DRAFT
CONFIRMATION OF BID
AND, IF BID ACCEPTED,
PURCHASE AGREEMENT
FOR PURCHASE OF $
*
FIRST MORTGAGE BONDS, SERIES *, *%, DUE *
OF
THE NARRAGANSETT ELECTRIC COMPANY
Date: , l9__
THE NARRAGANSETT ELECTRIC COMPANY
Ladies and Gentlemen:
In accordance with the Terms and Conditions referred to in the Public
Invitation for Bids, dated , 19 , for the purchase of $ * principal
amount of First Mortgage Bonds, Series *, **%, due * (New Bonds), of The
Narragansett Electric Company (the Company), the undersigned, acting for and
on behalf of the persons, firms, and corporations named in Schedule A hereto
(the Bidders), or in its own behalf (the Bidder) if no other person, firm, or
corporation is named in Schedule A, hereby confirms to the Company the
following bid:
I. Each of the Bidders severally, and not jointly and severally, or
the Bidder, if only one, hereby offers to purchase, subject to the conditions
and provisions set forth in the Terms of Purchase annexed as Schedule B
hereto, the principal amount of New Bonds set forth opposite its name in
Schedule A hereto, aggregating for all Bidders, or for the Bidder, if only
one, the principal amount of the offering, as specified by the Company in the
notice given pursuant to Section 1 of the Terms and Conditions,
WITH INTEREST AT THE RATE OF % PER ANNUM AND AT THE
PRICE OF % OF THE PRINCIPAL AMOUNT THEREOF.
Interest shall accrue from the Closing Date (see Section 6 of Schedule B
hereto).
II. In consideration of the agreements of the Company set forth in
the Terms and Conditions, each of the Bidders, or the Bidder, if only one,
agrees (a) that the offer of such Bidder included in this Confirmation of Bid
shall be irrevocable until four hours after the time designated for the
submission of bids, unless sooner rejected by the Company, and (b) if this bid
shall be accepted by the Company in the manner provided in the Terms and
Conditions, that this bid together with all schedules thereto shall thereupon
constitute a Purchase Agreement, effective as of the date of acceptance
written below, for the purchase and sale of the New Bonds, subject, however,
to such modification of the Purchase Agreement as is contemplated by the Terms
and Conditions.
______________________________
*The series designation, aggregate principal amount, and the year in
which the New Bonds mature are as specified by the Company in the notice given
pursuant to Section 1 of the Terms and Conditions.
** The percentage is the interest rate specified in the accepted bid.
III. Unless earlier accepted or rejected, this bid will be deemed
rejected four hours after the time designated for submission of bids.
IV. Each of the Bidders, or the Bidder, if only one, acknowledges
receipt of a copy of a prospectus relating to the New Bonds, and if such
prospectus has been supplemented or amended, a copy of each supplement or
amendment.
Very truly yours,
By: ________________________________
Name:
Title:
On behalf of and as Representative(s) of
the persons, firms, and corporations
listed on Schedule A hereto (except in the
case of a single bidder).
Accepted:
THE NARRAGANSETT ELECTRIC COMPANY
By: ______________________________________
Date: , 19__
THIS CONFIRMATION OF BID MUST BE SIGNED AND SUBMITTED WITH
SCHEDULE A COMPLETED IN FULL.
SCHEDULE A
PRINCIPAL
AMOUNT
NAME OF NEW BONDS
$
_______________________
TOTAL
_______________________
SCHEDULE B
TERMS OF PURCHASE
RELATING TO
FIRST MORTGAGE BONDS, SERIES **, %, DUE
ORIGINAL ISSUE DATE***
OF
THE NARRAGANSETT ELECTRIC COMPANY
TERMS OF PURCHASE between The Narragansett Electric Company (the
Company), a Rhode Island corporation, and the several Purchasers named in
Schedule A to the confirmation of bid (the Confirmation of Bid) to which these
Terms of Purchase are attached as Schedule B, the Confirmation of Bid and said
Schedules A and B thereto constituting and hereinafter collectively called the
Purchase Agreement. (The words "herein" and "hereunder," unless specifically
limited, mean "in the Purchase Agreement" and "under the Purchase Agreement,"
respectively.)
1. Purchasers and Representative. The term Purchasers as used
herein shall mean the several persons, firms, or corporations named in
Schedule A to the Confirmation of Bid (including the Representative
hereinafter mentioned); and the term Representative as used herein shall be
deemed to mean the representative or representatives designated as
Representative by, or in the manner authorized by, the Purchasers and who, by
submitting the bid as such and by signing the Confirmation of Bid, represent
that it or they have been authorized by the Purchasers to enter into this
Purchase Agreement on their behalf and to act for them in the manner herein
provided. If there shall be only one person, firm, or corporation named in
said Schedule A, the term Purchasers and the term Representative as used
herein shall mean such person, firm, or corporation.
2. Description of the New Bonds. The Company proposes to issue and
sell $** principal amount of its First Mortgage Bonds, Series __, *%, due **
(New Bonds), to be issued under an indenture supplemental to the First
Mortgage Indenture and Deed of Trust dated as of September 1, 1944, (as
heretofore and hereafter supplemented, the Indenture), from the Company to
Rhode Island Hospital Trust National Bank (the Trustee), successor to Rhode
Island Hospital Trust Company. The terms and provisions of the New Bonds and
of the Indenture are summarized in the registration statement and in the
prospectus below mentioned.
3. Representations and Warranties of the Company. The Company
represents and warrants to each Purchaser as follows:
(a) With respect to the proposed issue and sale of the New
Bonds, the Company has filed a registration statement, including as a
part thereof a prospectus, under the Securities Act of 1933, as amended
(the Securities Act), with the Securities and Exchange Commission (the
__________________________
* The percentage is the interest rate specified in the accepted bid.
** The series designation, aggregate principal amount, and the year in
which the New Bonds mature are as specified by the Company in the notice given
pursuant to Section 1 of the Terms and Conditions.
*** Original Issue Date shall be the Closing Date.
Commission). Said registration statement has become effective, and the
prospectus in the registration statement as now effective (the
Registration Statement) meets the requirements of section 10(a) of the
Securities Act. The Company will file a supplement to the prospectus
(the Supplement) with respect to the New Bonds to reflect the results of
the bidding pursuant to the rules and regulations under the Securities
Act, after giving the Representative an opportunity to examine and make
objections of substance to the Supplement. Such examination shall not
limit or affect the rights of any Purchaser in respect of any
representation, warranty, or covenant of indemnity by the Company herein
contained. Before filing any other supplement or amendment to the
Registration Statement or the Supplement with respect to the New Bonds,
the Company will afford the Representative an opportunity to examine it
and any documents incorporated therein and to make objections of
substance thereto. The Representative shall have the right to terminate
this Purchase Agreement, without liability on the part of any Purchaser,
if the Company shall file the Supplement or any other supplement or
amendment to the prospectus to which the Representative shall reasonably
so object in writing.
(b) Said prospectus and the Registration Statement have been,
and the Supplement and each other supplement or amendment thereto will
be, carefully prepared in conformity with the requirements of the
Securities Act and the rules, regulations, and releases of the
Commission thereunder; the Registration Statement contains all
statements which are required to be incorporated or stated therein in
accordance with the Securities Act and the rules, regulations, and
releases thereunder, and will in all material respects conform to the
requirements thereof; said prospectus, as supplemented when the
Supplement is filed (the Prospectus), will contain or incorporate
therein all statements made in the Registration Statement which the
Prospectus is required to contain and will in all material respects
conform to the requirements of the Securities Act and the rules,
regulations, and releases thereunder; wherever the terms prospectus,
Prospectus, registration statement, or Registration Statement are used
herein, they shall be deemed to include all documents incorporated by
reference therein pursuant to the requirements of Form S-3 under the
Securities Act, and such documents incorporated or to be incorporated by
reference therein have been or will be prepared and filed with the
Commission in a timely manner and in accordance with the provisions of
the Securities Exchange Act of 1934 (the Exchange Act) and applicable
rules, regulations, and releases thereunder; neither the Registration
Statement nor the Prospectus will include any untrue statement of a
material fact or omit to state a material fact which (in the case of the
Registration Statement) is required to be incorporated or stated therein
or is necessary to make the statements therein or incorporated therein
not misleading or which (in the case of the Prospectus) is necessary to
make the statements therein, in the light of the circumstances under
which they are made, not misleading; provided, however, that the
foregoing representations and warranties shall not apply to statements
or omissions made in reliance on written information furnished to the
Company by the Purchaser, or by and through the Representative on behalf
of any Purchaser, or to statements or omissions in the Statement of
Eligibility and Qualification of the Trustee under the Indenture.
(c) The financial statements of the Company included or
incorporated by reference in the Registration Statement will be correct
and complete and will truly present the financial position of the
Company as at the dates stated therein and the results of the operations
of the Company for the periods stated therein. The Company had, on the
date of the latest financial statements included or incorporated by
reference in the Registration Statement, no material liabilities or
obligations, fixed or contingent, other than those disclosed in the
Registration Statement or such financial statements, and since that date
the Company has not incurred any material liabilities or obligations
still outstanding, fixed or contingent, other than (i) in the ordinary
course of business, (ii) as a result of transactions described in the
prospectus included in the Registration Statement, or (iii) short-term
borrowings which result in short-term note indebtedness of not
exceeding, in the aggregate at any one time outstanding, the limitations
then authorized for the Company by the Commission under the Public
Utility Holding Company Act of 1935 (the 1935 Act). Since the date of
the latest financial statements included or incorporated by reference in
the Registration Statement, there has not been any material adverse
change in the financial condition of the Company not disclosed in the
prospectus included in the Registration Statement. Except as described
in said prospectus, there are no proceedings at law or in equity or
before any federal or state commission or other public authority the
result of which might have a material adverse effect upon the financial
condition of the Company.
(d) Coopers & Lybrand, who have certified certain of the
financial statements filed with the Commission, are independent
certified public accountants as required by the Securities Act and the
rules, regulations, and releases thereunder.
(e) The consummation of the transactions herein contemplated and
the performance by the Company of the terms of this Purchase Agreement
will not violate any of the terms, conditions, or provisions of, or
constitute a default under, any franchise, indenture, or other contract
or agreement to which the Company is now a party or by which the Company
or its property may be bound or affected, or the Company's charter,
by-laws, or preferred stock provisions, or any order of any court or
administrative agency by which the Company is bound.
(f) The issue and sale of the New Bonds are solely for the
purpose of financing the business of the Company.
4. Information from and Warranties of the Purchasers. Each
Purchaser, in addition to other information furnished to the Company for use
in the Prospectus, is contemporaneously furnishing and will continue to
furnish to the Company through the Representative for use in the Prospectus
the information to be stated therein with regard to the public offering to be
made by the Purchasers, any further information regarding the Purchasers and
such public offering which may be required under the 1935 Act, and all other
information required by law in respect of the purchase and sale of the New
Bonds. Each Purchaser warrants and represents to the Company, each of the
officers and directors of the Company, each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act, and each other
Purchaser that all information furnished at any time in writing to the Company
by such Purchaser, or by or through the Representative on behalf of such
Purchaser, for use in the Prospectus, will not contain an untrue statement of
a material fact and will not omit to state any material fact which is
necessary to make the statements therein, in the light of the circumstances
under which they are made, not misleading.
5. Purchase and Sale of New Bonds. The Company will sell to each
Purchaser and each Purchaser will severally purchase from the Company, at the
price specified in paragraph I of the Confirmation of Bid, at the time and
place, in the manner, and upon the terms and conditions hereinafter set forth,
the principal amount of New Bonds set forth opposite its name in Schedule A to
the Confirmation of Bid, which amount may be increased in accordance with
paragraph (a) of Section 12 hereof and Section 5 of the Terms and Conditions.
All obligations of the Purchasers hereunder are several, and not joint
or joint and several, and nothing herein shall constitute the Purchasers
copartners of each other.
6. Time and Place of Closing; Delivery and Payment. The term Closing
Date wherever used herein shall mean the eighth day (or if such day is not a
full business day, the next full business day thereafter) following the date
hereof, or such later date as shall be specified in the notice referred to in
Section 1 of the Terms and Conditions, or such other date as shall be agreed
in writing by the Company and the Representative (subject to postponement in
accordance with the provisions of Section 12 hereof).
Payment for the New Bonds, as provided in Section 5 hereof, shall be
made at the principal office of Rhode Island Trust National Bank at 10:00 a.m.
Providence time, on the Closing Date. Payment shall be made to the Company or
its order in immediately available current-day funds by certified check or
checks drawn on, or by official check or checks of, Rhode Island Hospital
Trust National Bank, or in Boston Federal Reserve Bank Funds. The Company
will reimburse the Purchasers for interest on the amount of such payment at
the Federal Reserve Bank Funds from the Closing Date until the next succeeding
day. Payment for the New Bonds may also be made by a FedWire electronic funds
transfer to The Narragansett Electric Company's bank account, Number 188292 at
Rhode Island Hospital Trust National Bank, Providence, Rhode Island, 02903,
Transit Routing Number 0115 00337. Such payment shall be made upon delivery
of the New Bonds to the Representative for the respective accounts of the
Purchasers, such delivery to be made at the offices of BancBoston Trust
Company of New York, 55 Broadway, 3rd Floor, New York, New York 10006. The
New Bonds will be delivered, at the option of the Company, either in temporary
or definitive form. If delivered in temporary form, each will be in the
denomination of $1,000, and an exchange of temporary New Bonds for
fully-registered New Bonds in definitive form will be made as soon as
practicable and without charge to the holders thereof. If delivered in
definitive form, the New Bonds will be in fully-registered form and will be
registered in such name or names and in such denominations of $1,000 or
integral multiples thereof as the Representative may request not later than 10
A.M., Providence time, on the third full business day prior to the Closing
Date. If no such direction is received, the New Bonds will be registered in
the names of the respective Purchasers in denominations selected by the
Company.
The Company will make such New Bonds available to the Representative for
examination at the place of delivery, not later than 2 P.M., Providence time,
on the first full business day prior to the Closing Date.
The Representative, individually and not as the Representative, may (but
shall not be obligated to) make payment to the Company for the New Bonds to be
purchased by any Purchaser whose funds shall not have been received by the
Representative as of the Closing Date, for the account of such Purchaser. Any
such payment by the Representative shall not relieve such Purchaser from any
of its obligations hereunder, but the Representative shall succeed to the
right of the Company to receive the amount of such payment from such
Purchaser.
7. Covenants of the Company. The Company agrees that:
(a) The Company will promptly deliver to the Representative a
copy of the registration statement with respect to the New Bonds, as
originally filed, and of all amendments thereto heretofore or hereafter
made, including a copy of each consent and certificate included or
incorporated by reference therein or filed as an exhibit thereto (but
excluding any other exhibit thereto unless specifically requested by the
Representative). The Company will deliver to the Representative in New
York or Providence, as requested, as soon as practicable after the
filing of the Supplement, and thereafter from time to time during the
nine-month period commencing on the date hereof, as many unsigned copies
of the Prospectus (as supplemented or amended, if the Company shall have
made any supplements or amendments thereto) and any documents
incorporated by reference therein as the Representative may reasonably
request for purposes contemplated by the Securities Act.
(b) The Company will advise the Representative immediately by
telegraph or other means of communication and confirm the advice in
writing:
(i) when the Supplement has been filed;
(ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement, or of
the initiation of any proceedings for that purpose, and agrees, if
any such stop order should be entered by the Commission, to make
every reasonable effort to obtain the lifting or removal thereof
as soon as possible;
(iii) of the issuance by the Commission or the Division of
Public Utilities and Carriers of the State of Rhode Island
(RIPUC), of any order altering, suspending, supplementing, or
otherwise affecting any of their orders permitting the issuance
and sale of the New Bonds;
(iv) of any action by the Commission which has the effect
of eliminating the exemption from the requirement of obtaining an
order under the 1935 Act pursuant to Rule 52 promulgated
thereunder; and
(v) of the commencement of any litigation in connection
with the New Bonds against the Company or any of its directors or
any signer of the Registration Statement.
(c) During the six-month period commencing on the effective date
of this Purchase Agreement, the Company will use its best efforts, when
and as requested by the Representative, to furnish information and
otherwise cooperate in qualifying the New Bonds for the purposes of any
public offering by the Purchasers under securities or "blue-sky" laws of
such states as the Representative may designate; provided that the
Company shall not be obligated to qualify as a foreign corporation in,
or consent to service of process under the laws of, any state, or to
meet other requirements deemed by it to be unduly burdensome. The
Company will pay or reimburse the Representative in an aggregate amount
not exceeding $3,000 for the filing fees and expenses in connection with
any qualification referred to in this paragraph.
(d) The Company will pay all expenses in connection with (i) the
preparation and filing by it of the Registration Statement and the
Prospectus and any supplement or amendment thereto, (ii) the issue and
delivery of the New Bonds, and (iii) the printing of the Prospectus and
any supplement or amendment thereto and the delivery of reasonable
quantities of copies thereof to Purchasers. The Company will pay all
federal and state taxes (except transfer taxes) on the issue of the New
Bonds. The Company shall not, however, be required to pay any amount
for the expenses of the Representative or of any Purchasers, except as
provided in paragraphs (c) and (e) of this Section. The fees and
disbursements of Milbank, Tweed, Hadley & McCloy (the Purchasers'
Counsel) shall be paid by the Purchasers, except as provided in
paragraph (e) of this Section; and in the event that the fees of
Purchasers' Counsel shall be reduced from the amount stated by such
counsel to the Representative, an amount equal to such reduction shall
be paid to the Company by or on behalf of the Purchasers.
(e) If the Purchase Agreement shall be terminated pursuant to
any of the provisions hereof, the Company will pay the reasonable fees
and disbursements of Purchasers' Counsel and the filing fees and
expenses referred to in paragraph (c) of this Section. If the
Purchasers shall not take up and pay for the New Bonds due to the
failure of the Company to comply with any of the conditions specified in
Section 8 hereof, the Company will reimburse the Purchasers in an
aggregate amount not exceeding $2,000 for their reasonable out-of-pocket
expenses incurred in connection with the financing contemplated by this
Purchase Agreement. The Company shall not in any event be liable to any
of the Purchasers for damages on account of loss of anticipated profits.
(f) During the nine-month period commencing on the date hereof,
if any event known to the Company or of which the Company shall be
advised by the Representative shall occur which should be set forth in a
supplement to or an amendment of the Prospectus or in any document to be
incorporated by reference therein in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, the Company will so advise the Representative
and, upon request from the Representative, will forthwith at the
Company's expense, or at the expense of the Purchasers if the only event
occasioning the supplement or amendment is a change in the purchasing or
distribution arrangements, prepare and furnish to the Representative (in
form satisfactory to Purchasers' Counsel) a reasonable number of copies
of a supplemented or amended prospectus or the document incorporated
therein or, at the option of the Company, a reasonable number of
appropriate supplements to be attached to the Prospectus, so that the
Prospectus as supplemented or amended will not contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading. In case any
Purchaser is required to deliver a prospectus descriptive of the New
Bonds more than nine months after the date hereof, the Company, upon the
request of the Representative, will furnish to the Representative, at
the expense of such Purchaser, a reasonable quantity of copies of a
supplemented or amended prospectus meeting the requirements of section
10(a) of the Securities Act.
(g) The Company will make generally available to its security
holders, as soon as practicable, an earnings statement (which need not
be certified) covering a twelve-month period commencing subsequent to
the date hereof, which earnings statement shall satisfy the requirements
of Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder.
8. Conditions of Purchasers' Obligations. The obligations of the
several Purchasers to purchase and pay for the New Bonds shall be subject to
the performance by the Company of its obligations hereunder and the following
conditions:
(a) Prior to 7 P.M., Providence time, on the date hereof, the
Indenture shall have been qualified under the Trust Indenture Act of
1939, there shall have been issued an order of the RIPUC, to the extent
that it has jurisdiction, permitting the issuance and sale of the New
Bonds, and at such time and on the Closing Date such orders shall not
contain any provision which, in the opinion of the Representative or the
Company, is unduly burdensome to the Company, it being understood that
such orders as are now in effect do not contain any such unduly
burdensome provision.
(b) All legal proceedings to be taken and all legal opinions to
be rendered in connection with the issue and sale of the New Bonds shall
be satisfactory to Purchasers' Counsel. Prior to or concurrently with
the delivery of the New Bonds, the Representative shall have received
the following opinions and letter, with printed or duplicated copies
thereof for each of the Purchasers, with such changes therein as may be
agreed upon by the Company and the Representative with the approval of
Purchasers' Counsel:
(i) Opinion of Edwards & Angell, special counsel for the
Company, substantially in the form attached hereto as Exhibit 1;
(ii) Opinion of Robert King Wulff, Esq. and/or Kirk L.
Ramsauer, Esq., counsel for the Company, substantially in the form
attached hereto as Exhibit 2;
(iii) Opinion of Purchasers' Counsel substantially in the
form attached hereto as Exhibit 3; and
(iv) Letter of Coopers & Lybrand, dated the Closing Date
and addressed to the Company and to the Representative, confirming
that they are independent certified public accountants with
respect to the Company within the meaning of the Securities Act
and the applicable published rules and regulations thereunder, and
stating in effect:
(1) that in their opinion the financial statements
and financial statement schedules (included or incorporated
by reference in the Registration Statement) examined by them
as stated in their report (incorporated by reference in the
Registration Statement) comply as to form in all material
respects with the applicable accounting requirements of the
Exchange Act and of the published rules and regulations
thereunder;
(2) that on the basis of reading the minutes of the
meetings of the stockholders and the Board of Directors of
the Company held during any period subsequent to 1992, and
not covered by the Financial Statements referred to in
paragraph (1) of this clause, as set forth in the minute
books through a specified date not more than five business
days prior to the date of their letter, a reading of the
unaudited financial statements of the Company included or
incorporated by reference in the Registration Statement, and
inquiries of officials of the Company who have
responsibility for financial and accounting matters (which
procedures do not constitute an examination made in
accordance with generally accepted auditing standards), they
agree that, if any unaudited amounts of total operating
revenue and net income are set forth or incorporated by
reference in the Registration Statement, including amounts
set forth under "Selected Financial Information," they agree
with the corresponding amounts set forth in the unaudited
financial statements for that period. Those officials of
the Company who have responsibility for financial and
accounting matters stated that:
(A) that the unaudited financial statements included
or incorporated by reference in the Registration
Statement do not comply as to form in all
material respects with the applicable accounting
requirements of the Exchange Act and the
published rules and regulations thereunder, and
that said financial statements are in conformity
with generally accepted accounting principles
applied on a basis substantially consistent with
that of the audited financial statements
incorporated by reference in the Registration
Statement,
(B) that, during the period from the date of the
latest financial statements incorporated by
reference in the Registration Statement through
a specified date not more than five business
days prior to the date of their letter, there
was no change in the capital stock and no
increase in long-term debt of the Company,
except in all instances as set forth or
incorporated in or contemplated by the
Prospectus; and
(3) that they have compared the dollar amounts
contained in Exhibit 12 (Computation of Ratio of Earnings to
Fixed Charges) to the Registration Statement with such
dollar amounts derived from the unaudited financial
statements incorporated by reference in the Registration
Statement, general accounting records of the Company or from
schedules prepared by the Company or derived directly from
such records or schedules by analysis or computation, and
have found such dollar amounts to be in agreement, and have
recalculated the ratios contained in Exhibit 12 and have
found the calculation of such ratios to be mathematically
correct, except in each case as otherwise stated in said
letter.
(c) At the time of the delivery of the New Bonds:
(i) no stop order suspending the effectiveness of the
Registration Statement shall have been entered and be in effect,
no proceeding for that purpose shall be pending, and any request
on the part of the Commission for amendments or additional
information shall have been complied with to its satisfaction;
(ii) the orders referred to in paragraph (a) of this
Section shall remain in force and effect; and
(iii) the representations and warranties of the Company
herein shall be true and correct;
and the Representative shall have received a certificate signed by an
officer of the Company to such effect, to the best of his knowledge,
information, and belief.
If any provision of this Section is not fulfilled at or prior to the
delivery of the New Bonds, this Purchase Agreement may be terminated by the
Representative (with the consent of Purchasers, including the Representative,
who have agreed to purchase in the aggregate 50% or more in principal amount
of the New Bonds) upon delivering written notice thereof to the Company. Any
such termination shall be without liability of any party to any other party,
except as otherwise provided in paragraph (e) of Section 7.
9. Conditions of the Company's Obligation. The obligation of the
Company to deliver the New Bonds is subject to the following conditions:
(a) The conditions set forth in paragraphs (a), (c)(i), and
(c)(iii) of Section 8 hereof.
(b) Concurrently with the delivery of the New Bonds, the Company
shall receive the full purchase price for all of the New Bonds.
If any provision of this Section is not fulfilled at or prior to the
delivery of the New Bonds, this Purchase Agreement may be terminated by the
Company, by written notice delivered to the Representative. Any such
termination shall be without liability of any party to any other party, except
as otherwise provided in paragraph (e) of Section 7.
10. Termination. This Purchase Agreement may be terminated at any
time prior to the Closing Date by the Representative (with the consent of
Purchasers including the Representative who have agreed to purchase in the
aggregate 50% or more in principal amount of the New Bonds), upon notice
thereof to the Company, if prior to such time (a) there shall have occurred
any general suspension of trading in securities on the New York Stock Exchange
or there shall have been established by the New York Stock Exchange, the
Commission, or any Federal or state agency or by the decision of any court any
limitation on prices for such trading or any restrictions on the distribution
of securities, (b) a banking moratorium shall have been declared either by
Federal or New York State authorities, or (c) there shall have occurred the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in this clause (c) in the judgement of the
Representative makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the New Bonds on the terms and in the
manner contemplated by the Prospectus.
Any termination of this Purchase Agreement pursuant to this Section
shall be without liability of any party to any other party, except as
otherwise provided in paragraph (e) of Section 7.
11. Indemnification.
(a) The term Bidding Prospectus as used in this Section 11 shall
mean the prospectus included in the registration statement on the date
of its initial effectiveness and such prospectus as and if amended or
supplemented prior to the date this Purchase Agreement becomes effective
and shall also include all preliminary prospectuses. The terms
Registration Statement and Prospectus as used in this Section 11 shall
mean said documents as defined, respectively, in Sections 3(a) and 3(b)
hereof and shall also include each and every amendment of and supplement
to said documents, respectively, furnished by the Company to the
Purchasers or to the Representative for distribution to the Purchasers.
No indemnity by the Company hereunder shall apply in respect of (i) any
Prospectus or Bidding Prospectus used at a time not authorized under the
Securities Act or this Purchase Agreement, (ii) any Prospectus or
Bidding Prospectus used in unamended or unsupplemented form after the
same has been amended or supplemented, provided the Company has supplied
such amendment or supplement to the Purchasers or to the Representative
for distribution to the Purchasers, or (iii) any Purchaser, or any
person controlling such Purchaser, on account of any loss, claim, or
liability arising by reason of any person acquiring any of the New
Bonds, if a copy of the Prospectus has not been sent or given by a
Purchaser or a securities dealer to such person with or prior to the
written confirmation of the sale involved. No use of any Bidding
Prospectus is authorized after the acceptance by the Company of the bid.
(b) The Company will indemnify and hold harmless each Purchaser
and each person, if any, who controls any Purchaser within the meaning
of Section 15 of the Securities Act against any loss, claim, or
liability, joint or several (including the reasonable cost of
investigating or defending any such alleged loss, claim, or liability
and reasonable counsel fees incurred in connection therewith), arising
by reason of any person acquiring any of the New Bonds, on the ground
that the Registration Statement, the Prospectus, or the Bidding
Prospectus includes or included an untrue statement of a material fact
or omits or omitted to state a material fact which (in the case of the
Registration Statement or the registration statement as now effective)
is or was required to be stated therein or is or was necessary to make
the statements therein not misleading or which (in the case of the
Prospectus or the Bidding Prospectus) is or was necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, unless such statement or omission was made in
reliance upon written information furnished to the Company by any
Purchaser, or by and through the Representative on behalf of any
Purchaser, for use therein, or unless such statement or omission shall
occur in the Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of the Trustee under the Indenture. For purposes
of the foregoing, no Purchaser shall be deemed to be required to send or
give a copy of documents incorporated by reference in the Prospectus to
any person with or prior to the written confirmation of the sale
involved in order to be entitled to the benefits of the indemnification
provided for herein. Upon commencement of any such suit, if any
Purchaser or any such controlling person wishes to make a claim in
respect thereof against the Company under its agreement herein
contained, such Purchaser or such controlling person, as the case may
be, shall, within thirty days after the summons or other first legal
process giving information of the nature of the claim shall have been
served upon such Purchaser or upon such controlling person (or after he
shall have received notice of such service on any designated agent),
give notice in writing of such suit to the Company; but failure so to
notify the Company shall not relieve it from any liability which it may
have to the person against whom such suit is brought, otherwise than on
account of its indemnity agreement contained in this paragraph. The
Company will be entitled to participate at its own expense in the
defense or, if it so elects, to assume the defense of any such suit,
and, if the Company elects to assume the defense, the defendant or
defendants therein will be entitled to participate in the defense but
shall bear the fees and expenses of any additional counsel retained by
them, unless the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel. The indemnifying
party shall not be liable for any settlement of any proceeding effected
without its written consent but if settled with such consent or if there
be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability
by reason of such settlement or judgment.
(c) Each Purchaser will indemnify and hold harmless the Company
and each of its officers and directors and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities
Act, to the same extent as the Company in the foregoing paragraph (b)
agrees to indemnify and hold harmless each Purchaser, but only with
respect to any written information furnished to the Company by such
Purchaser, or by and through the Representative on behalf of such
Purchaser, for use in the Prospectus. If any action shall be brought
hereunder against the Company or any such officer, director, or
controlling person, such Purchaser shall have the rights and duties
given to the Company by paragraph (b), and the Company or such officer,
director, or controlling person shall have the rights and duties given
to such Purchaser by said paragraph.
(d) If the indemnification provided for in this Section 11 is
unavailable to an indemnified party, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such
loss, claim, or liability in such proportion as is appropriate to
reflect not only the relative benefits received by the Company on the
one hand and the Purchaser on the other but also the relative fault of
the Company on the one hand and of the Purchaser on the other in
connection with the statement or omission that resulted in such loss,
claim, or liability, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and by the Purchaser on the other in connection with the
offering shall be deemed to be in the same proportion as the total net
proceeds from the offering, before deducting expenses, received by the
Company bear to the total underwriting discounts or commissions, if any,
received by all of the Purchasers, in each case as set forth in the
table on the cover page of the Prospectus. If there are no such
underwriting discounts or commissions so set forth, the relative
benefits received by the Purchaser shall be the difference between the
price received by the Purchaser upon sale of the New Bonds and the price
paid for the New Bonds pursuant to this Purchase Agreement. The
relative fault of the Company on the one hand and of the Purchaser on
the other shall be determined by reference to, among other things,
whether the untrue or allegedly untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Purchaser and the parties'
relative intent, knowledge, access to information, and opportunity to
correct or prevent such statement or omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
(e) The indemnities contained in this Section and all the
representations and warranties contained in this Purchase Agreement
shall survive the delivery of the New Bonds.
12. Substitution of Purchasers.
(a) If one or more Purchasers fail or refuse to take up and pay
for the entire principal amount of New Bonds that it or they agreed to
purchase under this Purchase Agreement and the aggregate principal
amount of New Bonds which all such defaulting Purchasers shall have
failed to purchase does not exceed ten percent of the aggregate
principal amount of the New Bonds, the nondefaulting Purchasers shall
have the right and are obligated severally to take up and pay for (in
addition to the principal amounts of New Bonds set forth opposite their
respective names in Schedule A to the Confirmation of Bid) the total
principal amount of New Bonds agreed to be purchased by all such
defaulting Purchasers in the respective proportions which the principal
amounts set forth opposite the names of the nondefaulting Purchasers in
Schedule A bear to the aggregate principal amount so set forth opposite
the names of all such nondefaulting Purchasers; provided, however, that
no New Bonds of denominations smaller than $1,000 are to be delivered
and, if New Bonds of smaller denominations would result from the
aforesaid proportions, such smaller denominations shall be combined and
the resulting $1,000 note or notes shall be delivered to, and shall be
purchased by, such Purchaser or Purchasers as the Representative shall
designate. In such event, the Representative, for the accounts of the
several nondefaulting Purchasers, may take up and pay for all or any
part of such principal amount of New Bonds to be purchased by each
remaining Purchaser under this paragraph and, in order to effect
necessary changes in the Registration Statement, Prospectus, and other
documents and arrangements, may postpone the Closing Date not more than
four full business days.
(b) If one or more of the Purchasers shall fail or refuse to
take up and pay for the entire principal amount of New Bonds which he or
they have agreed to purchase under this Purchase Agreement and the
aggregate principal amount of New Bonds which all such defaulting
Purchasers shall have failed to purchase exceeds ten percent of the
aggregate principal amount of the New Bonds, the nondefaulting
Purchasers, or any one or more of them, at 10 A.M., Providence time, on
the Closing Date or within 24 hours thereafter, shall have the right to
take up and pay for (in such proportion as may be agreed upon among them
so long as no New Bonds of denominations smaller than $1,000 are to be
delivered), or to substitute another Purchaser or Purchasers to take up
and pay for, the total principal amount of New Bonds agreed to be
purchased by all such defaulting Purchasers. In the event that the
nondefaulting Purchasers shall not take up and pay for all the New Bonds
which the defaulting Purchasers shall have agreed but failed to
purchase, or substitute another Purchaser or Purchasers, as aforesaid,
the Company shall have the privilege of finding and substituting within
a further 24-hour period another Purchaser or Purchasers to purchase the
principal amount of New Bonds which the defaulting Purchasers agreed but
failed to purchase. (The term Purchaser as used in this Purchase
Agreement shall refer to and include each Purchaser substituted under
this paragraph with the same effect as if said substituted Purchaser had
originally been named in Schedule A to the Confirmation of Bid.) In any
such case, either the Company or the Representative shall have the right
to postpone the Closing Date not more than seven full business days, in
order that necessary changes in the Registration Statement, the
Prospectus, and any other documents and arrangements may be effected.
If said nondefaulting Purchasers shall not take up and pay for such
principal amount of New Bonds, or substitute another Purchaser or
Purchasers therefor, and the Company shall not substitute another
Purchaser or Purchasers therefor, all as aforesaid, then this Purchase
Agreement shall terminate without any liability on the part of the
Company (except as otherwise provided in paragraph (e) of Section 7) or
of any nondefaulting Purchaser. Nothing contained in this paragraph
shall obligate any Purchaser to purchase or find purchasers for any
principal amount of New Bonds in excess of the amount agreed to be
purchased by such Purchaser under the terms of Section 5, nor shall
anything in this paragraph relieve any defaulting Purchaser of any
liability to the Company which it might otherwise have.
13. Persons Entitled to Benefit of Purchase Agreement. This Purchase
Agreement shall inure to the benefit of the Company and the Purchasers (and,
as to the provisions of Section 11, the other persons indemnified thereunder)
and their respective successors and assigns. Nothing in this Purchase
Agreement is intended or shall be construed to give to any other person, firm,
or corporation any legal or equitable right, remedy, or claim under or in
respect of this Purchase Agreement or any provision herein contained. The
term "successors and assigns" as used in this Purchase Agreement shall not
include any purchaser, as such purchaser, of any of the New Bonds from any of
the Purchasers.
14. Notices. Any request, consent, notice, or other communication on
behalf of the Purchasers shall be given in writing by the Representative
addressed to the Treasurer of the Company at 25 Research Drive, Westborough,
Massachusetts 01582, and any notice or other communication by the Company to
the Purchasers shall be given in writing to the Representative, at its address
stated in the Questionnaire furnished pursuant to Section 2 of the Terms and
Conditions.
15. Effectiveness of Purchase Agreement. The date on which this
Purchase Agreement is effective is the date stated by the Company in the
written acceptance of the Bid.
16. Governing Law. This Purchase Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts.
17. Counterparts. This Purchase Agreement may be executed by one or
more of the parties hereto in any number of counterparts, each of which shall
be deemed an original, but all such counterparts shall together constitute one
and the same instrument.
Exhibit 1 to Terms of Purchase
PROPOSED FORM OF OPINION
OF
EDWARDS & ANGELL
ONE HOSPITAL TRUST PLAZA
PROVIDENCE, RHODE ISLAND 02903
_________________ , 19__
As Representatives of the Several Purchasers
Re: THE NARRAGANSETT ELECTRIC COMPANY
First Mortgage Bonds Series __, ___ %, due ________
Dear Sirs:
At the request of The Narragansett Electric Company, we submit the
following opinion as to its franchises. The Narragansett Electric Company
(originally incorporated under the name of "United Electric Power Company")
acquired in 1927 all of the assets and franchises of The Narragansett Electric
Lighting Company. Since then it has acquired in 1936 all the property,
assets, plant and business of South County Public Service Company, Tiverton
Electric Light Company, Bristol County Gas and Electric Company, and East
Greenwich Electric Company and, in August, 1950, all the property, assets,
plant and business of Rhode Island Power Transmission Company. In connection
with such acquisitions, The Narragansett Electric Company became entitled to
exercise and enjoy all the rights, powers, easements, privileges and
franchises theretofore exercised and enjoyed by said corporations with respect
to the property, assets, plant and business acquired from them respectively.
It has also acquired certain other utility property, but the franchises, if
any, acquired in connection therewith are unimportant.
Article IX of the amendments to the Constitution of the State of Rhode
Island, adopted in November, 1892, limits the power of the General Assembly to
provide for the creation of corporations by general law so that no corporation
shall be created with the power to exercise the right of eminent domain or to
acquire franchises in the streets and highways of towns and cities except by
special act, on notice as required by law. The charters of The Narragansett
Electric Company and of the various corporations whose property, assets and
franchises were acquired by The Narragansett Electric Company as aforesaid,
were granted by special acts of the General Assembly, on such requisite
notice. Said charters and all amendments thereto we have duly examined. We
are of the opinion that The Narragansett Electric Company is now a duly
existing corporation.
We are familiar with the proceedings incident to the acquisition by The
Narragansett Electric Company of the property, assets and franchises of (1)
The Narragansett Electric Lighting Company in 1927, (2) the several other
corporations referred to above in 1936 and (3) Rhode Island Power Transmission
Company in 1950. We have examined certified copies of the orders by the
Division of Public Utilities, Department of Revenue and Regulation (originally
called "Department of Taxation and Regulation"), of the State of Rhode Island,
consenting to and approving the purchase and acquisition of the property,
assets, plant and business of South County Public Service Company, Bristol
County Gas and Electric Company, Tiverton Electric Light Company and East
Greenwich Electric Company and of the order by the Public Utility
Administrator, Department of Business Regulation (who succeeded to the powers
and authority of the Division of Public Utilities, Department of Revenue and
Regulation, as hereinafter set forth) consenting to and approving the purchase
from Rhode Island Power Transmission Company of all of its property, assets,
plant and business, in compliance with the provisions of Section 39-3-24 of
the General Laws (1956). We have been advised that the Federal Power
Commission (now called the "Federal Energy Regulatory Commission") consented
to the acquisition by The Narragansett Electric Company of the facilities of
South County Public Service Company, Tiverton Electric Light Company and Rhode
Island Power Transmission Company and that no such consent was necessary in
connection with the transfers from Bristol County Gas and Electric Company and
East Greenwich Electric Company.
We are of the opinion, based on the foregoing information, that The
Narragansett Electric Company validly acquired the property, assets, plant and
business of the above-mentioned corporations and is entitled to exercise and
enjoy all of the right, powers, easements, privileges and franchises
theretofore exercised and enjoyed by said corporations with respect to the
property, assets, plant and business purchased from them respectively by The
Narragansett Electric Company and that The Narragansett Electric Company has
succeeded to the rights and obligations of said corporations with respect to
operation in the towns and cities in Rhode Island where said corporations
carried on business under and pursuant to their respective charters prior to
said acquisition.
The original and amended charters of The Narragansett Electric Lighting
Company and of said corporations, all the property, assets, plant and business
of which were acquired as aforesaid, contain, among other matters, provisions
substantially similar in effect purporting to grant rights, with the consent,
or under the direction of the respective town and city councils and subject to
their ordinances, to install and maintain in the several towns and cities in
Rhode Island in the case of The Narragansett Electric Lighting Company and in
certain specific towns and cities in the case of the others of said
corporations, wires and conductors of electricity under and over highways,
streets and sidewalks for the purpose of selling and distributing electricity
for lighting, heating and other purposes.
The charter, as amended, of Bristol County Gas and Electric Company
contained provisions, among other matters, purporting in effect to grant the
right to carry on an electrical business and, with the consent of town
councils, to install wires and poles in, under and over highways, streets,
bridges and sidewalks in towns where it operates, subject to ordinances,
regulations and orders of the respective town councils. By the charters of
certain corporations (the rights of which Bristol County Gas and Electric
Company subsequently acquired) similar rights were provided for in the Town of
Bristol, with the consent of the Town Council, as to wires for electricity.
The charter of Rhode Island Power Transmission Company provided, among
other matters, for the right to string and maintain its wires across highways,
streets, etc., subject to reasonable regulations required for public safety by
the city or town councils of the cities or towns where the same are located or
the State Board of Public Roads if a state highway. It also provided that the
corporation, with the consent of the city or town councils or the State Board
of Public Roads (as to state highways) might put up, lay, maintain, repair and
use poles, transmission lines, wires, conductors, conduits and other
appurtenances in, through, along, over and under highways, streets, bridges
and other public places, subject to reasonable regulations of the town and
city councils or, in case of state highways, the State Board of Public Roads.
Prior consent of the City of Providence is required before crossing highways,
streets or public places in the City of Providence. We are informed that
Rhode Island Power Transmission had no locations and crossed no highways
within the City of Providence; that wherever its wires crossed highways
elsewhere it had observed all applicable regulations of the regulatory body
having jurisdiction; that its locations were entirely on private rights of
way, except for (1) certain poles in streets in Lincoln and Pawtucket on its
main line between the former Hazel Street Substation and the North Providence
town line, and (2) a spare circuit line leased from another utility extending
along several Pawtucket streets from the Pawtucket No. 1 Station to the East
Providence town line; that said poles and spare circuit line referred to in
(2) above have been so used and operated for more than twenty years without
objection from the City of Pawtucket; that the aforesaid poles in streets on
said main line may be relocated in part on property owned or controlled by The
Narragansett Electric Company, as successor to Rhode Island Power Transmission
Company, and in part on rights of way which it may acquire over other private
property so as to continue its present service; and that said spare circuit
line (transmitting current for distribution in East Providence) might, if
necessary, be discontinued without substantially interfering with such
distribution, other means therefor being available over other portions of the
company's lines and connections. Under these circumstances we have not deemed
it necessary to consider in detail whether any objection to these transmission
line locations on and along said Lincoln and Pawtucket streets, if hereafter
made by any public authority, would have any legal standing.
We have examined copies of various votes or special ordinances of, or
contracts with, cities or towns approved by the town and city councils from
time to time in principal towns and cities in Rhode Island within which The
Narragansett Electric Company now distributes electricity. These votes,
contracts or ordinances evidence either general express consent to operation
either by that company or by one or more of the companies, the property,
assets, plant and business of which have been acquired as aforesaid, within
such towns or cities and to the use of streets therein for the purposes of
such business or consent for specific street locations therein, or contain
provisions reciting due authority to operate and/or use the streets generally
as aforesaid, or otherwise indicate a general recognition of, and acquiescence
in, such operation and use. Furthermore, we are informed that The
Narragansett Electric Company secured in 1935 blanket consents from all of the
city and town councils in all towns and cities of the State (other than the
City of Providence where it was believed to be unnecessary because of specific
consents already obtained) in which it was doing business, approving its then
locations of all its poles, wires and conductors within such towns and cities.
We have not attempted to examine all of these consents, but have examined some
of them as to form, which we believe to be adequate.
We are informed that for a number of years it has been the practice of
The Narragansett Electric Lighting Company and the other predecessors in title
of The Narragansett Electric Company to apply for and obtain specific consents
(the form of which we have examined and believe to be adequate) from or under
the authority of all such town and city councils for additional locations in
streets as the need therefor arose to making openings in the public highways
for such purpose, and that this practice has been continued by The
Narragansett Electric Company down to the present time. We are further
informed that all cities and towns in Rhode Island wherein The Narragansett
Electric Company now operates, as aforesaid, have acquiesced in such operation
by it and/or by one or more of its predecessors and in the use by it or them
of streets and highways therein for the purposes of such operation without
objection for a number of years.
By a special act of the General Assembly of the State of Rhode Island,
approved on May 6, 1964, The Narragansett Electric Company was, by amendment
to its charter, granted the power of eminent domain in perpetuity for use with
respect to electric lines of 11,000 volts or more, subject to certain
conditions, limitations and exceptions specified in said special act.
We have duly examined the Rhode Island statutes affecting the rights,
privileges, franchises, elements and obligations of The Narragansett Electric
Company. By statute it is provided that in any town or city in Rhode Island
where a corporation created for the purpose of producing, selling and
distributing electricity for light, heat or motive-power is in actual use and
enjoyment of rights in streets and highways, the control of the town or city
council is so far limited that it may not grant an exclusive right or
franchise therein to any other corporation created for the same purpose, and
in such communities where more than one corporation is in such actual use and
enjoyment the council may not grant an exclusive franchise to either
corporation except with the consent of the other. (Section 39-17-2 of the
General Laws, 1956.) It is further provided that the location of all
transmission lines, poles, piers, abutments, conduits, manholes, vaults and
other fixtures for electricity use by Rhode Island public utilities is
validated as of May 19, 1982. (Section 39-1-30.1 of the General Laws, 1956.)
It is also provided that no public utility may furnish or sell electricity
(except to another public utility) in any town or city in which it or a
utility to which it is a successor was not, on or prior to March 1, 1926,
furnishing such service to the public generally and in which any other utility
is furnishing such service, unless it shall first obtain from the Division of
Public Utilities (the powers and duties of which, as hereinafter stated, are
now vested in the Public Utilities Commission or, under certain circumstances,
the Administrator of the Division of Public Utilities and Carriers, Department
of Business Regulation) a certificate of public convenience and necessity.
(Section 39-3-1 of the General Laws, 1956.) We are informed that on and prior
to March 1, 1926, The Narragansett Electric Lighting Company, or one of the
other corporations above-named, the property, assets, plant and business of
which have been acquired by The Narragansett Electric Company, was actually
furnishing to the public generally electric service in the same towns and
cities now served by The Narragansett Electric Company.
We are of the opinion that under the provisions of the Administrative
Code Act adopted in 1935 (P.L. May Session, 1935, Chapter 2250) and the
Administrative Act of 1939 (P.L. 1939, Chapter 660), as amended, the
Department of Public Works succeeded to the powers of the State Board of
Public Roads under the provisions of the charter of the Rhode Island Power
Transmission Company above referred to and that pursuant to Section 2 of
Chapter 111, P.L. 1970, the powers of the Department of Public Works became
vested in the Department of Transportation, that by the Administrative Act of
1939, as amended (particularly by Sec. 2 of Chapter 2174, P.L. 1949) the
powers and duties of the Division of Public Utilities above referred to became
vested in the Public Utility Administrator, Department of Business Regulation,
and that by Section 1 of Chapter 240, P.L. 1969, the duties of the Public
Utility Administrator, Department of Business Regulation, are now vested in
the Public Utilities Commission or, under certain circumstances, the
Administrator of the Division of Public Utilities and Carriers, Department of
Business Regulation. The above-mentioned statutes do not purport to modify
the powers or regulation previously vested in the State Board of Public Roads
or the Division of Public Utilities, nor do they purport to modify substantive
rights or obligations.
Based upon the examination made and the information received by us as
aforesaid and with the qualifications aforesaid, it is our opinion (1) that
the terms and requirements of all regulatory ordinances now in effect and
brought to our attention affecting The Narragansett Electric Company are
reasonable; (2) that so long as the charter of said corporation and the
statutes herein before referred to remain effective, said corporation may not
be excluded by ordinance or administrative regulation from operating within
the towns and cities within the State of Rhode Island where it now operates
under the authority of its charter, although it may be required to make
reasonable changes of location of wires, poles, and other apparatus located
in, on, over or across streets or highways; (3) that at the present time The
Narragansett Electric Company is free from burdensome restrictions affecting
franchises and has rights adequate to carry on the business now conducted by
it in said cities and towns; (4) that said business has been and is being
conducted with the consent, either express or implied, of the city and town
councils of said towns or cities where such consent is required under said
charter; (5) that The Narragansett Electric Company has indeterminate rights
adequate for the continued use of streets and highways in said cities and
towns for wires and conductors of electricity subject to reasonable
regulations; and (6) that the franchise situation of The Narragansett Electric
Company is satisfactory and that its said rights afford reasonable protection
to the holders of securities of The Narragansett Electric Company and to that
Company in operating its authorized business in Rhode Island.
Very truly yours,
EDWARDS & ANGELL
Exhibit 2 to Terms of Purchase
PROPOSED FORM OF OPINION
OF
COUNSEL FOR THE COMPANY
_______________ , 19__
As Representative of the Several Purchasers
Re: THE NARRAGANSETT ELECTRIC COMPANY
First Mortgage Bonds Series __, ____ %, due ____
Dear Representatives:
We have acted as counsel for The Narragansett Electric Company (the
Company) in connection with the issue by it of $_________ principal amount of
First Mortgage Bonds, Series __, __%, due ____ (New Bonds), and are therefore
familiar with the proceedings taken in connection therewith. The Company is a
subsidiary of New England Electric System.
This opinion is furnished to you pursuant to Section 8(b)(ii) of the
Purchase Agreement which became effective on ________________, 19__, between
you as purchaser of the New Bonds and the Company and is being delivered on
the Closing Date referred to therein, concurrently with said issue of New
Bonds.
The New Bonds are being issued under a First Mortgage Indenture and Deed
of Trust dated as of September 1, 1944 (the Original Indenture), as
supplemented and amended by an __________ Supplemental Indenture dated as of
___________, 19__, and previous supplemental indentures (the Original
Indenture and all supplemental indentures being collectively referred to
herein as the Indenture).
We are of opinion that:
1. The Company is a corporation validly organized and duly existing
under special charter granted by the State of Rhode Island.
2. The Company had full power and authority to accept your bid for
the New Bonds, and the Purchase Agreement has been duly authorized, executed,
and delivered by the Company.
3. The Company had corporate power proper and adequate for making the
Indenture which was duly executed and delivered in accordance with proper
authority from the stockholders and directors of the Company. The __________
Supplemental Indenture, including Schedule I thereto, contains a correct and
adequate description of the real estate, rights or interests in real estate,
and fixed property of the Company acquired up to ____________, 19__, and not
included in the Original Indenture or the previous supplemental indentures,
and now owned of record, except for the properties expressly excluded from the
Indenture.
4. All filings and recordings of or in respect of the Indenture have
been duly made where such filings and recordings are necessary for the
preservation or protection of the lien thereof, and the Indenture is a valid,
binding, and enforceable instrument subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the enforcement of creditors' rights generally and to the effects of
general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
5. The Company has corporate power proper and adequate for the
execution and issuance of the New Bonds under the Indenture in the initial
aggregate principal amount of $____________, and in accordance with due
authorization from the stockholders and directors of the Company and based in
part upon certificates by an officer of the Company and by an officer of the
Trustee under the Indenture as to execution, certification, and delivery, said
$____________ principal amount of New Bonds have been duly issued and are
valid and binding obligations of the Company and entitled to the benefits and
security of the Indenture.
6. Said New Bonds are secured by a direct first mortgage lien on
substantially all the properties and franchises now owned by the Company,
subject to the property specifically excepted in the granting clauses of, and
to the liens permitted by, the Indenture, including the prior lien of the
Trustee for compensation, expenses, and liabilities; and, except as aforesaid,
there is no existing indebtedness secured by lien on the property securing
such New Bonds ranking prior to or on a parity with the lien securing such New
Bonds.
7. The property specifically described as mortgaged property in the
Indenture constitutes substantially all of the property owned by the Company
and used by, or useful to, it in its business, except for the property
expressly excepted from the Indenture. None of the real estate and rights in
real estate described in the schedules to the Indenture and which constitute
the principal properties of the Company is excluded from the lien of the
Indenture by virtue of the provisions of clause (b) under "Reservations and
Exceptions" in the Original Indenture and the First through __________
Supplemental Indentures, and as to the remainder of the properties described
in said schedules the exclusions, if any, by virtue of said clause (b) are
minor.
8. Other than as described in the Prospectus, including all documents
incorporated therein by reference, the principal generating stations of the
Company are in general on land owned by the Company, the balance being upon
land of others pursuant to lease or other arrangements. As to the other
properties described in the schedules to the Indenture and indicated therein
as owned by the Company, being principally electric lines and related
equipment, they are in general not on land owned in fee, being in substantial
part located on, over, or under public streets or highways and in part on land
owned by others over which the Company has easements or rights of way. A
majority of the poles of the distribution system are owned jointly with
others, principally telephone companies. The Company's title to such
properties is free from any material defects of record except current taxes,
the mortgage of the Indenture, and such liens, encumbrances, and other defects
as are set forth or are referred to in the Indenture, and in respect to said
easement interests in real estate (which consist principally of transmission
and distribution line rights of way) such rights, with minor exceptions, are
perpetual or without limit of time.
9. With respect to the issue and sale of the New Bonds, an
appropriate order has been issued by the Division of Public Utilities and
Carriers of the State of Rhode Island, to the extent it has jurisdiction,
authorizing the issue and sale of the New Bonds and the mortgage by the
Company of its properties, and said order remains, to the best of our
knowledge, in effect at this date; the Company is exempted by Rule 52 under
the Public Utility Holding Company Act of l935 (the l935 Act) from the
requirement of an order of the Securities and Exchange Commission (the
Commission). The Indenture has been qualified under the Trust Indenture Act
of 1939; the Registration Statement referred to below has become effective
under the Securities Act of 1933, as amended (the Securities Act); said order
and said Registration Statement remain, to the best of our knowledge, in
effect at this date; and no other approval, consent, or action of any
governmental or regulatory authority is required for the issue and sale of the
New Bonds or the carrying out of the provisions of the Purchase Agreement
(except under the so-called blue-sky or securities laws of the several states
in connection with sales by you and others of the New Bonds, the applicability
of which we have not considered and as to which we express no opinion).
10. The statements upon our authority made or incorporated by
reference in the registration statement, as amended by all amendments thereto,
filed with the Securities and Exchange Commission under the Securities Act
(the Registration Statement) and in the prospectus dated _____________, 19__,
as supplemented by the prospectus supplement dated _________________, 19__,
relating to the New Bonds (the Prospectus) are correct; the Registration
Statement and the Prospectus, including all documents incorporated by
reference therein in accordance with the requirements of Form S-3 under the
Securities Act (except for the financial statements contained or incorporated
by reference therein, as to which we express no opinion), comply as to form in
all material respects with the relevant requirements of the Securities Act and
the Securities Exchange Act of 1934, as amended, and of the applicable rules,
regulations, and releases of the Securities and Exchange Commission
thereunder; and the New Bonds conform to the description thereof in the
Registration Statement and Prospectus. While we have not made a detailed
review of the accuracy or completeness of other information in, or
incorporated in, the Registration Statement and Prospectus and assume no
responsibility therefor, nothing has come to our attention which leads us to
believe that either the Registration Statement or Prospectus, or the documents
incorporated by reference therein, contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
The above opinion, insofar as it relates to mortgaging of franchises,
relates to the mortgaging of secondary franchises and not to the mortgaging of
the Company's primary franchise to be a corporation. The above opinion
insofar as it relates to the execution and delivery of the Original Indenture
and certain supplemental indentures prior to the __________ Supplemental
Indenture is based upon opinions of other counsel for The Company. The above
opinion, insofar as it relates to titles, is based in part upon opinions of
local counsel and of counsel associated with us and in part upon examination
of titles of the Company to its principal properties by title examiners under
our direction, the direction of counsel associated with us, or the direction
of local counsel, or examination by local counsel and reviewed by us or
counsel associated with us, such title examiners and local counsel being, in
our opinion, of good standing and experienced in the examination of titles.
In the case of easements over lands of others, the title of the grantors of
the easements were not in all cases examined to the same extent as in the case
of fee ownership and in some instances such easements depend upon long user.
We are members of the bar of The Commonwealth of Massachusetts and we do
not express any opinion as to matters governed by any laws other than those of
The Commonwealth of Massachusetts, the State of Rhode Island, and the Federal
Law of the United States of America. We are not, however, members of the bar
of the State of Rhode Island.
Yours very truly,
DRAFT
Robert King Wulff*
Corporation Counsel
DRAFT
Kirk L. Ramsauer*
Assistant General Counsel
_________________________
* To be signed by Robert King Wulff and/or Kirk L. Ramsauer.
Exhibit 3 to Terms of Purchase
PROPOSED FORM OF OPINION
of
MILBANK, TWEED, HADLEY & MCCLOY
1 CHASE MANHATTAN PLAZA
NEW YORK, NEW YORK 10005
_______________________, 19__
and the other several Purchasers
named in the Purchase Agreement
referred to below,
Re: THE NARRAGANSETT ELECTRIC COMPANY
First Mortgage Bonds Series __, ___%, due ____
Dear Sirs:
We have acted as your counsel in connection with your purchase from The
Narragansett Electric Company, a Rhode Island corporation (the Company),
pursuant to a Purchase Agreement dated ____________, 19__ (the Purchase
Agreement) made with the Company, of $______________ aggregate principal
amount of First Mortgage Bonds Series __, ___%, due ____ (New Bonds) of the
Company, issued under and pursuant to the First Mortgage Indenture and Deed of
Trust dated as of September 1, 1944, as supplemented and modified by
________________ supplemental indentures (collectively, the Mortgage), between
the Company and Rhode Island Hospital Trust National Bank, successor to Rhode
Island Hospital Trust Company, as Trustee (the Trustee). As such counsel we
have reviewed originals, or copies certified to our satisfaction, of all such
corporate records of the Company, indentures, agreements and other
instruments, certificates of public officials and of officers and
representatives of the Company and of the Trustee, and other documents, as we
have deemed necessary to require as a basis for the opinions hereinafter
expressed. In such examination we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as copies and
the authenticity of the originals of such later documents. As to various
questions of fact material to such opinions, we have, when relevant facts were
not independently established, relied upon certifications by officers of the
Company and other appropriate persons and statements contained in the
Registration Statement hereinafter mentioned.
In addition, we attended the closing held today at the principal office
of Rhode Island Hospital Trust National Bank, One Hospital Trust Plaza,
Providence, Rhode Island, in the course of which the Company caused to be
delivered to you $_____________ aggregate principal amount of Series __, New
Bonds against payment therefor.
Based upon the foregoing, and having regard to legal considerations
which we deem relevant, we are of the opinion that:
1. The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
2. The registration statement with respect to the Series __, New
Bonds filed with the Securities and Exchange Commission (the Commission)
pursuant to the Securities Act of 1933, as amended (the Act), as amended by
all amendments thereto (the Registration Statement), has become effective and,
to the best of our knowledge, remains in effect on the date hereof, and the
prospectus with respect to the Series __, New Bonds dated ____________, 19__,
as supplemented by the prospectus supplement dated ______________, 19__,
including all documents incorporated by reference therein pursuant to the
requirements of Form S-3 under the Act (the Prospectus), is lawful for use for
the purposes specified in the Act in connection with the offer for sale and
the sale of the Series __, New Bonds in the manner specified therein, subject
to compliance with the provisions of securities or "blue sky" laws of certain
jurisdictions in connection with the offer and sale of the Series __, New
Bonds in such jurisdictions.
The Registration Statement and the Prospectus (except the financial
statements and other financial data included therein, as to which we express
no opinion) comply as to form in all material respects with the requirements
of the Act and with the applicable published rules and regulations of the
Commission under the Act.
As to the financial statements included in the Prospectus, we have made
no examination of the Company's books of account and we therefore express no
opinion. As to the statements under "Description of Series __, New Bonds,
(except the financial data included thereunder as to which we express no
opinion), subject to the concluding three paragraphs of this opinion, we are
of the opinion that the statements are accurate and do not omit any material
fact required to be stated therein or necessary to make such statements not
misleading. As to other matters, we have not undertaken to determine
independently the accuracy or completeness of the statements contained in the
Registration Statement or in the Prospectus. We have, however, participated
in conferences with representatives of the Company and of New England Power
Service Company in connection with the preparation of the Registration
Statement and the Prospectus and we have reviewed all documents incorporated
by reference in the Prospectus pursuant to the requirements of Form S-3 under
the Act and such of the corporate records of the Company as we deemed
advisable. None of the foregoing disclosed to us any information which gave
us reason to believe that the Registration Statement or the Prospectus (except
the financial statements and other financial data included therein, as to
which we express no opinion) contains any untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.
3. The Company is exempt under Rule 52 of the Public Utility Holding
Company Act of l935 from the requirement for an order of the Commission under
said Act with respect to the issue and sale of the Series __, New Bonds.
4. The Division of Public Utilities and Carriers of the State of
Rhode Island has issued an appropriate order with respect to the issue and
sale of the Series __, New Bonds. Said order, to the best of our knowledge,
remains in effect on the date hereof.
5. No other order, approval or consent of any public regulatory body
is legally required under Federal law for the issue and sale of the Series __,
New Bonds pursuant to the Purchase Agreement or the carrying out of the
provisions of the Purchase Agreement.
6. The Mortgage has been duly authorized, executed and delivered by
the Company, and having, in the opinion of Robert King Wulff, Esq.,
Corporation Counsel for the Company, and Kirk L. Ramsauer, Esq., Assistant
General Counsel for the Company, referred to below, upon which we rely, been
duly filed and recorded, constitutes a valid mortgage legally effective to
create a lien (as to the ranking of which reference is made to said opinion)
as security for the Series __, New Bonds upon the interest of the Company in
the property now owned by the Company which is described in the Mortgage as
subject to the lien thereof; and the Mortgage is a valid, binding and
enforceable instrument, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general applicability
affecting the enforcement of creditors' rights generally. The enforceability
of the Mortgage is further subject to the effect of general principles of
equity (regardless of whether considered in a proceeding in equity or at law),
including without limitation (i) the possible unavailability of specific
performance, injunctive relief or any other equitable remedy and (ii) concepts
of materiality, reasonableness, good faith and fair dealing.
The Mortgage has been duly qualified under the Trust Indenture Act of
1939, as amended.
7. The Series __, New Bonds purchased by you conform as to legal
matters in all substantial respects to the description thereof contained in
the Registration Statement and the Prospectus and have been duly authorized
and (assuming due execution thereof by the Company and certification by the
Trustee) issued under the Mortgage and are valid and binding obligations of
the Company.
The foregoing opinions are subject to the following:
We have made no examination of the Company's title to the properties
purported to be owned by it or of the ranking of the lien created by the
Mortgage or of the franchises under which the Company operates. We express no
opinion on such matters (including the adequacy of the real property
descriptions in the Mortgage), and, to the extent that the opinions herein
expressed involve such matters, we have relied, so far as concerns the
Company's titles to its properties and the ranking of the lien of the
Mortgage, upon the opinion of Robert King Wulff, Esq. and Kirk L. Ramsauer,
Esq., addressed to you on this date, and, so far as concerns the Company's
franchises, upon the opinion of Edwards & Angell, likewise addressed to you on
this date. Furthermore, with respect to the filing and recording of the
Mortgage in the State of Rhode Island, we have relied upon said opinion of
Robert King Wulff, Esq. and Kirk L. Ramsauer, Esq.
In rendering the opinions hereinabove expressed, we have relied upon
said opinion of Robert King Wulff, Esq. and Kirk L. Ramsauer, Esq. as to all
matters governed by the law of the State of Rhode Island and upon said opinion
of Edwards & Angell as to matters concerning the Company's franchises, and as
to such matters, the opinions hereinabove expressed are subject to all
qualifications, limitations, assumptions and reliances, and other
considerations, therein set forth.
We are members of the bar of the State of New York and we do not express
any opinion as to matters governed by any laws other than the law of the State
of New York, the Federal law of the United States of America, and to the
extent hereinabove stated in reliance upon said opinions of Robert King Wulff,
Esq. and Kirk L. Ramsauer, Esq. and of Edwards & Angell, the law of the State
of Rhode Island.
Very truly yours,
MILBANK, TWEED, HADLEY & MCCLOY
THE NARRAGANSETT ELECTRIC COMPANY
FIRST MORTGAGE BONDS, SERIES **, * %, DUE **
_________________________
PROSPECTIVE BIDDER'S QUESTIONNAIRE
Group bidders should return three executed copies to their
Representative. Two executed copies on behalf of each prospective bidder
should be delivered by group Representatives and by single bidders to the
Company at the Corporate Finance Department of New England Power Service
Company, 25 Research Drive, Westborough, Massachusetts 01582, before 12 Noon,
Boston time on ___________, 19__, unless a later date is fixed by the Company.
_________________________
THE NARRAGANSETT ELECTRIC COMPANY
Ladies and Gentlemen:
In connection with the proposed offering of not exceeding $_______
principal amount of First Mortgage Bonds, Series **, *% due ** (New Bonds) of
The Narragansett Electric Company (the Company), and for use in the
registration statement on Form S-3 (the Registration Statement) and in the
Trustee's statement of eligibility and qualification on Form T-1, the
undersigned, as a prospective bidder, furnishes the following information:
Our name and address, as they should appear in the prospectus or the
Registration Statement, are as follows:
The name and address of our authorized Representative(s), if any, in
connection with our proposed bid for, and purchase of, the New Bonds, as
provided in the terms and conditions for bids (the Terms and Conditions) and
in the Purchase Agreement therein referred to, are as follows:
or, if no bid is made by the Representative(s), such other person who
represents to the satisfaction of the Company that it has been authorized by
us or by the named Representative(s) or any one of them to act in our behalf.
The Representative(s), or substituted representative(s), will have full
power and authority on behalf of the undersigned in all matters relating to
any bid for, and any purchase of, the New Bonds, including, without limiting
the generality of the foregoing, full power and authority (a) to make any bid
or, in the event specified in Section 6 of the Terms and Conditions, to
improve such bid, which bid or improved bid, together with all schedules
thereto, if accepted by the Company, shall become the Purchase Agreement for
the purchase and sale of the New Bonds, (b) to furnish to the Company in
writing the information with respect to the public offering, if any, of the
New Bonds, which is required to complete any post-effective amendment to the
Registration Statement or to the related prospectus or any supplement thereto,
or which is required under the Public Utility Holding Company Act of 1935, or
which is otherwise required by law in respect to the purchase or sale of the
New Bonds, and (c) to consent to the filing of any such post-effective
______________________________
* The percentage is in the interest rate specified in the accepted bid.
** Series and maturity date to be specified as provided in Section 1 of
the Terms and Conditions.
amendment, prospectus, or prospectus supplement. If there are two or more
representatives, any one or more may act on behalf of all the representatives.
Except as stated below:
(1) We propose to make a public offering of the New Bonds purchased by
us.
(2) Neither we nor any of our directors, officers, or partners have a
material relationship with the Company or with New England Electric System.
(The term "material" is defined in Rule 405 under the Securities Act of 1933.)
(3) We are not an affiliate (as that term is defined in Rule O-2 under
the Trust Indenture Act of 1939) of the Rhode Island Hospital Trust National
Bank, or of its parent, RIHT Financial Corporation, or of RIHT Financial
Corporation's parent, Bank of Boston Corporation, and none of said
institutions nor any of their directors or executive officers is a director,
officer, partner, employee, appointee, or representative of ours.
(4) We and our directors, partners, or executive officers, taken as a
group on ____________ did not own beneficially more than 10,200 shares (1%) of
the outstanding capital stock of Rhode Island Hospital Trust National Bank,
nor more than 752,000 shares (1%) of the outstanding capital stock of Bank of
Boston Corporation. (The meaning of the term "beneficial ownership" is
explained in SEC Release No. 227 under the Trust Indenture Act of 1939).
(5) We (if a corporation) do not have outstanding, nor have we assumed
or guaranteed, any securities issued other than in our present corporate name,
and neither the Rhode Island Hospital Trust National Bank nor RIHT Financial
Corporation nor Bank of Boston Corporation is a holder of record of any
securities issued in our corporate name.
(6) If any corporation holds of record or is known to us to be the
beneficial owner of 10% of more of a class of securities issued by us, either:
(a) we state, as to each such corporate securities-holders, that
neither Rhode Island Hospital Trust National Bank nor RIHT Financial
Corporation nor Bank of Boston Corporation, is a holder of 10% or more of any
class of securities issued by such corporate securities-holder, or
(b) we attach a list of the names and addresses of all such
corporate securities-holders.
(7) We are not a "holding company" or a "subsidiary company" or an
"affiliate" of a "holding company" or of a "public utility company", each as
defined in the Public Utility Holding Company Act of 1935. (If such is not
the case, there must be filed with this questionnaire evidence satisfactory to
the Company that the sale of the New Bonds to you will be lawful under the
Public Utility Holding Company Act of 1935.)
(8) We know of no arrangements, other than those, if any, described in
the Registration Statement, including exhibits thereto, or the related
prospectus, (i) to limit or restrict the sale of the New Bonds or the
Company's presently outstanding bonds for the period of distribution, (ii) to
stabilize the market for any such bonds or New Bonds, (iii) for withholding
commissions, or otherwise to hold any underwriter or dealer responsible for
the distribution of his participation, or (iv) for any discounts or
commissions to be allowed or paid to dealers.
(9) We represent and warrant that our commitment to buy the New Bonds
will not result in a violation of the financial responsibility requirements of
Rule 15c3-1 under the Securities Exchange Act of 1934 or of the applicable
rules relating to capital requirements of any securities exchange to which we
are subject.
(10) We have not prepared or had prepared for us any report or
memorandum for external use in connection with the proposed offering.
The exceptions to the above statements are: (Insert "None" or give
details on an attached sheet.)
We agree to notify you promptly of any material change in the foregoing
information which may occur prior to the date of any prospectus supplement,
prepared to reflect the results of the bidding for an offering of the New
Bonds in which we participate, filed pursuant to rules and regulations under
the Securities Act of 1933, as amended, and of any other development before
such date which makes untrue or incomplete any of the above statements as of
such date.
We further agree to make a record of any distribution of any preliminary
prospectus or other preliminary information and to bring all subsequent
changes and amendments, if required by the Securities and Exchange Commission,
to the attention of each person to whom such prospectus or information shall
have been given.
Yours very truly,
_____________________________________
(Official Signature)
By __________________________________
(Officer or Partner)
DATED: ____________________________