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File No. 70-8675
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
CERTIFICATE OF NOTIFICATION
Pursuant to Rule 24(a) under the Public
Utility Holding Company Act of 1935
Filed by
NEW ENGLAND ELECTRIC SYSTEM
NEW ENGLAND POWER COMPANY
MASSACHUSETTS ELECTRIC COMPANY
It is hereby certified that on July 16, 1996, Massachusetts
Electric Company issued its guaranty of $28 million aggregate
principal amount of Massachusetts Industrial Finance Agency
Electric Utility Revenue Bonds (Nantucket Electric Company
Project - 1996 Series A) as described in Form U-1 and amendments
thereto, File No. 70-8675, and in the Order of the Securities and
Exchange Commission with respect thereto dated December 27, 1995
(HCAR No. 26439). Such transaction has been carried out, in
accordance with the terms and conditions of and for the purpose
represented in said Form U-1 and the Order of the Commission.
The required "past tense" opinion of counsel is attached
hereto as Exhibit I.
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SIGNATURE
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Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, each of the undersigned companies has duly
caused this Certificate of Notification (Commission's File No.
70-8675) to be signed on its behalf by the undersigned officers
thereunto duly authorized.
NEW ENGLAND ELECTRIC SYSTEM
s/Cheryl A. LaFleur
By: _________________________
Cheryl A. LaFleur
Vice President and
Secretary
MASSACHUSETTS ELECTRIC COMPANY
s/Lawrence J. Reilly
By: _________________________
Lawrence J. Reilly
President
NEW ENGLAND POWER COMPANY
s/John G. Cochrane
By: _________________________
John G. Cochrane
Assistant Treasurer
Date: July 25, 1996
The name "New England Electric System" means the trustee or
trustees for the time being (as trustee or trustees but not
personally) under an agreement and declaration of trust dated
January 2, 1926, as amended, which is hereby referred to, and a
copy of which as amended has been filed with the Secretary of The
Commonwealth of Massachusetts. Any agreement, obligation or
liability made, entered into or incurred by or on behalf of New
England Electric System binds only its trust estate, and no
shareholder, director, trustee, officer or agent thereof assumes
or shall be held to any liability therefor.
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EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
B-3 Form of Massachusetts Electric Filed herewith
Company Guaranty
I Past Tense Opinion of Counsel Filed herewith
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Exhibit B-3
GUARANTY
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For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned
hereby: absolutely and unconditionally guarantees to Fleet
National Bank, as Trustee (the "Trustee") under the Loan and
Trust Agreement dated as of July 1, 1996 (the "Agreement") among
the Massachusetts Industrial Finance Agency (the "Issuer"),
Nantucket Electric Company (the "Borrower") and the Trustee, for
the benefit of the Bondowners, (as defined in the Agreement), the
full and prompt payment when due, whether at maturity or earlier
by reason of acceleration or otherwise, of the principal of,
premium, if any, and interest on the Bonds issued pursuant to the
Agreement (the "Indebtedness").
1. The undersigned represents and warrants that (a) the
undersigned is a corporation duly organized and existing in good
standing under the laws of The Commonwealth of Massachusetts and
has full power and authority to make and deliver this Guaranty;
(b) the execution, delivery and performance of this Guaranty by
the undersigned have been duly authorized by all necessary action
of its directors and do not and will not violate the provisions
of, or constitute a default under, any presently applicable law
or its articles of incorporation or bylaws or any agreement
presently binding on it; (c) this Guaranty has been duly executed
and delivered by an authorized officer of the undersigned and
constitutes its lawful, binding and legally enforceable
obligation; and (d) the authorization, execution, delivery and
performance of this Guaranty have been approved by the
Massachusetts Department of Public Utilities and the Securities
and Exchange Commission under the Public Utility Holding Company
Act of 1935 and no other consent or approval by any federal,
state or local regulatory body or administrative agency is
required.
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2. No act or thing need occur to establish the
liability of the undersigned hereunder, and no act or thing,
except full payment and discharge of all Indebtedness, shall in
any way exonerate the undersigned hereunder or modify, reduce,
limit or release the liability of the undersigned hereunder.
This is an absolute, unconditional and continuing guaranty of
payment of the Indebtedness. The dissolution or adjudication of
bankruptcy of the undersigned shall not revoke this Guaranty.
3. The undersigned represents and warrants that the
undersigned has an economic interest in Borrower and that this
Guaranty is given for a valid corporate purpose. This Guaranty
shall be effective and enforceable by Trustee without regard to
the receipt, nature or value of any such benefits.
4. If the undersigned shall be dissolved or shall be or
become insolvent (however defined), then Trustee shall have the
right to declare the full amount of all Indebtedness due and
payable, whether by acceleration or otherwise, due from the
undersigned. If the undersigned voluntarily commences or there
is commenced involuntarily against the undersigned (which is
consented to by the undersigned or remains undismissed for 90
days) a case under the United States Bankruptcy Code, then the
full amount of all Indebtedness due and payable, whether by
acceleration or otherwise, shall be immediately due and payable
without demand or notice thereof.
5. The undersigned will not exercise or enforce any
right of contribution, reimbursement, recourse or subrogation
available to the undersigned as to any Indebtedness, or against
any person liable therefor, or as to any collateral security
therefor, unless and until all Indebtedness shall have been fully
paid and discharged.
6. The undersigned will pay or reimburse the Trustee
for all costs and expenses (including reasonable attorneys' fees
and legal expenses) incurred by the Trustee in connection with
the protection, defense or enforcement of this Guaranty in any
litigation or bankruptcy or insolvency proceedings.
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7. a) So long as any Indebtedness is outstanding, the
undersigned will furnish to each nationally recognized municipal
securities information repository (each a "NRMSIR") that is at
the time recognized as such by the Securities and Exchange
Commission (the "SEC"), to each state information depository, if
any, of the Commonwealth of Massachusetts (the "SID"), and the
Bond Insurer (as defined in the Agreement), a copy of the
undersigned's Annual Report on Form 10-K for each fiscal year
filed with the SEC (or any successor form adopted by the SEC)
containing audited financial statements of the undersigned (or
attaching thereto the annual report to shareholders if such
information is incorporated by reference in such Form 10-K from
such annual report), in each case not less than 120 days after
the end of each fiscal year of the undersigned. In the event
that the undersigned no longer files such reports with the SEC
under the Securities Exchange Act of 1934, as amended (the "1934
Act"), it will deliver to each NRMSIR, the SID and the Bond
Insurer (as defined in the Agreement), within the time set forth
in this paragraph, a copy of its audited financial statements,
prepared in accordance with generally accepted accounting
principles and operating data (within the meaning of Rule 15c2-12
(the "Rule"), adopted by the SEC under the 1934 Act of the type
incorporated by reference in the Official Statement dated June
26, 1996 with respect to the Bonds. The deliveries described in
this paragraph may be accomplished by delivery of an instrument
incorporating by reference material on file with the SEC.
(b) The undersigned will, or will cause the Borrower to,
deliver to the Trustee, the Bond Insurer, each NRMSIR, and the
SID, in a timely manner, notice of the occurrence of any of the
following events with respect to the Bonds, if material:
(i) principal and interest payment delinquencies;
(ii) nonpayment related defaults;
(iii) unscheduled draws on debt service reserves,
if any, reflecting financial difficulties;
(iv) unscheduled draws on credit enhancements, if any,
reflecting financial difficulties;
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(v) substitution of credit or liquidity
providers, if any, or their failure to
perform;
(vi) adverse tax opinions or events affecting the
tax-exempt status of the Bonds;
(vii) modifications to rights of bondholders;
(viii) bond calls;
(ix) defeasances;
(x) releases, substitution or sale of property
securing payment of the Bonds; or
(xi) rating changes.
(c) The undersigned will give to the Trustee, the Bond
Insurer, each NRMSIR, and the SID, in a timely manner, notice of
any failure by the undersigned to provide any information
required pursuant to subsection (a) above within the time limit
required therein.
(d) Any breach by the undersigned of this Paragraph 7 shall
not, in and of itself, be a breach of this Guaranty or an Event
of Default with respect to the Bonds. The obligations set forth
in this Paragraph 7 are solely those of the undersigned and the
Borrower, and may be enforced by any Bondholder by action for
specific performance only.
(e) The undersigned's obligation to comply with this
Paragraph 7 shall continue so long as the undersigned is
obligated under this Guaranty. The undersigned's obligations
under this Paragraph 7 shall be suspended upon the primary
offering of the Bonds in any remarketing exempt from the
provisions of the Rule by virtue of paragraph (d) of the Rule.
(f) This Paragraph 7 may be modified by the undersigned to
the extent necessary as a result of change in legal requirements
or change in the nature of the Borrower or the undersigned;
provided that any such modification will be done in a manner
consistent with the Rule and will not, in the opinion of the
Trustee (who may rely conclusively on an opinion of counsel),
materially impair the interests of the Bond owners.
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8. The Trustee may enter into transactions resulting in
the creation or continuance of Indebtedness and may otherwise
agree, consent to, or suffer the creation or continuance of any
Indebtedness, without any consent or approval by the undersigned
and without any prior or subsequent notice to the undersigned.
The liability of the undersigned shall not be affected or
impaired by any of the following acts or things (which the
Trustee is expressly authorized to do by the undersigned, omit or
suffer from time to time, both before and after revocation of
this Guaranty, without consent or approval by or notice to the
undersigned): (a) any acceptance of collateral security,
guarantors, accommodation parties or sureties for any or all
Indebtedness; (b) one or more extensions or renewals of
Indebtedness (whether or not for longer than the original period)
or any modification of the interest rates, maturities or other
contractual terms applicable to any Indebtedness; (c) any waiver
or indulgence granted to Borrower, any delay or lack of diligence
in the enforcement of Indebtedness, or any failure to institute
proceedings, file a claim, give any required notices or otherwise
protect any Indebtedness; (d) any full or partial release of,
compromise or settlement with, or agreement not to sue, Borrower,
Issuer or any guarantor or other person liable in respect of any
Indebtedness; (e) any release, surrender, cancellation or other
discharge of any evidence of Indebtedness or the acceptance of
any instrument in renewal or substitution therefor; (f) any
failure to obtain collateral security (including rights of
setoff) for Indebtedness, or to see to the proper or sufficient
creation and perfection thereof, or to establish the priority
thereof, or to preserve, protect, insure, care for, exercise or
enforce any collateral security; or any modification, alteration,
substitution, exchange, surrender, cancellation, termination,
release or other change, impairment, limitation, loss or
discharge of any collateral security; (g) any collection, sale,
lease or disposition of, or any other foreclosure or enforcement
of or realization on, any collateral security; (h) any
assignment, pledge or other transfer of any Indebtedness or any
evidence thereof; (i) any manner, order or method of application
of any payments or credits upon Indebtedness; (j) any election
by the Trustee under Section 1111(b) of the United States
Bankruptcy Code. The undersigned waives any and all defenses and
discharges available to a surety, guarantor, or accommodation
co-obligor.
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9. The undersigned waives any and all defenses, claims,
setoffs, and discharges of Borrower or Issuer, or any other
obligor, pertaining to Indebtedness, except the defense of
discharge by payment in full. Without limiting the generality of
the foregoing, the undersigned will not assert, plead or enforce
against the Trustee any defense of waiver, release, discharge in
bankruptcy, statute of limitations, res judicata, statute of
frauds, anti-deficiency statute, fraud, incapacity, minority,
usury, illegality or unenforceability which may be available to
Borrower or Issuer or any other person liable in respect of any
Indebtedness, or any setoff available against the Trustee to
Borrower or Issuer or any other such person, whether or not on
account of a related transaction. The undersigned expressly
agrees that the undersigned shall be and remain liable for any
deficiency remaining after foreclosure of any mortgage or
security interest securing Indebtedness, whether or not the
liability of Borrower or Issuer or any other obligor for such
deficiency is discharged pursuant to statute or judicial
decision. The liability of the undersigned shall not be affected
or impaired by any voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially
all the assets, marshaling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or
readjustment of, or other similar event or proceeding affecting
Borrower or Issuer or any of their respective assets. The
undersigned will not assert, plead or enforce against the Trustee
any claim, defense or setoff available to the undersigned against
Borrower or Issuer.
10. The undersigned waives presentment, demand for payment,
notice of dishonor or nonpayment, and protest of any instrument
evidencing Indebtedness. The Trustee shall not be required first
to resort for payment of the Indebtedness to Borrower or Issuer
or other persons, or their properties, or first to enforce,
realize upon or exhaust any collateral security for Indebtedness,
before enforcing this Guaranty.
11. If any payment applied by the Trustee to Indebtedness
is thereafter set aside, recovered, rescinded or required to be
returned for any reason (including, without limitation, the
bankruptcy, insolvency or reorganization of Borrower or Issuer or
any other obligor), the Indebtedness to which such payment was
applied shall for the purpose of this Guaranty be deemed to have
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continued in existence, notwithstanding such application, and
this Guaranty shall be enforceable as to such Indebtedness as
fully as if such application had never been made.
12. The liability of the undersigned under this Guaranty is
in addition to and shall be cumulative with all other liabilities
of the undersigned to the Trustee as guarantor, surety, endorser,
accommodation co-obligor or otherwise of any Indebtedness or
obligation of Borrower or Issuer, without any limitation as to
amount, unless the instrument or agreement evidencing or creating
such other liability specifically provides to the contrary.
13. This Guaranty shall be effective upon delivery to the
Trustee, without further act, condition or acceptance by the
Trustee, shall be binding upon the undersigned and the successors
and assigns of the undersigned and shall inure to the benefit of
the Trustee. Any invalidity or unenforceability of any provision
or application of this Guaranty shall not affect other lawful
provisions and application hereof, and to this end the provisions
of this Guaranty are declared to be severable. This Guaranty may
not be waived, modified, amended, terminated, released or
otherwise changed except by a writing signed by the undersigned
and the Trustee. This Guaranty shall be governed by the laws of
The Commonwealth of Massachusetts. The undersigned waives notice
of the Trustee's acceptance hereof and waives the right to trial
by jury in any action based on or pertaining to this Guaranty.
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IN WITNESS WHEREOF, this Guaranty has been duly executed on
behalf of the undersigned by its duly authorized officer as of
this 1st day of July, 1996.
MASSACHUSETTS ELECTRIC COMPANY
By: __________________________
Title: Treasurer
COMMONWEALTH OF MASSACHUSETTS)
COUNTY OF WORCESTER)
The foregoing instrument was acknowledged before me this
____ day of July, 1996, by Michael E. Jesanis, the Treasurer of
Massachusetts Electric Company, a Massachusetts corporation, on
behalf of the corporation.
_____________________________
Notary Public:
My Commission expires:
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EXHIBIT I
25 Research Drive, Westborough, Massachusetts 01582
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July 25, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: New England Electric System
New England Power Company
Massachusetts Electric Company
Commission File No. 70-8675
Dear Ladies and Gentlemen:
Form U-1 and amendments thereto filed in the above
proceeding were permitted to become effective by the Commission's
Order dated December 27, 1995. As counsel for the above named
companies, we have reviewed the following actions taken
subsequent to our opinions dated December 26 and December 28,
1995, and April 9, 1996, to carry out the following transaction
described in the statement:
On July 16, 1996, Massachusetts Electric Company issued its
guaranty of $28 million aggregate principal amount of
Massachusetts Industrial Finance Agency Electric Utility Revenue
Bonds (Nantucket Electric Company Project - 1996 Series A) (the
MIFA Bonds) in favor of Fleet National Bank, as Trustee for the
MIFA Bonds.
We have reviewed the above mentioned opinions, which were
filed by amendment as Exhibits F and F-1, respectively, to the
statement on Form U-1 and the Certificate of Notification dated
April 9, 1996, in the above proceeding, and we hereby confirm the
various opinions and statements contained therein. It is our
opinion that:
(a) the foregoing transaction has been carried out in
accordance with the Application/Declaration;
(b) all State laws applicable to such transaction have been
complied with; and
(c) the consummation of the transaction does not violate
the legal rights of the holders of any securities
issued by NEES or any associate company.
Very truly yours,
s/Robert King Wulff
Robert King Wulff
Corporation Counsel
s/Kirk L. Ramsauer
Kirk L. Ramsauer
Associate General Counsel
