MTHM Draft
2/11/98
Exhibit 1-C
to Form S-3
$60,000,000
MASSACHUSETTS ELECTRIC COMPANY
(a Massachusetts corporation)
First Mortgage Bonds, Series V
Due from 9 Months to 30 Years from Date of Issue
DISTRIBUTION AGREEMENT
February __, 1998
[Name of Agent]
[Address of Agent]
Dear Agent:
Massachusetts Electric Company (the Company) agrees
with you with respect to the issue and sale by the Company of up
to $60,000,000 aggregate principal amount of its First Mortgage
Bonds, Series V (the Bonds). The Bonds are to be issued pursuant
to an indenture supplemental (the Supplemental Indenture) to the
First Mortgage Indenture and Deed of Trust dated as of July 1,
1949 (the Original Indenture) between the Company and State
Street Bank and Trust Company (the Trustee), formerly Second Bank
- - State Street Trust Company, successor to The Second National
Bank of Boston (such Original Indenture as heretofore and
hereafter supplemented, the Indenture).
Subject to the terms and conditions stated herein, the
Company hereby (i) appoints you as agent of the Company for the
purpose of soliciting purchases of the Bonds from the Company by
others and (ii) agrees that whenever the Company determines to
sell Bonds directly to you as principal for resale to others, it
will enter into a Terms Agreement relating to such sale in
accordance with the provisions of Section 2(b) hereof. The Bonds
shall have the maturities, interest rates, redemption provisions,
and other terms set forth in the Prospectus referred to below, as
it may be supplemented from time to time.
The Company has filed with the Securities and Exchange
Commission (the SEC) a registration statement on Form S-3
(No. 333-___) for the registration of First Mortgage Bonds,
including the Bonds, and the offering thereof from time to time
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. 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 for the reasonable
fees and disbursements of your counsel and any out-of-pocket
expenses, including advertising expenses, incurred with the
approval of the Company.
SECTION 5. Conditions of Obligations. Your
obligations to solicit offers to purchase the Bonds as agent of
the Company and your obligations to purchase Bonds pursuant to
any Terms Agreement will be subject to the accuracy of the
representations and warranties on the part of the Company herein,
to the accuracy of the statements of the Company's officers made
in any certificate furnished pursuant to the provisions hereof,
to the performance and observance by the Company of all covenants
and agreements herein contained on its part to be performed and
observed and to the following additional conditions precedent:
(a) Prior to the Commencement Date, the Indenture
shall have been qualified under the Trust Indenture Act; there
shall have been issued an order of the MDPU, to the extent that
it has jurisdiction, permitting the issuance and sale of the
Bonds, and at such time and at each Settlement Date with respect
to any applicable Terms Agreement such order shall not contain
any provision which, in your opinion or the opinion of the
Company, is unduly burdensome to the Company.
(b) At the Commencement Date and at each Settlement
Date with respect to any applicable Terms Agreement, if called
for by such Terms Agreement, you shall have received:
(i) The opinion, dated as of such date, of Robert King
Wulff, Esquire, and/or Kirk L. Ramsauer, Esquire, Counsel
for the Company, in form and substance satisfactory to you
and your counsel, to the effect that:
(A) The Company is a corporation validly
organized and duly existing under the laws of The
Commonwealth of Massachusetts, has the corporate power
to transact the electric business in which it is now
engaged, and has franchises adequate for carrying on
such business.
(B) This Agreement (and, if the opinion is being
given pursuant to Section 6(c) hereof on account of the
Company having entered into a Terms Agreement, the
applicable Terms Agreement) has been duly authorized,
executed, and delivered by the Company.
(C) The Company had corporate power proper and
adequate for making the Indenture which was duly
executed and delivered in accordance with proper
authority from the stockholders and directors of the
Company.
(D) The Supplemental Indenture, including
Schedule A thereto, contains a correct and adequate
description of the real estate, rights or interests in
real estate, and fixed property of the Company acquired
up to April 1, 1995, and not included in the Original
Indenture or the previous supplemental indentures, and
then owned of record, except for the properties
expressly excluded from the Indenture.
(E) All filings and recordings of or in respect
of the Indenture have been duly made where such filings
and recordings are necessary for the preservation or
protection of the lien thereof, and the Indenture is a
valid, binding, and enforceable instrument subject to
laws of general application affecting the rights and
remedies of mortgagees and creditors.
(F) The Company has corporate power proper and
adequate for the execution and issuance of the Bonds
under the Indenture in the aggregate principal amount
of $60,000,000, and, in accordance with due
authorization from the stockholders and directors of
the Company, when executed and certified as specified
in the Indenture and delivered against payment therefor
in accordance with this Agreement, will be duly issued
and valid and binding obligations of the Company and
entitled to the benefits and security of the Indenture.
(G) The Bonds are secured by a direct first
mortgage lien on substantially all the properties and
franchises now owned by the Company, subject to the
property specifically excepted in the granting clauses
of, and to the liens permitted by, the Indenture,
including the prior lien of the Trustee for
compensation, expenses, and liabilities; and, except as
disclosed in the Prospectus, there is no existing
indebtedness secured by lien on the property securing
such Bonds ranking prior to or on a parity with the
lien securing the Bonds.
(H) The property specifically described as
mortgaged property in the Indenture constitutes
substantially all of the property owned by the Company
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 applicable published rules and
regulations thereunder;
(ii) In their opinion the financial statements and
financial schedules (included or incorporated by reference
in the Registration Statement) examined by them as stated in
their report (incorporated by reference in the Registration
Statement) comply as to form in all material respects with
the applicable accounting requirements of the Securities Act
and the Exchange Act and of the published rules and
regulations thereunder;
(iii) On the basis of reading the minutes of the
meetings of the stockholders and the Board of Directors of
the Company held during any period subsequent to 1996, and
not covered by the financial statements referred to in
paragraph (ii) of this clause, as set forth in the minute
books through a specified date not more than five business
days prior to the date of their letter, a reading of the
unaudited financial statements of the Company included or
incorporated by reference in the Registration Statement, and
inquiries of officials of the Company who have
responsibility for financial and accounting matters (which
procedures do not constitute an examination made in
accordance with generally accepted standards), they agree
that if any unaudited amounts of total operating revenue and
net income are set forth or incorporated by reference in the
Registration Statement, including amounts set forth under
"Selected Financial Information", they agree with the
corresponding amounts set forth in the unaudited financial
statements for that period. Those officials of the Company
who have responsibility for financial and accounting matters
stated:
(A) that the unaudited financial statements
included or incorporated by reference in the
Registration Statement comply as to form in all
material respects with the applicable accounting
requirements of the Exchange Act and the published
rules and regulations thereunder, and that said
financial statements are in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited
financial statements included or incorporated by
reference in the Registration Statement;
(B) that, during the period from the date of the
latest financial statements included or incorporated by
reference in the Registration Statement through a
specified date not more than five business days prior
to the date of their letter, there was no change in the
capital stock and no increase in long-term debt of the
Company; and
(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 (but only upon your request in the
event of the filing with the SEC of, or an amendment or
supplement to the Registration Statement or the Prospectus solely
by, a report on Form 8-K) a certificate in form satisfactory to
you to the effect that the statements contained in the
certificate referred to in Section 5(c) hereof which were last
furnished to you are true and correct at the time of such
amendment or supplement or filing or sale, as the case may be, as
though made at and as of such time (except that such statements
shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such time) or, in lieu
of such certificate, certificates of the same tenor as the
certificates referred to in said Section 5(c), modified as
necessary to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of
such certificates;
(c) Within five business days after the Registration
Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement (i) relating solely to
the terms of an issue of Bonds, a change in the principal amount
of Bonds remaining to be sold, or similar changes or (ii) setting
forth or incorporating by reference financial statements or other
information as of and for a fiscal quarter) or there is filed
with the SEC any document (other than a document setting forth or
incorporating by reference only financial statements or other
financial information) incorporated by reference into the
Prospectus, and, if so indicated in the applicable Terms
Agreement, each time the Company sells Bonds to you pursuant to a
Terms Agreement, the Company shall furnish or cause to be
furnished to you and your counsel forthwith (but only upon your
request in the event of the filing with the SEC of, or an
amendment or supplement to the Registration Statement or the
Prospectus solely by, a report on Form 8-K) a written opinion of
Robert King Wulff and/or Kirk L. Ramsauer, Counsel for the
Company, or other counsel satisfactory to you, dated the date of
delivery of such opinion, in form satisfactory to you, of the
same tenor as the opinion referred to in paragraphs (K) and (L)
of Section 5(b)(i) hereof and as to such other matters referred
to in Section 5(b)(i) hereof as you may request but modified, as
necessary, to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of
such opinion or, in lieu of such opinion, counsel last furnishing
such opinion to you shall furnish you with a letter to the effect
that you may rely on such last opinion to the same extent as
though it was dated the date of such letter authorizing reliance
(except that statements in such last opinion shall be deemed to
relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of delivery of such letter
authorizing reliance); and
(d) Within five business days after the filing with
the SEC of each of the Company's annual report on Form 10-K, the
Company's quarterly reports on Form 10-Q, and any of the
Company's current reports on Form 8-K which contain financial
information, and each other time that the Registration Statement
or the Prospectus shall be amended or supplemented to include
additional financial information or there is filed with the SEC
any document incorporated by reference into the Prospectus which
contains additional financial information or, if so indicated in
the applicable Terms Agreement, the Company sells Bonds to you
pursuant to a Terms Agreement, the Company shall cause Coopers &
Lybrand L.L.P. to furnish to you forthwith (but only upon your
request in the event of the filing with the SEC of, or an
amendment or supplement to the Registration Statement or the
Prospectus solely by, a report on Form 8-K) a letter, dated no
earlier than the date of filing of such amendment, supplement or
document with the SEC, or the date of such sale, as the case may
be, in form satisfactory to you, of the same tenor as the
portions of the letter referred to in clauses (i) and (ii) of
Section 5(d) hereof but modified to relate to the Registration
Statement and Prospectus, as amended and supplemented to the date
of such letter, and of the same general tenor as the portions of
the letter referred to in clauses (iii) and (iv) of said Section
5(d) with such changes as may be necessary to reflect changes in
the financial statements and other information derived from the
accounting records of the Company; provided, however, that if the
Registration Statement or the Prospectus is amended or
supplemented solely to include financial information as of and
for a fiscal quarter, Coopers & Lybrand L.L.P. may limit the
scope of such letter to the unaudited financial statements
included in such amendment or supplement unless any other
information included therein of an accounting, financial or
statistical nature is of such a nature that, in your reasonable
judgment, such letter should cover such other information;
provided, further, that with respect to the filing of any of the
Company's reports on Form 8-K containing only financial
information which does not in any way reflect any material change
in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, the Company may
provide you with a certificate of its Treasurer, Assistant
Treasurer, or a principal accounting officer to such effect in
lieu of the letter from Coopers & Lybrand referred to above in
this paragraph (d).
SECTION 7. Indemnification. (a) The Company will
indemnify and hold harmless you and each person, if any, who
controls you within the meaning of Section 15 of the Securities
Act against any loss, claim, or liability, joint or several
(including the reasonable cost of investigating or defending any
such alleged loss, claim, or liability and reasonable counsel
fees incurred in connection therewith), arising by reason of any
person acquiring any of the Bonds, on the ground that the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, includes or included an untrue statement of a
material fact or omits or omitted to state a material fact which
(in the case of the Registration Statement, or any amendment
thereto) is or was required to be stated therein or is or was
necessary to make the statements therein not misleading or which
(in the case of the Prospectus, or any amendment or supplement
thereto) is or was necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, unless such statement or omission was made in
reliance upon written information furnished to the Company by
you, for use therein, or unless such statement or omission shall
occur in the Statement of Eligibility and Qualification under the
Trust Indenture Act (Form T-1) of the Trustee under the
Indenture. Upon commencement of any such suit, if you or any
controlling person wish to make a claim in respect thereof
against the Company under its agreement herein contained, you or
such controlling person, as the case may be, shall, within thirty
days after the summons or other first legal process giving
information of the nature of the claim shall have been served
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 [Name and Address of Agent].
SECTION 12. Parties. This Agreement and any Terms
Agreement shall inure to the benefit of and be binding on the
Agent and the Company and their respective successors. Nothing
expressed or mentioned in this Agreement or any Terms Agreement
is intended or shall be construed to give any person, firm, or
corporation, other than the parties hereto and their respective
successors and the controlling persons, officers, and directors
referred to in Section 7, and their heirs and legal
representatives, any legal or equitable right, remedy, or claim
under or in respect of this Agreement or any Terms Agreement or
any provision herein or therein contained. This Agreement and
any Terms Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of
the parties hereto and their respective successors and said
controlling persons, officers, directors, and their heirs and
legal representatives, and for the benefit of no other person,
firm, or corporation. No purchaser of Bonds shall be deemed to
be a successor by reason merely of such purchase.
SECTION 13. Governing Law. This Agreement and the
rights and obligations of the parties created hereby shall be
governed by the laws of The Commonwealth of Massachusetts.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to the
Company a counterpart hereof, whereupon this instrument along
with all counterparts will become a binding agreement between you
and the Company in accordance with its terms.
Very truly yours,
MASSACHUSETTS ELECTRIC COMPANY
By____________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date
first above written:
[NAME OF AGENT]
By_______________________
Name:
Title:
EXHIBIT A
MASSACHUSETTS ELECTRIC COMPANY
(A Massachusetts corporation)
First Mortgage Bonds, Series V
TERMS AGREEMENT
__________________, 19__
Massachusetts Electric Company
25 Research Drive
Westborough, Massachusetts 01582
Attention: Treasurer
Re: Distribution Agreement dated ________, 19__
Subject to the terms and conditions of the Distribution
Agreement dated ______________, 19__, between Massachusetts
Electric Company (the Company) and the undersigned, the
undersigned agrees to purchase the following Bonds: $
Original Issue Date:
Principal Amount:
Purchase Price: %
Original Issue Discount, if any:
Maturity Date:
Interest Rate: %
Redemption Provisions:
Method of and Specified Funds for Payment of
Purchase Price:
[By certified or official bank check or checks,
payable to the order of the Company in Boston
Federal Reserve Bank (same day) Funds.] [By wire
to a bank account specified by the Company in
immediately available funds.]
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
-------------
[Name of [Name of
MTN Maturity Agent] Agent]
------------ -------- --------
9 months to less than 12 months 0.125 0.125
12 months to less than 18 months 0.150 0.150
18 months to less than 24 months 0.200 0.200
24 months to less than 30 months 0.250 0.250
30 months to less than 3 years 0.300 0.300
3 years to less than 4 years 0.350 0.350
4 years to less than 5 years 0.450 0.450
5 years to less than 6 years 0.500 0.500
6 years to less than 7 years 0.500 0.500
7 years to less than 8 years 0.550 0.550
8 years to less than 9 years 0.550 0.550
9 years to less than 10 years 0.550 0.550
10 years to less than 15 years 0.600 0.600
15 years to less than 20 years 0.600 0.600
20 years to less than 30 years 0.750 0.750
EXHIBIT B
MASSACHUSETTS ELECTRIC COMPANY
First Mortgage Bonds, Series V
Administrative Procedures
First Mortgage Bonds, Series V (the Bonds) in the
aggregate principal amount of up to $60,000,000 are to be offered
from time to time by Massachusetts Electric Company (the
Company). [Name of Agent] as agent (the Agent) has agreed to use
its reasonable best efforts to solicit purchases of the Bonds
directly from the Company, and may also purchase Bonds, as
principal, for resale. The Bonds are being offered and sold
pursuant to a Distribution Agreement between the Company and the
Agent, dated [__________] 1998 (the Distribution Agreement). The
Bonds have been registered with the Securities and Exchange
Commission (the SEC). The Bonds will be issued pursuant to an
indenture supplemental to the First Mortgage Indenture and Deed
of Trust dated as of July 1, 1949 (the Indenture) between the
Company and State Street Bank and Trust Company (formerly Second
Bank - State Street Trust Company, successor to The Second
National Bank of Boston), as trustee (in its capacity as trustee
under the Indenture and otherwise, referred to herein as State
Street).
Each Bond will be represented by either a Global
Security (as defined hereinafter) delivered to State Street, as
agent for the Depository Trust Company (DTC), and recorded in the
book-entry system maintained by DTC (a Book-Entry Bond) or a
certificate delivered to the holder thereof or a person
designated by such holder (a Certificated Bond). In the event
that Book-Entry certificates are to be delivered to other
depositaries or their agents, the administrative procedures will
be appropriately amended or supplemented at that time. An owner
of a Book-Entry Bond will not be entitled to receive a
certificate representing such Bond. Book-Entry Bonds will be
issued in accordance with the administrative procedures set forth
in Part I hereof and Certificated Bonds will be issued in
accordance with the administrative procedures set forth in Part
II hereof.
To the extent the procedures set forth below conflict
with the provisions of the Bonds, the Indenture, or the
Distribution Agreement, the relevant provisions of the Bonds, the
Indenture, and the Distribution Agreement shall control. Unless
otherwise defined herein, terms defined in the Indenture shall be
used herein as therein defined.
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK ENTRY BONDS
In connection with the qualification of the Book-Entry
Bonds for eligibility in the book-entry system maintained by DTC,
State Street will perform the custodial, document control, and
administrative functions described below, in accordance with its
respective obligations under a Letter of Representations from the
Company and State Street to DTC, dated as of [__________], and a
Medium-Term Note Certificate Agreement between State Street and
DTC, dated as of August 21, 1989, and its obligations as a
participant in DTC, including DTC's Same-Day Funds Settlement
System (SDFS).
Issuance: On any date of settlement (as defined
under Settlement below) for one or more
Book-Entry Bonds, the Company will issue
a single global security in fully
registered form without coupons (a
Global Security) representing up to
$60,000,000 principal amount of all such
Bonds that have the same maturity,
interest rate, redemption, and, in the
case of original issue discount Bonds,
original issue discount provisions
(collectively, the Terms). Each Global
Security will be dated and issued as of
the date of its certification by State
Street. No Global Security will
represent any Certificated Bond.
CUSIP The Company has arranged with the CUSIP
Numbers: Service Bureau of Standard &
Poor's Corporation (the CUSIP Service
Bureau) for the reservation of one
series of CUSIP numbers (including
tranche numbers). This series consists
of approximately 900 CUSIP numbers and
relates to Global Securities
representing the Book-Entry Bonds. The
Company has delivered to State Street
and to DTC a written list of the numbers
in such series. State Street will
assign CUSIP numbers to Global
Securities as described below under
Settlement Procedure "B". DTC will
notify the CUSIP Service Bureau
periodically of the CUSIP numbers that
State Street has assigned. At any time
when fewer than 100 of the reserved
CUSIP numbers of the series remain
unassigned, and if it deems necessary,
the Company will reserve additional
CUSIP numbers for assignment to Global
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 May 1 and November 1 of each year
(the Interest Payment Dates) and at
maturity or, upon earlier redemption,
the date of redemption. Each payment of
interest shall include interest accrued
to but excluding the Interest Payment
Date.
Calculation of Interest (including payments for partial
Interest: periods) will be calculated on the basis
of a 360-day year of twelve 30-day
months. Interest will not accrue on the
31st day of any month.
Payments of Promptly after the close of business on
Interest: April 15 or October 15 (the Record
Dates), State Street will deliver to the
Company and DTC a written notice
specifying by CUSIP number the amount of
interest to be paid on each Global
Security on the following Interest
Payment Date (other than an Interest
Payment Date coinciding with a maturity
date or a redemption date) and the total
of such amounts. Standard & Poor's
Corporation will use the information
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
and Redemption: each month, State Street will deliver to
the Company and DTC a written list of
principal and interest to be paid on
each Global Security maturing either on
a maturity date or any redemption date
in the following month. The Company and
DTC will confirm with State Street the
amounts of such principal and interest
payments with respect to each such
Global Security on or about the fifth
Business Day preceding any such maturity
date or redemption date, as the case may
be, of such Global Security. The
Company will pay to State Street the
principal amount of such Global
Security, together with interest due on
such maturity date or redemption date.
State Street will pay such amounts to
DTC at the times and in the manner set
forth below. If the maturity date or
the redemption date of a Global Security
representing Book-Entry Bonds is not a
Business Day, the payment due on such
day shall be made on the next succeeding
Business Day and no interest shall
accrue on such payment for the period
from and after such maturity date or the
redemption date. Promptly after payment
to DTC of the principal and interest due
on the maturity date or the redemption
date of such Global Security and its
return by DTC, State Street will cancel
such Global Security in accordance with
the terms of the Indenture.
The total amount of any principal and
interest due on Global Securities on any
Interest Payment Date or on the maturity
date or a redemption date shall be paid
by the Company to State Street in
immediately available funds for use by
State Street on such date. Prior to 10
A.M. (New York City time) on each
maturity date or redemption date or as
soon as possible thereafter, State
Street will pay by separate wire
transfer (using Fedwire message entry
instructions in a form previously agreed
to with DTC) to an account at the
Federal Reserve Bank of New York
previously agreed to with DTC, in funds
available for immediate use by DTC, each
payment of principal (together with
interest thereon) due on Global
Securities on any maturity date or
redemption date.
Rate Setting and The Company and the Agent will discuss
Posting: from time to time the aggregate
principal amount of, the issuance price
of, and the interest rates to be borne
by, Bonds that may be sold as a result
of the solicitation of offers by the
Agents. If the Company decides to set
prices of, and rates borne by, any Bonds
in respect of which the Agent is to
solicit offers (the setting of such
prices and rates to be referred to
herein as "posting") or if the Company
decides to change prices or rates
previously posted, it will promptly
advise the Agent of the prices and rates
to be posted.
The Bonds will be sold at a price,
exclusive of accrued interest, which
will be not less than 95% nor more than
100% of the principal amount and at an
interest rate which will be a multiple
of 1/8 of 1%. Any discount will not be
greater than 1/4 of 1% for each year to
maturity.
Acceptance and The Company shall have the sole right to
Rejection of accept offers to purchase Bonds from the
Offers: Company and may reject any such offer in
whole or in part. The Agent shall
communicate to the Company, orally or in
writing, each reasonable offer to
purchase Bonds from the Company received
by it, other than those rejected by such
Agent. The Agent shall have the right,
in its discretion reasonably exercised,
to reject any offer in whole or in part.
Settlement: The receipt of immediately available
funds by the Company in payment for a
Book-Entry Bond and the certification
and issuance of the Global Security
representing such Bond shall, with
respect to such Bond, constitute
settlement. The date of such settlement
is herein referred to as the Settlement
Date. All offers accepted by the
Company will be settled on the third
business day next succeeding the date of
acceptance unless otherwise agreed by
the purchaser and the Company. The
Settlement Date shall be specified upon
acceptance of an offer.
Settlement In the event of a purchase of Bonds by
Procedures: the Agent, as principal, appropriate
settlement details will be set forth in
the applicable Terms Agreement to be
entered into between the Agent and the
Company pursuant to the Distribution
Agreement.
Settlement Procedures with regard to
each Book-Entry Bond sold by the Agent,
as agent, shall be as follows:
A. The Agent will advise the Company of
the following settlement
information:
1. Principal Amount.
2. Price of the Bonds.
3. Original Issue Discount, if any.
4. Maturity Date.
5. Interest Rate.
6. Redemption Provisions.
7. Agent's Commission.
8. Settlement Date.
B. The Company will notify State Street
by telephone of the information set
forth in Settlement Procedure "A"
above and the original issue date of
the Bond. State Street will assign
a CUSIP number to the Global
Security representing such Bond.
State Street will also notify the
Company and the Agent of such CUSIP
number by telephone as soon as
practicable.
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 third Business Day next
succeeding the date of acceptance,
Settlement Procedures "A" through "C"
shall be completed no later than the
third Business Day immediately preceding
the Settlement Date.
If settlement of a Book-Entry Bond is
rescheduled or cancelled, the Company
will instruct State Street to deliver to
DTC a cancellation message to such
effect by no later than 12:00 Noon on
the Business Day immediately preceding
the scheduled Settlement Date and State
Street will enter such order by 2:00
P.M. through DTC's Participation
Terminal System.
Failure to If after entry of a deliver order under
Settle: Settlement Procedure "H" or "I", a trade
does not settle, State Street may
deliver to DTC, through DTC's
Participant Terminal System, as soon as
practicable, a withdrawal message
instructing DTC to debit such Bond to
State Street's participant account,
provided that State Street's participant
account contains a principal amount of
the Global Security representing such
Bond that is at least equal to the
principal amount to be debited. If a
withdrawal message is processed with
respect to all the Book-Entry Bonds
represented by Global Security, State
Street will mark such Global Security
"cancelled", make appropriate entries in
State Street's records and send such
cancelled Global Security to the
Company. The CUSIP number assigned to
such Global Security shall be cancelled
and not immediately reassigned. If a
withdrawal message is processed with
respect to one or more, but not all, of
the Book-Entry Bonds represented by a
Global Security, State Street will
exchange such Global Security for
another Global Security, which shall
represent the Book-Entry Bonds
previously represented by the
surrendered Global Security with respect
to which a withdrawal message has not
been processed and shall bear the CUSIP
number of the surrendered Global
Security.
If the purchase price for any Book-Entry
Bond is not timely paid to the
Participant with respect to such Bond by
the beneficial purchaser thereof (or a
person, including an indirect
participant in DTC, acting on behalf of
such purchaser), such Participant and,
in turn, the Agent for such Bond may
enter SDFS deliver orders through DTC's
Participant Terminal System reversing
the orders entered pursuant to
Settlement Procedures "I" and "H",
respectively. Thereafter, State Street
will deliver the withdrawal message and
take the related actions described in
the preceding paragraph.
Notwithstanding the foregoing, upon any
failure to settle with respect to a
Book-Entry Bond, DTC may take any
actions in accordance with its SDFS
operating procedures then in effect. In
the event of a failure to settle with
respect to one or more, but not all, of
the Book-Entry Bonds to have been
represented by a Global Security, State
Street will provide, in accordance with
Settlement Procedure "F", for the
certification and issuance of a Global
Security representing the other Book-
Entry Bonds to have been represented by
such Global Security and will make
appropriate entries in its records.
Suspension of Subject to its representations,
Solicitation; warranties and covenants contained in
Amendment or the Distribution Agreement, the Company
Supplement: may instruct the Agent to suspend
solicitation of purchases at any time.
Upon receipt of such instructions the
Agent will forthwith suspend
solicitation of purchases from the
Company until such time as the Company
has advised them that solicitation of
purchases may be resumed. If the
Company decides to amend or supplement
the Registration Statement or the
Prospectus relating to the Bonds (other
than by the filing of an amendment or
supplement relating solely to the terms
of an issue of Bonds, a change in the
principal amount of Bonds remaining to
be sold, or similar changes) it will
promptly advise the Agent and State
Street and will furnish counsel to the
Agent with copies of the proposed
amendment or supplement, other than a
current report on Form 8-K.
In the event that at the time the
solicitation of purchases from the
Company is suspended there shall be any
offers outstanding which have not been
settled, the Company will promptly
advise the Agent and State Street
whether such offers may be settled and
whether copies of the Prospectus as
theretofore amended and/or supplemented
as in effect at the time of the
suspension may be delivered in
connection with the settlement of such
offers. The Company will have the sole
responsibility for such decision and for
any arrangements which may be made in
the event that the Company determines
that such offers may not be settled or
that copies of such Prospectus may not
be so delivered.
Preparation of If any offer to purchase a Bond is
Pricing Supplement: accepted by or Company, the Company,
with the approval of the Agent, will
prepare a pricing supplement (a Pricing
Supplement) reflecting the terms of such
Bond and will arrange to file the
Pricing Supplement with the Securities
and Exchange Commission in accordance
with the applicable paragraph of Rule
424(b) under the Act and will supply at
least 10 copies thereof (or additional
copies if requested) to the Agent. The
Agent will cause a Prospectus and the
appropriate Pricing Supplement to
accompany or precede each written
confirmation of a sale sent to each
purchaser or his agent.
In each instance that a Pricing
Supplement is prepared, the Agent will
affix the Pricing Supplement to
Prospectuses prior to their use.
Outdated Pricing Supplements (other than
those retained for files) will be
destroyed.
State Street not to Nothing herein shall be deemed to
risk own funds: require State Street to risk its own
funds in connection with any payment to
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.
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED BONDS
Date of Issuance: Each Bond will initially be dated and
issued as of the date of its
certification by State Street.
Registration: Bonds will be issued only in fully
registered form.
Denominations: Bonds will be issued in principal
amounts of $1,000 or any integral
multiple thereof.
Interest: Each Bond will bear interest from its
original issue date, at the annual
rate stated on the face thereof,
payable on May 1 and November 1 of
each year (the Interest Payment Dates)
and at maturity or, upon earlier
redemption, the date of redemption.
Each payment of interest shall include
interest accrued to but excluding the
Interest Payment Date.
Calculation of Interest: Interest (including payments for
partial periods) will be calculated on
the basis of a 360-day year of twelve
30-day months. Interest will not
accrue on the 31st day of any month.
Payments of Interest: Interest will be payable to the person
in whose name the Bond is registered
at the close of business on April 15
or October 15 (the Record Dates) next
preceding the Interest Payment Date;
provided, however, that interest
payable on a maturity date or a
redemption date will be payable to the
person to whom principal shall be
payable.
State Street, as paying agent, will be
responsible for withholding taxes on
interest paid as required by law.
The first payment of interest on any
Bond originally issued between a
Record Date and an Interest Payment
Date will be made on the Interest
Payment Date following the next
succeeding Record Date.
Payment at Maturity and Upon presentation of each Bond at
Redemption: maturity or upon maturity or upon
redemption, State Street will pay the
principal amount thereof, together
with accrued interest due at maturity
or the date of such redemption, as the
case may be. Such payment shall be
made in immediately available funds,
provided that the Bond is presented to
State Street in time for State Street
to make payments in such funds in
accordance with its normal procedures.
The Company will provide State Street
with funds available for immediate use
for such purpose. Bonds presented at
maturity or upon redemption will be
cancelled by State Street as provided
in the Indenture.
Rate Setting and Posting: The Company and the Agent will discuss
from time to time the aggregate
principal amount of, the issuance
price of, and the interest rates to be
borne by, Bonds that may be sold as a
result of the solicitation of offers
by the Agents. If the Company decides
to set prices of, and rates borne by,
any Bonds in respect of which the
Agent is to solicit offers (the
setting of such prices and rates to be
referred to herein as "posting") or if
the Company decides to change prices
or rates previously posted, it will
promptly advise the Agent of the
prices and rates to be posted.
The Bonds will be sold at a price,
exclusive of accrued interest, which
will be not less than 95% nor more
than 100% of the principal amount and
at an interest rate which will be a
multiple of 1/8 of 1%. Any discount
will not be greater than 1/4 of 1% for
each year to maturity.
Acceptance and The Company shall have the sole right
Rejection of Offers: to accept offers to purchase Bonds
from the Company and may reject any
such offer in whole or in part. The
Agent shall communicate to the
Company, orally or in writing, each
reasonable offer to purchase Bonds
from the Company received by it, other
than those rejected by such Agent.
The Agent shall have the right, in its
discretion reasonably exercised, to
reject any order in whole or in part.
Settlement: The receipt of immediately available
funds by the Company in payment for a
Bond and the certification and
issuance of such Bond shall, with
respect to such Bond, constitute
settlement. The date of such
settlement is herein referred to as
the Settlement Date. All offers
accepted by the Company will be
settled on the third business day next
succeeding the date of acceptance
unless otherwise agreed by the
purchaser and the Company. The
Settlement Date shall be specified
upon acceptance of an offer.
Settlement Procedures: In the event of a purchase of Bonds by
the Agent, as principal, appropriate
settlement details will be set forth
in the applicable Terms Agreement to
be entered into between the Agent and
the Company pursuant to the
Distribution Agreement.
Settlement Procedures with regard to
each Bond sold by the Agent, as agent,
shall be as follows:
A. The Agent will advise the Company
of the following settlement
information:
1. Principal Amount.
2. Exact name in which the
Bonds are to be registered
(Registered Owner).
3. Exact address of the
Registered Owner and address
for payment of principal and
interest.
4. Taxpayer identification
number of the Registered
Owner (if available).
5. Principal amount of each
Bond to be delivered to the
Registered Owner.
6. Price of the Bonds.
7. Original Issue Discount, if
any.
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 third Business Day next
succeeding the date of acceptance,
Settlement Procedures "A" through "B"
shall be completed no later than the
third Business Day immediately
preceding the settlement date.
Failure to Settle: In the event that a purchaser of a
Bond from the Company shall fail to
accept delivery of a Bond on the
Settlement Date, the Agent will
forthwith notify State Street and the
Company by telephone, confirmed in
writing, of such failure, and return
the Bond to State Street. Upon
receipt by State Street of the Bond
from the Agent, State Street will
immediately advise the Company of such
receipt and the Company will promptly
arrange to credit the account of the
Agent in an amount of immediately
available funds equal to the amount
previously paid by the Agent in
respect of the Bond. Such debits and
credits will be made on the Settlement
Date, if possible, and in any event
not later than the business day
following the Settlement Date.
Upon receipt of the Bond in respect of
which the default occurred, State
Street will cancel the Bond in
accordance with the Indenture.
Use of Funds: If after payment for a Bond having
been made by the Agent to the
Company's account, a failure occurs
for any reason other than default by
the Agent in the performance of its
obligations hereunder or under the
Distribution Agreement, the Company
will reimburse the Agent on an
equitable basis for its loss of the
use of the funds during the period
when the funds were credited to the
account of the Company. If the Agent
fails to perform its obligations
hereunder or under the Distribution
Agreement, which results in the
Company's loss of the use of funds,
including, without limitation, failure
to credit to the Company's account the
appropriate amount of the payment of a
Bond in funds available for immediate
use in accordance with the above
specified timetable, the Agent will
reimburse the Company on an equitable
basis for its loss of the use of the
funds resulting from such default by
the Agent.
Suspension of Subject to its representations,
Solicitation; warranties and covenants contained in
Amendment or the Distribution Agreement, the
Supplement: Company may instruct the Agent to
suspend solicitation of purchases at
any time. Upon receipt of such
instructions the Agent will forthwith
suspend solicitation of purchases from
the Company until such time as the
Company has advised them that
solicitation of purchases may be
resumed. If the Company decides to
amend or supplement the Registration
Statement or the Prospectus relating
to the Bonds (other than by the filing
of an amendment or supplement relating
solely to the terms of an issue of
Bonds, a change in the principal
amount of Bonds remaining to be sold,
or similar changes), it will promptly
advise the Agent and State Street and
will furnish counsel to the Agent with
copies of the proposed amendment or
supplement, other than a Current
Report on Form 8-K.
In the event that at the time the
solicitation of purchases from the
Company is suspended there shall be
any offers outstanding which have not
been settled, the Company will
promptly advise the Agent and State
Street whether such offers may be
settled and whether copies of the
Prospectus as theretofore amended
and/or supplemented as in effect at
the time of the suspension may be
delivered in connection with the
settlement of such offers. The
Company will have the sole
responsibility for such decision and
for any arrangements which may be made
in the event that the Company
determines that such offers may not be
settled or that copies of such
Prospectus may not be so delivered.
Preparation of Pricing If any offer to purchase a Bond is
Supplement; Delivery accepted by or on behalf of the
of Prospectus: Company, the Company, with the
approval of the Agent, will prepare a
pricing supplement (a Pricing
Supplement) reflecting the terms of
such Bond and will arrange to file the
Pricing Supplement with the Securities
and Exchange Commission in accordance
with the applicable paragraph of Rule
424(b) under the Act and will supply
at least 10 copies thereof (or
additional copies if requested) to the
Presenting Agent. The Agent will
cause a Prospectus and the appropriate
Pricing Supplement to accompany or
precede (a) each written confirmation
of a sale sent to a purchaser or his
agent and (b) each Bond delivered to a
customer or his agent.
In each instance that a Pricing
Supplement is prepared, the Agent will
affix the Pricing Supplement to
Prospectuses prior to their use.
Outdated Pricing Supplements (other
than those retained for files) will be
destroyed.
State Street not Nothing herein shall be deemed to
to risk own funds: require State Street to risk its own
funds in connection with any payment
to the Company, or the Agent, or the
purchaser, it being understood by all
parties that payments made by State
Street to either the Company, the
Agent or the purchaser shall be made
only to the extent that funds are
provided to State Street for such
purpose.
Duties of State Street: State Street, in its capacity as
trustee and otherwise, undertakes to
perform such duties and only such
duties as are specifically set forth
in these Administrative Procedures and
in the Indenture, as they may from
time to time be supplemented, and no
implied covenants or obligations shall
be read into these Administrative
Procedures against it. Nothing herein
shall diminish any right or immunity
that State Street shall have in its
capacity as trustee under the
Indenture.
Advertising Cost: The Company will determine and
approve, with the Agent, the amount of
advertising, if any, that is
appropriate in offering the Bonds.
Any advertising expenses which are
approved by the Company will be paid
by the Company.