financial statements and other financial data included therein, as to
which we express no opinion) contains any 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.
3. The Company is exempt under Rule 52 of the Public Utility Holding
Company Act of l935 from the requirement for an order of the Commission under
said Act with respect to the issue and sale of the Series __, New Bonds.
4. The Division of Public Utilities and Carriers of the State of
Rhode Island has issued an appropriate order with respect to the issue and
sale of the Series __, New Bonds. Said order, to the best of our knowledge,
remains in effect on the date hereof.
5. No other order, approval or consent of any public regulatory body
is legally required under Federal law for the issue and sale of the Series __,
New Bonds pursuant to the Purchase Agreement or the carrying out of the
provisions of the Purchase Agreement.
6. The Mortgage has been duly authorized, executed and delivered by
the Company, and having, in the opinion of Robert King Wulff, Esq.,
Corporation Counsel for the Company, and Kirk L. Ramsauer, Esq., Assistant
General Counsel for the Company, referred to below, upon which we rely, been
duly filed and recorded, constitutes a valid mortgage legally effective to
create a lien (as to the ranking of which reference is made to said opinion)
as security for the Series __, New Bonds upon the interest of the Company in
the property now owned by the Company which is described in the Mortgage as
subject to the lien thereof; and the Mortgage is a valid, binding and
enforceable instrument, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general applicability
affecting the enforcement of creditors' rights generally. The enforceability
of the Mortgage is further subject to the effect of general principles of
equity (regardless of whether considered in a proceeding in equity or at law),
including without limitation (i) the possible unavailability of specific
performance, injunctive relief or any other equitable remedy and (ii) concepts
of materiality, reasonableness, good faith and fair dealing.
<PAGE>
The Mortgage has been duly qualified under the Trust Indenture Act of
1939, as amended.
7. The Series __, New Bonds purchased by you conform as to legal
matters in all substantial respects to the description thereof contained in
the Registration Statement and the Prospectus and have been duly authorized
and (assuming due execution thereof by the Company and certification by the
Trustee) issued under the Mortgage and are valid and binding obligations of
the Company.
The foregoing opinions are subject to the following:
We have made no examination of the Company's title to the properties
purported to be owned by it or of the ranking of the lien created by the
Mortgage or of the franchises under which the Company operates. We express no
opinion on such matters (including the adequacy of the real property
descriptions in the Mortgage), and, to the extent that the opinions herein
expressed involve such matters, we have relied, so far as concerns the
Company's titles to its properties and the ranking of the lien of the
Mortgage, upon the opinion of Robert King Wulff, Esq. and Kirk L. Ramsauer,
Esq., addressed to you on this date, and, so far as concerns the Company's
franchises, upon the opinion of Edwards & Angell, likewise addressed to you on
this date. Furthermore, with respect to the filing and recording of the
Mortgage in the State of Rhode Island, we have relied upon said opinion of
Robert King Wulff, Esq. and Kirk L. Ramsauer, Esq.
In rendering the opinions hereinabove expressed, we have relied upon
said opinion of Robert King Wulff, Esq. and Kirk L. Ramsauer, Esq. as to all
matters governed by the law of the State of Rhode Island and upon said opinion
of Edwards & Angell as to matters concerning the Company's franchises, and as
to such matters, the opinions hereinabove expressed are subject to all
qualifications, limitations, assumptions and reliances, and other
considerations, therein set forth.
We are members of the bar of the State of New York and we do not express
any opinion as to matters governed by any laws other than the law of the State
of New York, the Federal law of the United States of America, and to the
extent hereinabove stated in reliance upon said opinions of Robert King Wulff,
Esq. and Kirk L. Ramsauer, Esq. and of Edwards & Angell, the law of the State
of Rhode Island.
Very truly yours,
MILBANK, TWEED, HADLEY & MCCLOY
<PAGE>
THE NARRAGANSETT ELECTRIC COMPANY
FIRST MORTGAGE BONDS, SERIES **, * %, DUE **
_________________________
PROSPECTIVE BIDDER'S QUESTIONNAIRE
Group bidders should return three executed copies to their
Representative. Two executed copies on behalf of each prospective bidder
should be delivered by group Representatives and by single bidders to the
Company at the Corporate Finance Department of New England Power Service
Company, 25 Research Drive, Westborough, Massachusetts 01582, before 12 Noon,
Boston time on ___________, 19__, unless a later date is fixed by the Company.
_________________________
THE NARRAGANSETT ELECTRIC COMPANY
Ladies and Gentlemen:
In connection with the proposed offering of not exceeding $_______
principal amount of First Mortgage Bonds, Series **, *% due ** (New Bonds) of
The Narragansett Electric Company (the Company), and for use in the
registration statement on Form S-3 (the Registration Statement) and in the
Trustee's statement of eligibility and qualification on Form T-1, the
undersigned, as a prospective bidder, furnishes the following information:
Our name and address, as they should appear in the prospectus or the
Registration Statement, are as follows:
The name and address of our authorized Representative(s), if any, in
connection with our proposed bid for, and purchase of, the New Bonds, as
provided in the terms and conditions for bids (the Terms and Conditions) and
in the Purchase Agreement therein referred to, are as follows:
or, if no bid is made by the Representative(s), such other person who
represents to the satisfaction of the Company that it has been authorized by
us or by the named Representative(s) or any one of them to act in our behalf.
The Representative(s), or substituted representative(s), will have full
power and authority on behalf of the undersigned in all matters relating to
any bid for, and any purchase of, the New Bonds, including, without limiting
the generality of the foregoing, full power and authority (a) to make any bid
or, in the event specified in Section 6 of the Terms and Conditions, to
improve such bid, which bid or improved bid, together with all schedules
thereto, if accepted by the Company, shall become the Purchase Agreement for
the purchase and sale of the New Bonds, (b) to furnish to the Company in
writing the information with respect to the public offering, if any, of the
New Bonds, which is required to complete any post-effective amendment to the
Registration Statement or to the related prospectus or any supplement thereto,
or which is required under the Public Utility Holding Company Act of 1935, or
which is otherwise required by law in respect to the purchase or sale of the
New Bonds, and (c) to consent to the filing of any such post-effective
______________________________
* The percentage is in the interest rate specified in the accepted bid.
** Series and maturity date to be specified as provided in Section 1 of
the Terms and Conditions.
<PAGE>
amendment, prospectus, or prospectus supplement. If there are two or more
representatives, any one or more may act on behalf of all the representatives.
Except as stated below:
(1) We propose to make a public offering of the New Bonds purchased by
us.
(2) Neither we nor any of our directors, officers, or partners have a
material relationship with the Company or with New England Electric System.
(The term "material" is defined in Rule 405 under the Securities Act of 1933.)
(3) We are not an affiliate (as that term is defined in Rule O-2 under
the Trust Indenture Act of 1939) of the Rhode Island Hospital Trust National
Bank, or of its parent, RIHT Financial Corporation, or of RIHT Financial
Corporation's parent, Bank of Boston Corporation, and none of said
institutions nor any of their directors or executive officers is a director,
officer, partner, employee, appointee, or representative of ours.
(4) We and our directors, partners, or executive officers, taken as a
group on ____________ did not own beneficially more than 10,200 shares (1%) of
the outstanding capital stock of Rhode Island Hospital Trust National Bank,
nor more than 752,000 shares (1%) of the outstanding capital stock of Bank of
Boston Corporation. (The meaning of the term "beneficial ownership" is
explained in SEC Release No. 227 under the Trust Indenture Act of 1939).
(5) We (if a corporation) do not have outstanding, nor have we assumed
or guaranteed, any securities issued other than in our present corporate name,
and neither the Rhode Island Hospital Trust National Bank nor RIHT Financial
Corporation nor Bank of Boston Corporation is a holder of record of any
securities issued in our corporate name.
(6) If any corporation holds of record or is known to us to be the
beneficial owner of 10% of more of a class of securities issued by us, either:
(a) we state, as to each such corporate securities-holders, that
neither Rhode Island Hospital Trust National Bank nor RIHT Financial
Corporation nor Bank of Boston Corporation, is a holder of 10% or more of any
class of securities issued by such corporate securities-holder, or
(b) we attach a list of the names and addresses of all such
corporate securities-holders.
(7) We are not a "holding company" or a "subsidiary company" or an
"affiliate" of a "holding company" or of a "public utility company", each as
defined in the Public Utility Holding Company Act of 1935. (If such is not
the case, there must be filed with this questionnaire evidence satisfactory to
the Company that the sale of the New Bonds to you will be lawful under the
Public Utility Holding Company Act of 1935.)
(8) We know of no arrangements, other than those, if any, described in
the Registration Statement, including exhibits thereto, or the related
prospectus, (i) to limit or restrict the sale of the New Bonds or the
Company's presently outstanding bonds for the period of distribution, (ii) to
stabilize the market for any such bonds or New Bonds, (iii) for withholding
commissions, or otherwise to hold any underwriter or dealer responsible for
the distribution of his participation, or (iv) for any discounts or
commissions to be allowed or paid to dealers.
(9) We represent and warrant that our commitment to buy the New Bonds
will not result in a violation of the financial responsibility requirements of
Rule 15c3-1 under the Securities Exchange Act of 1934 or of the applicable
rules relating to capital requirements of any securities exchange to which we
are subject.
<PAGE>
(10) We have not prepared or had prepared for us any report or
memorandum for external use in connection with the proposed offering.
The exceptions to the above statements are: (Insert "None" or give
details on an attached sheet.)
We agree to notify you promptly of any material change in the foregoing
information which may occur prior to the date of any prospectus supplement,
prepared to reflect the results of the bidding for an offering of the New
Bonds in which we participate, filed pursuant to rules and regulations under
the Securities Act of 1933, as amended, and of any other development before
such date which makes untrue or incomplete any of the above statements as of
such date.
We further agree to make a record of any distribution of any preliminary
prospectus or other preliminary information and to bring all subsequent
changes and amendments, if required by the Securities and Exchange Commission,
to the attention of each person to whom such prospectus or information shall
have been given.
Yours very truly,
_____________________________________
(Official Signature)
By __________________________________
(Officer or Partner)
DATED: ____________________________
<PAGE>
DRAFT
$_______________
THE NARRAGANSETT ELECTRIC COMPANY
(a Rhode Island corporation)
First Mortgage Bonds, Series_____
Due from 9 Months to 30 Years from Date of Issue
DISTRIBUTION AGREEMENT
[DATE]
[NAME AND ADDRESS OF AGENT]
Dear Agent:
The Narragansett Electric Company (the Company) agrees with you with
respect to the issue and sale by the Company of not exceeding $_______
aggregate principal amount of its First Mortgage Bonds, Series ______(New
Bonds). The New Bonds are to be issued pursuant to one or more indentures
supplemental (the Supplemental Indenture) to the First Mortgage Indenture and
Deed of Trust dated as of September 1, 1944 (the Original Indenture) between
the Company and Rhode Island Hospital Trust National Bank (successor to Rhode
Island Hospital Trust Company) (the Trustee), (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 New Bonds from the Company by others and (ii) agrees that
whenever the Company determines to sell New 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 New 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. ______) for the registration of
First Mortgage Bonds, including the New Bonds, and the offering thereof from
time to time 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 New 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
<PAGE>
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, New 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 New 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
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, 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
<PAGE>
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 in an amount 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.
(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 or
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 New 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 New
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 New Bonds upon the terms and
conditions set forth in the Prospectus. You are hereinafter 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 New 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 New 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 New
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 New Bonds received by you as Agent. The Company shall have the
sole right to accept offers to purchase the New Bonds and may reject any such
offer in whole or in part. You shall have the right, in your discretion
<PAGE>
reasonably exercised, to reject any offer to purchase the New 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 reserves the right to
sell, and may solicit and accept offers to purchase, New 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 New 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 New 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 New 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 New Bonds
to be purchased by you pursuant thereto, the price to be paid to the Company
for such New Bonds, the initial public offering price, if any, at which the
New Bonds are proposed to be re-offered, the Settlement Date, the place of
delivery of and payment for such New Bonds, and any other particular terms of
the New Bonds. Such Terms Agreement shall also specify any exceptions from
the requirements for opinions of counsel, letters from Coopers & Lybrand and
certificates from officers of the Company pursuant to Section 5 hereof.
(c) Procedures. Procedural details relating to the issue and
delivery of New Bonds, and solicitation of offers to purchase New 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 Hinckley, Allen, Snyder & Comen,
attention: Edwin G. Torrance, counsel for Rhode Island Hospital Trust National
Bank, on the date hereof, or at such other time as you and the Company may
agree upon in writing, which in no event shall be later than the time at which
you commence solicitation of purchases of New Bonds hereunder. 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 New 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 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 New Bonds in your capacity as Agent and to cease sales of any New 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
<PAGE>
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 New Bonds in your capacity as Agent pursuant to a request
from the Company and shall not then hold any New 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
New 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 New Bonds in your capacity as Agent
pursuant to a request from the Company, and shall not then hold any New 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 New 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 that 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 pursuant to
the Exchange Act of an amendment or supplement relating solely to the terms of
New Bonds, a change in the principal amount of New Bonds remaining to be sold,
or similar changes) and will furnish your counsel with copies of any such
amendment or supplement, other than a current report on Form 8-K, or other
documents proposed to be filed 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.
<PAGE>
(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 Rhode Island
Public Utilities Commission, Division of Public Utilities and Carriers (RIPUC)
of any order altering, suspending, supplementing, or otherwise affecting any
of its orders permitting the issuance and sale of the New 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 New 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 copy of the
Registration Statement, as originally filed, and of all amendments thereto
heretofore or hereafter 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 New 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 New 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 endeavor to maintain such qualifications in effect for as long as may
be required for the distribution of the New 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 New 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 New Bonds) of the same or
substantially similar maturity to the New 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
<PAGE>
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 New 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 New 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 printing and delivery to you in quantities as
herein above 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 New 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 the Agents for the reasonable fees
and disbursements of counsel for the Agents 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 New Bonds as agent
of the Company and your obligations to purchase New 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 RIPUC, to the extent it has jurisdiction, permitting the issuance and
sale of the New Bonds, and at such time and at each Settlement Date with
respect to any applicable Terms Agreement such letter or orders 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 one or both of
Robert King Wulff, Esq., or Kirk L. Ramsauer, Esq., 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 special charter granted by The
State of Rhode Island.
(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
<PAGE>
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 [DATE OF INDENTURE], 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 New Bonds under
the Indenture in the aggregate principal amount of
not exceeding $ ___________, 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,
the New Bonds will be duly issued and valid and
binding obligations of the Company and entitled to
the benefits and security of the Indenture.
(G) The New 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 causes
of, and to the liens permitted by, the Indenture,
including the prior lien of the Trustee for
compensation, expenses, and liabilities; and there is
no existing indebtedness secured by lien on the
property securing such New Bonds ranking prior to or
on a parity with the lien securing the New Bonds.
(H) The property specifically described as mortgaged
property in the Indenture constitutes substantially
all of the property owned by the Company and used by,
or useful to, it in its business, except for the
property expressly excepted from the Indenture and
except as described in the Prospectus, including all
documents incorporated therein by reference. 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 (b) of the paragraph in the
Original Indenture beginning "Reservations and
Exceptions," and as to the remainder of the
properties described in said schedules the
exclusions, if any, by virtue of said clause (b) are
minor.
(I) Other than as described in the Prospectus, including
all documents incorporated therein by reference, the
principal generating stations of the Company are in
general on land owned by the Company, the balance
being upon land of others pursuant to lease or other
<PAGE>
arrangements. As to the other properties described
in the schedules to the Indenture and indicated
therein as owned by the Company, being principally
electric lines and related equipment, they are in
general on land owned in fee, being in substantial
part located on, over, or under public streets or
highways and in part on land owned by others over
which the Company has easements or rights of way. A
majority of the poles of the distribution system are
owned jointly with others, principally telephone
companies. The Company's title to such properties is
free from any material defects of record except
current taxes, the mortgage of the Indenture, and
such liens, encumbrances, and other defects as are
set forth or are referred to in the Indenture, and in
respect to said easement interests in real estate
(which consist principally of transmission and
distribution line rights of way) such rights, with
minor exceptions, are perpetual or without limit of
time.
(J) An appropriate order with respect to the issue and
sale of the New Bonds has been issued by the RIPUC,
to the extent it has jurisdiction, authorizing the
issue and sale of the New Bonds and the mortgage by
the Company of its properties, and said order
remains, to the best of such counsel's knowledge, in
effect at this date; 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; the Registration
Statement has become effective under the Securities
Act; to the best of such counsel's knowledge, said
order, said letter and said Registration Statement
remain 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
New 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 New
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 New
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
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 New 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
<PAGE>
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 New
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 RIPUC 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, a letter, dated as of the
Commencement Date or such Settlement Date, in form and substance satisfactory
to you, to the effect that:
(i) They are independent 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
Exchange Act and of the published rules and regulations thereunder;
(iii) They have read the minutes of the meetings of the
stockholders and the Board of Directors of the Company held during any
period subsequent to 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 then five business days
prior to the date of their letter and:
(A) That they have read the unaudited financial
statements of the Company included or incorporated by
reference in the Registration Statement, and made
inquiries of officials of the Company who have
responsibility for financial and accounting matters
<PAGE>
and that those officials of the Company stated that
the unaudited financial statements included or
incorporated by reference in the Registration
Statement (1) 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 and (2)
comply as to form in all respects with the applicable
accounting requirements of the Exchange Act and the
published rules and regulations thereunder;
(B) That with respect to any period after the date of the
unaudited financial statements referred to in (iii)
(A) for which there are financial statements
available, they have read such financial statements
and made inquiries of officials of the Company who
have responsibility for financial and accounting
matters and that those officials of the Company
stated that such unaudited financial statements are
stated on a basis substantially consistent with that
of the audited financial statements included or
incorporated by reference in the Registration
Statement and that there was no change in the capital
stock, no increase in long-term debt or any decrease
in net assets of the Company (other than decreases
resulting from regular dividends on preferred or
common stock), as compared with the amounts shown in
the unaudited financial statements of the Company
included or incorporated by reference in the
Registration Statement; and
(C) That with respect to the period from the date of the
latest available financial statements of the Company
to a specified date not more than five business days
prior to the date of such letter they have made
inquiries of officials of the Company who have
responsibility for financial and accounting matters
and those officials of the Company stated that there
was no change in the capital stock or increase in
long-term debt compared to the amounts shown on the
unaudited financial statements of the Company
included or incorporated by reference in the
Registration Statement;
except in all instances as set forth or incorporated by
reference in or contemplated by the Prospectus or, with respect
to Clauses (B) and (C) above, except as disclosed in said
letter; and
(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 unaudited financial statements
incorporated by reference in the Registration Statement,
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.
<PAGE>
(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 New
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 New Bonds
as herein contemplated shall be satisfactory in form and substance to you and
your counsel.
(f) Your obligations to purchase New 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 New 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, 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 (or, at your option, any applicable Terms Agreement)
may be terminated by you by notice to the Company at any time prior to the
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 New
Bonds, and each sale of New 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 New Bonds or New 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);
<PAGE>
(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 New Bonds, a change in
the principal amount of New 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, the
Company shall furnish or cause to be furnished to you forthwith a certificate
in form satisfactory to you to the effect that the statements contained in the
certificates 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 for the same tenor as the certificates referred
to in said Section 5(c), modified as necessary to relate to the Registration
Statement and the 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 New Bonds, a change
in the principal amount of New 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 incorporated by reference into the Prospectus, and, if so
indicated in the applicable Terms Agreement, each time the Company sells New
Bonds to you pursuant to a Terms Agreement, the Company shall furnish or cause
to be furnished forthwith to you and your counsel a written opinion of one or
both of Robert King Wulff, or Kirk L. Ramsauer, Counsel for the Company, 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 New Bonds to you pursuant to a Terms Agreement, the Company
shall cause Coopers & Lybrand forthwith to furnish you 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 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 may limit the scope of such letter to the unaudited financial
<PAGE>
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 you reasonable judgment, such letter should cover
such other information.
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 New 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 herein 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 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 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 New
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
<PAGE>
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 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 New Bonds shall be
deemed to be in the same proportion as the total sales price received by the
Company from the sale of the New 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 New 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 New 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, indemnification provisions, 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 New
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 New Bonds with the intention of reselling them or (B) an offer to
purchase any of the New Bonds has been accepted by the Company but the time of
delivery to the purchaser or his agent of the New Bond or New Bonds relating
<PAGE>
thereto has not occurred, the covenants set forth in Sections 3 and 6 hereof
shall remain in effect until such New 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.
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 rights, 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 New 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 State of Rhode Island.
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,
THE NARRAGANSETT ELECTRIC COMPANY
DRAFT
By:____________________________________
Name:
Title:
<PAGE>
CONFIRMED AND ACCEPTED, as of the date first above written:
[NAME OF AGENT]
DRAFT
By:___________________________________
Name:
Title:
<PAGE>
EXHIBIT A
THE NARRAGANSETT ELECTRIC COMPANY
(A Rhode Island Corporation)
First Mortgage Bonds, Series ___
TERMS AGREEMENT
________________, 199_
The Narragansett Electric Company
25 Research Drive
Westborough, Massachusetts 01582
Attention: Treasurer
Re: Distribution Agreement dated ____________________
Subject to the terms and conditions of the Distribution Agreement dated
____________, between The Narragansett Electric Company (the Company) and the
undersigned, the undersigned agrees to purchase the following Bonds: $
Issue Designation:
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.]
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:
<PAGE>
[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]
DRAFT
By:__________________________________________
Name:
Title:
Accepted:
THE NARRAGANSETT ELECTRIC COMPANY
DRAFT
By:______________________________________
Name:
Title:
<PAGE>
SCHEDULE A
Term Commission Rate
---- ---------------
[ To be negotiated]
<PAGE>
EXHIBIT B
THE NARRAGANSETT ELECTRIC COMPANY
First Mortgage Bonds, Series ____
Administrative Procedures
---------------------------------
First Mortgage Bonds, Series ___ (the New Bonds) in the aggregate
principal amount of not exceeding $__________ are to be offered from time to
time by The Narragansett Electric Company (the Company). [NAME OF AGENT]
Corporation as agent (the Agent) has agreed to use its reasonable best efforts
to solicit purchases of the New Bonds directly from the Company, and may also
purchase New Bonds, as principal, for resale. The New Bonds are being offered
and sold pursuant to a Distribution Agreement between the Company and the
Agent, dated [DATE] (the Distribution Agreement). The New Bonds have been
registered with the Securities and Exchange Commission (the SEC). The New
Bonds will be issued pursuant to one or more indentures supplemental to the
First Mortgage Indenture and Deed of Trust dated as of September 1, 1944 (the
Indenture) between the Company and Rhode Island Hospital Trust National Bank
(successor to Rhode Island Hospital Trust Company), as trustee (in its
capacity as trustee under the Indenture and otherwise, referred to herein as
Hospital Trust). References to Hospital Trust shall include its service
provider, The First National Bank of Boston, as such.
Each New Bond will be represented by either a Global Security (as defined
hereinafter) delivered to Hospital Trust, as agent for the Depository Trust
Company (DTC), and recorded in the book-entry system maintained by DTC (a
Book-Entry New Bond) or a certificate delivered to the holder thereof or a
person designated by such holder (a Certificated New 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 Note will not be entitled
to receive a certificate representing such New Bond. Book-Entry Notes will be
issued in accordance with the administrative procedures set forth in Part I
hereof and Certificated Notes 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 New Bonds, the Indenture, or the Distribution Agreement, the relevant
provisions of the New 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.
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, Hospital Trust 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 Hospital Trust to DTC and a
Certificate Agreement between Hospital Trust and DTC, dated as of [DATE] and
April 15, 1991, respectively, and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System (SDFS).
<PAGE>
Issuance: On any date of settlement (as defined
under Settlement below) for one or more
Book-Entry New Bonds, the Company will
issue a single global security in fully
registered form without coupons (a Global
Security) representing not exceeding $
_______ principal amount of all such New
Bonds that have the same maturity,
interest rate, redemption, and, in the
case of original issue discount New Bonds,
original issue discount provisions
(collectively, the Terms). Each Global
Security will be dated and issued as of
the date of its certification by Hospital
Trust. No Global Security will represent
any Certificated New Bonds.
CUSIP Numbers: The Company has arranged with the CUSIP
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 New Bonds.
The Company has delivered to Hospital
Trust and to DTC a written list of the
numbers in such series. Hospital Trust
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 Hospital Trust 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 Securities. Upon obtaining such
additional CUSIP numbers, the Company
shall deliver a list thereof to Hospital
Trust 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 New 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
New 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 New Bond in
the account of such Participant. The
ownership interest of such beneficial
<PAGE>
owner in such New 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 New 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 New Bonds.
Consolidations: Hospital Trust may deliver to DTC and the
CUSIP Service Bureau at any time a written
notice of consolidation specifying (i) the
CUSIP numbers of two or more outstanding
Global Securities that represent
Book-Entry New 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 New
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 send to each
Participant (including Hospital Trust) a
written reorganization notice to the
effect that such exchange will occur on
such date. Prior to the specified
exchange date, Hospital Trust 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 date, the CUSIP numbers of the
Global Securities to be exchanged will no
longer be valid. On the specified
exchange date, Hospital Trust 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 New Bonds will be issued in
principal amounts of $1,000 or any
integral multiple thereof.
Interest: Each Book-Entry New Bond will bear
interest from the date as of which the
Global Security representing the
Book-Entry New Bond was first certified at
the annual rate stated on the face
thereof, payable on _____ 1 and _______ 1
of each year (the Interest Payment Dates)
and at maturity or, upon earlier
redemption, the date of redemption. Each
<PAGE>
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: Promptly after the close of business on
_______15 or ___________ 15 (the Record
Dates), Hospital Trust 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 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 weekly 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
Hospital Trust the total amount of
interest due on such Interest Payment Date
(other than a maturity date or a
redemption date), and Hospital Trust 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 New
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 Hospital
Trust 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
New Bonds represented by such Global
Securities are recorded in the book-entry
system maintained by DTC. Neither the
Company, nor Hospital Trust, nor the Agent
shall have any direct responsibility or
<PAGE>
liability for the payment by DTC to such
Participants of the principal of and
interest on the Book-Entry New Bonds.
The amount of any taxes required under
applicable law to be withheld from any
interest payment on a Book-Entry New 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 New Bond.
The first payment of interest on any New
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 Redemption:On or about the first Business Day of each
month, Hospital Trust 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 Hospital Trust the
amounts of such principal and interest
payments with respect to each such Global
Security on or about the third Business
Day preceding any such maturity date or
redemption date, as the case may be, of
such Global Security. The Company will
pay to Hospital Trust the principal amount
of such Global Security, together with
interest due on such maturity date or
redemption date. Hospital Trust 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
New 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, Hospital Trust 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 Hospital Trust in
immediately available funds for use by
<PAGE>
Hospital Trust 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, Hospital Trust will
pay by separate wire transfer (using
Fedwire message entry 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 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, New 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 New 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 New 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 Rejection of Offers:The Company shall have the sole right to
accept offers to purchase New 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
New 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
New Bond and the certification and
issuance of the Global Security
representing such New Bond shall, with
respect to such New 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
<PAGE>
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 New 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
Book-Entry New 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 New Bonds.
3. Original Issue Discount, if any.
4. Maturity Date.
5. Interest Rate.
6. Redemption Provisions, if any.
7. Agent's Commission.
8. Settlement Date.
B. The Company will notify Hospital
Trust by telephone of the information
set forth in Settlement Procedure "A"
above and the class designation of
the New Bond. Hospital Trust will
assign a CUSIP number to the Global
Security representing such New Bond.
Hospital Trust will also notify the
Company and the Agent of such CUSIP
number by telephone as soon as
practicable.
C. Hospital Trust 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 New Bond, number of days by
<PAGE>
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 New
Bond.
4. Whether such Global Security will
represent any other Book-Entry
New Bond (to the extent known at
such time).
D. The Company shall telecopy (promptly
followed by the original) to Hospital
Trust the certificate as to form
relating to the Global Security
representing such New Bonds. As soon
as practicable thereafter, the
Company will provide Hospital Trust
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 Hospital Trust.
F. The Company will cause Hospital Trust
to issue, certify, and deliver the
Global Security representing such New
Bonds. Hospital Trust will hold the
Global Security as DTC's agent.
G. DTC will credit such New Bond to the
participant account of Hospital
Trust, acting as DTC's agent, at DTC.
H. Hospital Trust will enter an SDFS
deliver order through DTC's
Participant Terminal System
instructing DTC to (i) debit such New
Bond to Hospital Trust's
participant's account and credit such
New Bond to the Agent's participant
account and (ii) debit the Agent's
settlement account and credit
Hospital Trust's settlement account
for an amount equal to the price of
such New Bond less the Agent's
commission. The entry of such a
deliver order shall constitute a
representation and warranty by
Hospital Trust to DTC that (a) the
Global Security representing such
Book-Entry New Bond has been issued
and certified and (b) Hospital Trust
is holding such Global Security
pursuant to the Medium-Term Note
<PAGE>
Certificate Agreement between
Hospital Trust and DTC.
I. The Agent will enter an SDFS deliver
order through DTC's Participation
Terminal System instructing DTC (i)
to debit such New Bond to the Agent's
participant account and credit such
New Bond to the participant accounts
of the Participant with respect to
such New 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 New Bond.
J. Hospital Trust 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 Hospital Trust in
accordance with Settlement Procedure
"H".
K. The Agent will confirm the purchase
of such New Bond to the purchaser
either by transmitting to the
participants with respect to such New
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"
will be settled in accordance with
SDFS operating procedures in effect
on the Settlement Date.
M. Upon written request by the Company,
Hospital Trust will send to the
Company a statement setting forth the
principal amount of the New Bonds
outstanding as of that date, after
giving effect to such transaction and
all other orders of which the Company
has advised Hospital Trust but which
have not yet been settled.
Settlement Procedures Timetable: For offers of Book-Entry New Bonds
solicited 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:
<PAGE>
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 4:00 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.
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 New Bond is
rescheduled or cancelled, the Company will
instruct Hospital Trust 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 Hospital Trust will
enter such order by 2:00 P.M. through
DTC's Participation Terminal System.
Failure to Settle: If after entry of a deliver order under
Settlement Procedure "H" or "I", a trade
does not settle, Hospital Trust may
deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable, a
withdrawal message instructing DTC to
debit such New Bond to Hospital Trust's
participant account, provided that
Hospital Trust participant account
contains a principal amount of the Global
Security representing such New 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 New Bonds represented by a
Global Security, Hospital Trust will mark
such Global Security "cancelled," make
<PAGE>
appropriate entries in Hospital Trust'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 New Bonds represented by a
Global Security, Hospital Trust will
exchange such Global Security for another
Global Security, which shall represent the
Book-Entry New 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.
If the purchase price for any Book-Entry
New Bond is not timely paid to the
Participant with respect to such New Bond
by the beneficial purchaser thereof (or a
person, including an indirect participant
in DTC, acting on behalf or such
purchaser), such Participant and, in turn,
the Agent for such New 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,
Hospital Trust 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 New 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 New Bonds to have been
represented by a Global Security, Hospital
Trust will provide, in accordance with
Settlement procedure "F", for the
certification and issuance of a Global
Security representing the other Book-Entry
New Bonds to have been represented by such
Global Security and will make appropriate
entries in its records.
Suspension of Solicitation;
Amendment or Supplement: Subject to its representations, warranties
and covenants contained in the
Distribution Agreement, the 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
<PAGE>
purchases may be resumed. If the Company
decides to amend or supplement the
Registration Statement or the Prospectus
relating to the New Bonds (other than by
the filing pursuant to the Exchange Act of
an amendment or supplement relating solely
to the terms of New Bonds, a change in the
principal amount of New Bonds remaining to
be sold, or similar changes) it will
promptly advise the Agent and Hospital
Trust 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 Hospital Trust 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
Supplement: If any offer to purchase a New Bond is
accepted by or on behalf of the Company,
the Company, with the approval of the
Agent, will prepare a pricing supplement
(a Pricing Supplement) reflecting the
terms of such New 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 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.
<PAGE>
Hospital Trust Not to
Risk Own Funds: Nothing herein shall be deemed to require
Hospital Trust 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 Hospital Trust to either
the Company, the Agent or the purchaser
shall be made only to the extent that
funds are provided to Hospital Trust for
such purpose.
Duties of Hospital Trust Hospital Trust, 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 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 Hospital Trust shall have in
it 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 New Bonds. Any advertising expenses
which are approved by the Company will be
paid by the Company.
<PAGE>
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NEW BONDS
Date of Issuance: Each New Bond will initially be dated and
issued as of the date of its certification
by Hospital Trust.
Registration: New Bonds will be issued only in fully
registered form.
Denominations: New Bonds will be issued in principal
amounts of $1,000 or any integral multiple
thereof.
Interest: Each New Bond will bear interest from the
date as of which the New Bonds of that
original issue date were first certified
at the annual rate stated on the face
thereof, payable on ________1 and
____________ 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 New Bond is registered at
the close of business on the ______ 15 or
________ 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. Hospital
Trust, as paying agent, will be
responsible for withholding taxes on
interest paid as required by law.
The first payment of interest on any New
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 Redemption: Upon presentation of each New Bond at
maturity or upon redemption, Hospital
Trust will pay the 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 New
Bond is presented to Hospital Trust in
time for Hospital Trust to make payments
<PAGE>
in such funds in accordance with its
normal procedures. The Company will
provide Hospital Trust with funds
available for immediate use for such
purpose. New Bonds presented at maturity
or upon redemption will be cancelled by
Hospital Trust 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, New 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 New 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 New 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 Rejection
of Offers: The Company shall have the sole right to
accept offers to purchase New 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
New 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.
Settlement: The receipt of immediately available funds
by the Company in payment for a New Bond
and the certification and issuance of such
New Bond shall, with respect to such New
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.
<PAGE>
Settlement Procedures: In the event of a purchase of New 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
New 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 New 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 New Bond
to be delivered to the Registered
Owner.
6. Price of the New Bonds.
7. Original Issue Discount, if any.
8. Maturity Date.
9. Interest Rate.
10. Redemption Provisions, if any.
11. Agent's Commission.
12. Settlement Date.
B. The Company shall telecopy (promptly
followed by the original) to Hospital
Trust the certificate as to form
relating to the New Bonds. As soon
as practicable thereafter, the
Company will provide Hospital Trust
with any additional information set
forth above.
C. The Company will prepare the New
Bonds in the form set forth in the
Indenture, with specific terms as
pre-approved by the Company, the
Agent, and Hospital Trust.
<PAGE>
D. The Company will cause Hospital Trust
to issue, certify, and deliver New
Bonds.
E. Hospital Trust will deliver the New
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 New 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 New
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
acknowledgment or receipt of the New
Bonds by the purchaser.
I. Upon written request by the Company,
Hospital Trust will send to the
Company a statement setting forth the
principal amount of the New Bonds
outstanding as of that date, after
giving effect to such transaction and
all other orders of which the Company
has advised Hospital Trust but which
have not yet been settled.
Settlement Procedures
Timetable: For offers accepted by the Company,
Settlement Procedures "A" through "I" set
forth above shall be completed on or
before the respective terms 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
<PAGE>
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 New
Bond from the Company shall fail to accept
delivery of a New Bond on the Settlement
Date, the Agent will forthwith notify
Hospital Trust and the Company by
telephone, confirmed in writing, of such
failure, and return the New Bond to
Hospital Trust. Upon receipt by Hospital
Trust of the New Bond from the Agent,
Hospital Trust 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 New 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 New Bond in respect of
which the default occurred, Hospital Trust
will cancel the New Bond in accordance
with the Indenture.
Use of Funds: If after payment for a New 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 the Company's account the
appropriate amount of the payment of a New
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.
<PAGE>
Suspension of Solicitation;
Amendment or Supplement: Subject to its representations, warranties
and covenants contained in the
Distribution Agreement, the Company may
instruct the Agent to suspend solicitation
of purchase 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 New Bonds (other than by
the filing pursuant to the Exchange Act of
an amendment or supplement relating solely
to the terms of a class of New Bonds, a
change in the principal amount of New
Bonds remaining to be sold, or similar
changes), it will promptly advise the
Agent and Hospital Trust 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 Hospital Trust 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
Supplement; Delivery Prospectus: If any offer to purchase a New Bond is
accepted by or on behalf of the Company,
the Company, with the approval of the
Agent, will prepare a pricing supplement
(a Pricing Supplement) reflecting the
terms of such New 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)
<PAGE>
each written confirmation of a sale sent
to a purchaser or his agent and (b) each
New Bond delivered to a customer 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.
Hospital Trust Not to
Risk Own Funds: Nothing herein shall be deemed to require
Hospital Trust 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 Hospital Trust to either
the Company, the Agent or the purchaser
shall be made only to the extent that
funds are provided to Hospital Trust for
such purpose.
Duties of Hospital Trust: Hospital Trust, 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 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 Hospital Trust 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 New Bonds. Any advertising expenses
which are approved by the Company will be
paid by the Company.
<PAGE>
DRAFT
UNDERWRITING AGREEMENT
FOR PURCHASE OF $___________
FIRST MORTGAGE BONDS, SERIES ___,
_____%, DUE _____
OF
THE NARRAGANSETT ELECTRIC COMPANY
Date:
The Narragansett Electric Company
25 Research Drive
Westborough, MA 01582
Ladies and Gentlemen:
We (the Underwriters) understand that The Narragansett Electric Company,
(the Company), proposes to issue and sell $____________ aggregate principal
amount of First Mortgage Bonds, Series ___, ___ %, due ____________, (with
Original Issue Date as defined in the Terms of Purchase) (the New Bonds).
Subject to the terms and conditions set forth in the Terms of Purchase
annexed hereto, the Company hereby agrees to sell all of the New Bonds, and
each of the Underwriters agrees, severally and not jointly, to purchase the
respective principal amount of the New Bonds set forth opposite its name below,
in each case at a purchase price of ___% of the principal amount of such New
Bonds.
Name Principal Amount of New Bonds
---- -----------------------------
_____________________
Total $
The Underwriters will pay for such New Bonds upon delivery thereof in
accordance with the Terms of Purchase.
The New Bonds shall have the terms set forth in the Prospectus dated
____________, and the Prospectus Supplement dated ______________, including the
following:
Maturity:
Interest Rate:
Redemption Provisions, if any:
Interest Payment Dates:
Form and Denomination:
Other:
All provisions contained in the document entitled "TERMS OF PURCHASE
RELATING TO FIRST MORTGAGE BONDS, SERIES **, *%, DUE ** (ORIGINAL ISSUE DATE***)
OF THE NARRAGANSETT ELECTRIC COMPANY", a copy of which is attached hereto, are
herein incorporated by reference in their entirety and shall be deemed to be a
part of this agreement to the same extent as if such provisions had been set
forth in full herein.
<PAGE>
Please confirm your agreement by having an authorized officer sign a copy
of this agreement in the space set forth below and returning the signed copy to
us at the address below.
Very truly yours,
[Name of Underwriter or Representative]
By_________________________________
Name:
Title:
Address:
Accepted:
THE NARRAGANSETT ELECTRIC COMPANY
By____________________________
Name:
Title:
<PAGE>
TERMS OF PURCHASE
RELATING TO
FIRST MORTGAGE BONDS, SERIES **,
%, DUE
(ORIGINAL ISSUE DATE ***)
OF
THE NARRAGANSETT ELECTRIC COMPANY
TERMS OF PURCHASE between The Narragansett Electric Company (the
Company), a Rhode Island corporation, and the several Underwriters named in a
confirmation letter (the Confirmation) to which these Terms of Purchase are
attached and hereinafter collectively called the Underwriting Agreement. (The
words "herein" and "hereunder", unless specifically limited, mean "in the
Underwriting Agreement" and "under the Underwriting Agreement", respectively.)
1. UNDERWRITERS AND REPRESENTATIVE. The term Underwriters as used
herein shall mean the several persons, firms, or corporations named in the
Confirmation (including the Representative hereinafter mentioned); and the term
Representative as used herein shall be deemed to mean the representative or
representatives designated as Representative by, or in the manner authorized
by, the Underwriters and who, by signing the Confirmation, represent that it
or they have been authorized by the Underwriters to enter into this
Underwriting Agreement on their behalf and to act for them in the manner herein
provided. If there shall be only one person, firm, or corporation named in
said Confirmation, the term Underwriters and the term Representative as used
herein shall mean such person, firm, or corporation.
2. DESCRIPTION OF THE NEW BONDS. The Company proposes to issue and
sell $** principal amount of its First Mortgage Bonds, Series **, *%, due **
(Original Issue Date ***) (the New Bonds), to be issued under an indenture
supplemental to the First Mortgage Indenture and Deed of Trust dated as of
September 1, 1944, (as heretofore and hereafter supplemented, the Indenture),
from the Company to Rhode Island Hospital Trust National Bank (the Trustee),
successor to Rhode Island Hospital Trust Company. References to Rhode Island
Hospital Trust National Bank shall include its service provider, The First
National Bank of Boston, as such. The terms and provisions of the New Bonds
and of the Indenture are summarized in the registration statement and in the
prospectus below mentioned.
3. PUBLIC OFFERING. The Company is advised by the Representative that
the Underwriters propose to make a public offering of their respective portions
of the New Bonds as soon after this Agreement is entered into as in the
Representative's judgment is advisable. The terms of the public offering of
the New Bonds are set forth in the prospectus below mentioned.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter as follows:
(a) With respect to the proposed issue and sale of the New Bonds,
the Company has filed a registration statement, including as a part
thereof a prospectus, under the Securities Act of 1933, as amended (the
___________________________
* The percentage is the interest rate specified in the Confirmation.
** The series designation, aggregate principal amount, and the year in
which the Bonds mature are as specified in the Confirmation.
*** Original Issue Date shall be the Closing Date.
<PAGE>
Securities Act), with the Securities and Exchange Commission (the
Commission). Said registration statement has become effective, and the
prospectus in the registration statement as now effective (the
Registration Statement) meets the requirements of section 10(a) of the
Securities Act. The Company will file a supplement to the prospectus
(the Supplement) with respect to the New Bonds to reflect the results of
the pricing set forth in the Confirmation pursuant to the rules and
regulations under the Securities Act, after giving the Representative an
opportunity to examine and make objections of substance to the
Supplement. Such examination shall not limit or affect the rights of any
Underwriter in respect of any representation, warranty, or covenant of
indemnity by the Company herein contained. Before filing any other
supplement or amendment to the Registration Statement or the Supplement
with respect to the New Bonds, the Company will afford the Representative
an opportunity to examine it and any documents incorporated therein and
to make objections of substance thereto. The Representative shall have
the right to terminate this Underwriting Agreement, without liability on
the part of any Underwriter, if the Company shall file the Supplement or
any other supplement or amendment to the prospectus to which the
Representative shall reasonably so object in writing.
(b) Said prospectus and the Registration Statement have been, and
the Supplement and each other supplement or amendment thereto will be,
carefully prepared in conformity with the requirements of the Securities
Act and the rules, regulations, and releases of the Commission
thereunder; the Registration Statement contains all statements which are
required to be incorporated or stated therein in accordance with the
Securities Act and the rules, regulations, and releases thereunder, and
will in all material respects conform to the requirements thereof; said
prospectus, as supplemented when the Supplement is filed (the
Prospectus), will contain or incorporate therein all statements made in
the Registration Statement which the Prospectus is required to contain
and will in all material respects conform to the requirements of the
Securities Act and the rules, regulations, and releases thereunder;
wherever the terms prospectus, Prospectus, registration statement, or
Registration Statement are used herein, they shall be deemed to include
all documents incorporated by reference therein pursuant to the
requirements of Form S-3 under the Securities Act, and such documents
incorporated or to be incorporated by reference therein have been or will
be prepared and filed with the Commission in a timely manner and in
accordance with the provisions of the Securities Exchange Act of 1934
(the Exchange Act) and applicable rules, regulations, and releases
thereunder; neither the Registration Statement nor the Prospectus will
include any untrue statement of a material fact or omit to state a
material fact which (in the case of the Registration Statement) is
required to be incorporated or stated therein or is necessary to make the
statements therein or incorporated therein not misleading or which (in
the case of the Prospectus) is necessary to make the statements therein,
in the light of the circumstances under which they are made, not
misleading; provided, however, that the foregoing representations and
warranties shall not apply to statements or omissions made in reliance
on written information furnished to the Company by the Underwriter, or
by and through the Representative on behalf of any Underwriter, or to
statements or omissions in the Statement of Eligibility and Qualification
of the Trustee under the Indenture.
(c) 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 Registration Statement
<PAGE>
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 described in the prospectus included in the
Registration Statement, 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 Commission 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 included in the Registration
Statement. Except as described 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.
(d) Coopers & Lybrand, who have certified certain of the financial
statements filed with the Commission, are independent certified public
accountants as required by the Securities Act and the rules, regulations,
and releases thereunder.
(e) The consummation of the transactions herein contemplated and
the performance by the Company of the terms of this Underwriting
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
charter, by-laws, or preferred stock preference provisions, or any order
of any court or administrative agency by which the Company is bound.
(f) The issue and sale of the New Bonds are solely for the purpose
of financing the business of the Company.
5. INFORMATION FROM AND WARRANTIES OF THE UNDERWRITERS. Each
Underwriter, in addition to other information furnished to the Company for use
in the Prospectus, is contemporaneously furnishing and will continue to furnish
to the Company through the Representative for use in the Prospectus the
information to be stated therein with regard to the public offering to be made
by the Underwriters, any further information regarding the Underwriters and
such public offering which may be required under the 1935 Act, and all other
information required by law in respect of the purchase and sale of the New
Bonds. Each Underwriter warrants and represents to the Company, each of the
officers and directors of the Company, each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act, and each other
Underwriter that all information furnished at any time in writing to the
Company by such Underwriter, or by or through the Representative on behalf of
such Underwriter, for use in the Prospectus, will not contain an untrue
statement of a material fact and will not omit to state any material fact which
is necessary to make the statements therein, in the light of the circumstances
under which they are made, not misleading.
6. PURCHASE AND SALE OF NEW BONDS. The Company will sell to each
Underwriter and each Underwriter will severally purchase from the Company, at
the price specified in the Confirmation, at the time and place, in the manner,
and upon the terms and conditions hereinafter set forth, the principal amount
of New Bonds set forth opposite its name in the Confirmation, which amount may
be increased in accordance with paragraph (a) of Section 13 hereof.
All obligations of the Underwriters hereunder are several, and not joint
or joint and several, and nothing herein shall constitute the Underwriters
copartners of each other.
<PAGE>
7. TIME AND PLACE OF CLOSING; DELIVERY AND PAYMENT. The term Closing
Date wherever used herein shall mean the eighth day (or if such day is not a
full business day, the next full business day thereafter) following the date
hereof, or such other date as shall be agreed in writing by the Company and the
Representative (subject to postponement in accordance with the provisions of
Section 13 hereof).
Payment for the New Bonds, as provided in Section 6 hereof, shall be made
at the principal office of Rhode Island Hospital Trust National Bank,
Providence, Rhode Island, at l0:00 a.m., Providence time, on the Closing Date.
Payment shall be made to the Company or its order in immediately available
current-day funds by certified check or checks drawn on, or by official check
or checks of, Rhode Island Hospital Trust National Bank, or in Boston Federal
Reserve Bank Funds. The Company will reimburse the Underwriters for interest
on the amount of such payment at the Federal Reserve Bank Funds rate from the
Closing Date until the next succeeding day. Payment for the New Bonds may also
be made by a FedWire electronic funds transfer to The Narragansett Electric
Company's bank account, number 188292, at Rhode Island Hospital Trust National
Bank, Providence, Rhode Island 02903, Transit Routing Number 0115 00337. Such
payment shall be made upon delivery of the New Bonds to the Representative for
the respective accounts of the Underwriters, such delivery to be made at the
offices of BancBoston Trust Company of New York, 55 Broadway, 3rd Floor, New
York, New York 10006. The New Bonds will be delivered, at the option of the
Company, either in temporary or definitive form. If delivered in temporary
form, each will be in the denomination of $1,000, and an exchange of temporary
New Bonds for fully-registered New Bonds in definitive form will be made as
soon as practicable and without charge to the holders thereof. If delivered
in definitive form, the New Bonds will be in fully-registered form and will be
registered in such name or names and in such denominations of $1,000 or
integral multiples thereof as the Representative may request not later than 10
A.M., Providence time, on the third full business day prior to the Closing
Date. If no such direction is received, the New Bonds will be registered in
the names of the respective Underwriters in denominations selected by the
Company.
The Company will make such New Bonds available to the Representative for
examination at the place of delivery, not later than 2 P.M., Providence time,
on the first full business day prior to the Closing Date.
The Representative, individually and not as the Representative, may (but
shall not be obligated to) make payment to the Company for the New Bonds to be
purchased by any Underwriter whose funds shall not have been received by the
Representative as of the Closing Date, for the account of such Underwriter.
Any such payment by the Representative shall not relieve such Underwriter from
any of its obligations hereunder, but the Representative shall succeed to the
right of the Company to receive the amount of such payment from such
Underwriter.
8. COVENANTS OF THE COMPANY. The Company agrees that:
(a) The Company will promptly deliver to the Representative a
certified copy of the registration statement with respect to the New
Bonds, as originally filed, and of all amendments thereto heretofore or
hereafter made, including a copy of each consent and certificate included
or incorporated by reference therein or filed as an exhibit thereto (but
excluding any other exhibit thereto unless specifically requested by the
Representative). The Company will deliver to the Representative in New
York or Providence, as requested, as soon as practicable after the filing
of the Supplement, and thereafter from time to time during the nine-month
period commencing on the date hereof, 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 the Representative may reasonably request for
purposes contemplated by the Securities Act.
<PAGE>
(b) The Company will advise the Representative immediately by
telegraph or other means of communication and confirm the advice in
writing:
(i) when the Supplement has been filed;
(ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement, or of
the initiation of any proceedings for that purpose, and agrees, if
any such stop order should be entered by the Commission, to make
every reasonable effort to obtain the lifting or removal thereof
as soon as possible;
(iii) of the issuance by the Commission or the Division of
Public Utilities and Carriers of the State of Rhode Island (RIPUC),
of any order altering, suspending, supplementing, or otherwise
affecting its order permitting the issuance and sale of the New
Bonds;
(iv) of any action by the Commission 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
(v) of the commencement of any litigation in connection with
the New Bonds against the Company or any of its directors or any
signer of the Registration Statement.
(c) During the six-month period commencing on the effective
date of this Underwriting Agreement, the Company will use its best
efforts, when and as requested by the Representative, to furnish
information and otherwise cooperate in qualifying the New Bonds for the
purposes of any public offering by the Underwriters under securities or
"blue-sky" laws of such states as the Representative may designate;
provided that the Company shall not be obligated to qualify as a foreign
corporation in, or consent to service of process under the laws of, any
state, or to meet other requirements deemed by it to be unduly
burdensome. The Company will pay or reimburse the Representative in an
aggregate amount not exceeding $3,000 for the filing fees and expenses
in connection with any qualification referred to in this paragraph.
(d) The Company will pay all expenses in connection with (i)
the preparation and filing by it of the Registration Statement and the
Prospectus and any supplement or amendment thereto, (ii) the issue and
delivery of the New Bonds, and (iii) the printing of the Prospectus and
any supplement or amendment thereto and the delivery of reasonable
quantities of copies thereof to Underwriters. The Company will pay all
federal and state taxes (except transfer taxes) on the issue of the New
Bonds. The Company shall not, however, be required to pay any amount for
the expenses of the Representative or of any Underwriters, except as
provided in paragraphs (c) and (e) of this Section. The fees and
disbursements of Milbank, Tweed, Hadley & McCloy (the Underwriters'
Counsel) shall be paid by the Underwriters, except as provided in
paragraph (e) of this Section; and in the event that the fees of
Underwriters' Counsel shall be reduced from the amount stated by such
counsel to the Representative, an amount equal to such reduction shall
be paid to the Company by or on behalf of the Underwriters.
(e) If the Underwriting Agreement shall be terminated pursuant
to any of the provisions hereof, the Company will pay the reasonable fees
and disbursements of Underwriters' Counsel and the filing fees and
expenses referred to in paragraph (c) of this Section. If the
Underwriters shall not take up and pay for the New Bonds due to the
<PAGE>
failure of the Company to comply with any of the conditions specified in
Section 9 hereof, the Company will reimburse the Underwriters in an
aggregate amount not exceeding $2,000 for their reasonable out-of-pocket
expenses incurred in connection with the financing contemplated by this
Underwriting Agreement. The Company shall not in any event be liable to
any of the Underwriters for damages on account of loss of anticipated
profits.
(f) During the nine-month period commencing on the date hereof, if
any event known to the Company or of which the Company shall be advised
by the Representative shall occur which should be set forth in a
supplement to or an amendment of the Prospectus or in any document to be
incorporated by reference therein in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, the Company will so advise the Representative
and, upon request from the Representative, will forthwith at the
Company's expense, or at the expense of the Underwriters if the only
event occasioning the supplement or amendment is a change in the
purchasing or distribution arrangements, prepare and furnish to the
Representative (in form satisfactory to Underwriters' Counsel) a
reasonable number of copies of a supplemented or amended prospectus or
the document incorporated therein or, at the option of the Company, a
reasonable number of appropriate supplements to be attached to the
Prospectus, so that the Prospectus as supplemented or amended will not
contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading. In case any
Underwriter is required to deliver a prospectus descriptive of the New
Bonds more than nine months after the date hereof, the Company, upon the
request of the Representative, will furnish to the Representative, at the
expense of such Underwriter, a reasonable quantity of copies of a
supplemented or amended prospectus meeting the requirements of section
10(a) of the Securities Act.
(g) The Company will make generally available to its security
holders, as soon as practicable, an earnings statement (which need not
be certified) covering a twelve-month period commencing subsequent to the
date hereof, which earnings statement shall satisfy the requirements of
Section 11(a) of the Securities Act and Rule 158 promulgated thereunder.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the New Bonds shall be subject to
the performance by the Company of its obligations hereunder and the following
conditions:
(a) Prior to 7 P.M., Providence time, on the date hereof, the
Indenture shall have been qualified under the Trust Indenture Act of
1939, there shall have been issued an order of the RIPUC, to the extent
that it has jurisdiction, permitting the issuance and sale of the New
Bonds, and at such time and on the Closing Date such order shall not
contain any provision which, in the opinion of the Representative or the
Company, is unduly burdensome to the Company, it being understood that
such order as is now in effect do not contain any such unduly burdensome
provision.
(b) All legal proceedings to be taken and all legal opinions to be
rendered in connection with the issue and sale of the New Bonds shall be
satisfactory to Underwriters' Counsel. Prior to or concurrently with the
delivery of the New Bonds, the Representative shall have received the
following opinions and letter, with printed or duplicated copies thereof
for each of the Underwriters, with such changes therein as may be agreed
upon by the Company and the Representative with the approval of
Underwriters' Counsel:
<PAGE>
(i) Opinion of Edwards & Angell, special counsel for the
Company, substantially in the form attached hereto as Exhibit 1;
(ii) Opinion of Robert King Wulff, Esq. and/or Kirk L.
Ramsauer, Esq., counsel for the Company, substantially in the form
attached hereto as Exhibit 2;
(iii) Opinion of Underwriters' Counsel substantially in the
form attached hereto as Exhibit 3; and
(iv) Letter of Coopers & Lybrand, dated the Closing Date and
addressed to the Company and to the Representative, confirming that
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, and stating
in effect:
(1) that in their opinion the financial statements and
financial statement 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
Exchange Act and of the published rules and regulations
thereunder;
(2) that on the basis of a reading of the minutes of the
meetings of the stockholders and the Board of Directors of the
Company held during any period subsequent to 1992, and not
covered by the financial statements referred to in paragraph
(1) 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 auditing
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 incorporated by
reference in the Registration Statement are in conformity
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 incorporated by reference in the Registration
Statement;
(B) that, during the period from the date of the latest
financial statements 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
<PAGE>
long-term debt of the Company, except in all instances as
set forth or incorporated in or contemplated by the
Prospectus; and
(3) 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 unaudited financial statements incorporated by
reference in the Registration Statement, 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.
(c) At the time of the delivery of the New Bonds:
(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 Commission for amendments or
additional information shall have been complied with to its
satisfaction;
(ii) the order or orders 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 the Representative shall have received a certificate signed by an
officer of the Company to such effect, to the best of his knowledge,
information, and belief.
If any provision of this Section is not fulfilled at or prior to the
delivery of the New Bonds, this Underwriting Agreement may be terminated by the
Representative (with the consent of Underwriters, including the Representative,
who have agreed to purchase in the aggregate 50% or more in principal amount
of the New Bonds) upon delivering written notice thereof to the Company. Any
such termination shall be without liability of any party to any other party,
except as otherwise provided in paragraph (e) of Section 8.
10. CONDITIONS OF THE COMPANY'S OBLIGATION. The obligation of the
Company to deliver the New Bonds is subject to the following conditions:
(a) The conditions set forth in paragraphs (a), (c)(i), and
(c)(ii) of Section 9 hereof.
(b) Concurrently with the delivery of the New Bonds, the Company
shall receive the full purchase price for all of the New Bonds.
If any provision of this Section is not fulfilled at or prior to the
delivery of the New Bonds, this Underwriting Agreement may be terminated by the
Company, by written notice delivered to the Representative. Any such
termination shall be without liability of any party to any other party, except
as otherwise provided in paragraph (e) of Section 8.
11. TERMINATION. This Underwriting Agreement may be terminated at any
time prior to the Closing Date by the Representative (with the consent of
Underwriters including the Representative who have agreed to purchase in the
aggregate 50% or more in principal amount of the New Bonds), upon notice
thereof to the Company, if prior to such time (a) there shall have occurred any
<PAGE>
general suspension of trading in securities on the New York Stock Exchange or
there shall have been established by the New York Stock Exchange, the
Commission, or any Federal or state agency or by the decision of any court, any
limitation on prices for such trading or any restrictions on the distribution
of securities, (b) a banking moratorium shall have been declared either by
Federal or New York State authorities, (c) there shall have come to the
attention of any Underwriter any facts that would cause the Representative to
believe that the Prospectus 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,
or (d) there shall have occurred the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war, if the effect of any such event specified in this
clause (d) in the judgement of the Representative makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the New
Bonds on the terms and in the manner contemplated by the Prospectus.
Any termination of this Underwriting Agreement pursuant to this Section
shall be without liability of any party to any other party, except as otherwise
provided in paragraph (e) of Section 8.
12. INDEMNIFICATION. (a) The term Preliminary Prospectus as used in
this Section 12 shall mean the prospectus included in the registration
statement on the date of its initial effectiveness and such prospectus as and
if amended or supplemented prior to the date this Underwriting Agreement
becomes effective and shall also include all preliminary prospectuses. The
terms Registration Statement and Prospectus as used in this Section 12 shall
mean said documents as defined, respectively, in Sections 4(a) and 4(b) hereof
and shall also include each and every amendment of and supplement to said
documents, respectively, furnished by the Company to the Underwriters or to the
Representative for distribution to the Underwriters. No indemnity by the
Company hereunder shall apply in respect of (i) any Prospectus or Preliminary
Prospectus used at a time not authorized under the Securities Act or this
Underwriting Agreement, (ii) any Prospectus or Preliminary 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 the Underwriters or to the Representative for distribution to the
Underwriters, or (iii) any Underwriter, or any person controlling such
Underwriter, on account of any loss, claim, or liability arising by reason of
any person acquiring any of the New Bonds, if a copy of the Prospectus has not
been sent or given by an Underwriter or a securities dealer to such person with
or prior to the written confirmation of the sale involved. No use of any
Preliminary Prospectus is authorized after the date hereof.
(b) The Company will indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter 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 New
Bonds, on the ground that the Registration Statement, the Prospectus, or the
Preliminary Prospectus 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 the registration statement as now effective) 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 the
Preliminary Prospectus) 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 any Underwriter, or by and through the
Representative on behalf of any Underwriter, for use therein, or unless such
statement or omission shall occur in the Statement of Eligibility and
Qualification under the Trust Indenture Act of 1939 of the Trustee under the
Indenture. For purposes of the foregoing, no Underwriter shall be deemed to
<PAGE>
be required to send or give a copy of documents incorporated by reference in
the Prospectus to any person with or prior to the written confirmation of the
sale involved in order to be entitled to the benefits of the indemnification
provided for herein. Upon commencement of any such suit, if any Underwriter
or any such controlling person wishes to make a claim in respect thereof
against the Company under its agreement herein contained, such Underwriter 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 upon such Underwriter 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.
(c) Each Underwriter 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 (b) agrees to indemnify and
hold harmless each Underwriter, but only with respect to any written
information furnished to the Company by such Underwriter, or by and through the
Representative on behalf of such Underwriter, for use in the Prospectus. If
any action shall be brought hereunder against the Company or any such officer,
director, or controlling person, such Underwriter shall have the rights and
duties given to the Company by paragraph (b), and the Company or such officer,
director, or controlling person shall have the rights and duties given to such
Underwriter by said paragraph.
(d) If the indemnification provided for in this Section 12 is
unavailable to an indemnified party, then 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 the Underwriter on the other but
also the relative fault of the Company on the one hand and of the Underwriter
on the other in connection with the statement or omission that resulted in such
loss, claim, or liability, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and by the Underwriter on the other in connection with the offering shall be
deemed to be in the same proportion as the total net proceeds from the
offering, before deducting expenses, received by the Company bear to the total
underwriting discounts or commissions, if any, received by all of the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. If there are no such underwriting discounts or commissions so set
forth, the relative benefits received by the Underwriter shall be the
difference between the price received by the Underwriter upon sale of the New
Bonds and the price paid for the New Bonds pursuant to this Underwriting
Agreement. The relative fault of the Company on the one hand and of the
Underwriter 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 the Underwriter and the parties'
relative intent, knowledge, access to information, and opportunity to correct
<PAGE>
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.
(e) The indemnities contained in this Section and all the
representations and warranties contained in this Underwriting Agreement shall
survive the delivery of the New Bonds.
13. SUBSTITUTION OF UNDERWRITERS. (a) If one or more Underwriters fail
or refuse to take up and pay for the entire principal amount of New Bonds that
it or they agreed to purchase under this Underwriting Agreement and the
aggregate principal amount of New Bonds which all such defaulting Underwriters
shall have failed to purchase does not exceed ten percent of the aggregate
principal amount of the New Bonds, the nondefaulting Underwriters shall have
the right and are obligated severally to take up and pay for (in addition to
the principal amounts of New Bonds set forth opposite their respective names
in the Confirmation) the total principal amount of New Bonds agreed to be
purchased by all such defaulting Underwriters in the respective proportions
which the principal amounts set forth opposite the names of the nondefaulting
Underwriters in the Confirmation bear to the aggregate principal amount so set
forth opposite the names of all such nondefaulting Underwriters; provided,
however, that no New Bonds of denominations smaller than $1,000 are to be
delivered and, if New Bonds of smaller denominations would result from the
aforesaid proportions, such smaller denominations shall be combined and the
resulting $1,000 bond or bonds shall be delivered to, and shall be purchased
by, such Underwriter or Underwriters as the Representative shall designate.
In such event, the Representative, for the accounts of the several
nondefaulting Underwriters, may take up and pay for all or any part of such
principal amount of New Bonds to be purchased by each remaining Underwriter
under this paragraph and, in order to effect necessary changes in the
Registration Statement, Prospectus, and other documents and arrangements, may
postpone the Closing Date not more than four full business days.
(b) If one or more of the Underwriters shall fail or refuse to take up
and pay for the entire principal amount of New Bonds which he or they have
agreed to purchase under this Underwriting Agreement and the aggregate
principal amount of New Bonds which all such defaulting Underwriters shall have
failed to purchase exceeds ten percent of the aggregate principal amount of the
New Bonds, the nondefaulting Underwriters, or any one or more of them, at 10
A.M., Providence time, on the Closing Date or within 24 hours thereafter, shall
have the right to take up and pay for (in such proportion as may be agreed upon
among them so long as no New Bonds of denominations smaller than $1,000 are to
be delivered), or to substitute another Underwriter or Underwriters to take up
and pay for, the total principal amount of New Bonds agreed to be purchased by
all such defaulting Underwriters. In the event that the nondefaulting
Underwriters shall not take up and pay for all the New Bonds which the
defaulting Underwriters shall have agreed but failed to purchase, or substitute
another Underwriter or Underwriters, as aforesaid, the Company shall have the
privilege of finding and substituting within a further 24-hour period another
Underwriter or Underwriters to purchase the principal amount of New Bonds which
the defaulting Underwriters agreed but failed to purchase. (The term
Underwriter as used in this Underwriting Agreement shall refer to and include
each Underwriter substituted under this paragraph with the same effect as if
said substituted Underwriter had originally been named in the Confirmation.)
In any such case, either the Company or the Representative shall have the right
to postpone the Closing Date not more than seven full business days, in order
that necessary changes in the Registration Statement, the Prospectus, and any
other documents and arrangements may be effected. If said nondefaulting
Underwriters shall not take up and pay for such principal amount of New Bonds,
or substitute another Underwriter or Underwriters therefor, and the Company
shall not substitute another Underwriter or Underwriters therefor, all as
aforesaid, then this Underwriting Agreement shall terminate without any
liability on the part of the Company (except as otherwise provided in paragraph
<PAGE>
(e) of Section 8) or of any nondefaulting Underwriter. Nothing contained in
this paragraph shall obligate any Underwriter to purchase or find underwriters
for any principal amount of New Bonds in excess of the amount agreed to be
purchased by such Underwriter under the terms of Section 6, nor shall anything
in this paragraph relieve any defaulting Underwriter of any liability to the
Company which it might otherwise have.
14. PERSONS ENTITLED TO BENEFIT OF UNDERWRITING AGREEMENT. This
Underwriting Agreement shall inure to the benefit of the Company and the
Underwriters (and, as to the provisions of Section 12, the other persons
indemnified thereunder) and their respective successors and assigns. Nothing
in this Underwriting Agreement is intended or shall be construed to give to any
other person, firm, or corporation any legal or equitable right, remedy, or
claim under or in respect of this Underwriting Agreement or any provision
herein contained. The term "successors and assigns" as used in this
Underwriting Agreement shall not include any purchaser, as such purchaser, of
any of the New Bonds from any of the Underwriters.
15. NOTICES. Any request, consent, notice, or other communication on
behalf of the Underwriters shall be given in writing by the Representative
addressed to the Treasurer of the Company at 25 Research Drive, Westborough,
Massachusetts 01582, and any notice or other communication by the Company to
the Underwriters shall be given in writing to the Representative, at its
address stated in the Confirmation.
16. EFFECTIVENESS OF UNDERWRITING AGREEMENT. The date on which this
Underwriting Agreement is effective is the date stated in the Confirmation.
17. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of The Commonwealth of Massachusetts.
18. COUNTERPARTS. This Agreement may be executed by one or more of the
parties hereto in any number of counterparts, each of which shall be deemed an
original, but all such counterparts shall together constitute one and the same
instrument.
<PAGE>
EXHIBIT 1 TO
TERMS OF PURCHASE
PROPOSED FORM OF OPINION
OF
EDWARDS & ANGELL
ONE HOSPITAL TRUST PLAZA
PROVIDENCE, RHODE ISLAND 02903
_________________ , 19__
As Representatives of the Several Purchasers
Re: THE NARRAGANSETT ELECTRIC COMPANY
First Mortgage Bonds Series __, ___ %, due ________
Dear Sirs:
At the request of The Narragansett Electric Company, we submit the
following opinion as to its franchises. The Narragansett Electric Company
(originally incorporated under the name of "United Electric Power Company")
acquired in 1927 all of the assets and franchises of The Narragansett Electric
Lighting Company. Since then it has acquired in 1936 all the property, assets,
plant and business of South County Public Service Company, Tiverton Electric
Light Company, Bristol County Gas and Electric Company, and East Greenwich
Electric Company and, in August, 1950, all the property, assets, plant and
business of Rhode Island Power Transmission Company. In connection with such
acquisitions, The Narragansett Electric Company became entitled to exercise and
enjoy all the rights, powers, easements, privileges and franchises theretofore
exercised and enjoyed by said corporations with respect to the property,
assets, plant and business acquired from them respectively. It has also
acquired certain other utility property, but the franchises, if any, acquired
in connection therewith are unimportant.
Article IX of the amendments to the Constitution of the State of Rhode
Island, adopted in November, 1892, limits the power of the General Assembly to
provide for the creation of corporations by general law so that no corporation
shall be created with the power to exercise the right of eminent domain or to
acquire franchises in the streets and highways of towns and cities except by
special act, on notice as required by law. The charters of The Narragansett
Electric Company and of the various corporations whose property, assets and
franchises were acquired by The Narragansett Electric Company as aforesaid,
were granted by special acts of the General Assembly, on such requisite notice.
Said charters and all amendments thereto we have duly examined. We are of the
opinion that The Narragansett Electric Company is now a duly existing
corporation.
We are familiar with the proceedings incident to the acquisition by The
Narragansett Electric Company of the property, assets and franchises of (1) The
Narragansett Electric Lighting Company in 1927, (2) the several other
corporations referred to above in 1936 and (3) Rhode Island Power Transmission
Company in 1950. We have examined certified copies of the orders by the
Division of Public Utilities, Department of Revenue and Regulation (originally
called "Department of Taxation and Regulation"), of the State of Rhode Island,
consenting to and approving the purchase and acquisition of the property,
assets, plant and business of South County Public Service Company, Bristol
County Gas and Electric Company, Tiverton Electric Light Company and East
Greenwich Electric Company and of the order by the Public Utility
Administrator, Department of Business Regulation (who succeeded to the powers
and authority of the Division of Public Utilities, Department of Revenue and
Regulation, as hereinafter set forth) consenting to and approving the purchase
<PAGE>
from Rhode Island Power Transmission Company of all of its property, assets,
plant and business, in compliance with the provisions of Section 39-3-24 of the
General Laws (1956). We have been advised that the Federal Power Commission
(now called the "Federal Energy Regulatory Commission") consented to the
acquisition by The Narragansett Electric Company of the facilities of South
County Public Service Company, Tiverton Electric Light Company and Rhode Island
Power Transmission Company and that no such consent was necessary in connection
with the transfers from Bristol County Gas and Electric Company and East
Greenwich Electric Company.
We are of the opinion, based on the foregoing information, that The
Narragansett Electric Company validly acquired the property, assets, plant and
business of the above-mentioned corporations and is entitled to exercise and
enjoy all of the right, powers, easements, privileges and franchises
theretofore exercised and enjoyed by said corporations with respect to the
property, assets, plant and business purchased from them respectively by The
Narragansett Electric Company and that The Narragansett Electric Company has
succeeded to the rights and obligations of said corporations with respect to
operation in the towns and cities in Rhode Island where said corporations
carried on business under and pursuant to their respective charters prior to
said acquisition.
The original and amended charters of The Narragansett Electric Lighting
Company and of said corporations, all the property, assets, plant and business
of which were acquired as aforesaid, contain, among other matters, provisions
substantially similar in effect purporting to grant rights, with the consent,
or under the direction of the respective town and city councils and subject to
their ordinances, to install and maintain in the several towns and cities in
Rhode Island in the case of The Narragansett Electric Lighting Company and in
certain specific towns and cities in the case of the others of said
corporations, wires and conductors of electricity under and over highways,
streets and sidewalks for the purpose of selling and distributing electricity
for lighting, heating and other purposes.
The charter, as amended, of Bristol County Gas and Electric Company
contained provisions, among other matters, purporting in effect to grant the
right to carry on an electrical business and, with the consent of town
councils, to install wires and poles in, under and over highways, streets,
bridges and sidewalks in towns where it operates, subject to ordinances,
regulations and orders of the respective town councils. By the charters of
certain corporations (the rights of which Bristol County Gas and Electric
Company subsequently acquired) similar rights were provided for in the Town of
Bristol, with the consent of the Town Council, as to wires for electricity.
The charter of Rhode Island Power Transmission Company provided, among
other matters, for the right to string and maintain its wires across highways,
streets, etc., subject to reasonable regulations required for public safety by
the city or town councils of the cities or towns where the same are located or
the State Board of Public Roads if a state highway. It also provided that the
corporation, with the consent of the city or town councils or the State Board
of Public Roads (as to state highways) might put up, lay, maintain, repair and
use poles, transmission lines, wires, conductors, conduits and other
appurtenances in, through, along, over and under highways, streets, bridges and
other public places, subject to reasonable regulations of the town and city
councils or, in case of state highways, the State Board of Public Roads. Prior
consent of the City of Providence is required before crossing highways, streets
or public places in the City of Providence. We are informed that Rhode Island
Power Transmission had no locations and crossed no highways within the City of
Providence; that wherever its wires crossed highways elsewhere it had observed
all applicable regulations of the regulatory body having jurisdiction; that its
locations were entirely on private rights of way, except for (1) certain poles
in streets in Lincoln and Pawtucket on its main line between the former Hazel
Street Substation and the North Providence town line, and (2) a spare circuit
line leased from another utility extending along several Pawtucket streets from
<PAGE>
the Pawtucket No. 1 Station to the East Providence town line; that said poles
and spare circuit line referred to in (2) above have been so used and operated
for more than twenty years without objection from the City of Pawtucket; that
the aforesaid poles in streets on said main line may be relocated in part on
property owned or controlled by The Narragansett Electric Company, as successor
to Rhode Island Power Transmission Company, and in part on rights of way which
it may acquire over other private property so as to continue its present
service; and that said spare circuit line (transmitting current for
distribution in East Providence) might, if necessary, be discontinued without
substantially interfering with such distribution, other means therefor being
available over other portions of the company's lines and connections. Under
these circumstances we have not deemed it necessary to consider in detail
whether any objection to these transmission line locations on and along said
Lincoln and Pawtucket streets, if hereafter made by any public authority, would
have any legal standing.
We have examined copies of various votes or special ordinances of, or
contracts with, cities or towns approved by the town and city councils from
time to time in principal towns and cities in Rhode Island within which The
Narragansett Electric Company now distributes electricity. These votes,
contracts or ordinances evidence either general express consent to operation
either by that company or by one or more of the companies, the property,
assets, plant and business of which have been acquired as aforesaid, within
such towns or cities and to the use of streets therein for the purposes of such
business or consent for specific street locations therein, or contain
provisions reciting due authority to operate and/or use the streets generally
as aforesaid, or otherwise indicate a general recognition of, and acquiescence
in, such operation and use. Furthermore, we are informed that The Narragansett
Electric Company secured in 1935 blanket consents from all of the city and town
councils in all towns and cities of the State (other than the City of
Providence where it was believed to be unnecessary because of specific consents
already obtained) in which it was doing business, approving its then locations
of all its poles, wires and conductors within such towns and cities. We have
not attempted to examine all of these consents, but have examined some of them
as to form, which we believe to be adequate.
We are informed that for a number of years it has been the practice of
The Narragansett Electric Lighting Company and the other predecessors in title
of The Narragansett Electric Company to apply for and obtain specific consents
(the form of which we have examined and believe to be adequate) from or under
the authority of all such town and city councils for additional locations in
streets as the need therefor arose to making openings in the public highways
for such purpose, and that this practice has been continued by The Narragansett
Electric Company down to the present time. We are further informed that all
cities and towns in Rhode Island wherein The Narragansett Electric Company now
operates, as aforesaid, have acquiesced in such operation by it and/or by one
or more of its predecessors and in the use by it or them of streets and
highways therein for the purposes of such operation without objection for a
number of years.
By a special act of the General Assembly of the State of Rhode Island,
approved on May 6, 1964, The Narragansett Electric Company was, by amendment
to its charter, granted the power of eminent domain in perpetuity for use with
respect to electric lines of 11,000 volts or more, subject to certain
conditions, limitations and exceptions specified in said special act.
We have duly examined the Rhode Island statutes affecting the rights,
privileges, franchises, elements and obligations of The Narragansett Electric
Company. By statute it is provided that in any town or city in Rhode Island
where a corporation created for the purpose of producing, selling and
distributing electricity for light, heat or motive-power is in actual use and
enjoyment of rights in streets and highways, the control of the town or city
council is so far limited that it may not grant an exclusive right or franchise
therein to any other corporation created for the same purpose, and in such
<PAGE>
communities where more than one corporation is in such actual use and enjoyment
the council may not grant an exclusive franchise to either corporation except
with the consent of the other. (Section 39-17-2 of the General Laws, 1956.)
It is further provided that the location of all transmission lines, poles,
piers, abutments, conduits, manholes, vaults and other fixtures for electricity
use by Rhode Island public utilities is validated as of May 19, 1982. (Section
39-1-30.1 of the General Laws, 1956.) It is also provided that no public
utility may furnish or sell electricity (except to another public utility) in
any town or city in which it or a utility to which it is a successor was not,
on or prior to March 1, 1926, furnishing such service to the public generally
and in which any other utility is furnishing such service, unless it shall
first obtain from the Division of Public Utilities (the powers and duties of
which, as hereinafter stated, are now vested in the Public Utilities Commission
or, under certain circumstances, the Administrator of the Division of Public
Utilities and Carriers, Department of Business Regulation) a certificate of
public convenience and necessity. (Section 39-3-1 of the General Laws, 1956.)
We are informed that on and prior to March 1, 1926, The Narragansett Electric
Lighting Company, or one of the other corporations above-named, the property,
assets, plant and business of which have been acquired by The Narragansett
Electric Company, was actually furnishing to the public generally electric
service in the same towns and cities now served by The Narragansett Electric
Company.
We are of the opinion that under the provisions of the Administrative
Code Act adopted in 1935 (P.L. May Session, 1935, Chapter 2250) and the
Administrative Act of 1939 (P.L. 1939, Chapter 660), as amended, the Department
of Public Works succeeded to the powers of the State Board of Public Roads
under the provisions of the charter of the Rhode Island Power Transmission
Company above referred to and that pursuant to Section 2 of Chapter 111, P.L.
1970, the powers of the Department of Public Works became vested in the
Department of Transportation, that by the Administrative Act of 1939, as
amended (particularly by Sec. 2 of Chapter 2174, P.L. 1949) the powers and
duties of the Division of Public Utilities above referred to became vested in
the Public Utility Administrator, Department of Business Regulation, and that
by Section 1 of Chapter 240, P.L. 1969, the duties of the Public Utility
Administrator, Department of Business Regulation, are now vested in the Public
Utilities Commission or, under certain circumstances, the Administrator of the
Division of Public Utilities and Carriers, Department of Business Regulation.
The above-mentioned statutes do not purport to modify the powers or regulation
previously vested in the State Board of Public Roads or the Division of Public
Utilities, nor do they purport to modify substantive rights or obligations.
Based upon the examination made and the information received by us as
aforesaid and with the qualifications aforesaid, it is our opinion (1) that the
terms and requirements of all regulatory ordinances now in effect and brought
to our attention affecting The Narragansett Electric Company are reasonable;
(2) that so long as the charter of said corporation and the statutes herein
before referred to remain effective, said corporation may not be excluded by
ordinance or administrative regulation from operating within the towns and
cities within the State of Rhode Island where it now operates under the
authority of its charter, although it may be required to make reasonable
changes of location of wires, poles, and other apparatus located in, on, over
or across streets or highways; (3) that at the present time The Narragansett
Electric Company is free from burdensome restrictions affecting franchises and
has rights adequate to carry on the business now conducted by it in said cities
and towns; (4) that said business has been and is being conducted with the
consent, either express or implied, of the city and town councils of said towns
or cities where such consent is required under said charter; (5) that The
Narragansett Electric Company has indeterminate rights adequate for the
continued use of streets and highways in said cities and towns for wires and
conductors of electricity subject to reasonable regulations; and (6) that the
franchise situation of The Narragansett Electric Company is satisfactory and
<PAGE>
that its said rights afford reasonable protection to the holders of securities
of The Narragansett Electric Company and to that Company in operating its
authorized business in Rhode Island.
Very truly yours,
EDWARDS & ANGELL
<PAGE>
EXHIBIT 2 TO
TERMS OF PURCHASE
PROPOSED FORM OF OPINION
OF
COUNSEL FOR THE COMPANY
_______________ , 19__
As Representative of the Several Purchasers
Re: THE NARRAGANSETT ELECTRIC COMPANY
First Mortgage Bonds Series __, ____ %, due ____
Dear Representatives:
We have acted as counsel for The Narragansett Electric Company (the
Company) in connection with the issue by it of $_________ principal amount of
First Mortgage Bonds, Series __, __%, due ____ (New Bonds), and are therefore
familiar with the proceedings taken in connection therewith. The Company is
a subsidiary of New England Electric System.
This opinion is furnished to you pursuant to Section 9(b)(ii) of the
Underwriting Agreement which became effective on ________________, 19__,
between you as underwriter of the New Bonds and the Company and is being
delivered on the Closing Date referred to therein, concurrently with said issue
of New Bonds.
The New Bonds are being issued under a First Mortgage Indenture and Deed
of Trust dated as of September 1, 1944 (the Original Indenture), as
supplemented and amended by an __________ Supplemental Indenture dated as of
___________, 19__, and previous supplemental indentures (the Original Indenture
and all supplemental indentures being collectively referred to herein as the
Indenture).
We are of opinion that:
1. The Company is a corporation validly organized and duly existing
under special charter granted by the State of Rhode Island.
2. The Company had full power and authority to accept your bid for the
New Bonds, and the Purchase Agreement has been duly authorized, executed, and
delivered by the Company.
3. 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. The __________
Supplemental Indenture, including Schedule I 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 ____________, 19__, and not
included in the Original Indenture or the previous supplemental indentures, and
now owned of record, except for the properties expressly excluded from the
Indenture.
4. 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, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
<PAGE>
affecting the enforcement of creditors' rights generally and to the effects of
general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
5. The Company has corporate power proper and adequate for the
execution and issuance of the New Bonds under the Indenture in the initial
aggregate principal amount of $____________, and in accordance with due
authorization from the stockholders and directors of the Company and based in
part upon certificates by an officer of the Company and by an officer of the
Trustee under the Indenture as to execution, certification, and delivery, said
$____________ principal amount of New Bonds have been duly issued and are valid
and binding obligations of the Company and entitled to the benefits and
security of the Indenture.
6. Said New 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 aforesaid,
there is no existing indebtedness secured by lien on the property securing such
New Bonds ranking prior to or on a parity with the lien securing such New
Bonds.
7. The property specifically described as mortgaged property in the
Indenture constitutes substantially all of the property owned by the Company
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 (b) under "Reservations and
Exceptions" in the Original Indenture and the First through __________
Supplemental Indentures, and as to the remainder of the properties described
in said schedules the exclusions, if any, by virtue of said clause (b) are
minor.
8. Other than as described in the Prospectus, including all documents
incorporated therein by reference, the principal generating stations 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. As to the other
properties described in the schedules to the Indenture and indicated therein
as owned by the Company, being principally electric lines and related
equipment, they are in general not on land owned in fee, being in substantial
part located on, over, or under public streets or highways and in part on land
owned by others over which the Company has easements or rights of way. A
majority of the poles of the distribution system are owned jointly with others,
principally telephone companies. The Company's title to such properties is
free from any material defects of record except current taxes, the mortgage of
the Indenture, and such liens, encumbrances, and other defects as are set forth
or are referred to in the Indenture, and in respect to said easement interests
in real estate (which consist principally of transmission and distribution line
rights of way) such rights, with minor exceptions, are perpetual or without
limit of time.
9. With respect to the issue and sale of the New Bonds, an appropriate
order has been issued by the Division of Public Utilities and Carriers of the
State of Rhode Island, to the extent it has jurisdiction, authorizing the issue
and sale of the New Bonds and the mortgage by the Company of its properties,
and said order remains, to the best of our knowledge, in effect at this date;
the Company is exempted by Rule 52 under the Public Utility Holding Company Act
of l935 (the l935 Act) from the requirement of an order of the Securities and
Exchange Commission (the Commission). The Indenture has been qualified under
<PAGE>
the Trust Indenture Act of 1939; the Registration Statement referred to below
has become effective under the Securities Act of 1933, as amended (the
Securities Act); said order and said Registration Statement remain, to the best
of our 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 New Bonds or the carrying out of the provisions of the Purchase
Agreement (except under the so-called blue-sky or securities laws of the
several states in connection with sales by you and others of the New Bonds, the
applicability of which we have not considered and as to which we express no
opinion).
10. The statements upon our authority made or incorporated by reference
in the Registration Statement, as amended by all amendments thereto, filed with
the Securities and Exchange Commission under the Securities Act (the
Registration Statement) and in the prospectus dated _____________, 19__, as
supplemented by the prospectus supplement dated _________________, 19__,
relating to the New Bonds (the Prospectus) 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 reference
therein, as to which we express no opinion), comply as to form in all material
respects with the relevant requirements of the Securities Act and the
Securities Exchange Act of 1934, as amended, and of the applicable rules,
regulations, and releases of the Securities and Exchange Commission thereunder;
and the New Bonds conform to the description thereof in the Registration
Statement and Prospectus. While we have not made a detailed review of the
accuracy or completeness of other information in, or incorporated in, the
Registration Statement and Prospectus and assume no responsibility therefor,
nothing has come to our attention which leads us to believe that either the
Registration Statement or Prospectus, or the documents incorporated by
reference therein, contains any 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.
The above opinion, insofar as it relates to mortgaging of franchises,
relates to the mortgaging of secondary franchises and not to the mortgaging of
the Company's primary franchise to be a corporation. The above opinion insofar
as it relates to the execution and delivery of the Original Indenture and
certain supplemental indentures prior to the __________ Supplemental Indenture
is based upon opinions of other counsel for The Company. The above opinion,
insofar as it relates to titles, is based in part upon opinions of local
counsel and of counsel associated with us and in part upon examination of
titles of the Company to its principal properties by title examiners under our
direction, the direction of counsel associated with us, or the direction of
local counsel, or examination by local counsel and reviewed by us or counsel
associated with us, such title examiners and local counsel being, in our
opinion, of good standing and experienced in the examination of titles. In the
case of easements over lands of others, the title of the grantors of the
easements were not in all cases examined to the same extent as in the case of
fee ownership and in some instances such easements depend upon long user.
<PAGE>
We are members of the bar of The Commonwealth of Massachusetts and we do
not express any opinion as to matters governed by any laws other than those of
The Commonwealth of Massachusetts, the State of Rhode Island, and the Federal
Law of the United States of America. We are not, however, members of the bar
of the State of Rhode Island.
Yours very truly,
DRAFT
Robert King Wulff*
Corporation Counsel
DRAFT
Kirk L. Ramsauer*
Assistant General Counsel
_______________________________
*To be signed by Robert King Wulff and/or Kirk L. Ramsauer
<PAGE>
EXHIBIT 3 TO
TERMS OF PURCHASE
PROPOSED FORM OF OPINION
OF
MILBANK, TWEED, HADLEY & MCCLOY
1 CHASE MANHATTAN PLAZA
NEW YORK, NEW YORK 10005
_______________________, 19__
and the other several Underwriters
named in the Underwriting Agreement
referred to below,
Re: THE NARRAGANSETT ELECTRIC COMPANY
First Mortgage Bonds Series __, ___%, due ____
Dear Sirs:
We have acted as your counsel in connection with your purchase from The
Narragansett Electric Company, a Rhode Island corporation (the Company),
pursuant to an Underwriting Agreement dated ____________, 19__ (the
Underwriting Agreement) made with the Company, of $______________ aggregate
principal amount of First Mortgage Bonds Series __, ___%, due ____ (New Bonds)
of the Company, issued under and pursuant to the First Mortgage Indenture and
Deed of Trust dated as of September 1, 1944, as supplemented and modified by
________________ supplemental indentures (collectively, the Mortgage), between
the Company and Rhode Island Hospital Trust National Bank, successor to Rhode
Island Hospital Trust Company, as Trustee (the Trustee). As such counsel we
have reviewed originals, or copies certified to our satisfaction, of all such
corporate records of the Company, indentures, agreements and other instruments,
certificates of public officials and of officers and representatives of the
Company and of the Trustee, and other documents, as we have deemed necessary
to require as a basis for the opinions hereinafter expressed. In such
examination we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as copies and the authenticity of the
originals of such later documents. As to various questions of fact material
to such opinions, we have, when relevant facts were not independently
established, relied upon certifications by officers of the Company and other
appropriate persons and statements contained in the Registration Statement
hereinafter mentioned.
In addition, we attended the closing held today at the principal office
of Rhode Island Hospital Trust National Bank, One Hospital Trust Plaza,
Providence, Rhode Island, in the course of which the Company caused to be
delivered to you $_____________ aggregate principal amount of Series __, New
Bonds against payment therefor.
Based upon the foregoing, and having regard to legal considerations which
we deem relevant, we are of the opinion that:
1. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
<PAGE>
2. The registration statement with respect to the Series __, New Bonds
filed with the Securities and Exchange Commission (the Commission) pursuant to
the Securities Act of 1933, as amended (the Act), as amended by all amendments
thereto (the Registration Statement), has become effective and, to the best of
our knowledge, remains in effect on the date hereof, and the prospectus with
respect to the Series __, New Bonds dated ____________, 19__, as supplemented
by the prospectus supplement dated ______________, 19__, including all
documents incorporated by reference therein pursuant to the requirements of
Form S-3 under the Act (the Prospectus), is lawful for use for the purposes
specified in the Act in connection with the offer for sale and the sale of the
Series __, New Bonds in the manner specified therein, subject to compliance
with the provisions of securities or "blue sky" laws of certain jurisdictions
in connection with the offer and sale of the Series __, New Bonds in such
jurisdictions.
The Registration Statement and the Prospectus (except the financial
statements and other financial data included therein, as to which we express
no opinion) comply as to form in all material respects with the requirements
of the Act and with the applicable published rules and regulations of the
Commission under the Act.
As to the financial statements included in the Prospectus, we have made
no examination of the Company's books of account and we therefore express no
opinion. As to the statements under "Description of Series __, New Bonds",
(except the financial data included thereunder as to which we express no
opinion), subject to the concluding three paragraphs of this opinion, we are
of the opinion that the statements are accurate and do not omit any material
fact required to be stated therein or necessary to make such statements not
misleading. As to other matters, we have not undertaken to determine
independently the accuracy or completeness of the statements contained in the
Registration Statement or in the Prospectus. We have, however, participated
in conferences with representatives of the Company and of New England Power
Service Company in connection with the preparation of the Registration
Statement and the Prospectus and we have reviewed all documents incorporated
by reference in the Prospectus pursuant to the requirements of Form S-3 under
the Act and such of the corporate records of the Company as we deemed
advisable. None of the foregoing disclosed to us any information which gave
us reason to believe that the Registration Statement or the Prospectus (except
the financial statements and other financial data included therein, as to which
we express no opinion) contains any 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.
3. The Company is exempt under Rule 52 of the Public Utility Holding
Company Act of l935 from the requirement for an order of the Commission under
said Act with respect to the issue and sale of the Series __, New Bonds.
4. The Division of Public Utilities and Carriers of the State of Rhode
Island has issued an appropriate order with respect to the issue and sale of
the Series __, New Bonds. Said order, to the best of our knowledge, remains
in effect on the date hereof.
5. No other order, approval or consent of any public regulatory body
is legally required under Federal law for the issue and sale of the Series __,
New Bonds pursuant to the Purchase Agreement or the carrying out of the
provisions of the Purchase Agreement.
6. The Mortgage has been duly authorized, executed and delivered by
the Company, and having, in the opinion of Robert King Wulff, Esq., Corporation
Counsel for the Company, and Kirk L. Ramsauer, Esq., Assistant General Counsel
<PAGE>
for the Company, referred to below, upon which we rely, been duly filed and
recorded, constitutes a valid mortgage legally effective to create a lien (as
to the ranking of which reference is made to said opinion) as security for the
Series __, New Bonds upon the interest of the Company in the property now owned
by the Company which is described in the Mortgage as subject to the lien
thereof; and the Mortgage is a valid, binding and enforceable instrument,
subject, as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium or other similar laws of general applicability or affecting the
enforcement of creditors' rights generally. The enforceability of the Mortgage
is further subject to the effect of general principles of equity (regardless
of whether considered in a proceeding in equity or at law), including without
limitation (i) the possible unavailability of specific performance, injunctive
relief or any other equitable remedy and (ii) concepts of materiality,
reasonableness, good faith and fair dealing.
The Mortgage has been duly qualified under the Trust Indenture Act of
1939, as amended.
7. The Series __, New Bonds purchased by you conform as to legal
matters in all substantial respects to the description thereof contained in the
Registration Statement and the Prospectus and have been duly authorized and
(assuming due execution thereof by the Company and certification by the
Trustee) issued under the Mortgage and are valid and binding obligations of the
Company.
The foregoing opinions are subject to the following:
We have made no examination of the Company's title to the properties
purported to be owned by it or of the ranking of the lien created by the
Mortgage or of the franchises under which the Company operates. We express no
opinion on such matters (including the adequacy of the real property
descriptions in the Mortgage), and, to the extent that the opinions herein
expressed involve such matters, we have relied, so far as concerns the
Company's titles to its properties and the ranking of the lien of the Mortgage,
upon the opinion of Robert King Wulff, Esq. and Kirk L. Ramsauer, Esq.,
addressed to you on this date, and, so far as concerns the Company's
franchises, upon the opinion of Edwards & Angell, likewise addressed to you on
this date. Furthermore, with respect to the filing and recording of the
Mortgage in the State of Rhode Island, we have relied upon said opinion of
Robert King Wulff, Esq. and Kirk L. Ramsauer, Esq.
In rendering the opinions hereinabove expressed, we have relied upon said
opinion of Robert King Wulff, Esq. and Kirk L. Ramsauer, Esq. as to all matters
governed by the law of the State of Rhode Island and upon said opinion of
Edwards & Angell as to matters concerning the Company's franchises, and as to
such matters, the opinions hereinabove expressed are subject to all
qualifications, limitations, assumptions and reliances, and other
considerations, therein set forth.
We are members of the bar of the State of New York and we do not express
any opinion as to matters governed by any laws other than the law of the State
of New York, the Federal law of the United States of America, and to the extent
hereinabove stated in reliance upon said opinions of Robert King Wulff, Esq.
and Kirk L. Ramsauer, Esq. and of Edwards & Angell, the law of the State of
Rhode Island.
Very truly yours,
MILBANK, TWEED, HADLEY & MCCLOY
<PAGE>
DRAFT
6/7/95
______________________________________________________________________________
______________________________________________________________________________
THE NARRAGANSETT ELECTRIC
COMPANY
TO
RHODE ISLAND HOSPITAL TRUST
NATIONAL BANK,
TRUSTEE
(SUCCESSOR TO RHODE ISLAND HOSPITAL TRUST COMPANY)
SUPPLEMENTAL INDENTURE
DATED AS OF ________, 19__
SUPPLEMENTAL TO
FIRST MORTGAGE INDENTURE
AND
DEED OF TRUST
DATED AS OF SEPTEMBER 1, 1944
AS AMENDED AND SUPPLEMENTED BY PRIOR SUPPLEMENTAL INDENTURES
TO SECURE FIRST MORTGAGE BONDS
____________ ISSUE (SERIES __) $
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
THE NARRAGANSETT ELECTRIC COMPANY
__________ SUPPLEMENTAL INDENTURE
DATED AS OF ______, 19__
________________________
TABLE OF CONTENTS
(NOT PART OF THE INDENTURE)
PAGE
----
PARTIES..................................................................1
RECITALS
Preamble...............................................................1
Form of Series __ Bonds [Face].........................................3
Form of Trustee's Certificate..........................................5
Form of Series __ Bonds [Reverse]......................................6
Recital of Validity....................................................9
GRANTING CLAUSES
Recital of Consideration...............................................9
Grant..................................................................10
Description of Mortgaged Property......................................10
Reservations and Exceptions............................................12
Habendum...............................................................13
Declaration of Trust...................................................13
ARTICLE I.
PARTICULAR COVENANTS OF THE COMPANY REGARDING
THE MORTGAGED PROPERTY
Section 1. Covenant against Encumbrances.................................14
Section 2. Covenant of Seizin............................................14
ARTICLE II.
COVENANTS OF THE COMPANY
Section 1. Warranty as to Default........................................15
Section 2. Existence and Authority......................................15
ARTICLE III.
CONCERNING THE SERIES __ BONDS
Section 1. Form, etc.....................................................15
Section 2. Limitations on Amount.........................................17
Section 3. Execution.....................................................18
Section 4. Transferability, Exchangeability, etc.........................18
Section 5. Redemption....................................................18
<PAGE>
PAGE
----
ARTICLE IV.
AMENDMENT TO THE INDENTURE
Section 1. Amendment.....................................................20
ARTICLE V
CONCERNING THE TRUSTEE
Acceptance of Trusts and Conditions Thereof..............................21
(a) Identity of Trustee.............................................21
(b) Recitals by Company, not Trustee................................21
(c) Limit of Responsibility.........................................21
ARTICLE VI.
DEFEASANCE
Section 1. Defeasance....................................................22
ARTICLE VII.
MISCELLANEOUS
Section 1. Supplemental to Original Indenture............................22
Section 2. For Benefit of Parties and Bondholders Only...................22
Section 3. Date of Supplemental Indenture................................22
Section 4. Original Counterparts.........................................22
Section 5. Cover, Headings, etc..........................................23
TESTIMONIUM CLAUSE.......................................................24
SIGNATURES...............................................................24
SCHEDULE I...............................................................25
ACKNOWLEDGMENTS..........................................................26
<PAGE>
THIS __________ SUPPLEMENTAL INDENTURE, dated as of the ___ day of
______, in the year __________________________________, between THE
NARRAGANSETT ELECTRIC COMPANY (hereinafter generally called the Company), a
corporation duly organized and existing under the laws of the State of Rhode
Island and having its principal place of business in Providence, Rhode Island,
and a mailing address of 280 Melrose Street, Providence, Rhode Island 02907,
and RHODE ISLAND HOSPITAL TRUST NATIONAL BANK (successor by merger to Rhode
Island Hospital Trust Company), as Trustee under the Indenture hereinafter
referred to (said Rhode Island Hospital Trust National Bank or, as applied to
actions antedating the effective date of said merger, said Rhode Island
Hospital Trust Company, being hereinafter generally called the Trustee), a
national banking association duly incorporated and existing under the laws of
the United States of America, having its principal place of business and
address at One Hospital Trust Plaza, Providence, Rhode Island 02903, and duly
authorized to execute the trusts hereof.
WITNESSETH THAT:
WHEREAS, the Company heretofore executed and delivered to the Trustee a
First Mortgage Indenture and Deed of Trust (hereinafter singly generally called
the Original Indenture, and with this and all other indentures supplemental
thereto collectively called the Indenture), dated as of September 1, 1944, and
recorded among other places in the records of land-evidence of the City of
Providence, R.I., Book 781, Page 1, to which this instrument is supplemental
pursuant to the terms thereof, whereby the Company has mortgaged, conveyed,
pledged, assigned and transferred to the Trustee all and singular the property
therein specified, whether owned at the time of the execution or thereafter
acquired by the Company, to secure its First Mortgage Bonds (hereinafter
generally called the Bonds) of an unlimited (except as therein provided)
permitted aggregate principal amount, to be issued in one or more series as
provided in the Original Indenture; and
WHEREAS, the Company has heretofore executed and delivered to the Trustee
twenty-one Supplemental Indentures, viz.:
Supplemental Indenture Dated As Of
---------------------- -----------
First Supplemental Indenture May 1, 1948
Second Supplemental Indenture March 1, 1952
Third Supplemental Indenture March 1, 1953
Fourth Supplemental Indenture March 1, 1956
Fifth Supplemental Indenture January 1, 1964
Sixth Supplemental Indenture February 1, 1968
Seventh Supplemental Indenture April 1, 1970
Eighth Supplemental Indenture March 1, 1972
Ninth Supplemental Indenture March 1, 1974
Tenth Supplemental Indenture August 1, 1974
Eleventh Supplemental Indenture March 1, 1975
Twelfth Supplemental Indenture August 1, 1980
Thirteenth Supplemental Indenture February 1, 1982
Fourteenth Supplemental Indenture January 1, 1984
Fifteenth Supplemental Indenture January 1, 1986
Sixteenth Supplemental Indenture June 1, 1986
Seventeenth Supplemental Indenture November 1, 1987
Eighteenth Supplemental Indenture May 1, 1991
Nineteenth Supplemental Indenture August 1, 1991
Twentieth Supplemental Indenture May 1, 1992
Twenty-First Supplemental IndentureOctober 1, 1993
(hereinafter referred to as the Prior Supplemental Indentures)
<PAGE>
each of which is supplemental to the Original Indenture, whereby the Company
has mortgaged, conveyed, pledged, assigned and transferred to the Trustee all
and singular the property therein specified, whether owned at the time of the
execution of each of said Supplemental Indentures or thereafter acquired by the
Company, to secure its Bonds issued or to be issued in one or more series as
provided in the Original Indenture; and
WHEREAS, the Company under the Indenture has heretofore issued and has
outstanding as of the date hereof the following aggregate principal amounts of
its First Mortgage Bonds:
SERIES PERCENT DUE AMOUNT
------ ------- ------- ------------
S 9 1/8% 2021 $ 22,200,000
T 8 7/8% 2021 $ 40,000,000
U Various Various $100,000,000
V Various Various $ 33,000,000
(hereinafter referred to as the Outstanding Bonds); and
WHEREAS, Sections 4.07 and 4.17 of the Original Indenture and Articles
I, Sections 2 of the Prior Supplemental Indentures provide that the Company
will from time to time give further assurances to the Trustee, and will from
time to time subject to the lien of the Indenture all after-acquired property
included in the granting clauses of the Indenture, and Section 12.01 of the
Original Indenture provides, among other things, that the Company and the
Trustee from time to time may enter into indentures supplemental to the
Original Indenture for, among other things, the purpose of conveying,
mortgaging, pledging, assigning or transferring to the Trustee any other
property or properties to be held subject to the lien of the Indenture with the
same force and effect as if included in the granting clauses thereof; of adding
to the covenants and agreements of the Company such further covenants and
agreements as the Board of Directors of the Company shall consider to be for
the protection of the holders of the Bonds outstanding under the Indenture and
for the protection of the trust estate; and of providing for the issue of Bonds
of any series other than Series A and the forms and provisions of such other
series pursuant to the provisions in Section 2.02 of the Original Indenture and
not inconsistent with the provisions of the Indenture; and of making such
provisions, for the purpose of curing any ambiguity or in regard to matters or
questions arising under the Indenture, as may be necessary or desirable and not
inconsistent with the security and protection intended to be conferred upon the
Trustee and the Bondholders; and
WHEREAS section 3.04 of the Original Indenture makes provision for the
application by the Company, upon compliance with the applicable provisions of
the Indenture, for the certification and delivery of additional Bonds against
the retirement of Bonds bearing a higher interest rate, which have not been
bona fide sold, pledged or otherwise negotiated by the Company, and whereas the
parties hereto desire to amend the Indenture in order to add provisions, not
inconsistent with the security and protection intended for the protection of
the Bondholders, to clarify such provisions and to better provide for the
certification and delivery of additional Bonds based upon the retirement of
Unissued Bonds; and
WHEREAS, the Company desires pursuant to said provisions and as
hereinafter provided to convey, mortgage, pledge, assign and transfer to the
Trustee certain other properties hereinafter specified, to be held subject to
the lien of the Indenture; to add certain covenants and agreements; to make
such provision in regard to the Indenture as may be necessary or desirable and
<PAGE>
not inconsistent with the security and protection intended to be conferred upon
the Trustee and the Bondholders; and to provide for the issue of an additional
series of Bonds under the Indenture and the forms and provisions thereof; and
WHEREAS, the Company desires to create and to issue from time to time
under and to secure by the Indenture a new series of its First Mortgage Bonds
(First Mortgage Bonds - Series __) (hereinafter generally called Series __
Bonds or Bonds of Series __) of unlimited (except as herein and in the Original
Indenture provided) permitted aggregate principal amount, the issue of $ of
which and the execution and delivery of this __________ Supplemental Indenture
having been duly approved, to the extent required by law, by the Division of
Public Utilities and Carriers of the State of Rhode Island and by the
Securities and Exchange Commission under the Public Utility Holding Company Act
of 1935, and all things necessary to make such issue of Series __ Bonds, when
executed by the Company and certified by the Trustee and delivered as herein
and in the Original Indenture provided, the legal, valid, and binding
obligations of the Company according to their tenor, and to make this
Supplemental Indenture a legal, valid, and binding instrument supplemental to
the Original Indenture, have in all respects been duly authorized; and
WHEREAS, the Series __ Bonds and the Trustee's certificate and the form
of endorsement thereon are to be substantially in the following form:
[Form of Series __ Bonds]
[Face]
[IF APPLICABLE, INSERT - Unless this certificate is presented by an
authorized representative of The Depository Trust Company (55 Water Street, New
York, New York) to the issuer or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as requested by an authorized representative of
The Depository Trust Company and any payment is made to Cede & Co., any
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.]
[IF APPLICABLE, INSERT - For purposes of proposed regulations issued
under sections 1271 through 1275 of the Internal Revenue Code of 1986, as
amended, the issue date of this Bond is __________; the amount of the original
issue discount allocable to the period from the issue date to _____________ is
$_____________; and the yield to maturity is _______ percent. The method used
to determine the yield to maturity was the exact method.]
<PAGE>
REGISTERED REGISTERED
NUMBER $
CUSIP
THE NARRAGANSETT ELECTRIC COMPANY
A CORPORATION OF THE STATE OF
RHODE ISLAND
First Mortgage Bond - Series __
_____%, Due __________
Original Issue Date:__________
For value received, THE NARRAGANSETT ELECTRIC COMPANY, a corporation duly
organized and existing under the laws of the State of Rhode Island
(hereinafter, with its successors and assigns as defined in the Indenture
mentioned below, generally called the Company), hereby promises to pay to
or registered
assigns, on __________, (or earlier as hereinafter referred to) the sum of
____________ DOLLARS ($ ) in lawful money of the United States of
America, at the principal office in Providence, Rhode Island, of Rhode Island
Hospital Trust National Bank (hereinafter, with its successors as defined in
said Indenture, generally called the Trustee), or at the principal office of
its successor in the trusts created by said Indenture, and in such other
places, if any, as may be authorized for the purpose, and to pay interest
thereon from the original issue date specified above, if the date hereof is
prior to ________, ________, or, if thereafter, from the first day of
___________or __________ as the case may be, next preceding the date hereof to
which interest has been paid or duly provided for (or from the date hereof if
such date be either of said days and interest has been paid or duly provided
for to such date), at the rate per annum specified in the title of this Bond,
at said office of the Trustee, semiannually, on the first days of _________ and
________ of each year until payment of the principal hereof. Interest so
payable, and punctually paid or duly provided for, on the first day of
_____________ or ___________ will be paid to the person in whose name this Bond
(or one or more Predecessor Bonds, as defined in said Indenture) is registered
at the close of business on the ________ 15 or ________ 15 (whether or not a
business day) next preceding such first day of ___________ or ___________.
However, any such interest installment that is not punctually paid or duly
provided for shall forthwith cease to be payable to the registered owner on
such _________ 15 or ________ 15, as the case may be, and may be paid to the
person in whose name this Bond (or one or more Predecessor Bonds) is registered
at the close of business on a special record date for the payment of such
defaulted interest to be fixed by the Trustee, notice whereof shall be given
to Bondholders not less than fifteen days prior to such special record date,
or may be paid, at any time and without prior notice to Bondholders, to the
person in whose name this Bond is registered at the close of business on the
day next preceding the date of such payment, or may be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the First Mortgage Bonds - Series __ may at the time be
listed and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture. Interest payable at maturity [IF APPLICABLE,
INSERT - or upon earlier redemption] will be payable to the person to whom the
principal will be payable. At the option of the Company, interest may be paid
by check payable to the order of and mailed to the address of the person
entitled thereto as the name and address of such person shall appear on
registration books maintained pursuant to said Indenture.
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.
<PAGE>
The provisions of this Bond are continued on the reverse hereof and such
continued provisions shall for all purposes have the same effect as though
fully set forth at this place.
This Bond shall not be valid or become obligatory for any purpose, or be
entitled to any security or benefit under the Indenture, until the certificate
hereon shall have been signed by the Trustee.
IN WITNESS WHEREOF, The Narragansett Electric Company has caused this
Bond to be executed, either manually or by facsimile, and its corporate seal
to be hereunto affixed, by its officers thereunto duly authorized, all as of
, .
THE NARRAGANSETT ELECTRIC COMPANY
By
(Vice) President
And by
(Assistant) Treasurer
TRUSTEE'S CERTIFICATE
This is one of the Bonds of Series __ referred to in the within mentioned
Indenture.
RHODE ISLAND HOSPITAL TRUST NATIONAL BANK,
As Trustee
By
Authorized Officer
[Form of Series __ Bond]
[Reverse]
THE NARRAGANSETT ELECTRIC COMPANY
First Mortgage Bond, Series __
____%, Due ______
Original Issue Date:__________
This Bond is one of a duly authorized issue of First Mortgage Bonds of
the Company, issued or to be issued in one or more series, the __________
series of which this Bond is one being designated First Mortgage Bonds, Series
__ unlimited (except as provided in said Indenture) in permitted aggregate
principal amount and all of said Bonds of all series and forms being issued or
to be issued under and secured by a First Mortgage Indenture and Deed of Trust
(herein, with all indentures stated to be supplemental thereto to which the
Trustee shall be a party, generally called the Indenture), dated as of
September 1, 1944, whereby the Company has mortgaged, conveyed, pledged,
assigned and transferred certain real estate and other property to the Trustee,
to which Indenture, an executed counterpart of which is on file with the
Trustee, reference is hereby made for a description of the property mortgaged,
conveyed, pledged, assigned and transferred to the Trustee, and for a statement
of the nature and extent of the security, the terms and conditions upon which
said Bonds are or are to be issued and secured, the rights and remedies under
the Indenture of the holders of all of said Bonds, and the rights and
<PAGE>
obligations under the Indenture of the Company and of the Trustee; but neither
the foregoing reference to the Indenture, nor any provision of this Bond or of
the Indenture, shall affect or impair the obligation of the Company, which is
absolute, unconditional and unalterable, to pay, at the stated or accelerated
maturities herein provided, the principal of and premium, if any, and interest
on this Bond as herein provided.
On the conditions, in the manner, to the extent and with the effect
provided in the Indenture, with the written consent, filed with the Trustee,
of the Company and of holders of the percent provided in the Indenture in
principal amount of the Bonds at the time outstanding, certain modifications
or alterations of the Indenture may be made (provided, however, that no such
modification or alteration shall, among other things, as provided in the
Indenture, affect or impair the absolute and unconditional obligation of the
Company in respect of the principal of and premium (if any) and interest on
this Bond), and, without the consent of Bondholders, instruments supplemental
to the Indenture may be made for certain purposes as provided in the Indenture.
In certain events, on the conditions, in the manner and with the effect
set forth in the Indenture, the principal of this Bond may be declared and/or
may become due and payable before the stated maturity hereof, together with the
interest accrued hereon. Interest on overdue installments of interest shall
be paid to the extent legally collectable at the rate of 6% per annum in the
manner set forth in the Indenture. In certain events, on the conditions and
in the manner set forth in the Indenture, interest on overdue principal shall
be paid at the rate of 6% per annum.
Payment of the principal of and/or premium (if any) on this Bond to the
registered owner (or his registered assigns) hereof and payment of the interest
on this Bond as hereinabove provided shall be a discharge of the Company, the
Trustee, and any paying agent in respect of such principal, premium and/or
interest, as the case may be, and said payee and every successive owner and
assignee of this Bond by accepting or holding the same, consents and agrees to
the foregoing provisions and each invites the others, and all persons, to rely
thereon.
The holders of the percent of the principal amount of the Bonds at the
time outstanding provided in the Indenture, may waive any existing default
under the Indenture and the consequences of any such default, except a default
in the payment of the principal of, premium, if any, or interest on any of the
Bonds, and except a default arising from the creation of any lien prior to or
on a parity with the lien of the Indenture.
Upon payment of charges and compliance with other conditions as provided
in the Indenture, the First Mortgage Bonds - Series __ [IF APPLICABLE, INSERT -
not drawn for redemption] are interchangeable, at the principal office of the
Trustee and at such other offices or agencies of the Trustee or of the Company
as may be designated for the purpose, for like aggregate principal amounts of
Bonds of the same series and original issue date with identical terms and
provisions, in denominations of $1,000 or any integral multiple thereof
(provided, however, the Company shall not be required to make transfers or
exchanges during the 15 days preceding any interest payment date and [IF
APPLICABLE, INSERT - during any reasonable period which may be necessary in
connection with the selection by lot of Bonds to be redeemed]); and, except as
aforesaid, this Bond [IF APPLICABLE, INSERT -, if not drawn for redemption,]
is transferable on books to be kept by the Company at said office of the
Trustee and at such other offices or agencies, upon surrender and cancellation
hereof at any such office or agency, duly endorsed or accompanied by a duly
executed instrument of transfer, and thereupon a new Bond or Bonds of the same
series and original issue date with identical terms and provisions, for a like
aggregate principal amount will be issued to the transferee or transferees in
exchange for this Bond.
<PAGE>
[IF APPLICABLE, INSERT - This Bond singly or together with all or less
than all other Bonds of the same series and original issue date, with identical
terms and provisions, or, if this Bond is for a principal amount exceeding
$1,000, any part of the principal amount hereof constituting said sum or any
integral multiple thereof, may be called for redemption at any time, whether
or not an interest payment date, upon prior notice given by a mailing thereof
to the respective registered owners of such Bonds not less than thirty days
prior to the redemption date [IF APPLICABLE, INSERT - (i) if redemption is made
at the option of the Company otherwise than out of the improvement fund, at the
respective general redemption prices, stated as percentages of the principal
amount thereof, set forth in Column A below, [IF APPLICABLE, INSERT - provided
however, that neither this Bond nor any portion hereof shall be so redeemed
prior to __________ 1, ____, if such redemption is for the purpose or in
anticipation of refunding such Bond, or any portion thereof, through the use,
directly or indirectly, of funds borrowed by the Company at an effective
interest cost to the Company (computed in accordance with generally accepted
financial practice) of less than ____% per annum,] and (ii) if] through
application of the improvement fund or eminent domain provisions of the
Indenture, at the special redemption prices, stated as percentages of the
principal amount thereof, set forth [IF APPLICABLE, INSERT - in Column B]
below, viz.:
IF REDEEMED AT COLUMN A COLUMN B
ANY TIME IN THE -------- --------
RESPECTIVE
TWELVE MONTHS'
PERIOD BEGINNING
____________ 1
IN EACH OF THE
FOLLOWING YEARS
_______________
[Table to be completed as provided in the Certificate as to Form.]
together in each case with accrued and unpaid interest to the date fixed for
redemption.
If provision has been duly made for notice of the redemption of this
Bond, or any such part hereof, and for payment as required in the Indenture,
thereafter this Bond, or such called part of the principal amount hereof, shall
cease to be entitled to any benefit, lien or security under the Indenture; no
interest shall accrue on this Bond, or such called part hereof, on or after the
date fixed for redemption; and, if less than the whole principal amount hereof
shall be so called, the registered owner (or registered assigns) hereof shall
be entitled, in addition to the sums payable on account of the part called, to
receive, without expense to such owner (or such assigns), on surrender hereof,
with a proper instrument of transfer, and upon cancellation hereof, one or more
First Mortgage Bonds - Series __, of the same original issue date and identical
terms and provisions, in fully registered form, for an aggregate principal
amount equal to that part of the principal amount hereof not then called and
paid.]
No recourse shall be had against any promoter, incorporator or any past,
present or future stockholder, director or officer of the Company by virtue of
any past, present or future constitution, statute (including charter
provisions) or rule of law or equity, or by the enforcement of any assessment
or penalty, or by any legal or equitable proceeding, or otherwise, for the
payment of the principal of or interest on this Bond, or for any claim based
<PAGE>
hereon or otherwise in respect hereof or of the Indenture; this Bond and the
Indenture being each a corporate obligation only, and all individual liability
of whatsoever kind or nature of, and all rights and claims against, such
promoters, incorporators, stockholders, directors and officers founded in any
way, directly or indirectly, upon the Indenture, or this Bond, or growing out
of the indebtedness hereby evidenced, are expressly waived and released by the
acceptance of this Bond by each holder hereof and as a condition of and a part
of the consideration for the issue hereof and the execution and delivery of the
Indenture, and by the provisions thereof, all subject to the limitations and
provisions of the Indenture; provided, however, that nothing herein or in the
Indenture contained shall be taken to prevent recourse to and the enforcement
of liability, if any, of any shareholder or any stockholder or subscriber to
capital stock upon or in respect of shares of capital stock not fully paid.
[End of Form of Bond]
AND WHEREAS, all things necessary to make the initial issue of the Series
__ Bonds, when executed by the Company and certified by the Trustee, and
delivered, all as in the Indenture provided, the valid, legal and binding
obligations of the Company according to their tenor, and this __________
Supplemental Indenture a valid, legal and binding instrument supplemental to
and confirmatory of the Original Indenture enforceable in accordance with its
terms for the uses and purposes herein set forth, have been in all respects
duly authorized:
NOW, THEREFORE, in consideration of the premises and of the sum of $10
duly paid to the Company by the Trustee, and of other good and valuable
considerations, receipt whereof upon the ensealing and delivery of this
__________ Supplemental Indenture the Company hereby acknowledges, and for the
purpose of confirming the Original Indenture and the Prior Supplemental
Indentures, and as an indenture hereby expressly stated to be supplemental to
the Original Indenture, and, except as herein otherwise provided, in order to
secure equally the pro rata payment of both the principal of and the interest
on all of the Bonds at any time certified, issued and outstanding under the
Indenture, according to their tenor, purport and effect and the provisions of
the Indenture, and to secure the faithful performance and observance of all the
covenants, obligations, conditions and provisions therein and in the Indenture
contained, and in order to provide for the form, provisions and issue of the
Series __ Bonds, and to declare further the terms and conditions upon which the
Bonds are to be secured, certified, issued, delivered, transferred and
exchanged, and upon which the trusts hereof are to be administered by the
Trustee, and upon which the Mortgaged Property is to be held and disposed of,
all as hereinafter provided,
THE COMPANY does hereby confirm the pledge, mortgage, conveyance,
assignment and transfer of the property set forth and described in the Original
Indenture and the Prior Supplemental Indentures, except such properties or
interests therein as may have been released by the Trustee or sold or disposed
of in whole or in part as permitted by the provisions of the Original Indenture
and the Prior Supplemental Indentures, or as were specifically reserved,
excepted and excluded by the Original Indenture and the Prior Supplemental
Indentures; and has given, granted, bargained, sold, warranted, pledged,
assigned, transferred, mortgaged and conveyed, and by these presents does give,
grant, bargain, sell, warrant, pledge, assign, transfer, mortgage and convey,
unto the Trustee, and its successors in the trusts of the Indenture, and its
and their assigns, upon and for the trusts thereby and hereby established and
confirmed, all and singular the following described land and personal
properties, franchises, rights and privileges acquired by the Company since the
execution and delivery of the __________ Supplemental Indenture or to be
acquired by the Company hereafter as by the terms of the Original Indenture and
the Prior Supplemental Indentures or by reason of being affixed to the freehold
<PAGE>
described in the Original Indenture and the Prior Supplemental Indentures, or
for any other reason whatsoever are subject to or to be subjected to the lien
of the Original Indenture and the Prior Supplemental Indentures, including, but
without in any way limiting the generality of the foregoing, all the right,
title and interest of the Company in and to the property and interests in
property, with the buildings thereon and the appurtenances thereto particularly
described in Schedule I hereto attached and hereby made a part hereof as fully
as if repeated herein at length (all of the foregoing, with all other property,
and rights and interests in property, intended to be hereby or by the Original
Indenture and the Prior Supplemental Indentures conveyed, mortgaged, pledged,
assigned and transferred, or at any time conveyed, mortgaged, pledged,
assigned, transferred or delivered, and all proceeds of any of the foregoing
at any time conveyed, mortgaged, pledged, assigned, transferred, and/or
delivered, to and from time to time held by the Trustee upon the trusts hereof
and of the Original Indenture and the Prior Supplemental Indentures, being
herein generally called, collectively, the Mortgaged Property):
FIRST.
REAL ESTATE AND RIGHTS AND INTERESTS IN REAL ESTATE.
Subject to the exceptions and reservations hereinafter set forth all the
real estate, rights and interests in real estate, lands, buildings, structures,
rights and interests in lands, easements, leases of land and every right
appurtenant thereto, franchises, rights of way, rights to construct, maintain
and operate overhead and underground systems for the generation, distribution
and transmission of electric current or other agencies for the supplying of
light, heat and power, transmission, service and distribution lines and
systems, and all releases of damages, water, flowage and riparian and shore
rights, now owned by the Company, including, without limitation, all property
particularly described in Schedule I hereto attached and hereby made a part
hereof as fully as if repeated herein at length.
SECOND.
PROPERTY HEREAFTER CONVEYED, ETC.
Any and all cash, stocks, shares, bonds, notes, securities or other
property which at any time hereafter, by delivery or writing of any kind for
the purposes hereof, may, at the option of the Company, be expressly conveyed,
mortgaged, pledged, delivered, assigned or transferred to or deposited with the
Trustee hereunder by the Company or by a successor corporation, or with its
consent by any one on its behalf, as and for any additional security for the
Bonds issued and to be issued hereunder, the Trustee being authorized at any
and all times to receive such conveyance, mortgage, pledge, delivery,
assignment, transfer or deposit and to hold and apply any and all such cash,
stock, shares, bonds, notes, securities or other property subject to all the
provisions hereof and/or of such writing.
THIRD.
MISCELLANEOUS PROPERTY.
All other, if any, lands, easements, leases of land and every right
appurtenant thereto, rights of way, rights to construct, maintain and operate
overhead and underground systems for the distribution and transmission of
electric current or other agencies for the supplying of light, heat and power,
all releases of damages, water, flowage and riparian and shore rights, dams,
wharves, tracks, switches, terminal facilities and other interests in lands,
including (without in any wise limiting or impairing by the enumeration of the
same the generality, scope and intent of the foregoing or of any general
<PAGE>
description contained in this __________ Supplemental Indenture) buildings,
electric generating, light, heat and power, and gas, ice and refrigerating,
plants and systems, transmission, service and distribution lines and systems
and steam heating plants and systems, water and/or water works, plants and
systems, manufactories, power houses, stations, substations, pipe lines, pipes,
mains, conduits, towers, tunnels, subways, bridges, poles, wires, cables,
fittings, connections and all other structures, machinery, engines, boilers,
pumps, valves, pipings, connections, dynamos, meters, transformers, generators,
motors, storage batteries, electrical and mechanical machinery, appliances,
equipment and appurtenances of every description and character, tools,
implements, wagons, fixtures, appliances, appurtenances, accessories, and all
other physical assets and all rights, grants, privileges, leases and leasehold
interests, licenses, permits, locations, consents, franchises, grants and
immunities, and all rights to compensation upon the termination in any manner
of any of the same, and any and all interest in property of the character
included in this Division Third, whether now owned by the Company or at any
time hereafter acquired.
TOGETHER WITH all the Company's now-existing or hereafter-acquired right,
title and interest in and to any and all physical property of the Company, now
or hereafter subject to any prior mortgage, pledge, charge and/or other
encumbrance or lien, and the cash and/or other proceeds therefrom, to the
extent that such property, cash and/or proceeds shall not be otherwise held
and/or applied pursuant to the requirements of any such mortgage, pledge,
charge and/or other encumbrance or lien.
AND TOGETHER WITH all and singular the now-existing and
hereafter-acquired rights, privileges, tenements, hereditaments and
appurtenances belonging or in any wise appertaining in and to the aforesaid
property or any part thereof, and the reversion and reversions, remainder and
remainders and, subject to the provisions of Section 6.01 of the Original
Indenture, all tolls, rents, revenues, earnings, interest, dividends,
royalties, issues, income and profits thereof, and all the estate, right,
title, interest and claim whatsoever, at law as well as in equity, which the
Company now has or may hereafter acquire, in and to all and every part and
parcel of the foregoing, it being the intention to include herein and to
subject to the lien hereof all land, interest in land, real estate, physical
assets and franchises whether now owned by the Company or which it may
hereafter acquire and wherever situated, as if the same were now owned by the
Company and were specifically described and conveyed hereby except as
hereinafter specified.
RESERVATIONS AND EXCEPTIONS.
SUBJECT, HOWEVER, as to all property, and rights and interests in and to
property, of any character hereinbefore described, in so far as affected
thereby, to any mortgages or other encumbrances or liens on such property
constituting permitted liens as in the Original Indenture defined;
AND SUBJECT FURTHER as to the property in Divisions First and Third above
described, insofar as affected thereby, to the liens, encumbrances,
reservations, restrictions, conditions, limitations, covenants, interests and
exceptions, if any, set forth or referred to in the descriptions thereof
hereinbefore and in said Schedule I contained, none of which substantially
interferes with the free use and enjoyment by the Company of the property and
rights hereinbefore described for the general purposes and uses of the
Company's business;
AND SPECIFICALLY RESERVING, EXCEPTING AND EXCLUDING from this instrument,
and from the grant, conveyance, mortgage, transfer and assignment herein
contained,
<PAGE>
(a) all property expressly excepted in the Original Indenture, the Prior
Supplemental Indentures and herein and in schedules of property thereto and
hereto;
(b) all property, permits, licenses, franchises and rights, whether now
owned or hereafter acquired by the Company, which are intended to be hereby
granted, conveyed, mortgaged, assigned and transferred, but which can not be
so granted, conveyed, mortgaged, assigned or transferred without the consent
of other parties whose consent is not secured, or without subjecting the
Trustee to a liability not otherwise contemplated by the provisions of the
Indenture, or which otherwise may not be, or are not, hereby lawfully and/or
effectively granted, conveyed, mortgaged, assigned and transferred by the
Company;
(c) the last day of the term of each leasehold estate (oral or written,
and/or any agreement therefor) now or hereafter enjoyed by the Company, and
whether falling within a general or particular description of property herein;
and
(d) all the Company's present and future fuel, automobiles, automotive
equipment, merchandise held for sale, cash on hand or in bank, furniture,
office equipment, books, choses in action, contracts, shares of stock, bonds
and other securities, documents and accounts and bills receivable (except
proceeds of the Mortgaged Property, and insurance and other monies, and
purchase money obligations, required by the provisions of the Original
Indenture and hereof to be paid to or deposited with the Trustee), and
materials, stores, supplies and other personal property which are consumable
(otherwise than by ordinary wear and tear) in their use in the operation of the
plants or systems of the Company.
TO HAVE AND TO HOLD the Mortgaged Property, with all of the privileges
and appurtenances thereunto belonging (but subject to the foregoing specified
exceptions and reservations) unto the Trustee, its successors in the trusts of
the Indenture, and its and their assigns, to its and their own use, forever;
BUT IN TRUST NEVERTHELESS for the equal pro rata benefit, security and
protection (except as provided in the Indenture, and except insofar as a
sinking or analogous fund or funds, established in accordance with the
provisions of the Indenture, may afford particular security for Bonds of one
or more series, and except independent security as provided in Section 2.02 of
the Original Indenture) of the bearers and the registered owners of the Bonds
from time to time certified, issued and outstanding under the Indenture, and
the bearers of the coupons thereunto belonging, without (except as aforesaid)
any preference, priority or distinction whatever of any one Bond over any other
Bond by reason of priority in the issue, sale or negotiation thereof, or
otherwise.
The Company hereby declares that it holds and will hold and apply all
property described in the foregoing clauses (b) and (c) as specifically
reserved and excepted, upon the trusts in the Indenture set forth and as the
Trustee (or any purchaser thereof upon any sale thereof under the Indenture)
shall for such purpose direct from time to time, to the fullest extent
permitted by law or in equity, as fully as if the same could be and had been
hereby granted, conveyed, mortgaged, assigned and transferred to and vested in
the Trustee.
In addition to and in confirmation and performance of the covenants,
declarations, agreements, conditions and provisions of the Original Indenture
and the Prior Supplemental Indentures, it is hereby further covenanted,
declared and agreed, upon the trusts and for the purposes aforesaid, that the
<PAGE>
trusts, terms and conditions, upon which the Mortgaged Property hereby granted,
mortgaged, conveyed, assigned and transferred or intended so to be is to be
held and disposed of, are as set forth in the Original Indenture and the Prior
Supplemental Indentures and in the following covenants, agreements, conditions
and provisions, viz.:
ARTICLE I.
PARTICULAR COVENANTS OF THE COMPANY REGARDING THE
MORTGAGED PROPERTY.
The Company covenants and agrees, in particular, but without limiting
other covenants and provisions hereof, or of the Original Indenture and the
Prior Supplemental Indentures, as hereinafter in this Article set forth,
namely:
SECTION 1. The Mortgaged Property specifically described in the granting
clauses of this __________ Supplemental Indenture, including Schedule I hereof,
is now wholly free from and unencumbered by any defect, mortgage, pledge,
charge or other encumbrance or lien, of any kind, superior to or on a parity
with the lien of the Indenture, except only taxes for the current year not yet
due, permitted liens and those encumbrances, if any, referred to in said
granting clauses and Schedule I hereof; and the Company will duly and
punctually remove, perform, pay and discharge, or if it contests, will stay
(and indemnify the Trustee from time to time to the satisfaction of the Trustee
against) the enforcement of, all obligations and claims arising or to arise out
of or in connection with each and all thereof. The Company will not create or
suffer any other mortgage, pledge, charge or material encumbrance or lien, of
any kind, superior to or on a parity with the lien of the Indenture, upon the
Mortgaged Property, or any part thereof, now owned or hereafter acquired,
except only such as are permitted under the provisions of Section 4.16 of the
Original Indenture.
SECTION 2. The Company is lawfully seized in fee simple of the real
estate, and owns outright and is lawfully possessed in its own right,
absolutely and unconditionally, of the property and rights, constituting the
Mortgaged Property specifically described in the granting clauses of this
__________ Supplemental Indenture, including Schedule I hereof, and has good
title to, and full power and authority to sell, transfer, assign, mortgage,
pledge and convey the property, rights and interests hereby presently sold,
transferred, assigned, mortgaged, pledged and conveyed or purported or intended
so to be, all subject only to taxes not yet due, to those liens, encumbrances
and defects, if any, referred to in the granting clauses and said Schedule I
hereof; and the Company will warrant and defend the title to the Mortgaged
Property, and every part thereof (subject as aforesaid), to the Trustee,
against all claims and demands whatsoever of any person and all persons
claiming or to claim the same or any interest therein, subject only as
aforesaid and to mortgages, encumbrances and liens on after-acquired property
to the extent permitted by Section 4.16 of the Original Indenture. The Company
will keep this __________ Supplemental Indenture at all times properly filed
and recorded, and refiled and rerecorded, in such manner and in such places,
and will do such other acts, as may be necessary or desirable to establish and
maintain the superior lien of the Indenture upon the Mortgaged Property, and
for the proper protection of the Trustee and the Bondholders. The Company will
also from time to time subject to the lien of the Indenture all of its
hereafter-acquired property which is included in the granting clauses hereof
or which the Company is required by any of the provisions of the Indenture to
subject to the lien thereof.
<PAGE>
ARTICLE II.
COVENANTS OF THE COMPANY.
SECTION 1. The Company warrants that at the date of the execution and
delivery of this __________ Supplemental Indenture the Company is not in
default in any respect under any of the provisions of the Original Indenture,
of the Prior Supplemental Indentures or of the Outstanding Bonds, and covenants
that it will perform and fulfill all the terms, covenants and conditions of the
Indenture to be performed and fulfilled by the Company.
SECTION 2. The Company is duly organized and existing under the laws of
the State of Rhode Island, and is duly authorized under all applicable
provisions of law to create and issue the Series __ Bonds and to execute this
__________ Supplemental Indenture, and all corporate action on its part for the
creation and issue of the Series __ Bonds as herein provided, and for the
execution and delivery of this __________ Supplemental Indenture, has been duly
and effectively taken. The Series __ Bonds in the hands of the holders
thereof, and this __________ Supplemental Indenture, are and will be,
respectively, valid and enforceable obligations of the Company in accordance
with the provisions thereof and hereof.
ARTICLE III.
CONCERNING THE SERIES __ BONDS.
In addition to the provisions of the Original Indenture applicable by
their terms, the following provisions (pursuant particularly to the provisions
of Section 12.01(e) of the Original Indenture) relating to the forms and
provisions of the Series __ Bonds are hereby established as follows:
SECTION 1. The Series __ Bonds shall be issued from time to time upon
delivery to the Trustee of a certificate as to form signed by an officer of the
Company setting forth the matter described below.
Each issue of the Series __ Bonds shall be designated in such manner as
to distinguish it from all other issues. Bonds of each issue shall be
identical to other Bonds of such issue in tenor and effect. The certificates
as to form shall designate, within such limits as may be from time to time
established by a directors' resolution, the designation and amount of the
issue, the date of maturity (which date shall not be more than thirty years
from the date on which Bonds of that issue were first certified and delivered),
the interest rate, the provisions for call and redemption, if any, including
any premium or premiums payable thereon.
The permanent Series __ Bonds shall be lithographed on steel engraved
tints or, (i) if so authorized by the certificate as to form, engraved either
fully or partially in such manner as to meet the listing requirements of any
securities exchange on which the Series __ Bonds may at the time be listed, or
(ii) if so authorized by the certificate as to form, printed, photocopied, or
otherwise reproduced in such manner as to meet the requirements of a depository
with which the Series __ Bonds may be placed.
The Series __ Bonds shall consist of fully registered Bonds without
coupons in denominations of $1,000 and any integral multiples thereof,
authorized by a certificate as to form, with distinguishing letters and/or
numbers as may be determined by a certificate as to form, and all as approved
by the Trustee. The permanent Series __ Bonds, Trustee's certificate and the
form of endorsement shall be substantially in the forms hereinbefore set forth,
<PAGE>
with appropriate insertions, omissions and variations approved by the Trustee
for the different issues and denominations.
The certificate as to form may also provide that ownership of all or any
issue of Series __ Bonds shall be evidenced by one or more certificates placed
with a depository. If, after the initial issue of Series __ Bonds which had
been placed with a depository, the depository no longer holds such issue of the
Series __ Bonds, the Company may determine that ownership of such Series __
Bonds shall be evidenced in the usual certificated form. No provision of the
certificate as to form with respect to matters referred to in this paragraph
shall be made applicable to the holder of a Bond or Bonds of Series __, the
original issue date of which is prior to the date of the certificate as to
form, except at the option of such holder.
The principal of and the premium (if any) and interest on the Series __
Bonds shall be payable at the principal office in Providence, Rhode Island, of
the Trustee, or at the principal office of its successor in the trusts created
by the Indenture, or in such other places, if any, as may be authorized for the
purpose. At the option of the Company, such interest may be paid by check
payable to the order of, and mailed to the address of, the person entitled
thereto, as the name and address of such person shall appear on the bond
register maintained pursuant to the Indenture. The interest installment on any
Series __ Bond which is payable, and is punctually paid or duly provided for,
on any first of March or September shall be paid to the person in whose name
that Bond (or one or more Predecessor Bonds) is registered at the close of
business on the relevant regular record date, namely, the February 15 or August
15 (whether or not a business day) next preceding. However, any interest
installment on any Series __ Bond which is payable, but is not punctually paid
or duly provided for (in whole or in part), on any first of March or September
(herein called Defaulted Interest) shall forthwith cease to be payable to the
registered owner on the relevant regular record date; and such Defaulted
Interest may be paid by the Company, at its election in each case, in either
of the ways provided in Clause (1) or Clause (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the persons in whose names the Series __ Bonds (or their respective
Predecessor Bonds) are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Series __ Bond and the date of the proposed payment which shall be not
less than forty-five days after the receipt by the Trustee of such notice
of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest, or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the persons entitled to such Defaulted Interest
as in this Clause provided. Thereupon the Trustee shall fix a special
record date for the payment of such Defaulted Interest which shall be not
more than fifteen but not less than five days prior to the date of the
proposed payment. The Trustee shall promptly notify the Company of such
special record date, and in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the special record date therefor to be mailed, postage prepaid, to each
owner of Series __ Bonds, at his address on the transfer registry, not
less than fifteen days prior to such special record date. The Trustee
may, in its discretion, in the name and at the expense of the Company,
cause a similar notice to be published at least once in a newspaper or
newspapers printed in the English language, customarily published on each
business day, of general circulation in each city or place where interest
<PAGE>
is payable, but such publication shall not be a condition precedent to
the establishment of such special record date. Notice of the proposed
payment of such Defaulted Interest and the special record date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid
to the persons in whose names the Series __ Bonds (or their respective
Predecessor Bonds) are registered on such special record date and shall
no longer be payable pursuant to the following Clause (2).
(2) The Company may elect to make payment of any Defaulted Interest,
at any time and without prior notice to Bondholders, to the persons in
whose names the Series __ Bonds are registered at the close of business
on the day preceding the date of payment, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Clause,
such payment shall be deemed practicable by the Trustee.
As used herein "Predecessor Bonds" of any particular Bond means every
previous Bond evidencing all or a portion of the same debt as that evidenced
by such particular Bond; and, for the purposes of this definition, any Bond
certified and delivered in lieu of a destroyed or lost Bond shall be deemed to
evidence the same debt as the destroyed or lost Bond.
Subject to the foregoing provisions of this Section, each Series __ Bond
delivered under the Indenture upon transfer of or exchange for or in lieu of
any other Series __ Bond of the same original issue date and identical terms
and provisions shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Series __ Bond of the same original
issue date.
SECTION 2. The permitted aggregate principal amount of the Series __
Bonds which may be executed by the Company and certified by the Trustee shall
not be limited, except as otherwise provided in Article 3 of and elsewhere, in
the Original Indenture, and except that the aggregate principal amount of Bonds
certified, delivered or outstanding at any time shall never in any event exceed
the amount at that time permitted by law.
SECTION 3. All of the Series __ Bonds shall be executed, in the name and
on behalf of the Company and under its corporate seal impressed or imprinted
thereon, by its president or one of its vice-presidents, and by its treasurer
or one of its assistant treasurers. The signature of any or all of these
officers on the Series __ Bonds may be either manual or facsimile. In case any
officer of the Company who shall have signed or sealed any of the Series __
Bonds shall not have been such officer on the date borne by the Bonds, or shall
cease to be such officer before the Bond so signed or sealed shall have been
actually certified and/or delivered, such Bonds, nevertheless, by presentation
to the Trustee for certification, or by delivery, shall be adopted by the
Company and may be certified and delivered as herein provided, and thereupon
shall be issued hereunder and shall be as binding upon the Company as though
the person who signed or sealed such Bonds had been such officer of the Company
on the date borne by the Bonds and on the date of certification and delivery.
SECTION 4. The Series __ Bonds shall be transferable, shall be
exchangeable for other fully registered Series __ Bonds of the same original
issue date and identical terms and provisions, and may be presented for
payment, transfer and exchange, and notices and demands in respect of Series
__ Bonds may be served or made, and the Series __ Bonds may bear such
endorsements or legends in respect of any or all of the foregoing matters or
otherwise, all upon the payment of applicable charges and upon and subject to
the applicable conditions and provisions of the Original Indenture in respect
of the Bonds and/or of the Series A Bonds, all of which conditions and
provisions mutatis mutandis are hereby adopted and made applicable in respect
of the Series __ Bonds as fully as if set forth herein at length; provided,
<PAGE>
however, that, with respect to the Series __ Bonds, the last three paragraphs
of Section 2.06(b) of the Original Indenture shall not be applicable; and
provided, further, that the owner of any Series __ Bond shall be entitled to
transfer or exchange such Bond without charge (except for any stamp tax or
other governmental charge incident thereto); and provided, further, that the
Company shall not be required (i) to issue, transfer or exchange any Series __
Bond during a period beginning at the opening of business fifteen days before
the day of the mailing of a notice of redemption of Series __ Bonds selected
for redemption and ending at the close of business on the day of such mailing,
or (ii) to transfer or exchange any Series __ Bond so selected for redemption
in whole or in part.
SECTION 5. The certificate as to form, as to an issue of Series __ Bonds
shall provide whether such Series __ Bonds may be called, as a whole or in
part, or whether any part of the principal amount constituting $1,000 or any
integral multiple thereof, may be called, at the option of the Company under
the improvement fund provisions of Section 5.06 of the Original Indenture, for
redemption, in all cases at any time, whether or not an interest payment date,
upon not less than thirty days prior notice given as hereinafter provided, at
the applicable redemption price, together in each case with accrued and unpaid
interest to the redemption date; provided, however, the certificate as to form,
as to any issue of Series __ Bonds, may provide that none of such Bonds shall
be so called, whether for a period of years or at any time, from the date such
Bonds were first certified and delivered, as set forth in the certificate. The
applicable redemption price shall be as set forth in the certificate as to
form.
The certificate as to form, as to any issue of Series __ Bonds, may
provide that none of such Series __ Bonds shall be redeemed prior to a stated
date at general redemption prices if such redemption is for the purpose or in
anticipation of refunding such Bonds, or any part thereof, through the use,
directly or indirectly, of funds borrowed by the Company at an effective
interest cost to the Company (computed in accordance with generally accepted
financial practices) of less than the effective interest cost to the Company
of the such Bonds.
Notice of such redemption shall be given, money for such redemption shall
be deposited with and held and applied by the Trustee, and such redemption
shall be carried out, all at the times, on the publication of notice, in the
manner, on the conditions and with the effect and pursuant to the provisions
specified in Section 5.02 (so far as applicable to the redemption of Bonds
other than Series A Bonds) and Sections 5.03 and 5.04 of the Original
Indenture; provided, however, that "published notice" with respect to any
redemption of the Series __ Bonds need not be given but a similar notice shall
be mailed, postage prepaid, at least thirty days prior to any redemption date
of the Series __ Bonds, to each owner of the Bonds to be redeemed, at his
address on the transfer registry; as a convenience but not as a condition
precedent to a redemption, the Trustee may, in its discretion, in the name and
at the expense of the Company, cause a similar notice of redemption to be
published at least once in a newspaper or newspapers printed in the English
language, customarily published on each business day and of general circulation
in each city or place where the principal of the called Bond is payable; and,
provided, further, that, in case the Company shall have elected to redeem less
than all of an issue of outstanding Series __ Bonds it shall, in each instance,
at least fifteen days before the date upon which mailing of the notice of
redemption herein mentioned is required to be made, notify the Trustee in
writing of such election and of the aggregate principal amount of Series __
Bonds to be redeemed and the original issue date or dates of the Series __
Bonds from which redemption is to be made, and the Trustee shall thereupon
select the Bonds to be redeemed from the outstanding Series __ Bonds of the
appropriate issue or issues not previously called for redemption, by such
method as the Trustee shall deem fair and appropriate and which may provide for
the selection for redemption of portions of the principal of Bonds of
denominations larger than $1,000, the portions of the principal of the Bonds
<PAGE>
so selected for partial redemption to equal $1,000 or an integral multiple
thereof (provided, however, no remaining part of such bond shall be less than
$1,000), and within ten days after receiving the aforesaid notice shall notify
the Company in writing of the Bonds selected for redemption and, in the case
of any Bond selected for partial redemption, the principal amount thereof to
be redeemed; and provided, further, that in case the Company shall have elected
to redeem less than all of an issue of the outstanding Series __ Bonds, the
notice of redemption shall state, among other things, the identification (by
numbers, groups of numbers ending in the same digit, or series of digits, or
otherwise) and, in case of partial redemption of Bonds of denominations larger
than $1,000, the respective principal amounts of the Bonds to be redeemed.
Installments of interest on any Series __ Bond maturing on or prior to the
redemption date of such Bond shall continue to be payable as provided in
Section 1 of this Article III.
ARTICLE IV.
AMENDMENT TO THE INDENTURE
Section 1. The Original Indenture, as previously amended, is hereby
further amended as set forth below.
There is hereby added to Article 3 section 3.02 of the Original Indenture
two new paragraphs at the conclusion of section 3.02 reading as follows:
"The Company may, from time to time, and upon furnishing the
Trustee with the documents set forth in this section and in section
3.03, direct the Trustee in writing to acknowledge on its books the
right of the Company to request the certification and delivery of
Bonds pursuant to section 3.04 up to the aggregate principal amount
set forth in such direction. Such rights are hereinafter called
"Unissued Bonds." Any additional property used as the basis for the
acknowledgment of the Unissued Bonds shall be deemed funded for the
purposes of any certificate required under any section of this
Indenture, and such Unissued Bonds shall be deemed to be Bonds
outstanding hereunder for the purposes of this section, section 3.03
and section 3.04 (including any application or certificate required
hereby or thereby) in the principal amounts and having the interest
rates and maturity dates as set forth in the written application
therefor but shall not have any voting rights or be deemed to be
Bonds outstanding hereunder for any other purpose. The Trustee, upon
being furnished by the Company with an officers' certificate
surrendering the rights evidenced by any Unissued Bonds, shall
acknowledge upon its books that cancellation of said Unissued Bonds.
Any canceled Unissued Bonds not used theretofore against the issuance
of Bonds pursuant to section 3.04 shall thereafter be treated as
though they had never been outstanding.
The authorizing directors' resolutions and forms required by
paragraph (a) of this section 3.02 and the authorizations and forms
in the documents required by paragraphs (b), (e), and (f) of this
section as applicable to Unissued Bonds shall be considered subsumed
in the authorizations and forms for the Bonds to be ultimately issued
pursuant to section 3.04. The opinion required pursuant to paragraph
(d) of this section shall be appropriately modified to reflect the
use of the Unissued Bonds as herein provided."
Section 3.03 of Article 3 of the Original Indenture is hereby
amended by adding in the 1st line after "and delivered" the
following:
"and Unissued Bonds may be acknowledged by the Trustee."
<PAGE>
There is added to Article 3 section 3.04 of the Original Indenture
two new paragraphs at the conclusion of section 3.04 reading as
follows:
"References herein to the certification and delivery of Bonds to
the aggregate amount of Bonds which shall have been retired and which
are unfunded shall be considered to include the aggregate amount of
Unissued Bonds which the Trustee has acknowledged pursuant to section
3.02 and section 3.03 and which are unfunded and not otherwise
cancelled. Such Unissued Bonds shall be deemed to be funded to the
extent that they have been used as the basis for the certification
and delivery of Bonds pursuant to this section.
Any application of the Company for the authentication and delivery
of Bonds pursuant to this section against "Unissued Bonds" created
in accordance with section 3.02 shall be accompanied by an officers'
certificate stating that retirements since September 1, 1944, were
not greater than the amount payable as an improvement fund since
September 1, 1944, and, unless there has been filed a net earnings
certificate including the interest charges on the Unissued Bonds
within the calendar year preceding the date of the application, shall
be accompanied by a net earnings certificate satisfying the
requirement of paragraph (d) of section 3.03 as far as applicable."
ARTICLE V.
CONCERNING THE TRUSTEE.
The Trustee accepts and agrees to execute the trusts, powers, rights and
duties of the Trustee under this __________ Supplemental Indenture upon and
only upon and subject to the terms and conditions of this __________
Supplemental Indenture and the terms and conditions of the Original Indenture
relating to the Trustee thereunder, all of which the Company and the holders
of the Series __ Bonds, by the issue, acceptance and holding of said Bonds,
agree are applicable to the Trustee hereunder, expressly including, but without
limiting the foregoing, or other provisions of the Indenture and hereof
protecting the Trustee, and without limiting or affecting any right, power or
discretion of the Trustee thereunder or hereunder, or otherwise existing, the
following:
(a) The Trustee for the time being under the Original Indenture shall
ex officio be the Trustee under this __________ Supplemental Indenture.
The word "Trustee" wherever used herein shall be taken to apply to the
Trustee for the time being under the Original Indenture and hereunder.
(b) The recitals of fact contained herein and in the Series __ Bonds
(except only the certificate upon said Bonds that they are issued under
the Indenture) shall be taken as the statements of the Company and the
Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representations as to the value of the mortgaged and
pledged property or any part thereof, or as to the title of the Company
thereto, or as to the validity or adequacy of the security afforded
thereby and hereby, or as to the validity of this __________ Supplemental
Indenture or of the Series __ Bonds issued hereunder.
(c) The Trustee in respect of all provisions hereof, of all moneys
held by it hereunder, of all property herein embraced and of all action
or omission to act hereunder and/or under or relating to the Series __
Bonds (i) shall be held to no responsibility or liability hereunder in
any way greater than the responsibility or liability to which the Trustee
under the Original Indenture is held thereunder and (ii) shall be
entitled to, may exercise and shall be protected by (to the full extent
that the same are applicable) all estate, rights, powers, conditions,
<PAGE>
duties, privileges, immunities, exemptions, authorities, protection and
provisions set forth in Article 10 of the Original Indenture as applying
to the Trustee thereunder, all of which mutatis mutandis are hereby
adopted and made applicable in respect of such provisions hereof, moneys
held hereunder, property herein embraced and action or omission to act
hereunder as fully as if the provisions concerning the same were set
forth herein at length.
ARTICLE VI.
DEFEASANCE.
SECTION 1. All the property hereby mortgaged and pledged or intended so
to be shall revert to the Company and the estate, right, title and interest of
the Trustee in respect thereof shall cease, determine and become void and the
Trustee shall execute to the Company or its order proper instruments
acknowledging satisfaction of this __________ Supplemental Indenture and
surrendering to the Company or its order all cash and deposited securities, if
any, which shall then be held hereunder in the manner and with the effect
provided in Article 15 of the Original Indenture, but only upon the discharge
of the Original Indenture by the Trustee thereunder pursuant to the provisions
thereof.
ARTICLE VII.
MISCELLANEOUS.
SECTION 1. This __________ Supplemental Indenture is executed and shall
be construed as an indenture supplemental to the Original Indenture and as
provided in the Original Indenture this __________ Supplemental Indenture forms
a part thereof and, except as herein expressly otherwise defined, the use of
terms and expressions herein is in accordance with the definitions, uses and
constructions contained in the Original Indenture. Pursuant to Section 12.01
of the Original Indenture, it is hereby stipulated that the Trustee shall not
be taken impliedly to waive hereby any right it would otherwise have.
SECTION 2. All the covenants and provisions of this __________
Supplemental Indenture and of the Series __ Bonds are for the sole and
exclusive benefit of the parties hereto and the holders of the Bonds, and no
others shall have any legal, equitable or other right, remedy or claim under
or by reason of this __________ Supplemental Indenture or of the Series __
Bonds.
SECTION 3. This __________ Supplemental Indenture is stated to be dated
as of ______, 19__. This is intended as and for a date for reference and for
identification, the actual time of the execution hereof being the date set
forth in the testimonium clause hereof.
SECTION 4. This __________ Supplemental Indenture may be executed in any
number of counterparts, each of which shall be deemed an original; and such
counterparts shall constitute but one and the same instrument, which shall for
all purposes be sufficiently evidenced by any such original counterpart.
SECTION 5. The cover of this __________ Supplemental Indenture and all
article headings, and the table of contents and marginal notes, if any, are
inserted for convenience only, and shall not affect any construction or
interpretation hereof.
<PAGE>
IN WITNESS WHEREOF, The Narragansett Electric Company has caused this
__________ Supplemental Indenture to be executed, and its corporate seal to be
hereto affixed, by its officers thereunto duly authorized, and Rhode Island
Hospital Trust National Bank has caused this __________ Supplemental Indenture
to be executed, and its corporate seal to be hereto affixed, by its officers
thereunto duly authorized, all as of the day and year first above written, but
actually executed on ______, 19__.
THE NARRAGANSETT ELECTRIC COMPANY
DRAFT
By__________________________________________
ATTEST:
______________________
RHODE ISLAND HOSPITAL TRUST NATIONAL BANK
DRAFT
By__________________________________________
ATTEST:
______________________
<PAGE>
SCHEDULE I
----------
<PAGE>
STATE OF RHODE ISLAND )
) SC.
COUNTY OF PROVIDENCE )
At Providence in said County on this ____ day of ______, 19__, before me
personally appeared the above named _________________, to me known and known
by me to be the party executing in his capacity as ____________________ for and
on behalf of The Narragansett Electric Company, a corporation, the foregoing
instrument and acknowledged said instrument by him so executed to be his free
and voluntary act and deed and the free and voluntary act and deed of The
Narragansett Electric Company, a corporation, and that the seal affixed to the
foregoing instrument is the corporate seal of said corporation.
IN WITNESS WHEREOF I have hereunto set my hand and affixed my official
seal this ____ day of ______, 19__.
By_______________________________________
, Notary Public
My commission expires: _____________
<PAGE>
STATE OF RHODE ISLAND )
) SC.
COUNTY OF PROVIDENCE )
At Providence in said County on this ____ day of ______, 19__, before me
personally appeared the above named ________________, to me known and known by
me to be the party executing in his capacity as _____________________ for and
on behalf of Rhode Island Hospital Trust National Bank, a national banking
association, the foregoing instrument and acknowledged said instrument by him
so executed to be his free and voluntary act and deed and the free and
voluntary act and deed of Rhode Island Hospital Trust National Bank, a national
banking association, and that the seal affixed to the foregoing instrument is
the corporate seal of said corporation.
IN WITNESS WHEREOF I have hereunto set my hand and affixed my official
seal this ____ day of ______, 19__.
By_______________________________________
Notary Public
My commission expires: ________________
<PAGE>
I, Thomas G. Robinson, Secretary of The Narragansett Electric Company,
a corporation duly organized under the laws of the State of Rhode Island and
having its principal place of business in Providence, Rhode Island, HEREBY
CERTIFY that at a special meeting of the stockholders of said corporation, duly
called and held at 280 Melrose Street, Providence, Rhode Island, on _________,
19__, by the affirmative action of the holders of all of the outstanding common
stock of said corporation, being the only class of stock outstanding the
holders of which were entitled to vote at said meeting, the following vote was
duly adopted:
VOTED: That the form, terms, and provisions of the Supplemental Indenture
to be dated as of ________, 19__, from the Company, to Rhode Island
Hospital Trust National Bank, as Trustee (hereinafter in these votes
called the __________ Supplemental Indenture), supplementing and
amending the Company's First Mortgage Indenture and Deed of Trust
dated as of September 1, 1944, as supplemented and amended, and
mortgaging, pledging, conveying, assigning, and transferring to said
Bank, as Trustee, the property and rights and interests in property
therein described for the security of the First Mortgage Bonds of the
Company, substantially in the form presented to this meeting, are
hereby approved; and the President and each Vice President are
severally authorized in the name and on behalf of the Company to
execute, under the corporate seal attested by the Secretary or an
Assistant Secretary, to acknowledge and to deliver, in as many
counterparts as the officer so acting may deem advisable, an
instrument in substantially the form of said supplemental indenture,
the execution and delivery of such an instrument by any of said
officers to be conclusive evidence that the same is authorized by
this vote.
I FURTHER CERTIFY that by the affirmative action of all the directors
present, upon a motion duly made and recorded, at a regular meeting of the
Board of Directors of said Company, duly called and held at 280 Melrose Street,
Providence, Rhode Island, on __________, at which meeting a quorum was present
and acting throughout, the following vote was duly adopted:
VOTED: (i) That the form, terms, and provisions of the supplemental
indentures created for each additional series of New Bonds from
the Company, to Rhode Island Hospital Trust National Bank, as
Trustee, supplementing and amending the Company's First Mortgage
Indenture and Deed of Trust dated as of September 1, 1944, as
supplemented and amended, and mortgaging, pledging, conveying,
assigning, and transferring to said Bank, as Trustee, the
property and rights and interests in property therein described
for the security of the First Mortgage Bonds of the Company, a
form of which is presented to this meeting, and hereby ordered
filed as Exhibit " __" with the minutes of the meeting are
hereby approved; and the President and each Vice President are
severally authorized in the name and on behalf of the Company to
execute, under the corporate seal attested by the Secretary or
an Assistant Secretary, to acknowledge and to deliver, in as
many counterparts as the officer so acting may deem advisable,
an instrument in substantially the form of supplemental
indenture (with appropriate insertions of principal amount,
maturity date, interest payment dates, redemption and refunding
provisions, and interest rates, as well as other terms and
conditions for the specific series of New Bonds, and with such
further modifications as the officers executing said
supplemental indenture shall approve, such execution to be
conclusive evidence of such approval); and the execution and
delivery of such an instrument by any of said officers to be
conclusive evidence that the same is authorized by this vote.
<PAGE>
VOTED: (ii) That the Board of Directors considers the additions to the
covenants and agreements of the Indenture, as contained in
the form of the supplemental indentures authorized by the
preceding vote, to be for the protection of the holders of
the Bonds outstanding under the Indenture and for the
protection of the trust estate.
AND I FURTHER CERTIFY that as appears from the records of said
corporation _______________ is Vice President of said corporation and duly
authorized to execute in its name and on its behalf the foregoing __________
Supplemental Indenture, dated as of _________, 19__, that the foregoing
__________ Supplemental Indenture to which this certificate is attached is
substantially in the form presented to and approved at said meetings; that the
foregoing is a true and correct copy of the votes passed at said meetings
respectively as recorded in the records of said corporation and that said votes
remain in full force and effect without alteration.
IN WITNESS WHEREOF I have hereunto subscribed my name as Secretary as
aforesaid and have caused the corporate seal of said corporation to be hereto
affixed this ______ day of _________, 19__.
____________________________________
Thomas G. Robinson, Secretary of
THE NARRAGANSETT ELECTRIC COMPANY
<PAGE>
DRAFT
[Narragansett Electric Stationery]
Certificate as to Form
First Mortgage Bonds, Series __
__________ Supplemental Indenture
Original Issue Date:__________
[DATE]
Rhode Island Hospital Trust National Bank
(Successor by merger to Rhode Island
Hospital Trust Company)
Trustee under First Mortgage Indenture
and Deed of Trust, dated as of September 1, 1944
as supplemented (the Indenture, including the
__________ Supplemental Indenture dated as of
______________________
One Hospital Trust Plaza
Providence, Rhode Island 02903
Dear Trustee:
The undersigned, _____________ of the Narragansett Electric Company (the
Company), in connection with the certification and delivery of the Company's
First Mortgage Bonds, Series __ (the New Bonds), hereby establishes the
following terms and conditions pursuant to Section 1 of Article III of the
__________ Supplemental Indenture for a new issue thereof:
Issue Designation: ________________________
Principal Amount: ________________________
Date of Maturity: ________________________
Interest Rate: ________________________
Interest Payment Months: ________________________
Normal Record Months: ________________________
Certificated or Book-Entry Only: ________________________
Bond Form: ________________________
Distinguishing Letters/Numbers: ________________________
Date of First Certification
and Delivery: ________________________
Original Issue Discount: ________, if applicable,
<PAGE>
Total Amount of Discount: ________________________
Date of First Interest Payment: ________________________
Initial Price to Public: ________________________
(percentage)
Restrictions on Call: ________________________
Restrictions on Refunding: ________________________
(rate of effective
interest cost)
Provisions for Redemption: ________________________
(years of par call)
Applicable Redemption Prices:
IF REDEEMED AT
ANY TIME IN THE
RESPECTIVE
TWELVE MONTHS'
PERIOD BEGINNING
_____________ 1 GENERAL SPECIAL
IN EACH OF THE REDEMPTION REDEMPTION
FOLLOWING YEARS: PRICES PRICES
--------------- ---------- ----------
I have read the applicable provisions of the Indenture, particularly Section
3.02 of the Indenture and Section 1, Article III of the __________ Supplemental
Indenture, compliance with which is a condition precedent to certification and
delivery of the New Bonds requested by the Company's application and have made
such examination and investigation as in my opinion is necessary to enable me
to express an informed opinion as to the matters covered in this certificate.
In my opinion, there has been compliance with all requirements of the Indenture
with respect to the furnishing of this certificate.
All statements made in this certificate are true with reference to all
pertinent definitions and uses of terms in the Indenture.
Very truly yours,
DRAFT
____________________________________
Name:
Title:
<PAGE>
Exhibit 5 to Form S-3
25 RESEARCH DRIVE, WESTBOROUGH, MASSACHUSETTS 01582
===================================================
July 19, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: The Narragansett Electric Company
First Mortgage Bonds
Dear Commissioners:
We have acted as counsel for The Narragansett 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 $50,000,000 (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 proposed form of supplemental
indenture supplementing the Company's First Mortgage Indenture and Deed of
Trust, 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 State of Rhode Island;
2. That the Company has proper and adequate powers for supplementing
the Indenture; for executing and issuing the New Bonds thereunder; and for
mortgaging under the Indenture the property therein described;
3. That the issuance of the New Bonds has been duly authorized by the
stockholders and 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 Division of Pubic
Utilities and Carriers of the State of Rhode Island authorizing the issuance
of the New Bonds;
<PAGE>
Securities and Exchange Commission
Page Two
July 19, 1995
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; 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 to the qualification of each
supplemental indenture pertaining to the New Bonds under the Trust Indenture
Act of 1939; and
6. That, when each supplemental indenture pertaining to the New Bonds
has been duly executed and delivered, and the New Bonds issued thereunder 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
Assistant General Counsel
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-3 of our report dated February 27, 1995, on our audits of the financial
statements of The Narragansett 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
July 19, 1995
<PAGE>
Exhibit 24-A
to Form S-3
THE NARRAGANSETT ELECTRIC COMPANY
__________________________________
Certified Copy of Vote re:
First Mortgage Bonds.
___________________________
VOTED: That this Company execute one or more registration
______ statements under the Securities Act of 1933 with reference to the
proposed issue and sale of up to $50 million of the New Bonds;
that the officers of this Company, and Robert King Wulff, and
Craig L. Eaton, 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 statement and to execute and
file such amendment or supplement 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, the principal accounting officer, and the
Directors of the Company are authorized to execute such
registration statement and any such amendment or supplement
thereto.
I, Thomas G. Robinson, hereby certify that I am Secretary of The
Narragansett Electric Company; that the foregoing is a true copy from the
records of votes duly passed at a meeting of the Directors of said Company duly
held March 28, 1995, at which meeting a quorum was present and acting
throughout; and that said vote remains in full force and effect without
alteration.
A T T E S T:
s/ Thomas G. Robinson
_____________________________
Secretary
Date: July 19, 1995
<PAGE>
POWER OF ATTORNEY
=================
Each of the undersigned directors of The Narragansett Electric
Company (the Company), individually as a director of the Company, hereby
constitutes and appoints Robert King Wulff, John G. Cochrane, and Craig L.
Eaton, 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 $50 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 28th day of March, 1995.
Joan T. Bok John W. Rowe
s/Stephen A. Cardi s/Richard P. Sergel
Stephen A. Cardi Richard P. Sergel
s/Frances H. Gammell s/William E. Trueheart
Frances H. Gammell William E. Trueheart
s/Joseph J. Kirby s/John A. Wilson, Jr.
Joseph J. Kirby John A. Wilson, Jr.
s/Robert L. McCabe
Robert L. McCabe
<PAGE>
SECURITIES ACT OF 1933 FILE NO: (IF APPLICATION TO DETERMINE
ELIGIBILITY OF TRUSTEE FOR DELAYED OFFERING PURSUANT TO SECTION
305(b)(2)
_________________________________________________________________
________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
____________________________
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION 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) _______
_______________________________
RHODE ISLAND HOSPITAL TRUST NATIONAL BANK
(Exact name of Trustee as specified in its charter)
05-0318903
(I.R.S. Employer Identification No.)
One Hospital Trust Plaza, Providence, RI 02903
(Address of principal executive offices) (Zip Code)
c/o The First National Bank of Boston
Gary A. Spiess, Cashier and General Counsel
100 Federal Street, 24th Floor,
Boston, Massachusetts 02110 (617)434-2870
_______________________
The Narragansett Electric Company
(Exact name of obligor as specified in its charter)
Rhode Island 05-0187805
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
280 Melrose Street, Providence, RI 02901 (Zip Code)
(Address of principal executive offices)
First Mortgage Bonds, Series , %, Due
(Title of Indenture Securities)
___________________________________________________________
___________________________________________________________
<PAGE>
1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Comptroller of the Currency of the United States,
Washington D.C.
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.
2. Affiliations with Obligor and Underwriters.
If the obligor or any underwriter for the obligor is an
affiliate of the trustee, describe each such affiliation.
None with respect to the Trustee.
(See Notes on page 2)
None with respect to Bank of Boston Corporation.
3. through 15. Not applicable
16. List of Exhibits.
Exhibits identified in parentheses below are incorporated herein by
reference as exhibits hereto.
List below all exhibits filed as part of this statement of
eligibility and qualification.
1. A copy of the articles of association of the trustee as now in
effect.
A certified copy of the Articles of Association of the trustee.
(Exhibit 1 to Form T-1, Registration Statement No. 33-2344).
2. A copy of the certificate of authority of the trustee to
commence business, if not contained in the articles of
association.
(a) A copy of the certificate of the Comptroller of the
Currency dated May 26, 1969, evidencing authority of
Rhode Island Hospital Trust National Bank to commence
business. (Exhibit 2 to Form T-1, Registration Statement
No. 2-36398).
<PAGE>
(b) A copy of the certificate of said Comptroller dated May
26, 1969, evidencing approval of the merger of Rhode
Island Hospital Trust Company into Rhode Island Hospital
Trust National Bank effective as of the close of business
May 29, 1969. (Exhibit 2 to form T-1, Registration
Statement No. 2-36398).
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 certificate of said Comptroller dated May 26, 1969,
evidencing authority of Rhode Island Hospital Trust National
Bank to exercise corporate trust powers (Exhibit 3 to form T-1,
Registration Statement No. 2-36398).
4. A copy of the existing by-laws of the trustee, or instruments
corresponding thereto.
A copy of the By-Laws of the trustee is attached hereto and made
a part hereof.
5. The consent of the trustee required by Section 321(b) of the
Act.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto and made a part hereof.
6. 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 requirement of its supervising or
examining authority is annexed hereto as Exhibit 7 and made a part
hereof.
<PAGE>
Exhibit 4
BY-LAWS
OF
RHODE ISLAND HOSPITAL TRUST NATIONAL BANK
_________________
Revised to April 29, 1992
<PAGE>
BY-LAWS
OF
RHODE ISLAND HOSPITAL TRUST NATIONAL BANK
_______________________
TABLE OF CONTENTS
ARTICLE I
MEETINGS OF SHAREHOLDERS
PAGE
_____
SECTION 1. Place of Meeting............................1
SECTION 2. Annual Meetings.............................1
SECTION 3. Special Meetings............................2
SECTION 4. Notices of Meetings.........................2
SECTION 5. Quorum......................................2
SECTION 6. Organization................................2
SECTION 7. Voting......................................2
SECTION 8. Action Without a Meeting....................3
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. General Powers..............................3
SECTION 2. Number, Qualification, Election and Term of
Office......................................3
SECTION 3. Quorum and Manner of Acting.................4
SECTION 4. Organization Meeting........................4
SECTION 5. Regular Meetings............................4
SECTION 6. Special Meetings............................5
SECTION 7. Notices of Meetings.........................5
SECTION 8. Organization of Meetings....................5
SECTION 9. Order of Business...........................5
SECTION 10. Resignation................................ 6
SECTION 11. Vacancies...................................6
SECTION 12. Fees and Expenses of Directors..............6
SECTION 13. Validity of Acts of Directors...............6
SECTION 14. Action by Directors Without a Meeting.......6
SECTION 15. Transactions with the Bank..................7
<PAGE>
ARTICLE III
COMMITTEES
PAGE
_____
SECTION 1. Executive Committee..........................7
SECTION 2 Audit Committee..............................8
SECTION 3. Trust Committee..............................9
SECTION 4. Community Investment Committee..............10
SECTION 5. Other Committees............................10
SECTION 6. Changes in Committee Membership and
Filling Vacancies...........................11
SECTION 7. Records of Committee Action and
Board of Directors' Approval................11
SECTION 8. Committee Proceedings.......................11
SECTION 9. Action of Committees without a Meeting......11
SECTION 10. General Authority of Committees.............11
ARTICLE IV
OFFICERS
SECTION 1. Titles and Qualifications...................12
SECTION 2. Appointment.................................12
SECTION 3. Terms of Office.............................13
SECTION 4. Duties, Fidelity Bond.......................13
SECTION 5. The Chairman of the Board...................13
SECTION 6. The President...............................13
SECTION 7. The Vice Chairmen...........................13
SECTION 8. Executive Officers..........................14
SECTION 9. Senior Officers.............................14
SECTION 10. The Cashier and the Secretary of the Board
of Directors................................14
SECTION 11. Assistant Cashiers and Assistant
Secretaries.................................14
SECTION 12. The Authorized Officers.....................15
SECTION 13. Other Officers..............................15
SECTION 14. Resignation.................................15
SECTION 15. Designated Officer..........................15
ARTICLE V
CONVEYANCE OF REAL PROPERTY, TRANSFER OF PERSONAL PROPERTY, AND
EXECUTION AND DELIVERY OF DEEDS, LEASES, CONTRACTS, ETC.
<PAGE>
ARTICLE VI
STOCK CERTIFICATES AND TRANSFER OF STOCK
PAGE
_____
SECTION 1. Certificates of Stock.........................16
SECTION 2. Transfer of Stock.............................16
ARTICLE VII
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
ARTICLE VIII
AMENDMENTS
ARTICLE IX
GENERAL PROVISIONS
SECTION 1. State Boards..................................17
SECTION 2. Voting of Securities..........................18
SECTION 3. Powers of Attorney............................18
SECTION 4. Minute Book; By-Laws..........................19
SECTION 5. Seal..........................................19
SECTION 6. Fiscal Year...................................19
SECTION 7. Waiver of Notice..............................19
ARTICLE X
EMERGENCY BY-LAWS
SECTION 1. Effective Period..............................20
SECTION 2. Meetings of the Board of Directors............20
SECTION 3. Emergency Location of Head Office.............20
SECTION 4. Preservation of Continuity of Management......20
SECTION 5. Immunity......................................20
SECTION 6. Amendments of Emergency By-Laws...............20
<PAGE>
BY-LAWS
OF
RHODE ISLAND HOSPITAL TRUST NATIONAL BANK
ARTICLE I
MEETINGS OF SHAREHOLDERS
Section 1. Place of Meeting. The principal place of business
of the Bank shall be at its Head Office in Providence, Rhode
Island. All meetings of the shareholders of the Bank shall be held
at the Head Office of Bank of Boston Corporation (the
"Corporation") in the City of Boston, Suffolk County, Commonwealth
of Massachusetts or at such other place as the Board of Directors
may designate. If, when any meeting is convened, the presiding
officer deems the place designated therefor to be inadequate, he or
she may adjourn the meeting for such period of time on the same day
as he or she may deem reasonably necessary to permit the meeting to
be reconvened at some adequate and convenient place located in the
same city. The presiding officer in such event shall announce the
adjournment and time and place of reconvening.
Section 2. Annual Meetings. The regular annual meeting of
the shareholders for the election of directors and for the
transaction of such other business as properly may come before the
meeting shall be held on the fourth Wednesday of April of each year
(or, if that day would not be a business day (as hereinafter
defined) in the City of Boston, then on the first following such
business day), or such other date as determined by the Board of
Directors, at eight-thirty in the forenoon unless another hour
shall have been designated by the vote of the Board of Directors.
If no election of directors is held on either of the days herein
designated for the annual meeting of shareholders or any
adjournment of such meeting occurs, an election shall be held on
some subsequent day within 60 days thereafter and notice thereof
shall be given in accordance with the provisions of Section 75 of
Title 12 of the United States Code. All elections shall be held in
accordance with such regulations as may be prescribed by the Board
of Directors, not inconsistent with law and these By-Laws. As used
in these By-Laws, the expression "business day" means a day other
than a day which, at a particular place, is a public holiday or a
day other than a day on which banking institutions at such place
are allowed or required, by law or otherwise, to remain closed.
<PAGE>
Section 3. Special Meetings. Except as otherwise provided by
law, special meetings of the shareholders may be called for any
purpose at any time by the Board of Directors, the Chairman of the
Board, the President or by the holder or holders of at least one-
tenth of the then outstanding shares.
Section 4. Notices of Meetings. Except as otherwise provided
by law, written notice of the time, place and purpose of each
meeting of the shareholders shall be mailed by the Cashier (or any
other person authorized to do so by law, the Board of Directors or
these By-Laws), by first-class mail, postage prepaid, or delivered
at least 10 days before the day on which the meeting is to be held,
to each shareholder of record entitled to vote at such meeting at
such shareholder's address as shown on the stock books of the Bank.
Such further notice shall be given by publication or otherwise as
may be required by law or as may be ordered by the Board of
Directors. Any such notice may be waived in writing by any
shareholder.
Section 5. Quorum. Except as otherwise provided by law or
these By-Laws, all the business of a duly convened meeting of
shareholders may be transacted by the shareholders present in
person or represented by proxy owning of record a majority of the
outstanding shares entitled to vote thereat.
Section 6. Organization. At every meeting of the
shareholders, the Chairman of the Board or the President or, in
their absence, any Vice Chairman of the Board or, in the absence of
all such officers, a person chosen by majority vote of the
shareholders entitled to vote thereat present in person or
represented by proxy shall act as chairman; and the Cashier or, in
his or her absence, an Assistant Secretary of the Board of
Directors or, in their absence, any person present appointed by the
chairman shall act as secretary of the meeting.
Section 7. Voting. Save for the statutory right of
shareholders to cumulate their votes for the election of directors
as provided in Section 61 of Title 12 of the United States Code, in
deciding all questions at meetings of the shareholders, each
shareholder, except such shareholders as are prohibited from voting
under the provisions of said Section 61, shall be entitled to one
vote for each share of stock registered in the name of such
shareholder on the books of the Bank. Any vote on stock may be
given by the shareholder entitled thereto, either in person or by
proxy appointed by an instrument in writing, subscribed by such
shareholder or by such shareholder's attorney-in-fact thereunto
authorized and delivered to the secretary of the meeting, provided,
however, that no officer or employee of the Bank may act as proxy.
A proxy shall be valid for only one meeting, to be specified
therein, and all adjournments of such meeting. A majority of the
votes cast shall decide each matter submitted to the shareholders
at any meeting except in cases where a larger vote is required by
<PAGE>
law. The election of directors at any meeting of the shareholders
shall be by ballot. Except as otherwise provided by law or these
By-Laws, the vote on any other matter considered at a meeting of
the shareholders may be taken by show of hands or by voice vote
unless any shareholder present in person or represented by proxy
and entitled to vote thereon shall demand a vote by ballot, in
which case such vote by ballot shall immediately be taken.
Section 8. Action Without A Meeting. Any action which may be
taken by shareholders may be taken without a meeting if all
shareholders entitled to vote on the matter consent to the action
by a writing filed with the records of the meetings of
shareholders. Any such consent shall be treated for all purposes
as a vote at a meeting and may be described as such in any
certificate or other document filed with or furnished to any
official, governmental agency or other person having dealings with
the Bank.
ARTICLE II
BOARD OF DIRECTORS
Section 1. General Powers. The property and business of the
Bank shall be managed by the Board of Directors which may exercise
all corporate powers of the Bank except such powers as are by law
or the Articles of Association or these By-Laws conferred upon or
reserved to the shareholders.
Section 2. Number, Qualification, Election and Term of
Office. The number of directors shall not be less than five nor
more than twenty-five. Within those limits, the number of
directors shall be determined from time to time by vote of a
majority of the entire Board or by resolution of the shareholders
at any meeting at which directors are to be elected; provided,
however, that no director shall be required to vacate office by
reason only of a reduction in the number comprising the entire
Board of Directors made pursuant to this Section. Each director
must during his or her whole term of office have the qualifications
prescribed in Section 72 of Title 12 of the United States Code.
Except in the case of directors appointed by the Board of Directors
to fill vacancies pursuant to Section II of this Article, directors
shall be elected by ballot at the regular annual meeting of the
shareholders; provided that in the event of failure to hold such
meeting or to hold such election at such meeting, such election
shall be held within 60 days of the day fixed as prescribed by
Section 75 of Title 12 of the United States Code. Directors,
except those appointed by the Board of Directors to fill vacancies,
shall be elected as provided in Section 61 of Title 12 of the
United States Code. Each director shall hold office until the
annual meeting next following the date of his or her election or
<PAGE>
appointment and until the election and qualification of his or her
successor or until his or her earlier resignation, death or
disqualification. As used in these By-Laws, the expression "entire
Board" means the number of directors in office at a particular
time.
Section 3. Quorum and Manner of Acting. A majority of the
number of directors in office shall constitute a quorum for the
transaction of business at any meeting, and except as otherwise
provided by law or these By-Laws, the act of a majority of the
directors present at any meeting at which a quorum is present shall
be the act of the Board of Directors. Directors shall be deemed
present at a meeting when present in person or by means of a
conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each
other at the same time. In the absence of a quorum, a majority of
the directors present, or if only two directors are present, either
director, or the sole director present, may adjourn any meeting to
a day certain or from time to time until a quorum is present. At
any adjourned meeting at which a quorum is present any business may
be transacted which might have been transacted if the meeting had
been held when originally called. A director may not vote or
otherwise act by proxy.
Section 4. Organization Meeting. The Board of Directors
elected at any meeting of the shareholders shall meet in the Board
Room at the Head Office of the Corporation or such other locations
as the Directors shall determine immediately after the final
adjournment of such meeting or as soon as practicable (but not more
than 30 days) thereafter for purposes of taking the oath prescribed
by law, organization, the election of officers for the succeeding
year and the transaction of other business.
Section 5. Regular Meetings. Regular meetings of the Board
of Directors (other than the organization meeting of the Board of
Directors to be held in April of each year immediately following
the annual election of directors) shall be held at such place and
at such time, as shall be designated in the notice of meeting given
to the directors as provided in these By-Laws. If the day
designated for a regular meeting of the Board of Directors would
not be a business day (as defined in Section 2 of Article I of
these By-Laws) at the place where the meeting is to be held, then
the meeting shall be held on such other business day as the Board
of Directors may have previously designated, or if no such day
shall have been designated, the meeting shall be held on the first
business day at such place preceding the date originally designated
for such meeting. Any regular meeting of the Board of Directors
may be dispensed with by an appropriate vote passed by the Board of
Directors at any prior meeting.
<PAGE>
Section 6. Special Meetings. Special meetings of the Board
of Directors may be called by the Chairman of the Board or the
President and shall be called by the Cashier at the written request
of three or more directors. A special meeting of the Board of
Directors shall be held at such place and time as may be designated
in the call of the meeting.
Section 7. Notices of Meetings. Notice of the time and place
of each regular or special meeting of the Board of Directors shall
be given to each director at least 48 hours before such meeting if
delivered personally or sent by mail or at least 24 hours before
such meeting if given by telephone, telex, panafax or other
electronic means. Notice by mail shall be deemed to be given when
deposited in the post office or a letter box in postage-paid sealed
wrappers or when transmitted by telegraph, telex or panafax and
addressed separately to each director at his or her address
appearing on the records of the Bank. Notices of meetings of the
Board of Directors need not include a statement of the business to
be transacted thereat unless required by law or these By-Laws. No
notice of any adjourned meeting of the Board of Directors need be
given other than by announcement at the session of the meeting
which is being adjourned. Failure to give any such notice of any
meeting, or any irregularity in the notice thereof, shall not
invalidate any proceedings taken thereat if a quorum is present and
if all absent directors, either before or after the meeting, shall
sign a waiver of notice or a consent to the holding of such meeting
or an approval of the minutes thereof. All such waivers, consents
and approvals shall be filed with the minutes of the meeting to
which they relate.
Section 8. Organization of Meetings. At each meeting of the
Board of Directors, the Chairman of the Board or the President or
in their absence, any Vice Chairman of the Board, or in the absence
of all such officers, a director chosen by a majority of the
directors present shall act as chairman. The Cashier or, in his or
her absence, any person appointed by the chairman, shall act as
secretary of the meeting and keep minutes of the proceedings. The
secretary of the meeting need not be sworn.
Section 9. Order of Business. At all meetings of the Board
of Directors, business shall be transacted in the order determined
by the chairman of the meeting, subject to approval of the
directors present thereat.
Section 10. Resignation. Any director may resign at any time
by giving written notice to the Chairman of the Board, the
President or the Cashier. The resignation of any director shall
take effect upon its receipt or on any later date specified
therein; and unless otherwise specified therein, the acceptance of
such resignation shall not be required to make it effective.
<PAGE>
Section 11. Vacancies The Board of Directors may act
notwithstanding a vacancy or vacancies in its membership; but if
the office of any director becomes vacant by reason of resignation,
death or any other circumstance (including a vacancy resulting from
an enlargement of the Board of Directors), the remaining directors
in office, although more or less than a quorum, by a majority vote
of such remaining directors may appoint a successor or one or more
additional directors, as the case may be, each of whom shall hold
office until the next annual election of directors and until the
election and qualification his or her successor, or until his or
her earlier resignation, death or disqualification.
Section 12. Fees and Expenses of Directors. Each director who
is not an officer and employee of the Corporation, the Bank or any
of their respective affiliates may be paid such fees for his or her
services and for attendance at meetings of the Board of Directors
or of any committee thereof as the Board of Directors may determine
from time to time to be appropriate. Such fees may be payable
currently or on a deferred basis. In addition, each such director
shall be entitled to reimbursement for reasonable expenses incurred
by him or her in order to attend meetings of the Board of Directors
and committees thereof or otherwise in connection with the
performance of his or her duties as a director.
Section 13. Validity of Acts of Directors. All action taken
by any meeting of the Board of Directors or a committee of the
directors or by any person acting as a director shall,
notwithstanding that it shall afterwards be discovered that there
was some defect in the election or appointment or continuance in
office of any such director or person acting as a director, or that
they or any of them were disqualified, or had vacated office, or
were not entitled to vote in relation to the matter acting upon, be
as valid as if every such person had been duly elected or
appointed, had duly continued in office and was qualified to be a
director and entitled to vote on such matter.
Section 14. Action by Directors Without a Meeting. Unless
otherwise restricted by the Articles of Association or these By-
Laws, any action required or permitted to be taken at any meeting
of the Board of Directors or of any committee thereof may be taken
without a meeting, if a written consent thereto is signed by all
members of the Board of Directors or of such committee, as the case
may be, and such written consent is filed with the minutes of
proceedings of the Board of Directors or of such committee. Any
such consent shall be treated for all purposes as a vote duly
adopted by the Board of Directors or such committee at a meeting
and may be described as such in any certificate or other document
filed with or furnished to any public official, governmental agency
or other person having dealings with the Bank.
<PAGE>
Section 15. Transactions With the Bank. No contract or other
transaction between the Bank and one or more of its directors or
between the Bank or any other corporation, partnership, voluntary
association, trust or other organization of which any of its
directors is a director or officer or in which he or she has any
financial interest shall be void or voidable for this reason or
because any such director is present at or participates in the
meeting of the Board of Directors or of the committee thereof which
authorizes the contract or transactions or because his or her vote
is counted for such purpose (a) if the material facts as to the
contract or transaction and as to his or her relationship or
interest are disclosed to the Board of Directors or such committee
and the Board of Directors or such committee in good faith
authorizes the contract or transaction by the affirmative votes of
a majority of disinterested directors even though the disinterested
directors be less than a quorum or (b) if the material facts as to
the contract or transaction and as to his or her relationship or
interest are disclosed or are known to the shareholders entitled to
vote thereon and the contract or transaction is specifically
approved in good faith by vote of the shareholders or (c) if the
contract or transaction is fair and reasonable as to the Bank as of
the time it is authorized, approved or ratified by the Board of
Directors, such committee or the shareholders. Common or
interested directors may be counted in determining the presence of
a quorum at a meeting of the Board of Directors or of a committee
thereof which authorizes the contract or transaction.
ARTICLE III
COMMITTEES
Section 1. Executive Committee. There shall be an Executive
Committee composed of not less than two and not more than seven
directors which shall include the Chairman of the Board, the
President and such number of other directors, as the Board of
Directors may appoint from time to time by resolution passed by the
vote of a majority of the entire Board. The Board of Directors may
also, from time to time, by similar resolution, appoint one or more
alternate members of the Executive Committee who may attend and act
in the place of any absent or disqualified member or members of the
Executive Committee at any meeting thereof. Subject to the
provisions of Section 6 of this Article III, the term of office of
any appointed member or alternate member of the Executive Committee
shall expire on the date specified in the resolution of appointment
or any earlier date on which he or she ceases to be a director.
Any director who has served as a member or alternate member of the
Executive Committee shall be eligible for reappointment to a new
term of office on the Committee.
<PAGE>
During the intervals between meetings of the Board of
Directors, the Executive Committee, unless expressly provided
otherwise by law or these By-laws, shall have and may exercise all
the authority of the Board of Directors, except that it shall not
be entitled to
(i) change the principal office of the Bank;
(ii) amend or repeal these By-Laws or to adopt new by-
laws;
(iii) issue stock;
(iv) establish and designate series of stock or to fix
and determine the relative rights and preferences
of any series of stock;
(v) elect officers required by law to be elected by
the shareholders or directors or to fill
vacancies in any such offices;
(vi) change the number of the Board of Directors or to
fill vacancies in the Board of Directors;
(vii) fix the remuneration of any director for serving
on the Board of Directors or any Committee
thereof or for services to the Bank in any other
capacity; or
(viii) authorize the payment of any dividend or
distribution to shareholders.
The action taken by the Executive Committee at each meeting
shall be reported to the Board of Directors and shall be subject to
alteration or repeal by the latter, provided that no alteration or
repeal by the Board of Directors of action taken by the Executive
Committee shall prejudice the rights or acts of any third person.
The Executive Committee may hold meetings at such times and
places and upon such notice as it may from time to time determine.
Other meetings of the Executive Committee may be called at any time
by the Chairman of the Board or by the President or by any two
members of the Executive Committee or by the Secretary of the Board
of Directors at the written request of the person or persons
entitled to call such a meeting.
Section 2. Audit Committee. There shall be an Audit
Committee composed of such number of directors (not less than two)
and such additional non-directors as the Board of Directors, by
resolution passed by the vote of a majority of the entire Board,
may appoint.
<PAGE>
The duties of the Audit Committee shall be
(a) at least once in each calendar year and within 15
months of the last occasion, to make, or cause to be made by
independent accountants recommended by the Committee, approved
by the Board of Directors and responsible only to the Board of
Directors, a suitable examination and evaluation of the
practices and internal accounting, operating and
administrative controls being employed by the Bank in the
performance of its fiduciary functions in order to ascertain,
since the last such review and evaluation, whether such
fiduciary functions have been administered in accordance with
applicable law and rules and regulations thereunder and sound
fiduciary principles;
(b) to make, or cause to be made by the independent
accountants, such other examinations or audits of the affairs
and operations of the Bank or of any one or more of its
subsidiaries, of such scope, with such objects and at such
times or intervals as the Committee may determine in its
discretion or as may be ordered by the Board of Directors or
the Executive Committee;
(c) to submit to the Board of Directors as soon as may be
convenient following the conclusion of each examination or
audit made by or at the direction of the Committee, a written
report relative thereto; and
(d) to oversee the activities of the Bank's auditor and
his or her staff.
A notation with respect to each report made to the Board of
Directors by the Audit Committee and of the action taken thereon by
the Board of Directors shall be made in the minutes of the latter.
Section 3. Trust Committee. The Board of Directors shall
appoint a Trust Committee composed of not less than one director
and one officer of the Bank, and of such additional members who are
officers of the Corporation or its subsidiaries or are members of
the Bank's State Board, or both, as the Board of Directors may
determine.
The functions of the Trust Committee shall be
(a) to review and approve all general policies pertaining
to the exercise of fiduciary powers by the Bank and to oversee
the exercise of the fiduciary powers and policies of the Bank;
<PAGE>
(b) to discharge any other duties or responsibilities
specifically delegated to the Committee by the Board of
Directors; and
(c) to make written reports to the Board of Directors
from time to time of its findings and recommendations.
In order to assist in the administration of fiduciary powers,
the Trust Committee may from time to time appoint or revoke the
appointment of one or more committees responsible only to the Trust
Committee composed of one or more directors or officers of the
Bank, the Corporation or its subsidiaries or members of the Bank's
State Board or both. Any such committee shall perform such
functions as the Trust Committee may assign to it.
Section 4. Community Investment Committee. The Board of
Directors may from time to time appoint a Community Investment
Committee composed of not less than two directors and such other
non-directors who are officers of the Bank, the Corporation or its
subsidiaries, or who are members of the Bank's State Board, as the
Board of Directors may determine.
The duties of the Committee shall be from time to time to
review the policies established by the Bank relating to the
discharge by the Bank of its responsibilities under the Community
Reinvestment Act of 1977 (Section 2901 et seq. of Title 12 of the
United States Code) and regulations thereunder, or any other
applicable Federal or state law or regulations thereunder relating
to substantially the same subject as the said Community
Reinvestment Act of 1977, and to evaluate such policies and the
measures being taken by the Bank to implement them and any related
matters and to make reports to the Board of Directors from time to
time of its findings and recommendations.
Section 5. Other Committees. The Board of Directors may,
from time to time, by resolution passed by the vote of a majority
of the entire Board, constitute such other standing or special
committees made up of such directors, officers or other persons as
it deems desirable and may dissolve any such committee by like
resolution at its pleasure. Each such committee shall have such
authority and perform such duties not inconsistent with law and
these By-Laws as may be assigned to it by the Board of Directors.
Vacancies in any such committee shall be filled by resolution
passed by the vote of a majority of the entire Board. No such
committee shall be granted or shall exercise any authority which
shall have been delegated to another committee by these By-Laws or
by resolution of the Board of Directors or which, in the absence of
such delegation, could not be exercised by the Executive Committee.
<PAGE>
Section 6. Changes in Committee Membership and Filling of
Vacancies. The Board of Directors by resolution passed by the vote
of a majority of the entire Board may at any time or from time to
time (a) increase or reduce the number of members of any committee,
within any applicable limits imposed by these By-Laws, (b) remove
any member (except a member ex officio) from any committee, (c)
appoint a director or other eligible person to fill a vacancy in,
or to be an additional member of, any committee, and (d) discharge
any committee except a standing committee established pursuant to
Section 2 through 4 of this Article III.
Section 7. Records of Committee Action and Board of
Directors' Approval. Each committee appointed by the Board of
Directors shall keep a record of its acts and proceedings which
shall be open for inspection at any time by any director. Such
records shall be submitted to the Board of Directors at such time
or times as may be required by these By-Laws or as may be requested
by the Board of Directors. Failure to submit such record, or
failure of the Board of Directors to approve any action indicated
therein, shall not invalidate any action otherwise lawful, to the
extent that it has been carried out by the Bank prior to the time
the record of such action was, or should have been, submitted to
the Board of Directors as herein provided. The action of the Board
of Directors at any meeting with respect to action taken by any
standing committee shall be recorded in the minutes of the meeting.
Section 8. Committee Proceedings. In the absence of specific
provisions in these By-Laws or regulations imposed by the Board of
Directors, a committee may meet and adjourn and otherwise regulate
its meetings as it thinks fit. A committee may appoint a chairman
of its meetings if none has been appointed by the Board of
Directors or is designated elsewhere in this Article III. If no
such chairman has been appointed, or if at any meeting the chairman
is not present within five minutes after the time appointed for the
holding of the meeting, the members present may choose one of their
number to be chairman of the meeting. A quorum for the transaction
of business at any meeting of a committee shall be a majority of
the fixed number of members thereof for the time being (whether or
not any seat is vacant) unless a different rule shall have been
adopted by a resolution passed by the vote of a majority of the
Board of Directors. A resolution passed by the vote of a majority
of the members present at the time of voting if a quorum is present
shall be the act of the committee. In the case of an equality of
votes the Chairman shall have a second or casting vote. A
committee cannot sub-delegate any of its powers or duties within
its membership or to any other person or persons unless authorized
to do so by the Board of Directors or these By-Laws. Committee
members cannot vote by proxy.
<PAGE>
Section 9. Action of Committees Without a Meeting. Any
action required or permitted to be taken by a committee of the
Board of Directors may be taken without a meeting if all members of
the committee consent thereto in writing either before or after the
action is taken and the writing or writings evidencing such consent
are filed with the minutes of proceedings of such committee. For
all purposes of these By-Laws, any such consent shall constitute a
resolution duly passed by such committee.
Section 10. General Authority of Committees. Any committee
appointed by the Board of Directors pursuant to this Article III
shall be at liberty
(a) to meet and confer with employees of the Bank, the
Corporation and their respective subsidiaries on all matters
relating to the work of the Committee which fall within the
purview of such employees and to be informed by any of them as
to the policies, practices, and controls of the division or
department of the Bank or of the subsidiary of the Bank to
which he or she is assigned; and
(b) to examine all reports which are relevant to the work
of the Committee (i) made by the Bank or any of its
subsidiaries to regulatory authorities and (ii) of
examinations of the Bank or any of its subsidiaries made by
regulatory authorities.
ARTICLE IV
Officers
Section 1. Titles and Qualifications. The officers of the
Bank shall be a Chairman of the Board, a President, a Cashier, and
such other officers, including one or more Vice Chairmen of the
Board of Directors, as may be appointed from time to time in
accordance with these By-Laws. Except as otherwise provided by
law, the duties of any two officers may be discharged by the same
person, but the President shall not serve at the same time as
Cashier. The Chairman of the Board, the President and each Vice
Chairman of the Board must be directors.
Section 2. Appointment. The Chairman of the Board, the
President, any Vice Chairman, Executive Officers and other Senior
Officers, including the Cashier, shall be appointed by a majority
vote of the entire Board. The Board of Directors, the Chairman of
the Board or the President may establish grades of Senior Officers
and may prescribe the titles, designations, qualifications and
duties of the Senior Officers except as set forth in Section 9 of
this Article IV. The Chairman of the Board, the President or each
such Senior Officer to whom the Chairman of the Board or the
<PAGE>
President has delegated authority by written delegation filed from
time to time with the Cashier as a part of the official records of
the Bank shall appoint the Authorized Officers of the Bank and
shall establish the grades of the Authorized Officers and prescribe
the titles, designations, qualifications, and duties of the
Authorized Officers so appointed. In addition, there may be from
time to time such other officers or agents of the Bank with such
titles, designations, qualifications, and duties as the Chairman of
the Board, the President or a Senior Officer may see fit to appoint
or employ, provided that such Senior Officer is one to whom the
Chairman of the Board or the President has delegated the authority
to appoint such officers or agents in one or more written
delegations filed from time to time with the Cashier as a part of
the records of the Bank.
Section 3. Terms of Office. Each officer or agent of the
Bank shall occupy his or her office or continue as such officer or
agent only during the pleasure of the Board of Directors or of the
officer who appointed him or her or until such officer or agent
sooner resigns, retires or dies except that the Board of Directors,
the Chairman of the Board or the President may delegate to one or
more of the Senior Officers of the Bank the authority to vary or
terminate the term of office of an officer or agent of the Bank.
The delegation of authority to vary or terminate the term of office
of an officer or agent shall be effected by or in accordance with
the terms of a resolution of the Board of Directors.
Section 4. Duties; Fidelity Bond. The duties and authority
of each officer, employee or other agent of the Bank, other than as
set forth in these By-Laws, shall be prescribed, and may be varied
from time to time, by the body or officer of the Bank which
appointed or employed him or her. Each officer and employee of the
Bank shall be covered by a bond or fidelity insurance approved by
the Board of Directors and conditioned for the honest discharge of
his or her duties as such officer or employee. Such bonds or
insurance may be in individual, schedule or blanket form and the
premiums therefor shall be paid by the Bank.
Section 5. The Chairman of the Board. The Chairman of the
Board shall when present, preside at all meetings of the Board of
Directors and of the shareholders. He or she shall have such
powers and duties as usually are incident to the Office of him or
her by law, the Articles of Association and these By-Laws, or as
may be assigned by the Board of Directors. The Chairman of the
Board shall be a member of the Executive Committee.
Section 6. The President. Except when the Chairman of the
Board is serving as such, the President shall preside at all
meetings of the Board of Directors and the shareholders. The
President shall be subject to the direction of the Board of
Directors and of the Chairman of the Board under whose direct
<PAGE>
supervision he or she shall be. The President shall perform such
duties as may be imposed on him or her by law, the Articles of
Association and these By-Laws or as may be assigned to him or her
by the Board of Directors or the Chairman of the Board. He or she
shall have such other powers and duties as are usually incident to
the Office of President. The President shall be a member of the
Executive Committee.
Section 7. The Vice Chairmen. Each Vice Chairman shall
perform the duties imposed upon him or her by these By-Laws or
assigned to him or her by the Board of Directors, the Executive
Committee, the Chairman of the Board or the President. The Vice
Chairmen shall be senior in rank to the Senior Officers other than
the Chairman of the Board and the President. In the absence of the
Chairman of the Board and the President, a Vice Chairman of the
Board of Directors, if one is in office, shall preside at all
meetings of the shareholders, of the Board of Directors, and of the
Executive Committee held during such absence.
Section 8. Executive Officers. The Board of Directors may
designate from time to time certain officers, including the
President, the Vice Chairmen or other persons as the Executive
Officers of the Bank. Executive Officers shall be charged with the
major policy-making functions of the Bank.
Section 9. Senior Officers. The Chairman of the Board, the
President, the Vice Chairmen, the Cashier, and such other officers
as may from time to time be designated as Senior Officers by the
Board of Directors shall be the Senior Officers. Each Senior
Officer shall perform the duties imposed on him or he by these By-
Laws and such duties as may be assigned to him or her by the Board
of Directors, the Executive Committee, the Chairman of the Board,
the President or the Senior Officer to whom he or she reports.
Each Senior Officer shall bear such title as the Board of
Directors, the Chairman of the Board or the President may from time
to time prescribe.
Section 10. The Cashier and the Secretary of the Board of
Directors. The Cashier shall be the principal recording officer of
the Bank. The Cashier shall be ex officio, the Secretary of the
Board of Directors and of the Executive Committee and of the Audit
Committee. The Cashier shall attend and keep minutes of the
proceedings at all meetings of the shareholders, the Board of
Directors, the Executive Committee and the Audit Committee and of
each other committee appointed by the Board of Directors which
shall not have appointed any other person to serve as its
secretary. As required by law, these By-Laws, the Board of
Directors or the Executive Committee, the Cashier shall give or
cause to be given notice to the shareholders of each annual and
special meeting and to the directors of each regular and special
meeting of the Board of Directors, except the organization meeting
<PAGE>
held immediately after the regular annual meeting of the
shareholders. The Cashier shall have charge of the corporate seal
and minute books of the Bank and of such other corporate records,
books and papers as the Board of Directors or the Executive
Committee may order to be kept in his or her custody or under his
or her control. The Cashier shall have authority to affix the seal
of the Bank to all instruments executed under seal and to attest
thereto. The Cashier shall perform such other duties as may be
imposed upon him or her by law, the Articles of Association, these
By-Laws, the Board of Directors, any Committee thereof or the
Chairman of the Board, under whose direct supervision he or she
shall be. The Cashier shall be a Senior Officer of the Bank. A
vacancy occurring in the office of Cashier shall be filled promptly
by the Board of Directors.
Section 11. Assistant Cashiers and Assistant Secretaries.
Each Assistant Cashier and Assistant Secretary shall perform such
duties as may be assigned to him or her by the Board of Directors,
the Chairman of the Board, the President or the Cashier, and shall
have the authority to affix the seal of the Bank to all instruments
executed under seal and to attest thereto.
Section 12. The Authorized Officers. Each Authorized Officer
shall bear such title as may be conferred on him or her from time
to time by the Chairman of the Board, the President or the Senior
Officer appointing him or her and shall perform the duties imposed
upon him or her by these By-Laws or assigned to him or her by the
Board of Directors, the Executive Committee, the Chairman of the
Board, the President, the Senior Officer appointing him or her or
the officer to whom he or she reports.
Section 13. Other Officers. The Board of Directors may
appoint such additional officers as from time to time may appear to
the Board of Directors to be required or desirable to transact the
business of the Association. Such officers shall respectively
exercise such powers and perform such duties as pertain to their
several offices, or as may be conferred upon or assigned to them by
the Board of Directors, the Chairman of the Board, or the
President. Assistant Secretaries shall have and exercise such
powers and perform such duties assigned to the Secretary under
these By-Laws. Special Assistant Secretaries, if there be any,
shall have and exercise the power to sign and countersign and the
powers of certification and authentication of certificates of stock
where the Bank acts as Transfer Agent or Registrar.
Section 14. Resignation. Any officer may resign at any time
by giving written notice to the Chairman of the Board, the
President, the Cashier or to the Senior Officer to whom he or she
reports. The resignation of any officer shall take effect upon its
receipt or on any later date specified therein; and unless
<PAGE>
otherwise specified therein, the acceptance of such resignation
shall not be required to make it effective.
Section 15. Designated Officer. The term designated officer
of the Bank, whenever it appears in a resolution or vote of the
Board of Directors of the Bank, shall refer to any one of the
Chairman of the Board, the President, any Vice Chairman of the
Board, any Senior Officer, the Cashier, and any Authorized Officer
unless the resolution or vote of the Board of Directors otherwise
provides.
ARTICLE V
CONVEYANCE OF REAL PROPERTY, TRANSFER OF PERSONAL
PROPERTY, AND EXECUTION AND DELIVERY OF DEEDS, LEASES, CONTRACTS,
ETC.
Authority to convey real property, transfer personal property,
sign, execute and deliver deeds, leases, contracts, notes,
negotiable instruments, agreements and all other written
instruments and documents for and on behalf of this Bank, other
than as set forth in these By-Laws or as prescribed by law, shall
be prescribed by resolutions adopted by the Board of Directors of
the Bank from time to time.
ARTICLE VI
STOCK CERTIFICATES AND TRANSFER OF STOCK
Section 1. Certificates of Stock. Certificates for shares of
the Capital Stock of the Bank shall be in such form as shall be
approved by the Board of Directors. They shall be numbered
consecutively and entered in the stock record book of the Bank as
they are issued. They shall be signed by the Chairman of the Board
or the President and by the Cashier or an Assistant Cashier of the
Bank and shall be sealed with its corporate seal. The seal may be
a facsimile. Where a stock certificate is manually countersigned
by a transfer agent other than the Bank or its employee and by a
registrar other than the Bank or its employee, the signature
thereon of any officer of the Bank may be a facsimile. In case any
person who, as officer, transfer agent or registrar, shall have
signed, or whose facsimile signature shall have been placed on, a
stock certificate shall have ceased to be such officer, transfer
agent or registrar before such certificate shall have been
delivered by the Bank, such certificate may nevertheless be
delivered with the same effect as though such person had not ceased
to be such officer, transfer agent or registrar. Each certificate
shall recite on its face that it is transferable only on the books
<PAGE>
of the Bank and shall meet the requirements of the laws of the
United States. The stock record book and blank stock certificates
shall be kept in the custody and under the control of the Cashier
or of any other officer or agent designated by the Board of
Directors or the Executive Committee.
Section 2. Transfer of Stock. Transfer of shares of the
Capital Stock of the Bank shall be made only on the books of the
Bank subject to the restrictions and provisions of the laws of the
United States, and a transfer book shall be provided in which all
assignments and transfers of shares of the Capital Stock of the
Bank shall be made.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
Indemnification of the Directors and officers against
judgments, fines, settlement payments and expenses paid or incurred
in connection with any claim, action, suit or proceeding, civil,
criminal, administrative or investigative, to which he may be made
a party of with which he may be threatened by reason of his being
or having been a director or officer of the Corporation of any of
subsidiaries shall be as provided in the By-Laws of Bank of Boston
Corporation, the sole stockholder of the Corporation.
ARTICLE VIII
AMENDMENTS
Except as otherwise provided in Article X hereof, these By-
Laws may be repealed or amended, or new by-laws may be adopted by
resolution passed by the vote of a majority of the entire Board at
any regular or special meeting of the Board of Directors, provided
that notice of the proposal to repeal or amend these By-Laws or to
adopt new by-laws was included in the notice of the meeting at
which action on such proposal is taken.
ARTICLE IX
GENERAL PROVISIONS
Section 1. State Boards. Whenever, in the opinion of the
Board of Directors, it shall be advisable to have a state board for
the Bank, or any division or department of the Bank or for any
branch or branches of the Bank, the Board of Directors may, by
resolution passed by the vote of a majority of the entire Board,
<PAGE>
establish such a state board to have such advisory powers and
duties as may be fixed by the Board of Directors. The Board of
Directors, the Chairman of the Board or the President shall have
the power to appoint and to change the membership of any such state
board at any time and fill vacancies therein. The Board of
Directors shall have the power to discontinue the existence of any
such state board at any time. Members of any state board who are
not officers or employees of the Bank, the Corporation or any of
their respective subsidiaries or affiliates shall be paid such
compensation for services on such board as the Board of Directors,
the Chairman of the Board or the President may fix from time to
time. In addition, each such member shall be entitled to
reimbursement for reasonable expenses incurred by him or her to
attend meetings of such a state board or otherwise in connection
with the performance of his or her duties thereon.
Section 2. Voting of Securities. Unless otherwise ordered by
the Board of Directors, the Chairman of the Board, the President,
each Vice Chairman of the Board, each Senior Officer, each
Authorized Officer, and the Cashier, each acting alone, shall have
authority on behalf of the Bank (a) to attend and act and vote in
person for the Bank, and as its duly appointed agent and attorney-
in-fact, at any meeting of the holders of securities or creditors
of any person (as herein defined) any securities of which are owned
or held with power to vote by the Bank or any indebtedness of which
is owed to the Bank, (b) by an instrument in writing, to appoint a
proxy or proxies to attend and act and vote for the Bank at any
such meeting and (c) to execute and deliver in the name and on
behalf of the Bank any notice, demand, protest, receipt, consent or
waiver by the Bank as a holder of securities or a creditor of any
person. Each officer named in this Section and each person
designated by any such officer as a proxy for the Bank shall have
and may exercise at any such meeting for and on behalf of the Bank
any and all rights and powers incident to the ownership of such
securities or indebtedness which an owner would have if personally
present.
As used in this Section and in Section 3 of this Article IX,
the word "person" includes a natural person, a corporation, a
company, a partnership, a voluntary association, a proprietorship,
a trust, an estate, a government (national, state, regional or
local) or a department or agency thereof, and any other form of
legal entity or business organization however denominated and
wherever formed or existing.
Section 3. Powers of Attorney. The Chairman of the Board,
the President, each Vice Chairman of the Board, any Executive Vice
President or any Senior Officer may from time to time and at any
time by power of attorney appoint any person (as herein defined) or
persons to be the attorney or attorneys of the Bank for such
purposes and with such powers, authorities and discretions (not
<PAGE>
exceeding those vested in or exercisable by the Board of Directors)
and for such period and subject to such conditions as the officer
making such appointment may think fit; and any such power of
attorney may contain such provisions for the protection and
convenience of persons dealing with such attorney or attorneys as
the officer making such appointment may think fit and may also
authorize any such attorney to appoint a substitute or substitutes
and to delegate all or any of the powers, authorities and
discretions vested in any such attorney or attorneys, except such
power of substitution (without prejudice to the power of such
attorney or attorneys to exercise concurrently any of the powers
delegated and to revoke or vary any such appointment). The
Chairman of the Board, the President, a Vice Chairman of the Board,
or any Senior Officer may at any time revoke any power of attorney
executed by any of those officers then or formerly in office,
provided that no such revocation shall invalidate any act performed
by the attorney or attorneys (or any substitute or substitutes
appointed thereunder) in the exercise of the powers conferred
hereby between the revocation thereof and the time such revocation
becomes known to the attorney or attorneys, or to any such
substitute or substitutes, and any such power of attorney shall at
all times be conclusively binding on the Bank and its successors in
favor of those parties who have not received notice of the
revocation thereof.
Section 4. Minute Book; By-Laws. The organization papers of
the Bank, the Articles of Association, the returns of the judges of
election and the proceedings of all regular and special meetings of
the shareholders and of the Board of Directors and of committees
appointed by the Board of Directors shall be recorded in
appropriate minute books kept in the custody and under the control
of the Cashier. The minutes of each such meeting shall be signed
by the Cashier or other person appointed to act as secretary of the
meeting. The By-Laws of this Bank and all amendments thereto shall
be kept by the Cashier in a special book entitled "By-Laws of Rhode
Island Hospital Trust National Bank" and shall be open to
inspection by any shareholder during banking hours.
Section 5. Seal. The seal of the Bank shall be substantially
in the following form:
[SEAL]
The seal of the Bank may be affixed to any document executed
in the name of the Bank either by impression or, when authorized by
these By-Laws or by resolution of the Board of Directors or the
Executive Committee, by imprinting, stamping or otherwise producing
thereof a facsimile, and may be attested by the Cashier or any
Assistant Cashier or any Assistant Secretary of the Board of
Directors.
<PAGE>
Section 6. Fiscal Year. The fiscal year of the Bank shall be
coincident with the calendar year.
Section 7. Waiver of Notice. Whenever any notice whatever is
required to be given by law or by these By-Laws or the Articles of
Association, a waiver thereof in writing, signed by the person or
persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto. The presence
of any director at any regular or special meeting of the Board of
Directors or of any standing or special committee of directors
shall constitute waiver of notice thereof.
ARTICLE X
EMERGENCY BY-LAWS
Section 1. Effective Period. The emergency by-laws set forth
in this Article X shall be effective only during the continuance of
a national emergency proclaimed by the President of the United
States of America or by other governmental authority following an
attack on the United States of America or another catastrophic
event as a result of which a regular quorum of the Board of
Directors or of the Executive Committee cannot be convened readily.
During any such emergency, the provisions of this Article X shall
supersede any different provisions contained in the preceding
Articles of these By-Laws.
Section 2. Meetings of the Board of Directors. During any
such emergency, a meeting of the Board of Directors may be called
by any director or officer who deems it necessary. The meeting
shall be held at such time or place as the person calling the
meeting may specify in giving notice thereof. Such notice may be
given in writing or orally and by such means of communication
(including announcement by radio) as in the judgment of the person
giving the same are then feasible to reach as many of the directors
as it is reasonably possible to reach under the prevailing
circumstances. Three directors shall constitute a quorum for the
transaction of business at any such meeting.
Section 3. Emergency Location of Head Office. With effect
during any such emergency, the Board of Directors may change the
location of the Head Office of the Bank or designate one or more
alternative locations or authorize one or more officers to do so.
Section 4. Preservation of Continuity of Management. In
order to preserve continuity of management of the Bank during any
such emergency, the Board of Directors may provide and from time to
<PAGE>
time change lines of succession in management in the event that
during any such emergency any or all of the officers of the rank of
Senior Officer or higher shall die or be missing or for any reason
be rendered incapable of discharging his or her or their respective
duties.
Section 5. Immunity. No director, officer or employee of the
Bank acting in accordance with these emergency by-laws shall be
liable for any act or omission except willful misconduct.
Section 6. Amendments of Emergency By-Laws. The provisions
of this article X can be amended or repealed during any emergency
by resolution of the directors or the shareholders by no such
amendment or repeal shall prejudice any rights or immunities
acquired by any director, officer or employee under Section 5 of
this Article X in respect of action taken or omitted by him or her
prior to such amendment or repeal. Any such amendment may make
such further or different provisions as may be deemed to be
practical and necessary to deal with the circumstances of the
emergency.
NOTES
In answering any item in this Statement of Eligibility and
Qualification 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.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939, the trustee, Rhode Island Hospital Trust National Bank, a
national banking association organized and existing under the laws
of The United States of America, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the city of
Providence and State of Rhode Island, on the 13th day of June,
1995.
RHODE ISLAND HOSPITAL TRUST NATIONAL BANK,
Trustee
By: s/ Mark Nelson
Mark Nelson
Vice President
EXHIBIT 5
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, in connection with the proposed issue of The
Narragansett Electric Company of its First Mortgage Bonds, Series
, %, due, we hereby consent that reports of examinations by
Federal, State, Territorial, or District authorities may be
furnished by such authorities to the Securities and Exchange
Commission upon request therefor.
RHODE ISLAND HOSPITAL TRUST NATIONAL BANK,
Trustee
By: s/ Mark Nelson
Mark Nelson
Vice President
<PAGE>
In answering any item in this Statement of Eligibility and
Qualification 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,
the trustee, Rhode Island Hospital Trust National Bank, a national
banking association organized and existing under the laws of The
United States of America, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of
Providence and State of Rhode Island, on the 13th day of June 1995.
RHODE ISLAND HOSPITAL TRUST NATIONAL BANK,
Trustee
s/ Mark Nelson
By _______________________________________
Mark Nelson
Vice President
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, in connection with the proposed issue of The
Narragansett Electric Company of its First Mortgage Bonds, Series
, __ % due _______, we hereby consent that reports of
examinations by Federal, State, Territorial, or District
authorities may be furnished by such authorities to the Securities
and Exchange Commission upon request therefor.
RHODE ISLAND HOSPITAL TRUST NATIONAL BANK,
Trustee
s/ Mark Nelson
By _______________________________________
Mark Nelson
Vice President
June 13, 1995
<PAGE>
EXHIBIT 7
Consolidated Report of Condition, including Domestic and Foreign
Subsidiaries of Rhode Island Hospital Trust National Bank.
In the Commonwealth of Massachusetts, at the close of business on
March 31, 1995. Published is response to call made by Comptroller
of the Currency, under Title 12, United States Code, Section 161.
Dollar
Amounts
in
Thousands
---------
ASSETS
- ------
1. Cash and balances due from depository institutions
(from Schedule RC-A): Noninterest-bearing balances
and currency and coin (1)......................... $167,520
Interest-bearing balances (2)............... 2,916
2. Securities
a. Held- to- maturity securities
(from Schedule RC-B, column A).............. 4,832
b. Available-for sale securities
(from Schedule Rc-B, column D).............. 194,995
3. Federal funds sold and securities purchased under
agreements to resell:
Federal funds sold................................ 170,700
Securities purchased under agreements to resell... 0
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income
(from Schedule RC-C).......................... 2,048,727
b. LESS: Allowance for loan and lease losses..... 30,000
c. LESS: Allocated transfer risk reserve........ 0
Allowance, and reserve (item 4.a minus 4.b ---------
and 4.c)................................... 2,018,727
5. Tracing assets (from Schedule RC-D)...............
6. Premises are fixed assets
(including capitalized leases).................... 48,173
_____________
(1) Includes cash items in process of collection and unposted
debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
7. Other real estate owned
(from Schedule RC-M............................... 2,467
8. Investments in unconsolidated subsidiaries and
associated companies (from Schedule RC-M).........
9. Customers' liability to this bank on acceptances
outstanding....................................... 1,232
10. Intangible assets (from Schedule RC-M)............
11. Other assets (from Schedule RC-F)................. 230,168
----------
12. Total Assets (summed items 1 through 11).......... $2,841,730
==========
LIABILITIES
-----------
13. Deposits:
a. In domestic offices (SJ of totals of
columns A and C from Schedule RC-E)............ $2,360,169
(1) Noninterest-bearing (1)............. 330,793
(2) Interest-bearing ................... 2,029,376
b. In foreign offices, Edge and Agreement
subsidiaries, and IBF's
(1) Noninterest-bearing.....................
(2) Interest-bearing........................
14. Federal funds purchases and securities sold under
agreements to repurchase:
a. Federal funds purchased....................... 103,754
b. Securities sold under agreements to
repurchase.................................... 18,733
15. a. Demand notes issued to the U.S. Treasury...... 14,963
b. Tracing liabilities (from Schedule RC-D).......
16. Other borrowed money:.............................
a With original maturity of one year or less.....
b With original maturity of more than one year... 9,500
17. Mortgage indebtedness and obligations under
capitalized leases................................ 275
18. Bank's liability on acceptances executed and
outstanding....................................... 1,232
19. Subordinated notes and debentures.................
<PAGE>
20. Other liabilities (from Schedule RC-G)............ 37,387
----------
21. Total Liabilities (sum of items 13 through 20).... $2,546,013
22. Limited-life preferred stock and related surplus.. 0
EQUITY CAPITAL
--------------
23. Perpetual preferred stock and related surplus..... $ 0
24. Common stock...................................... 10,200
25. Surplus (exclude all surplus related to preferred
stock)............................................ 36,449
26. a. Undivided profits and capital reserves......... 248,142
27. Cumulative foreign currency translation
adjustments.......................................
--------
28. Total equity capital (total of items 23 through
27)............................................... $295,717
29. Total Liabilities, Limited-life preferred stock,
and equity capital (sum of items 21, 22, and
28)............................................... $2,841,730
==========
I, James H. Waterman, Jr., Senior Vice President of the above-
named bank, do hereby declare that this Report of Condition is true
and correct to the best of my knowledge and belief.
James H. Waterman, Jr.
April 28, 1995
We, the undersigned directors, attest to the correctness of
this statement of resources and liabilities. We 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 and
is true and correct.
Thomas Holliston
Edward Dolan
Fred C. Lohrum
Directors
April 28, 1995
<PAGE>
DRAFT
THE NARRAGANSETT ELECTRIC COMPANY
INVITATION FOR BIDS
FOR PURCHASE OF
FIRST MORTGAGE BONDS
The Narragansett Electric Company (the Company) is inviting bids, subject
to the terms and conditions for bids attached hereto (the Terms and
Conditions), for the purchase of not exceeding $___ million aggregate
principal amount of its First Mortgage Bonds (New Bonds). The series
designation, principal amount, maturity date, redemption provisions, and
interest payment dates of each issue of New Bonds, the time, date, and place
for the submission of bids therefor, and the place for delivery of
Confirmations of Bids therefor, shall be designated by the Company by prior
notice given pursuant to the Terms and Conditions. Copies of the
registration statement, the Terms and Conditions, and the form of
confirmation of bid may be obtained from the Company's Corporate Finance
Department at the offices of New England Power Service Company, 25 Research
Drive, Westborough, Massachusetts 01582. Bids will be considered only if
made in accordance with, and subject to, the Terms and Conditions. Prior to
the acceptance of any bid, the bidder or bidders will be furnished with a
copy of a prospectus relating to the New Bonds which meets the requirements
of section 10(a) of the Securities Act of 1933 at that time.
The issue of a particular series of New Bonds shall not be contingent upon
the issue of any other series. A bidder may bid for any one or more series
or issue of New Bonds, but shall submit a separate bid for each such series
or issue. The bidding for each series or issue shall be a separate
transaction, and a bidder shall fully and timely comply with the Terms and
Conditions separately for such series or issue.
Inquiries and requests for additional information with respect to the
bidding for the New Bonds may be directed to the Company's Corporate Finance
Department at 25 Research Drive, Westborough, Massachusetts 01582 (telephone
508-366-9011).
THE NARRAGANSETT ELECTRIC COMPANY
DRAFT
By: ______________________________
______________________________
Providence, Rhode Island
, 19__
<PAGE>
THE NARRAGANSETT ELECTRIC COMPANY
TERMS AND CONDITIONS FOR BIDS
FOR PURCHASE OF
FIRST MORTGAGE BONDS
The Narragansett Electric Company (the Company) is inviting bids, subject
to the following terms and conditions, for the purchase of its First Mortgage
Bonds (New Bonds). Details concerning the New Bonds and the submission of
bids therefor will be designated in a notice given to prospective bidders as
set forth in Section 1 hereof. The registration statement referred to below
contains brief summaries of some of the terms of the New Bonds and of the
Indenture (as defined below) under which the New Bonds are to be issued.
These summaries use terms defined in the Indenture and are qualified in their
entirety by reference to the Indenture.
The Company may invite bids for more than one series or issue of New Bonds.
The issue of a particular series or issue of New Bonds shall not be
contingent upon the issue of any other series or issue. A bidder may bid for
any one or more series or issue of New Bonds, but shall submit a separate bid
for each such series or issue. The bidding for each series or issue shall be
a separate transaction, and a bidder shall fully and timely comply with the
Terms and Conditions separately for each such series or issue.
1. Information and Forms Available to Prospective Bidders
The following documents relating to the New Bonds may be examined by
prospective bidders at the offices of New England Power Service Company,
Corporate Finance Department, 25 Research Drive, Westborough, Massachusetts,
on any business day between 10 A.M. and 4 P.M.:
(a) the registration statement on Form S-3 (including the financial
statements, exhibits, any documents incorporated therein by reference, and
any amendments or supplements thereto), as filed with the Securities and
Exchange Commission, and the prospectus included therein;
(b) the First Mortgage Indenture and Deed of Trust of the Company, dated
as of September 1, 1944, the indentures supplemental thereto and the form of
Supplemental Indenture thereto (collectively the Indenture), to Rhode Island
Hospital Trust National Bank (successor to Rhode Island Hospital Trust
Company), Trustee;
(c) the form of confirmation of bid to be used in confirming the
telephonic submissions of bids (the Confirmation of Bid) which, together with
all schedules thereto, constitutes the form of purchase agreement (the
Purchase Agreement);
(d) the form of questionnaire referred to in Section 2 hereof (the
Questionnaire) to be used by prospective bidders in furnishing certain
information to the Company and to the Trustee under the Indenture and, in the
case of a group of bidders, in designating the Representative (as defined
below) of such group;
(e) the order of the Division of Public Utilities and Carriers of the
State of Rhode Island; and
<PAGE>
(f) the surveys by Milbank, Tweed, Hadley & McCloy (referred to in
Section 9 hereof) with respect to the necessity for qualification of the New
Bonds for sale under securities or "blue sky" laws of the various states and
with respect to legality of the New Bonds for investment in certain states by
savings banks, life insurance companies, and trustees.
Copies in reasonable quantities of Item (a) above, excluding any exhibits
incorporated therein, and of Items (c), (d), and (f) above will be supplied
to prospective bidders upon request.
Not later than 4 p.m., Providence time, on the day immediately preceding
the day for submission of bids for the New Bonds, the Company shall designate
to prospective bidders, by telephone, telecopy, or telegram:
(i) the series designation of the New Bonds to be issued;
(ii) the aggregate principal amount of the New Bonds to be issued;
(iii) the maturity date of the New Bonds, which maturity date shall be
not later than 30 years from the date as of which the New Bonds
are first issued;
(iv) the redemption provisions;
(v) the dates on which interest shall be paid; and
(vi) the date, time, and place for submission of bids and the place
for delivery of the Confirmations of Bids.
The Company reserves the right to amend and/or supplement the registration
statement and prospectus and to make changes in these Terms and Conditions
and in the documents referred to in this Section, including the forms of
supplemental indentures, and will give notice of the making of any such
amendment, supplement, or change that, in the opinion of the Company, is
material. Upon request, the Company will furnish copies of any amendment,
supplement, or change to each prospective single bidder or to the
Representative of any group of prospective bidders.
Any notice given by the Company under these Terms and Conditions need be
sent only to prospective bidders who have filed Questionnaires as provided in
Section 2 hereof. If a group of bidders shall have designated a
Representative, such notice need be sent only to said Representative.
2. General Provisions with Respect to Bidders
In case of a bid by a group of bidders, the several bidders in the group
shall act through a duly authorized representative or representatives (the
Representative), who shall be a member of such group and who shall be
designated and authorized as Representative by each member of such group in
the Questionnaire filed by such member, or who may be substituted for a named
Representative in accordance with the terms of said Questionnaire. (If a
Representative ceases to be duly authorized by reason of substitution,
withdrawal from the group, or otherwise, any action by the Representative
while duly authorized shall continue in full force and effect, unless
expressly modified or terminated.)
No bid for the New Bonds will be considered unless the bidder (or, in the
case of a group of bidders, each bidder) shall have filed with the Company's
Corporate Finance Department, at the offices of New England Power Service
Company, 25 Research Drive, Westborough, Massachusetts 01582, before noon,
Boston time, seven days prior to the date of bid opening (or such later date
as may be fixed by the Company), a Questionnaire properly filled in and
<PAGE>
signed in duplicate. Notwithstanding the filing of such Questionnaire, any
prospective bidder may thereafter determine not to bid. The Company reserves
the right to waive any irregularity in any Questionnaire or in the filing
thereof and to obtain by telephone or other means of communication any
information required by a Questionnaire. New Questionnaires properly filled
in and signed in duplicate shall be submitted from time to time as necessary
to reflect any changes in the information contained therein.
3. Form and Content of Bids and Confirmation of Bids
Each bid may be made by a single bidder or by a group of bidders and shall
be for the purchase of all of the New Bonds. No bidder may submit or
participate in more than one bid for the New Bonds. If any bidder
participating in the winning bid for the New Bonds shall have submitted or
participated in another bid, said bidder shall be deemed a defaulting bidder
and the provisions of Section 12 of the Purchase Agreement shall apply to its
participation. If a bid is made by a representative on behalf of a group of
bidders, the obligations of the members of the group shall be several, and
not joint or joint and several.
All bids must be submitted by telephone and confirmed in writing in the
manner set forth below on a Confirmation of Bid signed by the Representative
on behalf of the members of a group of bidders, or in the case of a single
bidder, by such bidder. Each bid must specify: (a) the interest rate, which
shall be a multiple of 1/8 of 1% (if the interest rate specified exceeds
____% per annum, a further order of the Division of Public Utilities and
Carriers will be necessary); and (b) the price to be paid to the Company for
the New Bonds, which shall be expressed as a percentage of the principal
amount of the New Bonds and shall not be less than 95% thereof nor more than
100% thereof. If the Confirmation of Bid is not signed by a partner or
executive officer of the bidder or Representative, authority to sign and
deliver said bid must be appended thereto unless previously furnished to the
Company. The Confirmation of Bid shall specify the same interest rate and
price specified in the telephonic bid and, if submitted by a Representative
on behalf of a group of bidders, the principal amount of the offering of New
Bonds to be purchased by each member of the group.
4. Submission of Bids and Delivery of Confirmations of Bids
All bids must be submitted by telephone, in the manner hereinafter set
forth, at the time designated by the Company. Each Representative or single
bidder, by submission of a bid, agrees to confirm the bid in writing, within
one hour after the time designated for the submission of bids, by delivery of
a Confirmation of Bid meeting the requirements of Section 3, at the place
(which shall be in New York City) designated by the Company for delivery of
the Confirmations of Bids, if notified that such bidder has tentatively been
identified as the lowest bidder, or by telecopy if not so notified. The
Company reserves the right at any time and from time to time to postpone the
bidding date or time.
Not less than one hour prior to the time designated by the Company for
submission of bids, the Representative or single bidder shall notify the
Company's Corporate Finance Department, at the offices of New England Power
Service Company, 25 Research Drive, Westborough, Massachusetts, by telephone
(508-366-9011), of the name and telephone number of the person or persons
(the Authorized Telephonic Bidder) designated by the Representative or the
single bidder to submit its bid.
Not more than fifteen nor less than five minutes prior to the time
designated for submission of bids, a representative of the Company shall
establish telephonic contact with the Authorized Telephonic Bidder. Promptly
at the time designated for submission of bids, the representative of the
Company shall request the Authorized Telephonic Bidder to state the bid. The
<PAGE>
representative of the Company shall then repeat the bid to the Authorized
Telephonic Bidder to verify its accuracy. Upon such verification of the
accuracy of the bid, the representative of the Company shall make a record of
the bid. Such record of the Company shall be controlling, except in the case
of manifest error, for all purposes hereunder. After the closing of bids,
information as to bids submitted by other bidders or groups of bidders will
be furnished upon request.
5. Acceptance or Rejection of Bids
Each Confirmation of Bid will be examined by the Company promptly upon
receipt at the place designated for the delivery thereof. Each bid, as
evidenced by such confirmation, will be accepted or rejected in its entirety
by the Company at said place within four hours after the time designated for
submission of bids, and each bid not accepted within such four-hour period
shall be deemed to have been rejected. Acceptance of a bid will be evidenced
by endorsement by the Company upon the applicable Confirmation of Bid of its
acceptance thereof and announcement thereof at said place and within such
period.
The Company reserves the right: (a) not to receive any bids; (b) to waive
any irregularities in the form or submission of bids or the form or delivery
of Confirmations of Bids; (c) to reject all bids after the submission
thereof; and (d) to disqualify and reject the bid of any bidder or group of
bidders (i) if the Company, in the opinion of its counsel, may not lawfully
sell the New Bonds to such bidder or to one or more members of such group,
(ii) if the Company is not satisfied with the financial responsibility of
such bidder or of one or more members of such group, or (iii) if, in the
opinion of counsel for the Company, such bidder or one or more members of
such group is in such relationship with Rhode Island Hospital Trust National
Bank, Providence, Rhode Island, as would disqualify said Bank from acting as
trustee under the Indenture if such bid were accepted (unless, in the case of
a group of bidders, within two hours after the time designated for submission
of bids, each such member shall have withdrawn from the group and the
remaining members shall have agreed to purchase the New Bonds which such
withdrawing member or members had offered to purchase); and any bid so
disqualified and rejected by the Company shall be disregarded in determining
the bid to be accepted.
If, in a Confirmation of Bid submitted by a Representative, the total of
the principal amounts designated to be purchased by the various members of
the group does not equal the aggregate principal amount of the New
Bonds being offered, the Representative executing such bid may, forthwith
upon notice of the discrepancy, correct any error in the Confirmation of Bid.
If after any such correction is made there remains a discrepancy, the
Representative's allocable share shall be increased or decreased by an amount
necessary to eliminate such discrepancy; provided that, if the
Representative's allocable share is eliminated entirely and the total of the
principal amounts allocable to the remaining members of the group still
exceeds the aggregate principal amount of the New Bonds, the remaining
members' shares shall be ratably reduced by an amount necessary to eliminate
the discrepancy. If, in a Confirmation of Bid submitted by a Representative,
any bidder designated shall not have filed a Questionnaire as provided in
Section 2 hereof, and such filing shall not have been expressly waived by the
Company, said bidder's name shall be stricken from the list and the
Representative's allocable share shall be increased by the amount designated
for the bidder whose name is stricken. (If there is more than one
Representative, such increases or decreases shall be divided among them in
proportion to the amount of New Bonds initially specified to be taken by
each.) Any other errors with respect to the amounts allocable to various
members of a group of bidders may be corrected by the Representative at any
time prior to the acceptance of a bid by the Company. The Company shall be
entitled to note any correction or change made pursuant to this paragraph on
Schedule A to the Confirmation of Bid.
<PAGE>
If the interest rate or price specified in a Confirmation of Bid is not
identical to that shown on the record of bid maintained by the Company, the
Representative or single bidder, forthwith upon notice of the discrepancy,
shall correct the Confirmation of Bid to conform to said record except if
there shall be manifest error in such record.
If any bid is accepted, the qualified bid resulting in the lowest cost of
money to the Company (the Best Bid) will be accepted. The Best Bid will be
that bid which, as determined by the Company, results in the lowest yield on
the New Bonds being offered based on this term, the interest rate, and the
bid price to the Company. The determination by the Company of the Best Bid
shall be final.
If two or more bids would yield the same lowest cost of money to the
Company, the Company may, in its discretion, accept any one of such bids or
may give the makers of such bids an opportunity to improve their bids within
a designated time. If the Representative of any group of bidders which has
submitted one of such bids shall within the designated time submit an
improved bid for all of the New Bonds being offered that does not include all
members of the original bidding group, the Company shall be entitled to
accept the improved bid, provided that the bidders shall thereafter be
limited to those designated in the improved bid. If no improved bid is
submitted within the designated time, or if there are submitted two or more
improved bids yielding the same lowest cost of money to the Company, the
Company may in its discretion accept any one of such bids.
Prior to acceptance of any bid, each bidder designated therein will be
furnished a prospectus relating to the New Bonds which meets the requirements
of Section 10(a) of the Securities Act of 1933 at that time.
6. Determination of Redemption Prices for the New Bonds
Forthwith upon the acceptance of a bid, the successful bidder or, if a
group of bidders, the Representative, shall specify in writing the proposed
initial public offering price of the New Bonds or shall state that no public
offering of the New Bonds is intended to be made. The redemption prices of
the New Bonds will thereupon be determined by the Company in the following
manner, which determination shall be final.
The Initial Public Offering Price shall be the price at which the New Bonds
are to be initially offered for sale to the public, as specified by the
successful bidder or the Representative of the successful bidders; provided
that, in the event the successful bidder or the Representative shall have
stated as aforesaid that no public offering of the New Bonds is intended, or
declines to state a price at which the New Bonds are to be initially offered
for sale to the public, the Initial Public Offering Price shall be deemed to
be the price to be paid by the successful bidder or bidders to the Company
for the New Bonds. The Annual Redemption Period shall be the twelve-month
period beginning on the first day of the month as of which the New Bonds were
first issued in each year, commencing with the year the New Bonds are first
issued.
Special Redemption Prices
The special redemption price applicable to each Annual Redemption Period
shall be 100% of the principal amount of the New Bonds.
<PAGE>
General Redemption Prices
The initial general redemption price applicable during the twelve-month
period beginning on the date as of which the New Bonds are first issued shall
be the Initial Public Offering Price plus a percentage of the principal
amount thereof equal to the interest rate of the New Bonds, which total, if
not a multiple of 1/100 of 1%, shall be increased to the next higher multiple
of 1/100 of 1%. Such initial general redemption price shall be reduced
annually on the first day of the month as of which the New Bonds were first
issued, commencing the year immediately following the year in which the New
Bonds are first issued, by 1/* of the amount by which the initial general
redemption price exceeds the principal amount of the New Bonds; provided,
however:
(a) that, if any general redemption price so determined is not a
multiple of 1/100 of 1%, such redemption price shall be increased to the next
higher multiple of 1/100 of 1%;
(b) that the general redemption price applicable to any Annual
Redemption Period shall not in any event be lower than the special redemption
price applicable to such Annual Redemption Period; and
(c) that the Company may designate additional terms, such as
restrictions on redemption, as set forth in Section 1.
7. The Purchase Agreement
Forthwith upon the acceptance by the Company of a bid for the New Bonds,
the accepted Confirmation of Bid together with all schedules thereto shall
become a binding contract, which shall be the Purchase Agreement between the
Company and the successful bidder or bidders, all of whose rights shall
thereupon be determined solely in accordance with the terms thereof, subject
to such changes therein as may be appropriate if the successful bidder or
bidders shall not contemplate a public offering. The Company shall, upon
request, indicate its acceptance of the accepted bid by signing and
delivering to the successful bidder or Representative of the successful
bidders a duplicate copy of the Confirmation of Bid.
8. Counsel for the Successful Bidder or Bidders
Milbank, Tweed, Hadley & McCloy, 1 Chase Manhattan Plaza, New York, New
York 10005, have been selected by the Company as counsel for the successful
bidder or bidders for the New Bonds to give opinions with respect to the New
Bonds. Such counsel have prepared surveys for prospective bidders
contemplating a reoffering of New Bonds, with respect to the necessity for
qualification of the New Bonds for sale under securities or "blue sky" laws
of various states and with respect to the legality of the New Bonds for
investment in certain states by savings banks, life insurance companies, and
________________________________
* The denominator of the fraction is two-thirds of the number of years from
the first day of the month as of which the New Bonds are first issued to the
maturity date specified by the Company in the notice given pursuant to
Section 1 hereof, or, if such calculation does not produce an integer, the
denominator shall be the next higher integer.
<PAGE>
trustees. The successful bidder or bidders are to pay the compensation and
disbursements of such counsel, except as otherwise provided in the Purchase
Agreement. Such counsel will, on request, advise any prospective bidder who
has filed a Questionnaire as provided in Section 2 hereof of the amounts of
such compensation and estimates of the disbursements.
THE NARRAGANSETT ELECTRIC COMPANY
DRAFT
By: ______________________________
_______________________________
Providence, Rhode Island
, 19__
