Exhibit 1-C
to Form S-3
$
MASSACHUSETTS ELECTRIC COMPANY
(a Massachusetts corporation)
First Mortgage Bonds, Series
Due from 9 Months to 30 Years from Date of Issue
DISTRIBUTION AGREEMENT
[DATE]
[Name of Agent]
[Address of Agent]
Dear Agent:
Massachusetts Electric Company (the Company) agrees with you
with respect to the issue and sale by the Company of up to $
aggregate principal amount of its First Mortgage Bonds,
Series (the Bonds). The Bonds are to be issued pursuant to
an indenture supplemental (the Supplemental Indenture) to the
First Mortgage Indenture and Deed of Trust dated as of July 1,
1949 (the Original Indenture) between the Company and State
Street Bank and Trust Company (the Trustee), formerly Second Bank
- - State Street Trust Company, successor to The Second National
Bank of Boston (such Original Indenture as heretofore and
hereafter supplemented, the Indenture).
Subject to the terms and conditions stated herein, the
Company hereby (i) appoints you as agent of the Company for the
purpose of soliciting purchases of the Bonds from the Company by
others and (ii) agrees that whenever the Company determines to
sell Bonds directly to you as principal for resale to others, it
will enter into a Terms Agreement relating to such sale in
accordance with the provisions of Section 2(b) hereof. The Bonds
shall have the maturities, interest rates, provisions for
redemption, 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 for the
registration of First Mortgage Bonds, including the 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 Bonds
from the Company by entering into distribution agreements
substantially similar to this Agreement. The Company will notify
you prior to making any such appointment and will notify you of
any proposed additions, modifications, amendments, waivers, or
changes of any nature with respect to any such distribution
agreement. The Company reserves the right to sell, and may
accept offers to purchase, Bonds directly on its own behalf.
As used herein, Commencement Date shall have the
meaning set out in Section 2(d) hereof and Settlement Date shall
mean the time and date for the delivery of and payment for Bonds,
whether sold under Section 2(b) hereof and the applicable Terms
Agreement or under Section 2(a) hereof and the Administrative
Procedures set out in Exhibit B hereto.
SECTION 1. Representations and Warranties. (a) The
Company represents and warrants to you, as of the Commencement
Date and each Settlement Date with respect to any applicable
Terms Agreement, and as of the times referred to in Sections 6(a)
and 6(b) hereof (in each case the Representation Date), as
follows:
(i) The Registration Statement and the Prospectus, at
the time the Registration Statement became effective,
complied, and as of the applicable Representation Date will
comply, in all material respects with the requirements of
the Securities Act and the rules and regulations thereunder
(the Regulations) and the Trust Indenture Act. The
Registration Statement, at the time the Registration
Statement became effective did not, and as of the applicable
Representation Date will not, contain any untrue statement
of a material fact or omit to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus, at the
time the Registration Statement became effective did not,
and as of the applicable Representation Date will not,
contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however,
that the representations and warranties in this subsection
shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon
information furnished to the Company in writing by you for
use in the Registration Statement or Prospectus or to that
part of the Registration Statement which shall constitute
the Statement of Eligibility and Qualification under the
Trust Indenture Act (Form T-1) of the Trustee.
(ii) The documents incorporated by reference in the
Prospectus, at the time they were or hereafter are filed
with the SEC, complied and will comply in all material
respects with the requirements of the Exchange Act and the
rules and regulations thereunder (the Exchange Act
Regulations), and, when read together and with the other
information in the Prospectus, at the time the Registration
Statement became, and any amendments thereto become,
effective, did not and will not contain an untrue statement
of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they
were or are made, not misleading.
(iii) Coopers & Lybrand L. L. P., who have certified
certain financial statements included or incorporated by
reference in the Prospectus, are independent public
accountants as required by the Securities Act and the
Regulations.
(iv) The financial statements of the Company included
or incorporated by reference in the Registration Statement
will be correct and complete and will truly present the
financial position of the Company as at the dates stated
therein and the results of the operations of the Company for
the periods stated therein. The Company had, on the date of
the latest financial statements included or incorporated by
reference in the Registration Statement, no material
liabilities or obligations, fixed or contingent, other than
those disclosed in the Prospectus or such financial
statements, and since that date the Company has not incurred
any material liabilities or obligations still outstanding,
fixed or contingent, other than (i) in the ordinary course
of business, (ii) as a result of transactions disclosed in
the Prospectus, or (iii) short-term borrowings which result
in short-term note indebtedness of not exceeding, in the
aggregate at any one time outstanding, the limitations then
authorized for the Company by the SEC under the Public
Utility Holding Company Act of 1935 (the 1935 Act). Since
the date of the latest financial statements included or
incorporated by reference in the Registration Statement,
there has not been any material adverse change in the
financial condition of the Company not disclosed in the
Prospectus. Except as disclosed in said Prospectus, there
are no proceedings at law or in equity or before any Federal
or state commission or other public authority the result of
which might have a material adverse effect upon the
financial condition of the Company.
(v) The consummation of the transactions herein
contemplated and the performance by the Company of the terms
of this Distribution Agreement and each applicable Terms
Agreement will not violate any of the terms, conditions, or
provisions of, or constitute a default under, any franchise,
indenture, or other contract or agreement to which the
Company is now a party or by which the Company or its
property may be bound or affected, or the Company's articles
of organization, by-laws, or preferred stock provisions, or
any order of any court or administrative agency by which the
Company is bound.
(vi) The issue and sale of the Bonds are solely for
the purpose of financing the business of the Company.
(b) Any certificate signed by any officer of the
Company and delivered to you or to your counsel in connection
with an offering of Bonds shall be deemed a representation and
warranty of and by the Company to you as to the matters covered
thereby.
SECTION 2. Solicitations as Agent; Purchases as
Principal.
(a) Solicitations as Agent. On the basis of the
representations and warranties herein contained, but subject to
the terms and conditions herein set forth, you agree, as agent of
the Company to use your reasonable best efforts to solicit offers
to purchase the Bonds upon the terms and conditions set forth in
the Prospectus. You are hereinafter sometimes referred to, in
your capacity as agent, as the Agent.
The Company reserves the right, in its sole discretion,
to suspend solicitation of purchases of the Bonds commencing at
any time for any period of time or permanently. Upon receipt of
instructions from the Company, you will forthwith suspend
solicitation of purchases from the Company until such time as the
Company has advised you that such solicitation may be resumed.
The Company agrees to pay you a commission, in the form
of a discount, equal to the percentage of the principal amount of
each Bond sold by the Company as a result of a solicitation made
by you as set forth in Schedule A hereto.
As Agent, you are authorized to solicit orders for the
Bonds only in denominations of $1,000 or any integral multiple
thereof. You shall communicate to the Company, orally or in
writing, each reasonable offer to purchase Bonds received by you
as Agent. The Company shall have the sole right to accept offers
to purchase the Bonds and may reject any such offer in whole or
in part. You shall have the right, in your discretion reasonably
exercised, to reject any offer to purchase the Bonds received by
you in whole or in part, and any such rejection shall not be
deemed a breach of your agreement contained herein. The Company
reserves the right to sell, and may solicit and accept offers to
purchase, Bonds directly on its own behalf, and, in the case of
any such sale not resulting from a solicitation made by you, no
commission will be payable with respect to such sale.
(b) Purchases as Principal. Each sale of Bonds to you
as principal shall be made in accordance with the terms of this
Agreement and a separate agreement which will provide for the
sale of such Bonds to, and the purchase by, you. Each such
separate agreement (which shall be substantially in the form of
Exhibit A hereto and which may take the form of an exchange of
any standard form of written telecommunication between you and
the Company) is herein referred to as a Terms Agreement. Your
commitment to purchase Bonds pursuant to any Terms Agreement
shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained
and shall be subject to the terms and conditions herein set
forth. Each Terms Agreement shall specify the principal amount
of Bonds to be purchased by you pursuant thereto, the price to be
paid to the Company for such Bonds, the initial public offering
price, if any, at which the Bonds are proposed to be reoffered,
the Settlement Date, the place of delivery of and payment for
such Bonds, and any other particular terms of the Bonds. Such
Terms Agreement shall also specify any requirements for opinions
of counsel, letters from Coopers & Lybrand L. L. P., and
certificates of officers of the Company pursuant to Section 5
hereof.
(c) Procedures. Procedural details relating to the
issue and delivery of Bonds, and solicitation of offers to
purchase Bonds, and the payment in each case therefor, shall be
as set forth in the Administrative Procedures attached hereto as
Exhibit B (the Procedures). You and the Company agree to perform
the respective duties and obligations specifically provided to be
performed by each of us herein and in the Procedures, as amended
from time to time. The Procedures may be amended only by written
agreement of you and the Company.
(d) Delivery. The documents required to be delivered
by Section 5 hereof shall be delivered at the office of Peabody &
Arnold, counsel for State Street Bank and Trust Company, on the
date hereof, or at such other time as you and the Company may
agree upon in writing, which in no event shall be later than the
time at which you commence solicitation of purchases of 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 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 Bonds in your capacity as Agent and to
cease sales of any Bonds you may then own as principal, and the
Company will promptly prepare and file with the SEC such
amendment or supplement, whether by filing documents pursuant to
the Exchange Act or the Securities Act or otherwise, as may be
necessary to correct such untrue statement or omission or to make
the Registration Statement comply with such requirements.
(b) On or prior to the date on which there shall be
released to the general public interim financial statement
information related to the Company with respect to each of the
first three quarters of any fiscal year or preliminary financial
statement information with respect to any fiscal year, the
Company shall furnish such information to you, confirmed in
writing, and shall cause the Prospectus to be amended or
supplemented to include or incorporate by reference full or
capsule financial information with respect to the results of
operations of the Company for the period between the end of the
preceding fiscal year and the end of such quarter or for such
fiscal year, as the case may be, and corresponding information
for the comparable period of the preceding fiscal year, as well
as such other information and explanations as shall be necessary
for an understanding of such financial information or as shall be
required by the Securities Act or the Regulations; provided,
however, that if on the date of such release you shall have
suspended solicitation of purchases of the Bonds in your capacity
as Agent pursuant to a request from the Company and shall not
then hold any Bonds as principal, the Company shall not be
obligated so to amend or supplement the Prospectus until such
time as the Company shall determine that solicitation of
purchases of the Bonds should be resumed or shall subsequently
enter into a new Terms Agreement with you.
(c) On or prior to the date on which there shall be
released to the general public financial information included in
or derived from the audited financial statements of the Company
for the preceding fiscal year, the Company shall cause the
Registration Statement and the Prospectus to be amended, whether
by the filing of documents pursuant to the Exchange Act or the
Securities Act or otherwise, to include or incorporate by
reference such audited financial statements and the report or
reports, and consent or consents to such inclusion or
incorporation by reference, of the independent accountants with
respect thereto, as well as such other information and
explanations as shall be necessary for an understanding of such
financial statements or as shall be required by the Securities
Act or the Regulations; provided, however, that if on the date of
such release you shall have suspended solicitation of purchases
of the Bonds in your capacity as Agent pursuant to a request from
the Company, and shall not then hold any Bonds as principal, the
Company shall not be obligated so to amend or supplement the
Prospectus until such time as the Company shall determine that
solicitation of purchases of the Bonds should be resumed or shall
subsequently enter into a new Terms Agreement with you.
(d) The Company will make generally available to its
security holders as soon as practicable, but not later than 18
months after the effective date of the Registration Statement and
of each post-effective amendment thereto and after the date of
each Terms Agreement, an earnings statement of the Company (which
need not be audited) complying with Section 11(a) of the
Securities Act and the Regulations (including, at the option of
the Company, Rule 158 under the Act).
(e) The Company will give to you notice of its
intention to file any amendment to the Registration Statement or
any amendment or supplement to the Prospectus, whether by the
filing of documents pursuant to the Exchange Act or the
Securities Act or otherwise (other than by the filing of an
amendment or supplement relating solely to the terms of an issue
of Bonds, a change in the principal amount of Bonds remaining to
be sold, or similar changes) and will furnish your counsel with
copies of any such amendment or supplement or other documents
proposed to be filed, other than a current report on Form 8-K, a
reasonable time in advance of filing, and will afford your
counsel a reasonable opportunity to examine such amendment or
supplement or other document and to make objections of substance
thereto.
(f) The Company will advise you immediately, (i) of
the effectiveness of any amendment to the Registration Statement,
(ii) of the filing with the SEC of any supplement to the
Prospectus or any document to be filed pursuant to the Exchange
Act or the Securities Act which will be incorporated by reference
in the Prospectus, (iii) of the receipt of any comments from the
SEC with respect to the Registration Statement or the Prospectus,
(iv) of any request by the SEC for any amendment to the
Registration Statement or any amendment or supplement to the
Prospectus or for additional information, (v) of the issuance by
the SEC of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for
that purpose, (vi) of the issuance by the Massachusetts
Department of Public Utilities (MDPU) of any order altering,
suspending, supplementing, or otherwise affecting any of its
order permitting the issuance and sale of the Bonds, (vii) of any
action by the SEC which has the effect of eliminating the
exemption from the requirement of obtaining an order under the
1935 Act pursuant to Rule 52 promulgated thereunder, and (viii)
of the commencement of any litigation in connection with the
Bonds against the Company or any of its directors or any signer
of the Registration Statement.
(g) The Company will promptly deliver to you a
certified copy of the Registration Statement, as originally
filed, and of all amendments thereto heretofore or hereafter
made, including a copy of each consent included or incorporated
by reference therein or filed as an exhibit thereto (but
excluding any other exhibit thereto unless specifically requested
by you) all to the extent not previously delivered. The Company
will deliver to you in New York or Boston, as requested, as many
unsigned copies of the Prospectus (as supplemented or amended, if
the Company shall have made any supplements or amendments
thereto) and any documents incorporated by reference therein as
you may reasonably request so long as you are required to deliver
a Prospectus in connection with the sale or solicitation of
offers to purchase the Bonds.
(h) The Company will furnish to you, at the earliest
time the Company makes the same available to others, copies of
its annual reports and other financial reports furnished or made
available to the public generally.
(i) The Company will endeavor, in cooperation with
you, to qualify the Bonds for offering and sale under the
applicable securities laws of such states and other jurisdictions
of the United States as you may designate, and will maintain such
qualifications in effect for as long as may be required for the
distribution of the Bonds; provided, however, that the Company
shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified. The Company will
file such statements and reports as may be required by the laws
of each jurisdiction in which the Bonds have been qualified as
above provided.
(j) The Company, during the period when the Prospectus
is required to be delivered under the Securities Act, will file
promptly all documents required to be filed with the SEC pursuant
to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act.
(k) Between the date of any Terms Agreement and the
Settlement Date with respect to such Terms Agreement, the Company
will not, without your prior consent, offer or sell, or enter
into any agreement to sell, any debt securities of the Company
(other than the Bonds) of the same or substantially similar
maturity to the Bonds, except as may otherwise be provided in any
such Terms Agreement.
SECTION 4. Payment of Expenses. The Company covenants
and agrees with you that the Company will pay or cause to be paid
expenses incident to its performance of its obligations under
this Agreement, including the following: (i) the preparation and
filing of the Registration Statement and all amendments thereto,
(ii) the preparation, issuance, and delivery of the Bonds if in
certificated form, (iii) the fees and disbursements of the
Company's accountants and of the Trustee and its counsel, (iv)
the qualification of the Bonds under securities laws in
accordance with the provisions of Section 3(i), including filing
fees and the reasonable fees and disbursements of your counsel in
connection therewith and in connection with the preparation of
any Blue Sky Survey and any Legal Investment Survey, (v) the
printing and delivery to you in quantities as hereinabove stated
of copies of the Registration Statement and all amendments
thereto, and of the Prospectus and any amendments or supplements
thereto, (vi) the printing and delivery to you of copies of the
Indenture and any Blue Sky Survey and any Legal Investment
Survey, (vii) any fees charged by rating agencies for the rating
of the Bonds, (viii) the fees and expenses, if any, incurred with
respect to any filing with the National Association of Securities
Dealers, Inc., and (ix) all other costs and expenses incident to
the performance of its obligations hereunder which are not
otherwise specifically provided in this subsection.
The Company shall also reimburse you [the Agents] for
the reasonable fees and disbursements of your 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 Bonds as agent of
the Company and your obligations to purchase Bonds pursuant to
any Terms Agreement will be subject to the accuracy of the
representations and warranties on the part of the Company herein,
to the accuracy of the statements of the Company's officers made
in any certificate furnished pursuant to the provisions hereof,
to the performance and observance by the Company of all covenants
and agreements herein contained on its part to be performed and
observed and to the following additional conditions precedent:
(a) Prior to the Commencement Date, the Indenture
shall have been qualified under the Trust Indenture Act; there
shall have been issued an order of the MDPU, to the extent that
it has jurisdiction, permitting the issuance and sale of the
Bonds, and at such time and at each Settlement Date with respect
to any applicable Terms Agreement such order shall not contain
any provision which, in your opinion or the opinion of the
Company, is unduly burdensome to the Company.
(b) At the Commencement Date and at each Settlement
Date with respect to any applicable Terms Agreement, if called
for by such Terms Agreement, you shall have received:
(i) The opinion, dated as of such date, of Robert King
Wulff, Esquire, and/or Kirk L. Ramsauer, Esquire, Counsel
for the Company, in form and substance satisfactory to you
and your counsel, to the effect that:
(A) The Company is a corporation validly
organized and duly existing under the laws of The
Commonwealth of Massachusetts, has the corporate power
to transact the electric business in which it is now
engaged, and has franchises adequate for carrying on
such business.
(B) This Agreement (and, if the opinion is being
given pursuant to Section 6(c) hereof on account of the
Company having entered into a Terms Agreement, the
applicable Terms Agreement) has been duly authorized,
executed, and delivered by the Company.
(C) The Company had corporate power proper and
adequate for making the Indenture which was duly
executed and delivered in accordance with proper
authority from the stockholders and directors of the
Company.
(D) The Supplemental Indenture, including
Schedule A thereto, contains a correct and adequate
description of the real estate, rights or interests in
real estate, and fixed property of the Company acquired
up to __________, and not included in the Original
Indenture or the previous supplemental indentures, and
then owned of record, except for the properties
expressly excluded from the Indenture.
(E) All filings and recordings of or in respect
of the Indenture have been duly made where such filings
and recordings are necessary for the preservation or
protection of the lien thereof, and the Indenture is a
valid, binding, and enforceable instrument subject to
laws of general application affecting the rights and
remedies of mortgagees and creditors.
(F) The Company has corporate power proper and
adequate for the execution and issuance of the Bonds
under the Indenture in the aggregate principal amount
of $ , and, in accordance with due
authorization from the stockholders and directors of
the Company, when executed and certified as specified
in the Indenture and delivered against payment therefor
in accordance with this Agreement, will be duly issued
and valid and binding obligations of the Company and
entitled to the benefits and security of the Indenture.
(G) The Bonds are secured by a direct first
mortgage lien on substantially all the properties and
franchises now owned by the Company, subject to the
property specifically excepted in the granting clauses
of, and to the liens permitted by, the Indenture,
including the prior lien of the Trustee for
compensation, expenses, and liabilities; and, except as
disclosed in the Prospectus, there is no existing
indebtedness secured by lien on the property securing
such Bonds ranking prior to or on a parity with the
lien securing the Bonds.
(H) The property specifically described as
mortgaged property in the Indenture constitutes
substantially all of the property owned by the Company
and used by, or useful to, it in its business, except
for the property expressly excepted from the Indenture.
None of the real estate and rights in real estate
described in the schedules to the Indenture and which
constitute the principal properties of the Company is
excluded from the lien of the Indenture by virtue of
the provisions of clause (c) of the paragraph in the
Original Indenture beginning "But Specifically
Reserving, Excepting and Excluding," and as to the
remainder of the properties described in said schedules
the exclusions, if any, by virtue of said clause (c)
are minor.
(I) The principal substations of the Company are
in general on land owned by the Company, the balance
being upon land of others pursuant to lease or other
arrangements. The electric lines and related equipment
of the Company are in general on land of others, being
in substantial part located upon, over, or under public
streets or highways and in part upon, over, or under
private ways or other property not owned by the
Company, such occupation of private property being in
general pursuant to easements, licenses, or permits
from owners thereof, but without examination of titles,
or pursuant to long user, a majority of the poles being
owned jointly with others, principally telephone
companies.
(J) With respect to the issue and sale of the
Bonds, an appropriate order has been issued by the
MDPU, to the extent it has jurisdiction, authorizing
the issue and sale of the Bonds; the Company is
exempted by Rule 52 under the 1935 Act from the
requirement of an order of the SEC; the Indenture has
been qualified under the Trust Indenture Act of 1939;
the Registration Statement has become effective under
the Securities Act; said order and said Registration
Statement remain, to the best of such counsel's
knowledge, in effect at this date; and no other
approval, consent, or action of any governmental or
regulatory authority is required for the issue and sale
of the Bonds or the carrying out of the provisions of
this Agreement (except that such counsel need express
no opinion concerning the applicability of the blue-sky
or securities laws of the several states in connection
with sales by you and others of the Bonds).
(K) The statements upon such counsel's authority
made or incorporated by reference in the Registration
Statement and in the Prospectus, relating to the Bonds
are correct; the Registration Statement and the
Prospectus, including all documents incorporated by
reference therein in accordance with the requirements
of Form S-3 under the Securities Act (except for the
financial statements contained or incorporated by
reference therein, as to which such counsel need
express no opinion), comply as to form in all material
respects with the relevant requirements of the
Securities Act and the Exchange Act, as amended, and of
the applicable rules, regulations, and releases of the
SEC thereunder; and the Bonds conform to the
description thereof in the Registration Statement and
Prospectus.
(L) Nothing has come to the attention of such
counsel which leads them to believe that either the
Registration Statement, or the documents incorporated
by reference therein, contains an untrue statement of a
material fact or omits to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading or that the
Prospectus, as amended or supplemented at the
Commencement Date or said Settlement Date, as the case
may be, contains an untrue statement of a material fact
or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances
in which they were made, not misleading.
(ii) The opinion of Milbank, Tweed, Hadley & McCloy,
counsel to the Agent, with respect to the validity of the
Indenture, the Bonds, the Registration Statement, the
Prospectus, and other related matters as you may reasonably
request.
(c) At the Commencement Date and at each Settlement
Date with respect to any Terms Agreement,
(i) no stop order suspending the effectiveness of the
Registration Statement shall have been entered and be in
effect, no proceeding for that purpose shall be pending, and
any request on the part of the SEC for amendments or
additional information shall have been complied with to its
satisfaction;
(ii) the order of the MDPU referred to in paragraph
(a) of this Section shall remain in force and effect; and
(iii) the representations and warranties of the
Company herein shall be true and correct;
and you shall have received a certificate of an officer of the
Company, dated as of the Commencement Date or such Settlement
Date, if called for by the applicable Terms Agreement, to such
effect to the best of his knowledge, information and belief.
(d) At the Commencement Date and at each Settlement
Date with respect to any Terms Agreement, if called for by such
Terms Agreement, you shall have received from Coopers & Lybrand
L. L. P., a letter, dated as of the Commencement Date or such
Settlement Date, in form and substance satisfactory to you, to
the effect that:
(i) They are independent certified public accountants
with respect to the Company within the meaning of the
Securities Act and the and the applicable published rules
and regulations thereunder;
(ii) In their opinion the financial statements and
financial schedules (included or incorporated by reference
in the Registration Statement) examined by them as stated in
their report (incorporated by reference in the Registration
Statement) comply as to form in all material respects with
the applicable accounting requirements of the Securities Act
and the Exchange Act and of the published rules and
regulations thereunder;
(iii) On the basis of reading the minutes of the
meetings of the stockholders and the Board of Directors of
the Company held during any period subsequent to 199 , and
not covered by the financial statements referred to in
paragraph (ii) of this clause, as set forth in the minute
books through a specified date not more than five business
days prior to the date of their letter, a reading of the
unaudited financial statements of the Company included or
incorporated by reference in the Registration Statement, and
inquiries of officials of the Company who have
responsibility for financial and accounting matters (which
procedures do not constitute an examination made in
accordance with generally accepted standards), they agree
that if any unaudited amounts of total operating revenue and
net income are set forth or incorporated by reference in the
Registration Statement, including amounts set forth under
"Selected Financial Information", they agree with the
corresponding amounts set forth in the unaudited financial
statements for that period. Those officials of the Company
who have responsibility for financial and accounting matters
stated that:
(A) that the unaudited financial statements
included or 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 included or incorporated by
reference in the Registration Statement;
(B) that, during the period from the date of the
latest financial statements included or incorporated by
reference in the Registration Statement through a
specified date not more than five business days prior
to the date of their letter, there was no change in the
capital stock and no increase in long-term debt of the
Company; and
(iv) That they have compared the dollar amounts
contained in Exhibit 12 (Computation of Ratio of Earnings to
Fixed Charges) to the Registration Statement with such
dollar amounts derived from the general accounting records
of the Company or from schedules prepared by the Company or
derived directly from such records or schedules by analysis
or computation, and have found such dollar amounts to be in
agreement, and have recalculated the ratios contained in
Exhibit 12 and have found the calculation of such ratios to
be mathematically correct, except in each case as otherwise
stated in said letter.
(e) At the Commencement Date and at each Settlement
Date with respect to any applicable Terms Agreement, your counsel
shall have been furnished with such documents and opinions as
they may reasonably require for the purpose of enabling them to
pass upon the issuance and sale of the Bonds as herein
contemplated and related proceedings, or in order to evidence the
accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein
contained and all proceedings taken by the Company in connection
with the issuance and sale of the Bonds as herein contemplated
shall be satisfactory in form and substance to you and your
counsel.
(f) Your obligations to purchase Bonds pursuant to any
Terms Agreement will be subject to the following further
conditions: (i) the rating assigned by any nationally recognized
securities rating agency to any debt securities of the Company as
of the date of the applicable Terms Agreement shall not have been
lowered since that date; (ii) there shall not have occurred,
since the date of the applicable Terms Agreement or since the
respective dates as of which information is given in the
Registration Statement, any material adverse change in the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the
ordinary course of business; (iii) there shall not have come to
your attention any facts that would cause you to believe that the
Prospectus, at the time it was required to be delivered to a
purchaser of the Bonds, contained an untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements therein, in light of the
circumstances existing at such time, not misleading; (iv) there
shall not have occurred any suspension or limitation of trading
in securities generally on the New York Stock Exchange, or any
setting of minimum prices for trading on such exchange, or any
suspension of trading of any securities of the Company on any
exchange or in the over-the-counter market; (v) there shall not
have occurred any banking moratorium declared by Federal or New
York authorities; or (vi) there shall not have occurred any
outbreak or escalation of major hostilities in which the United
States is involved, any declaration of war by Congress, or any
other substantial national or international calamity or emergency
if, in the judgment of the Agent, the effect of such outbreak,
escalation, declaration, calamity, or emergency makes it
impracticable or inadvisable to proceed.
If any condition specified in this Section shall not
have been fulfilled, this Agreement (and, at your option, any
Terms Agreement) may be terminated by you by notice to the
Company at any time at or prior to the applicable Settlement
Date, and such termination shall be without liability of any
party to any other party, except that the covenants set forth in
Section 3(d) hereof, the provisions of Section 4 hereof, the
indemnity and contribution agreement set forth in Section 7
hereof, and the provisions of Sections 8 and 12 hereof shall
remain in effect.
SECTION 6. Additional Covenants of the Company. The
Company covenants and agrees that:
(a) Each acceptance by it of an offer for the purchase
of Bonds, and each sale of Bonds to you pursuant to a Terms
Agreement, shall be deemed to be an affirmation that the
representations and warranties of the Company contained in this
Agreement and in any certificate theretofore delivered to you
pursuant hereto are true and correct at the time of such
acceptance or sale, as the case may be, and an undertaking that
such representations and warranties will be true and correct at
the time of delivery to the purchaser or his agent, or you, of
the Bond or Bonds relating to such acceptance or sale, as the
case may be, as though made at and as of each such time (and it
is understood that such representations and warranties shall
relate to the Registration Statement and the Prospectus as
amended and supplemented to each such time);
(b) Within five business days after the Registration
Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement relating solely to the
terms of an issue of Bonds, a change in the principal amount of
Bonds remaining to be sold, or similar changes) or there is filed
with the SEC any document incorporated by reference into the
Prospectus, and, if so indicated in the applicable Terms
Agreement, each time the Company sells Bonds to you pursuant to a
Terms Agreement, the Company shall furnish or cause to be
furnished to you forthwith a certificate in form satisfactory to
you to the effect that the statements contained in the
certificate referred to in Section 5(c) hereof which were last
furnished to you are true and correct at the time of such
amendment or supplement or filing or sale, as the case may be, as
though made at and as of such time (except that such statements
shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such time) or, in lieu
of such certificate, certificates of the same tenor as the
certificates referred to in said Section 5(c), modified as
necessary to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of
such certificates;
(c) Within five business days after the Registration
Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement (i) relating solely to
the terms of an issue of Bonds, a change in the principal amount
of Bonds remaining to be sold, or similar changes or (ii) setting
forth or incorporating by reference financial statements or other
information as of and for a fiscal quarter) or there is filed
with the SEC any document (other than a document setting forth or
incorporating by reference only financial statements or other
financial information) incorporated by reference into the
Prospectus, and, if so indicated in the applicable Terms
Agreement, each time the Company sells Bonds to you pursuant to a
Terms Agreement, the Company shall furnish or cause to be
furnished forthwith to you and your counsel a written opinion of
Robert King Wulff and/or Kirk L. Ramsauer, Counsel for the
Company, or other counsel satisfactory to you, dated the date of
delivery of such opinion, in form satisfactory to you, of the
same tenor as the opinion referred to in paragraphs (K) and (L)
of Section 5(b)(i) hereof and as to such other matters referred
to in Section 5(b)(i) hereof as you may request but modified, as
necessary, to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of
such opinion or, in lieu of such opinion, counsel last furnishing
such opinion to you shall furnish you with a letter to the effect
that you may rely on such last opinion to the same extent as
though it was dated the date of such letter authorizing reliance
(except that statements in such last opinion shall be deemed to
relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of delivery of such letter
authorizing reliance); and
(d) Within five business days after the filing with
the SEC of each of the Company's annual report on Form 10-K, the
Company's quarterly reports on Form 10-Q, and any of the
Company's current reports on Form 8-K which contain financial
information, and each other time that the Registration Statement
or the Prospectus shall be amended or supplemented to include
additional financial information or there is filed with the SEC
any document incorporated by reference into the Prospectus which
contains additional financial information or, if so indicated in
the applicable Terms Agreement, the Company sells Bonds to you
pursuant to a Terms Agreement, the Company shall cause Coopers &
Lybrand L. L. P. 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 L. L. P. may limit the
scope of such letter to the unaudited financial statements
included in such amendment or supplement unless any other
information included therein of an accounting, financial or
statistical nature is of such a nature that, in your reasonable
judgment, such letter should cover such other information;
provided, further, that with respect to the filing of any of the
Company's reports on Form 8-K containing only financial
information which does not in any way reflect any material change
in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, the Company may
provide you with a certificate of its Treasurer, Assistant
Treasurer, or a principal accounting officer to such effect in
lieu of the letter from Coopers & Lybrand L. L. P. referred to
above in this paragraph (d).
SECTION 7. Indemnification. (a) The Company will
indemnify and hold harmless you and each person, if any, who
controls you within the meaning of Section 15 of the Securities
Act against any loss, claim, or liability, joint or several
(including the reasonable cost of investigating or defending any
such alleged loss, claim, or liability and reasonable counsel
fees incurred in connection therewith), arising by reason of any
person acquiring any of the Bonds, on the ground that the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, includes or included an untrue statement of a
material fact or omits or omitted to state a material fact which
(in the case of the Registration Statement, or any amendment
thereto) is or was required to be stated therein or is or was
necessary to make the statements therein not misleading or which
(in the case of the Prospectus, or any amendment or supplement
thereto) is or was necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, unless such statement or omission was made in
reliance upon written information furnished to the Company by
you, for use therein, or unless such statement or omission shall
occur in the Statement of Eligibility and Qualification under the
Trust Indenture Act (Form T-1) of the Trustee under the
Indenture. Upon commencement of any such suit, if you or any
controlling person wish to make a claim in respect thereof
against the Company under its agreement herein contained, you or
such controlling person, as the case may be, shall, within thirty
days after the summons or other first legal process giving
information of the nature of the claim shall have been served
upon you or upon such controlling person (or after he shall have
received notice of such service on any designated agent), give
notice in writing of such suit to the Company; but failure so to
notify the Company shall not relieve it from any liability which
it may have to the person against whom such suit is brought,
otherwise than on account of its indemnity agreement contained in
this paragraph. The Company will be entitled to participate at
its own expense in the defense or, if it so elects, to assume the
defense of any such suit, and, if the Company elects to assume
the defense, the defendant or defendants therein will be entitled
to participate in the defense but shall bear the fees and
expenses of any additional counsel retained by them, unless the
indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel. The indemnifying party
shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or
if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
No indemnity by the Company hereunder shall apply in respect of
(i) any Prospectus used at a time not authorized under the
Securities Act or this Agreement, (ii) any Prospectus used in
unamended or unsupplemented form after the same has been amended
or supplemented, provided the Company has supplied such amendment
or supplement to you, or (iii) you, or any person controlling
you, on account of any loss, claim, or liability arising by
reason of any person acquiring any of the Bonds, if a copy of the
Prospectus has not been sent or given by you or a securities
dealer to such person with or prior to the written confirmation
of the sale involved.
(b) You will indemnify and hold harmless the Company
and each of its officers and directors and each person, if any,
who controls the Company within the meaning of Section 15 of the
Securities Act, to the same extent as the Company in the
foregoing paragraph (a) agrees to indemnify and hold harmless
you, but only with respect to any written information furnished
to the Company by you for use in the Prospectus, or any amendment
or supplement thereto. If any action shall be brought hereunder
against the Company or any such officer, director, or controlling
person, you shall have the rights and duties given to the Company
by paragraph (a), and the Company or such officer, director, or
controlling person shall have the rights and duties given to you
by said paragraph.
(c) If the indemnification provided for in this
Section 7 is unavailable to an indemnified party, each
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, or liability,
in such proportion as is appropriate to reflect not only the
relative benefits received by the Company on the one hand and by
you on the other but also the relative fault of the Company on
the one hand and of you on the other in connection with the
statement or omission that resulted in such loss, claim, or
liability, as well as any other relevant equitable
considerations. The relative benefits received by the Company on
the one hand and you on the other in connection with the sale of
the Bonds shall be deemed to be in the same proportion as the
total sales price received by the Company from the sale of the
Bonds to the date of liability, before deducting expenses, bear
to the total discounts or commissions, if any, received by you to
the date of such liability. The relative fault of the Company on
the one hand and of you on the other shall be determined by
reference to, among other things, whether the untrue or allegedly
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied
by the Company or by you and the parties' relative intent,
knowledge, access to information, and opportunity to correct or
prevent such statement or omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
SECTION 8. Status of the Agent. In soliciting
purchases of the Bonds from the Company, you are acting solely as
agent for the Company and not as principal. You will make
reasonable efforts to assist the Company in obtaining performance
by each purchaser whose offer to purchase Bonds from the Company
has been solicited by you and accepted by the Company but you
shall not have any liability to the Company in the event any such
purchase is not consummated for any reason.
SECTION 9. Representations, Warranties and Agreement
to Survive Delivery. All representations, warranties and
agreements contained in this Agreement or any Terms Agreement, or
contained in certificates of officers of the Company submitted
pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of
you or any controlling person, or by or on behalf of the Company,
and shall survive each delivery of and payment for any of the
Bonds.
SECTION 10. Termination. This Agreement may be
terminated for any reason, at any time by either party hereto
upon the giving of 30 days' written notice of such termination to
the other party hereto. In the event of any such termination,
neither party will have any liability to the other party hereto,
except that (i) you shall be entitled to any commissions earned
in accordance with the third paragraph of Section 2(a) hereof,
(ii) if at the time of termination (A) you shall own any of the
Bonds with the intention of reselling them or (B) an offer to
purchase any of the Bonds has been accepted by the Company but
the time of delivery to the purchaser or his agent of the Bond or
Bonds relating thereto has not occurred, the covenants set forth
in Sections 3 and 6 hereof shall remain in effect until such
Bonds are so resold or delivered, as the case may be, and (iii)
the covenant set forth in Section 3(d) hereof, the provisions of
Section 4 hereof, the indemnity agreement set forth in Section 7
hereof, and the provisions of Sections 8 and 12 hereof shall
remain in effect.
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 ___________________.
SECTION 12. Parties. This Agreement and any Terms
Agreement shall inure to the benefit of and be binding on the
Agent and the Company and their respective successors. Nothing
expressed or mentioned in this Agreement or any Terms Agreement
is intended or shall be construed to give any person, firm, or
corporation, other than the parties hereto and their respective
successors and the controlling persons, officers, and directors
referred to in Section 7, and their heirs and legal
representatives, any legal or equitable right, remedy, or claim
under or in respect of this Agreement or any Terms Agreement or
any provision herein or therein contained. This Agreement and
any Terms Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of
the parties hereto and their respective successors and said
controlling persons, officers, directors, and their heirs and
legal representatives, and for the benefit of no other person,
firm, or corporation. No purchaser of Bonds shall be deemed to
be a successor by reason merely of such purchase.
SECTION 13. Governing Law. This Agreement and the
rights and obligations of the parties created hereby shall be
governed by the laws of The Commonwealth of Massachusetts.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to the
Company a counterpart hereof, whereupon this instrument along
with all counterparts will become a binding agreement between you
and the Company in accordance with its terms.
Very truly yours,
MASSACHUSETTS ELECTRIC COMPANY
By_________________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first
above written:
_________________________________
By________________________________________
Name:
Title:
EXHIBIT A
MASSACHUSETTS ELECTRIC COMPANY
(A Massachusetts corporation)
First Mortgage Bonds, Series
TERMS AGREEMENT
, 199
Massachusetts Electric Company
25 Research Drive
Westborough, Massachusetts 01582
Attention: Treasurer
Re: Distribution Agreement dated __________,19__
Subject to the terms and conditions of the Distribution
Agreement dated __________, 19__ between Massachusetts Electric
Company (the Company) and the undersigned, the undersigned agrees
to purchase the following Bonds: $
Original Issue Date:
Principal Amount:
Purchase Price: %
Original Issue Discount, if any:
Maturity Date:
Interest Rate: %
Redemption Provisions:
Method of and Specified Funds for Payment of Purchase
Price:
[By certified or official bank check or checks, payable
to the order of the Company in Boston Federal Reserve
Bank (same day) Funds.] [By wire to a bank account
specified by the Company in immediately available
funds.]
Settlement Date:
Exceptions, if any, to Section 3(k) of the Distribution
Agreement:
[The following documents referred to in the
Distribution Agreement shall be delivered as a
condition to the Closing:
[The certificate referred to in Section
[5(c)][6(b)].]
[The opinion referred to in Section
[5(b)(i)][6(c)].]
[The opinion referred to in Section 5(b)(ii).]
[The accountants' letter referred to in
Section [5(d)][6(d)].]
Syndicate Provisions:
[Set forth any provisions relating to underwriters' default
and step-up of amounts to be
purchased by underwriters acting with [Agent]].
[NAME OF AGENT]
By_________________________________
Name:
Title:
Accepted:
MASSACHUSETTS ELECTRIC COMPANY
By________________________________________
Name:
Title:
Schedule A
Medium Term Note Programs
-------------------------
Fee Schedule
------------
EXHIBIT B
MASSACHUSETTS ELECTRIC COMPANY
First Mortgage Bonds, Series
Administrative Procedures
First Mortgage Bonds, Series (the Bonds) in the
aggregate principal amount of up to $__________ are to be offered
from time to time by Massachusetts Electric Company (the
Company). _____________________ as agent (the Agent) has agreed
to use its reasonable best efforts to solicit purchases of the
Bonds directly from the Company, and may also purchase Bonds, as
principal, for resale. The Bonds are being offered and sold
pursuant to a Distribution Agreement between the Company and the
Agent, dated __________ (the Distribution Agreement). The Bonds
have been registered with the Securities and Exchange Commission
(the SEC). The Bonds will be issued pursuant to an indenture
supplemental to the First Mortgage Indenture and Deed of Trust
dated as of July 1, 1949 (the Indenture) between the Company and
State Street Bank and Trust Company (formerly Second Bank - State
Street Trust Company, successor to The Second National Bank of
Boston), as trustee (in its capacity as trustee under the
Indenture and otherwise, referred to herein as State Street).
Each Bond will be represented by either a Global
Security (as defined hereinafter) delivered to State Street, as
agent for the Depository Trust Company (DTC), and recorded in the
book-entry system maintained by DTC (a Book-Entry Bond) or a
certificate delivered to the holder thereof or a person
designated by such holder (a Certificated Bond). In the event
that Book-Entry certificates are to be delivered to other
depositaries or their agents, the administrative procedures will
be appropriately amended or supplemented at that time. An owner
of a Book-Entry Bond will not be entitled to receive a
certificate representing such Bond. Book-Entry Bonds will be
issued in accordance with the administrative procedures set forth
in Part I hereof and Certificated Bonds will be issued in
accordance with the administrative procedures set forth in Part
II hereof.
To the extent the procedures set forth below conflict
with the provisions of the Bonds, the Indenture, or the
Distribution Agreement, the relevant provisions of the Bonds, the
Indenture, and the Distribution Agreement shall control. Unless
otherwise defined herein, terms defined in the Indenture shall be
used herein as therein defined.
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY BONDS
In connection with the qualification of the Book-Entry
Bonds for eligibility in the book-entry system maintained by DTC,
State Street will perform the custodial, document control, and
administrative functions described below, in accordance with its
respective obligations under a Letter of Representations from the
Company and State Street to DTC, dated as of __________, and a
Medium-Term Note Certificate Agreement between State Street and
DTC, dated as of August 21, 1989, and its obligations as a
participant in DTC, including DTC's Same-Day Funds Settlement
System (SDFS).
Issuance: On any date of settlement (as defined under
Settlement below) for one or more Book-Entry
Bonds, the Company will issue a single global
security in fully registered form without
coupons (a Global Security) representing up
to $__________ principal amount of all such
Bonds that have the same maturity, interest
rate, redemption, and, in the case of
original issue discount Bonds, original issue
discount provisions (collectively, the
Terms). Each Global Security will be dated
and issued as of the date of its
certification by State Street. No Global
Security will represent any Certificated
Bond.
CUSIP The Company has arranged with the CUSIP
Numbers: Service Bureau of Standard & Poor's
Corporation (the CUSIP Service Bureau) for
the reservation of one series of CUSIP
numbers (including tranche numbers). This
series consists of approximately 900 CUSIP
numbers and relates to Global Securities
representing the Book-Entry Bonds. The
Company has delivered to State Street and to
DTC a written list of the numbers in such
series. State Street will assign CUSIP
numbers to Global Securities as described
below under Settlement Procedure "B". DTC
will notify the CUSIP Service Bureau
periodically of the CUSIP numbers that State
Street has assigned. At any time when fewer
than 100 of the reserved CUSIP numbers of the
series remain unassigned, and if it deems
necessary, the Company will reserve
additional CUSIP numbers for assignment to
Global Securities. Upon obtaining such
additional CUSIP numbers, the Company shall
deliver a list thereof to State Street and
DTC.
Registration: Each Global Security will be registered in
the name of Cede & Co., as nominee for DTC,
on the transfer registry maintained under the
Indenture. The beneficial owner of a Book-
Entry Bond (or one or more indirect
participants in DTC designated by such owner)
will designate one or more participants in
DTC (with respect to such Bond, the
Participant) to act as agent or agents for
such owner in connection with the book-entry
system maintained by DTC, and DTC will record
in book-entry form, in accordance with
instructions provided by such Participant, a
credit balance with respect to such Bond in
the account of such Participant. The
ownership interest of such beneficial owner
in such Bond will be recorded through the
records of such Participant or through the
separate records of such Participant and one
or more indirect participants in DTC.
Transfers: Transfers of a Book-Entry Bond will be
accomplished by book entries made by DTC and,
in turn, by the Participant (and in certain
cases, one or more indirect participants in
DTC) acting on behalf of beneficial
transferees and transferors of such Bond.
Consolidations: State Street may deliver to DTC and the CUSIP
Service Bureau at any time, but at least 30
days before the consolidation is to be
effective, a written notice of consolidation
specifying (i) the CUSIP numbers of two or
more outstanding Global Securities that
represent Book-Entry Bonds having the same
Terms and for which interest has been paid to
the same date, (ii) a date, occurring at
least thirty days before the next Interest
Payment Date for such Book-Entry Bonds, on
which such Global Securities shall be
exchanged for a single replacement Global
Security, and (iii) a new CUSIP number to be
assigned to such replacement Global Security.
Upon receipt of such a notice, DTC will send
to each Participant (including State Street)
a written reorganization notice to the effect
that such exchange will occur on such date.
Prior to the specified exchange date, State
Street will deliver to the CUSIP Service
Bureau a written notice setting forth such
exchange date and the new CUSIP number and
stating that, as of such exchange date, the
CUSIP numbers of the Global Securities to be
exchanged will no longer be valid. On the
specified exchange date, State Street will
exchange such Global Securities for a single
Global Security bearing the new CUSIP number,
and the CUSIP numbers of the exchanged Global
Securities will be cancelled and not
immediately reassigned.
Denominations: Book-Entry Bonds will be issued in principal
amounts of $1,000 or any integral multiple
thereof.
Interest: Each Book-Entry Bond will bear interest from
the date as of which the Global Security
representing such Book-Entry Bond was first
certified, at the annual rate stated on the
face thereof, payable on __________ and
__________ of each year (the Interest Payment
Dates) and at maturity or, upon earlier
redemption, the date of redemption. Each
payment of interest shall include interest
accrued to but excluding the Interest Payment
Date.
Calculation of Interest (including payments for partial
Interest: periods) will be calculated on the basis of a
360-day year of twelve 30-day months.
Interest will not accrue on the 31st day of
any month.
Payments of Promptly after the close of business on _____
Interest: or __________ (the Record Dates), State
Street will deliver to the Company and DTC a
written notice specifying by CUSIP number the
amount of interest to be paid on each Global
Security on the following Interest Payment
Date (other than an Interest Payment Date
coinciding with a maturity date or a
redemption date) and the total of such
amounts. Standard & Poor's Corporation will
use the information received in the pending
deposit message described under Settlement
Procedure "C" below in order to include the
amount of any interest payment and certain
other information regarding the related
Global Security in the appropriate daily bond
report published by Standard & Poor's
Corporation. DTC will confirm the amount
payable on each Global Security on such
Interest Payment Date by reference to the
appropriate bond reports published by
Standard & Poor's Corporation. The Company
will pay to State Street the total amount of
interest due on such Interest Payment Date
(other than on a maturity date or a
redemption date), and State Street will pay
such amount to DTC at the times and in the
manner set forth below. If any Interest
Payment Date for a Book-Entry Bond is not a
Business Day, the payment due on such day
shall be made on the next succeeding Business
Day and no interest shall accrue on such
payment for the period from and after such
Interest Payment Date. On each Interest
Payment Date, interest payments shall be made
to DTC in same day funds in accordance with
existing arrangements between State Street
and DTC. Thereafter, on each such date, DTC
will pay, in accordance with its SDFS
operating procedures then in effect, such
amounts in funds available for immediate use
to the respective Participants in whose names
the Book-Entry Bonds represented by such
Global Securities are recorded in the book-
entry system maintained by DTC. Neither the
Company, nor State Street, nor the Agent
shall have any direct responsibility or
liability for the payment by DTC to such
Participants of the principal of and interest
on the Book-Entry Bonds.
The amount of any taxes required under
applicable law to be withheld from any
interest payment on a Book-Entry Bond will be
determined and withheld by the Participant,
indirect participant in DTC, or other person
responsible for forwarding payments and
materials directly to the beneficial owner of
such Bond.
The first payment of interest on any Bond
originally issued between a Record Date and
an Interest Payment Date will be made on the
Interest Payment Date following the next
succeeding Record Date.
Payment at Maturity On or about the first Business Day of each
and Redemption: month, State Street will deliver to the
Company and DTC a written list of principal
and interest to be paid on each Global
Security maturing either on a maturity date
or any redemption date in the following
month. The Company and DTC will confirm with
State Street the amounts of such principal
and interest payments with respect to each
such Global Security on or about the fifth
Business Day preceding any such maturity date
or redemption date, as the case may be, of
such Global Security. The Company will pay
to State Street the principal amount of such
Global Security, together with interest due
on such maturity date or redemption date.
State Street will pay such amounts to DTC at
the times and in the manner set forth below.
If the maturity date or the redemption date
of a Global Security representing Book-Entry
Bonds is not a Business Day, the payment due
on such day shall be made on the next
succeeding Business Day and no interest shall
accrue on such payment for the period from
and after such maturity date or the
redemption date. Promptly after payment to
DTC of the principal and interest due on the
maturity date or the redemption date of such
Global Security and its return by DTC, State
Street will cancel such Global Security in
accordance with the terms of the Indenture.
The total amount of any principal and
interest due on Global Securities on any
Interest Payment Date or on the maturity date
or a redemption date shall be paid by the
Company to State Street in immediately
available funds for use by State Street on
such date. Prior to 10 A.M. (New York City
time) on each maturity date or redemption
date or as soon as possible thereafter, State
Street will pay by separate wire transfer
(using Fedwire message entry instructions in
a form previously agreed to with DTC) to an
account at the Federal Reserve Bank of New
York previously agreed to with DTC, in funds
available for immediate use by DTC, each
payment of principal (together with interest
thereon) due on Global Securities on any
maturity date or redemption date.
Rate Setting and The Company and the Agent will discuss from
Posting: time to time the aggregate principal amount
of, the issuance price of, and the interest
rates to be borne by, Bonds that may be sold
as a result of the solicitation of offers by
the Agents. If the Company decides to set
prices of, and rates borne by, any Bonds in
respect of which the Agent is to solicit
offers (the setting of such prices and rates
to be referred to herein as "posting") or if
the Company decides to change prices or rates
previously posted, it will promptly advise
the Agent of the prices and rates to be
posted.
The Bonds will be sold at a price, exclusive
of accrued interest, which will be not less
than 95% nor more than 100% of the principal
amount and at an interest rate which will be
a multiple of 1/8 of 1%. Any discount will
not be greater than 1/4 of 1% for each year
to maturity.
Acceptance and The Company shall have the sole right to
Rejection of accept offers to purchase Bonds from the
Offers: Company and may reject any such offer in
whole or in part. The Agent shall
communicate to the Company, orally or in
writing, each reasonable offer to purchase
Bonds from the Company received by it, other
than those rejected by such Agent. The Agent
shall have the right, in its discretion
reasonably exercised, to reject any offer in
whole or in part.
Settlement: The receipt of immediately available funds by
the Company in payment for a Book-Entry Bond
and the certification and issuance of the
Global Security representing such Bond shall,
with respect to such Bond, constitute
settlement. The date of such settlement is
herein referred to as the Settlement Date.
All offers accepted by the Company will be
settled on the fifth business day next
succeeding the date of acceptance unless
otherwise agreed by the purchaser and the
Company. The Settlement Date shall be
specified upon acceptance of an offer.
Settlement In the event of a purchase of Bonds by the
Procedures: Agent, as principal, appropriate settlement
details will be set forth in the applicable
Terms Agreement to be entered into between
the Agent and the Company pursuant to the
Distribution Agreement.
Settlement Procedures with regard to each
Book-Entry Bond sold by the Agent, as agent,
shall be as follows:
A. The Agent will advise the Company of the
following settlement information:
1. Principal Amount.
2. Price of the Bonds.
3. Original Issue Discount, if any.
4. Maturity Date.
5. Interest Rate.
6. Redemption Provisions.
7. Agent's Commission.
8. Settlement Date.
B. The Company will notify State Street by
telephone of the information set forth
in Settlement Procedure "A" above and
the original issue date of the Bond.
State Street will assign a CUSIP number
to the Global Security representing such
Bond. State Street will also notify the
Company and the Agent of such CUSIP
number by telephone as soon as
practicable.
C. State Street will enter a pending
deposit message through DTC's
Participant Terminal System, providing
the following settlement information to
DTC, such information will be routed to
Standard & Poor's Corporation through
DTC:
1. The information set forth in
Settlement Procedure "A".
2. Initial Interest Payment Date for
such Bond, number of days by which
such date succeeds the related
Record Date and amount of interest
payable on such Interest Payment
Date.
3. CUSIP number of the Global Security
representing such Bond.
4. Whether such Global Security will
represent any other Book-Entry Bond
(to the extent known at such time).
D. The Company shall telecopy (promptly
followed by the original) to State
Street the certificate as to form
relating to the Global Security
representing such Bonds. As soon as
practicable thereafter, the Company will
provide State Street with any additional
information set forth above.
E. The Company will prepare the Global
Security in the form set forth in the
Indenture, with specific terms as pre-
approved by the Company, the Agent, and
State Street.
F. The Company will cause State Street to
issue, certify, and deliver the Global
Security representing such Bonds. State
Street will hold the Global Security as
DTC's agent.
G. DTC will credit such Bond to the
participant account of State Street,
acting as DTC's agent, at DTC.
H. State Street will enter an SDFS deliver
order through DTC's Participant Terminal
System instructing DTC to (i) debit such
Bond to State Street's participant
account and credit such Bond to the
Agent's participant account and (ii)
debit the Agent's settlement account and
credit State Street's settlement account
for an amount equal to the price of such
Bond less the Agent's commission. The
entry of such a deliver order shall
constitute a representation and warranty
by State Street to DTC that (a) the
Global Security representing such Book-
Entry Bond has been issued and certified
and (b) State Street is holding such
Global Security pursuant to the Medium-
Term Note Certificate Agreement between
State Street and DTC.
I. The Agent will enter an SDFS deliver
order through DTC's Participation
Terminal System instructing DTC (i) to
debit such Bond to the Agent's
participant account and credit such Bond
to the participant accounts of the
Participant with respect to such Bond
and (ii) to debit the settlement
accounts of such Participant and credit
the settlement account of the Agent for
an amount equal to the price of such
Bond.
J. State Street will transfer to the
account of the Company maintained at the
Bank of Boston in Boston, Massachusetts
in immediately available funds in the
amount transferred to State Street in
accordance with Settlement Procedure
"H".
K. The Agent will confirm the purchase of
such Bond to the purchaser either by
transmitting to the Participants with
respect to such Bond a confirmation
order or orders through DTC's
institutional delivery system or by
mailing a written confirmation to such
purchaser.
L. Transfers of funds in accordance with
SDFS deliver orders described in
Settlement Procedures "H" and "I" will
be settled in accordance with SDFS
operating procedures in effect on the
Settlement Date.
M. Upon written request by the Company,
State Street will send to the Company a
statement setting forth the principal
amount of the Bonds outstanding as of
that date, after giving effect to such
transaction and all other orders of
which the Company has advised State
Street but which have not yet been
settled.
Settlement Procedures For offers of Book-Entry Bonds solicited
Timetable: by the Agent and accepted by the
Company, Settlement Procedures "A"
through "M" set forth above shall be
completed on or before the respective
times set forth below:
Settlement
Procedure Time
__________ ____
A 11:00 A.M. on the acceptance
date
B 12:00 Noon on the acceptance
date
C 2:00 P.M. on the acceptance
date
D-E 9:00 A.M. on the Settlement
Date
F-G 11:00 A.M. on the Settlement
Date
H-I 2:00 P.M. on the Settlement
Date
J-K 4:45 P.M. on the Settlement
Date
L-M 5:00 P.M. on the Settlement
Date
If a sale is to be settled more than one
Business Day after the sale, Settlement
Procedures "A", "B" and "C" shall be
completed as soon as practicable, but not
later than 11:00 A.M., 12:00 Noon and
2:00 P.M., respectively, on the first
Business Day after the acceptance date.
Settlement Procedures "J" and "L" are subject
to extension in accordance with any extension
of Fedwire closing deadlines and in the other
events specified in the SDFS operating
procedures in effect on the Settlement Date.
If a sale is to be settled on a date after
the fifth Business Day next succeeding the
date of acceptance, Settlement Procedures "A"
through "C" shall be completed no later than
the fifth Business Day immediately preceding
the Settlement Date.
If settlement of a Book-Entry Bond is
rescheduled or cancelled, the Company will
instruct State Street to deliver to DTC a
cancellation message to such effect by no
later than 12:00 Noon on the Business Day
immediately preceding the scheduled
Settlement Date and State Street will enter
such order by 2:00 P.M. through DTC's
Participation Terminal System.
Failure to If after entry of a deliver order under
Settle: Settlement Procedure "H" or "I", a trade does
not settle, State Street may deliver to DTC,
through DTC's Participant Terminal System, as
soon as practicable, a withdrawal message
instructing DTC to debit such Bond to State
Street's participant account, provided that
State Street's participant account contains a
principal amount of the Global Security
representing such Bond that is at least equal
to the principal amount to be debited. If a
withdrawal message is processed with respect
to all the Book-Entry Bonds represented by a
Global Security, State Street will mark such
Global Security "cancelled", make appropriate
entries in State Street's records and send
such cancelled Global Security to the
Company. The CUSIP number assigned to such
Global Security shall be cancelled and not
immediately reassigned. If a withdrawal
message is processed with respect to one or
more, but not all, of the Book-Entry Bonds
represented by a Global Security, State
Street will exchange such Global Security for
another Global Security, which shall
represent the Book-Entry Bonds previously
represented by the surrendered Global
Security with respect to which a withdrawal
message has not been processed and shall bear
the CUSIP number of the surrendered Global
Security.
If the purchase price for any Book-Entry Bond
is not timely paid to the Participant with
respect to such Bond by the beneficial
purchaser thereof (or a person, including an
indirect participant in DTC, acting on behalf
or such purchaser), such Participant and, in
turn, the Agent for such Bond may enter SDFS
deliver orders through DTC's Participant
Terminal System reversing the orders entered
pursuant to Settlement Procedures "I" and
"H", respectively. Thereafter, State Street
will deliver the withdrawal message and take
the related actions described in the
preceding paragraph.
Notwithstanding the foregoing, upon any
failure to settle with respect to a Book-
Entry Bond, DTC may take any actions in
accordance with its SDFS operating procedures
then in effect. In the event of a failure to
settle with respect to one or more, but not
all, of the Book-Entry Bonds to have been
represented by a Global Security, State
Street will provide, in accordance with
Settlement Procedure "F", for the
certification and issuance of a Global
Security representing the other Book-Entry
Bonds to have been represented by such Global
Security and will make appropriate entries in
its records.
Suspension of Subject to its representations, warranties
Solicitation; and covenants contained in the Distribution
Amendment or Agreement, the Company may instruct the Agent
Supplement: to suspend solicitation of purchases at any
time. Upon receipt of such instructions the
Agent will forthwith suspend solicitation of
purchases from the Company until such time as
the Company has advised them that
solicitation of purchases may be resumed. If
the Company decides to amend or supplement
the Registration Statement or the Prospectus
relating to the Bonds (other than by the
filing of an amendment or supplement relating
solely to the terms of an issue of Bonds, a
change in the principal amount of Bonds
remaining to be sold, or similar changes) it
will promptly advise the Agent and State
Street and will furnish counsel to the Agent
with copies of the proposed amendment or
supplement, other than a current report on
Form 8-K.
In the event that at the time the
solicitation of purchases from the Company is
suspended there shall be any offers
outstanding which have not been settled, the
Company will promptly advise the Agent and
State Street whether such offers may be
settled and whether copies of the Prospectus
as theretofore amended and/or supplemented as
in effect at the time of the suspension may
be delivered in connection with the
settlement of such offers. The Company will
have the sole responsibility for such
decision and for any arrangements which may
be made in the event that the Company
determines that such offers may not be
settled or that copies of such Prospectus may
not be so delivered.
Preparation of If any offer to purchase a Bond is accepted
Pricing Supplement: 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 Bond and will
arrange to file the Pricing Supplement with
the Securities and Exchange Commission in
accordance with the applicable paragraph of
Rule 424(b) under the Act and will supply at
least 10 copies thereof (or additional copies
if requested) to the Agent. The Agent will
cause a Prospectus and the appropriate
Pricing Supplement to accompany or precede
each written confirmation of a sale sent to
each purchaser or his agent.
In each instance that a Pricing Supplement is
prepared, the Agent will affix the Pricing
Supplement to Prospectuses prior to their
use. Outdated Pricing Supplements (other
that those retained for files) will be
destroyed.
State Street not Nothing herein shall be deemed to require
to risk own funds: State Street to risk its own funds in
connection with any payment to the Company,
or the Agent, or the purchaser, it being
understood by all parties that payments made
by State Street to either the Company, the
Agent or the purchaser shall be made only to
the extent that funds are provided to State
Street for such purpose.
Duties of State Street, in its capacity as trustee and
State Street: otherwise, undertakes to perform such duties
and only such duties as are specifically set
forth in these Administrative Procedures and
in the Indenture, as they may from time to
time be supplemented, and no implied
covenants or obligations shall be read into
these Administrative Procedures against it.
Nothing herein shall diminish any right or
immunity that State Street shall have in its
capacity as trustee under the Indenture.
Advertising Cost: The Company will determine and approve, with
the Agent, the amount of advertising, if any,
that is appropriate in offering the Bonds.
Any advertising expenses which are approved
by the Company will be paid by the Company.
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED BONDS
Date of Issuance: Each Bond will initially be dated
and issued as of the date of its
certification by State Street.
Registration: Bonds will be issued only in fully
registered form.
Denominations: Bonds will be issued in principal
amounts of $1,000 or any integral
multiple thereof.
Interest: Each Bond will bear interest from
its original issue date, at the
annual rate stated on the face
thereof, payable on and
of each year (the
Interest Payment Dates) and at
maturity or, upon earlier
redemption, the date of redemption.
Each payment of interest shall
include interest accrued to but
excluding the Interest Payment Date.
Calculation of Interest: Interest (including payments for
partial periods) will be calculated
on the basis of a 360-day year of
twelve 30-day months. Interest will
not accrue on the 31st day of any
month.
Payments of Interest: Interest will be payable to the
person in whose name the Bond is
registered at the close of business
on or
(the Record Dates) next preceding
the Interest Payment Date; provided,
however, that interest payable on a
maturity date or a redemption date
will be payable to the person to
whom principal shall be payable.
State Street, as paying agent, will
be responsible for withholding taxes
on interest paid as required by law.
The first payment of interest on any
Bond originally issued between a
Record Date and an Interest Payment
Date will be made on the Interest
Payment Date following the next
succeeding Record Date.
Payment at Maturity and Upon presentation of each Bond at
Redemption: maturity or upon maturity or upon
redemption, State Street will pay
the principal amount thereof,
together with accrued interest due
at maturity or the date of such
redemption, as the case may be.
Such payment shall be made in
immediately available funds,
provided that the Bond is presented
to State Street in time for State
Street to make payments in such
funds in accordance with its normal
procedures. The Company will
provide State Street with funds
available for immediate use for such
purpose. Bonds presented at
maturity or upon redemption will be
cancelled by State Street as
provided in the Indenture.
Rate Setting and Posting: The Company and the Agent will
discuss from time to time the
aggregate principal amount of, the
issuance price of, and the interest
rates to be borne by, Bonds that may
be sold as a result of the
solicitation of offers by the
Agents. If the Company decides to
set prices of, and rates borne by,
any Bonds in respect of which the
Agent is to solicit offers (the
setting of such prices and rates to
be referred to herein as "posting")
or if the Company decides to change
prices or rates previously posted,
it will promptly advise the Agent of
the prices and rates to be posted.
The Bonds will be sold at a price,
exclusive of accrued interest, which
will be not less than 95% nor more
than 100% of the principal amount
and at an interest rate which will
be a multiple of 1/8 of 1%. Any
discount will not be greater than
1/4 of 1% for each year to maturity.
Acceptance and The Company shall have the sole
Rejection of Offers: right to accept offers to purchase
Bonds from the Company and may
reject any such offer in whole or in
part. The Agent shall communicate
to the Company, orally or in
writing, each reasonable offer to
purchase Bonds from the Company
received by it, other than those
rejected by such Agent. The Agent
shall have the right, in its
discretion reasonably exercised, to
reject any order in whole or in
part.
Settlement: The receipt of immediately available
funds by the Company in payment for
a Bond and the certification and
issuance of such Bond shall, with
respect to such Bond, constitute
settlement. The date of such
settlement is herein referred to as
the Settlement Date. All offers
accepted by the Company will be
settled on the fifth business day
next succeeding the date of
acceptance unless otherwise agreed
by the purchaser and the Company.
The Settlement Date shall be
specified upon acceptance of an
offer.
Settlement Procedures: In the event of a purchase of Bonds
by the Agent, as principal,
appropriate settlement details will
be set forth in the applicable Terms
Agreement to be entered into between
the Agent and the Company
pursuant to the Distribution
Agreement.
Settlement Procedures with regard to
each Bond sold by the Agent, as
agent, shall be as follows:
A. The Agent will advise the
Company of the following
settlement information:
1. Principal Amount.
2. Exact name in which the
Bonds are to be registered
(Registered Owner).
3. Exact address of the
Registered Owner and
address for payment of
principal and interest.
4. Taxpayer identification
number of the Registered
Owner (if available).
5. Principal amount of each
Bond to be delivered to
the Registered Owner.
6. Price of the Bonds.
7. Original Issue Discount,
if any.
8. Maturity Date.
9. Interest Rate.
10. Redemption Provisions.
11. Agent's Commission.
12. Settlement Date.
B. The Company shall telecopy
(promptly followed by the
original) to State Street the
certificate as to form relating
to the Bonds. As soon as
practicable thereafter, the
Company will provide State
Street with any additional
information set forth above.
C. The Company will prepare the
Bonds in the form set forth in
the Indenture, with specific
terms as pre-approved by the
Company, the Agent, and State
Street.
D. The Company will cause State
Street to issue, certify, and
deliver Bonds.
E. State Street will deliver the
Bonds in accordance with the
Company's instructions provided
in the settlement information
(with confirmation) to the
Agent against written evidence
of receipt by the Agent.
F. The Agent will deliver the
Bonds (with confirmation) to
the purchaser against payment
in immediately available funds.
G. The Agent will deposit, in
funds available for immediate
use, an amount equal to the
price of the Bond, less the
applicable commission, received
under Settlement Procedure "F",
into the Company's account at
Bank of Boston, Boston,
Massachusetts.
H. The Agent will obtain a written
acknowledgement of receipt of
the Bonds by the purchaser.
I. Upon written request by the
Company, State Street will send
to the Company a statement
setting forth the principal
amount of the Bonds outstanding
as of that date, after giving
effect to such transaction and
all other orders of which the
Company has advised State
Street but which have not yet
been settled.
Settlement Procedures For offers accepted by the Company,
Timetable: Settlement Procedures "A" through
"I" set forth above shall be
completed on or before the
respective times set forth below:
Settlement
Procedure Time
---------- ----
A 11:00 A.M. on
the first
Business Day
after the
acceptance date.
B 3:00 P.M. on the
first Business
Day after the
acceptance date.
C-E 11:00 A.M. on
the Settlement
Date.
F-I 4:00 P.M. on the
Settlement Date.
If a sale is to be settled on a date
after the fifth Business Day next
succeeding the date of acceptance,
Settlement Procedures "A" through
"B" shall be completed no later than
the fifth Business Day immediately
preceding the settlement date.
Failure to Settle: In the event that a purchaser of a
Bond from the Company shall fail to
accept delivery of a Bond on the
Settlement Date, the Agent will
forthwith notify State Street and
the Company by telephone, confirmed
in writing, of such failure, and
return the Bond to State Street.
Upon receipt by State Street of the
Bond from the Agent, State Street
will immediately advise the Company
of such receipt and the Company will
promptly arrange to credit the
account of the Agent in an amount of
immediately available funds equal to
the amount previously paid by the
Agent in respect of the Bond. Such
debits and credits will be made on
the Settlement Date, if possible,
and in any event not later than the
business day following the
Settlement Date.
Upon receipt of the Bond in respect
of which the default occurred, State
Street will cancel the Bond in
accordance with the Indenture.
Use of Funds: If after payment for a Bond having
been made by the Agent to the
Company's account, a failure occurs
for any reason other than default by
the Agent in the performance of its
obligations hereunder or under the
Distribution Agreement, the Company
will reimburse the Agent on an
equitable basis for its loss of the
use of the funds during the period
when the funds were credited to the
account of the Company. If the
Agent fails to perform its
obligations hereunder or under the
Distribution Agreement, which
results in the Company's loss of the
use of funds, including, without
limitation, failure to credit to the
Company's account the appropriate
amount of the payment of a Bond in
funds available for immediate use in
accordance with the above specified
timetable, the Agent will reimburse
the Company on an equitable basis
for its loss of the use of the funds
resulting from such default by the
Agent.
Suspension of Subject to its representations,
Solicitation; warranties and covenants contained
Amendment or in the Distribution Agreement, the
Supplement: Company may instruct the Agent to
suspend solicitation of purchases at
any time. Upon receipt of such
instructions the Agent will
forthwith suspend solicitation of
purchases from the Company until
such time as the Company has advised
them that solicitation of purchases
may be resumed. If the Company
decides to amend or supplement the
Registration Statement or the
Prospectus relating to the Bonds
(other than by the filing of an
amendment or supplement relating
solely to the terms of an issue of
Bonds, a change in the principal
amount of Bonds remaining to be
sold, or similar changes), it will
promptly advise the Agent and State
Street and will furnish counsel to
the Agent with copies of the
proposed amendment or supplement,
other than a Current Report on Form
8-K.
In the event that at the time the
solicitation of purchases from the
Company is suspended there shall be
any offers outstanding which have
not been settled, the Company will
promptly advise the Agent and State
Street whether such offers may be
settled and whether copies of the
Prospectus as theretofore amended
and/or supplemented as in effect at
the time of the suspension may be
delivered in connection with the
settlement of such offers. The
Company will have the sole
responsibility for such decision and
for any arrangements which may be
made in the event that the Company
determines that such offers may not
be settled or that copies of such
Prospectus may not be so delivered.
Preparation of If any offer to purchase a Bond is
Pricing Supplement; accepted by or on behalf of the
Delivery of Company, the Company, with the
Prospectus: approval of the Agent, will prepare
a pricing supplement (a Pricing
Supplement) reflecting the terms of
such Bond and will arrange to file
the Pricing Supplement with the
Securities and Exchange Commission
in accordance with the applicable
paragraph of Rule 424(b) under the
Act and will supply at least 10
copies thereof (or additional copies
if requested) to the Presenting
Agent. The Agent will cause a
Prospectus and the appropriate
Pricing Supplement to accompany or
precede (a) each written
confirmation of a sale sent to a
purchaser or his agent and (b) each
Bond delivered to a customer or his
agent.
In each instance that a Pricing
Supplement is prepared, the Agent
will affix the Pricing Supplement to
Prospectuses prior to their use.
Outdated Pricing Supplements (other
than those retained for files) will
be destroyed.
State Street not to Nothing herein shall be deemed to
risk own funds: require State Street to risk its own
funds in connection with any payment
to the Company, or the Agent, or the
purchaser, it being understood by
all parties that payments made by
State Street to either the Company,
the Agent or the purchaser shall be
made only to the extent that funds
are provided to State Street for
such purpose.
Duties of State Street: State Street, in its capacity as
trustee and otherwise, undertakes to
perform such duties and only such
duties as are specifically set forth
in these Administrative Procedures
and in the Indenture, as they may
from time to time be supplemented,
and no implied covenants or
obligations shall be read into these
Administrative Procedures against
it. Nothing herein shall diminish
any right or immunity that State
Street shall have in its capacity as
trustee under the Indenture.
Advertising Cost: The Company will determine and
approve, with the Agent, the amount
of advertising, if any, that is
appropriate in offering the Bonds.
Any advertising expenses which are
approved by the Company will be paid
by the Company.