Exhibit 26
to Form S-3
MASSACHUSETTS ELECTRIC COMPANY
INVITATION FOR BIDS
FOR PURCHASE OF
FIRST MORTGAGE BONDS
Massachusetts 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 (the Bonds). The series designation, principal
amount, maturity date, provisions for redemption, and interest
payment dates of each issue of 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 Bonds which meets the requirements of Section 10(a) of the
Securities Act of 1933 at that time.
The issue of a particular series or issue of 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 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 Bonds may be directed to the
Company's Corporate Finance Department at 25 Research Drive,
Westborough, Massachusetts 01582 (telephone 508-389-2000).
MASSACHUSETTS ELECTRIC COMPANY
By: MICHAEL E. JESANIS
Treasurer
Westborough, Massachusetts
Date:
MASSACHUSETTS ELECTRIC COMPANY
TERMS AND CONDITIONS FOR BIDS
FOR PURCHASE OF
FIRST MORTGAGE BONDS
Massachusetts Electric Company (the Company) is inviting
bids, subject to the following terms and conditions, for the
purchase of its First Mortgage Bonds (the Bonds). Details
concerning the 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 Bonds
and of the Indenture (as defined below) under which the 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 Bonds. The issue of a particular series or issue of 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 issues of
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.
1. Information and Forms Available to Prospective Bidders
The following documents relating to the 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, dated as
of July 1, 1949, from the Company to State Street Bank
and Trust Company (formerly Second Bank-State Street
Trust Company, successor to The Second National Bank of
Boston), as Trustee, the outstanding indentures
supplemental thereto and the form of the supplemental
indenture thereto relating to the Bonds (collectively,
the Indenture);
(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 Massachusetts Department of Public
Utilities; and
(f) the surveys by Milbank, Tweed, Hadley & McCloy (referred
to in Section 8 hereof) with respect to the necessity
for qualification of the Bonds for sale under securities
or "blue sky" laws of the various states and with
respect to legality of the 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.
No later than 4 P.M., Boston time, on the day immediately
preceding the day for submission of bids for the Bonds, the
Company shall designate to prospective bidders, by telephone,
telecopy, or telegram:
(i) the series designation of the Bonds to be issued;
(ii) the aggregate principal amount of the Bonds to be
issued;
(iii) the maturity date of the Bonds, which maturity
date shall be not later than 30 years from the
date as of which the 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 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
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 Confirmations 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 Bonds. No
bidder may submit or participate in more than one bid for the
Bonds. If any bidder participating in the winning bid for the
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%; and (b) the price to be paid to the
Company for the Bonds, which shall be expressed as a percentage
of the principal amount of the Bonds and shall not be less than
95% 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 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 (508-389-2000),
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
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. Opening and 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 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
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 State Street Bank and Trust Company, Boston,
Massachusetts, 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 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 Bonds, 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
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 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.
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 Bonds based on
the term of the Bonds, 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 Bonds 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 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 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 Bonds
or shall state that no public offering of the Bonds is intended
to be made. The redemption prices for a redemption of the 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 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 Bonds is intended, 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 Bonds. The
Annual Redemption Period shall be the twelve-month period
beginning on the first day of the month as of which the Bonds are
first issued in each year, commencing with the year the 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
Bonds.
General Redemption Prices
The initial general redemption price applicable during the
twelve-month period beginning on the date as of which the 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 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
Bonds are first issued, commencing the year immediately following
the year in which the Bonds are first issued, by 1/* of the
amount by which the initial general redemption price exceeds the
principal amount of the 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
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
__________
* The denominator of the fraction is two-thirds of the number
of years from the first day of the month as of which the 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.
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 Bonds to
give opinions with respect to the Bonds. Such counsel have
prepared surveys for prospective bidders contemplating a
reoffering of Bonds, with respect to the necessity for
qualification of the Bonds for sale under securities or "blue
sky" laws of various states and with respect to the legality of
the Bonds for investment in certain states by savings banks, life
insurance companies, and 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.
MASSACHUSETTS ELECTRIC COMPANY
By:MICHAEL E. JESANIS
Treasurer
Westborough, Massachusetts
Date: