DRAFT
UNDERWRITING AGREEMENT
FOR PURCHASE OF $___________
FIRST MORTGAGE BONDS, SERIES ___,
_____%, DUE _____
OF
THE NARRAGANSETT ELECTRIC COMPANY
Date:
The Narragansett Electric Company
25 Research Drive
Westborough, MA 01582
Ladies and Gentlemen:
We (the Underwriters) understand that The Narragansett Electric Company,
(the Company), proposes to issue and sell $____________ aggregate principal
amount of First Mortgage Bonds, Series ___, ___ %, due ____________, (with
Original Issue Date as defined in the Terms of Purchase) (the New Bonds).
Subject to the terms and conditions set forth in the Terms of Purchase
annexed hereto, the Company hereby agrees to sell all of the New Bonds, and
each of the Underwriters agrees, severally and not jointly, to purchase the
respective principal amount of the New Bonds set forth opposite its name below,
in each case at a purchase price of ___% of the principal amount of such New
Bonds.
Name Principal Amount of New Bonds
---- -----------------------------
_____________________
Total $
The Underwriters will pay for such New Bonds upon delivery thereof in
accordance with the Terms of Purchase.
The New Bonds shall have the terms set forth in the Prospectus dated
____________, and the Prospectus Supplement dated ______________, including the
following:
Maturity:
Interest Rate:
Redemption Provisions, if any:
Interest Payment Dates:
Form and Denomination:
Other:
All provisions contained in the document entitled "TERMS OF PURCHASE
RELATING TO FIRST MORTGAGE BONDS, SERIES **, *%, DUE ** (ORIGINAL ISSUE DATE***)
OF THE NARRAGANSETT ELECTRIC COMPANY", a copy of which is attached hereto, are
herein incorporated by reference in their entirety and shall be deemed to be a
part of this agreement to the same extent as if such provisions had been set
forth in full herein.
Please confirm your agreement by having an authorized officer sign a copy
of this agreement in the space set forth below and returning the signed copy to
us at the address below.
Very truly yours,
[Name of Underwriter or Representative]
By_________________________________
Name:
Title:
Address:
Accepted:
THE NARRAGANSETT ELECTRIC COMPANY
By____________________________
Name:
Title:
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 Underwriters named in a
confirmation letter (the Confirmation) to which these Terms of Purchase are
attached and hereinafter collectively called the Underwriting Agreement. (The
words "herein" and "hereunder", unless specifically limited, mean "in the
Underwriting Agreement" and "under the Underwriting Agreement", respectively.)
1. UNDERWRITERS AND REPRESENTATIVE. The term Underwriters as used
herein shall mean the several persons, firms, or corporations named in the
Confirmation (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 Underwriters and who, by signing the Confirmation, represent that it
or they have been authorized by the Underwriters to enter into this
Underwriting 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 Confirmation, the term Underwriters 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 **
(Original Issue Date ***) (the 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. References to Rhode Island
Hospital Trust National Bank shall include its service provider, The First
National Bank of Boston, as such. 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. PUBLIC OFFERING. The Company is advised by the Representative that
the Underwriters propose to make a public offering of their respective portions
of the New Bonds as soon after this Agreement is entered into as in the
Representative's judgment is advisable. The terms of the public offering of
the New Bonds are set forth in the prospectus below mentioned.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter 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
___________________________
* The percentage is the interest rate specified in the Confirmation.
** The series designation, aggregate principal amount, and the year in
which the Bonds mature are as specified in the Confirmation.
*** Original Issue Date shall be the Closing Date.
Securities Act), with the Securities and Exchange Commission (the
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 pricing set forth in the Confirmation 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
Underwriter 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 Underwriting Agreement, without liability on
the part of any Underwriter, 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 Underwriter, or
by and through the Representative on behalf of any Underwriter, 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 Underwriting
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 preference 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.
5. INFORMATION FROM AND WARRANTIES OF THE UNDERWRITERS. Each
Underwriter, 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 Underwriters, any further information regarding the Underwriters 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 Underwriter 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
Underwriter that all information furnished at any time in writing to the
Company by such Underwriter, or by or through the Representative on behalf of
such Underwriter, 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.
6. PURCHASE AND SALE OF NEW BONDS. The Company will sell to each
Underwriter and each Underwriter will severally purchase from the Company, at
the price specified in the Confirmation, 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 the Confirmation, which amount may
be increased in accordance with paragraph (a) of Section 13 hereof.
All obligations of the Underwriters hereunder are several, and not joint
or joint and several, and nothing herein shall constitute the Underwriters
copartners of each other.
7. 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 other date as shall be agreed in writing by the Company and the
Representative (subject to postponement in accordance with the provisions of
Section 13 hereof).
Payment for the New Bonds, as provided in Section 6 hereof, shall be made
at the principal office of Rhode Island Hospital Trust National Bank,
Providence, Rhode Island, at l0:00 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 Underwriters for interest
on the amount of such payment at the Federal Reserve Bank Funds rate 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 Underwriters, 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 Underwriters 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 Underwriter whose funds shall not have been received by the
Representative as of the Closing Date, for the account of such Underwriter.
Any such payment by the Representative shall not relieve such Underwriter 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
Underwriter.
8. COVENANTS OF THE COMPANY. The Company agrees that:
(a) The Company will promptly deliver to the Representative a
certified 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 its order 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 Underwriting 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 Underwriters 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 Underwriters. 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 Underwriters, except as
provided in paragraphs (c) and (e) of this Section. The fees and
disbursements of Milbank, Tweed, Hadley & McCloy (the Underwriters'
Counsel) shall be paid by the Underwriters, except as provided in
paragraph (e) of this Section; and in the event that the fees of
Underwriters' 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 Underwriters.
(e) If the Underwriting Agreement shall be terminated pursuant
to any of the provisions hereof, the Company will pay the reasonable fees
and disbursements of Underwriters' Counsel and the filing fees and
expenses referred to in paragraph (c) of this Section. If the
Underwriters 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 9 hereof, the Company will reimburse the Underwriters in an
aggregate amount not exceeding $2,000 for their reasonable out-of-pocket
expenses incurred in connection with the financing contemplated by this
Underwriting Agreement. The Company shall not in any event be liable to
any of the Underwriters 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 Underwriters 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 Underwriters' 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
Underwriter 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 Underwriter, 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.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters 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 order 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 order as is 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 Underwriters' 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 Underwriters, with such changes therein as may be agreed
upon by the Company and the Representative with the approval of
Underwriters' 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 Underwriters' 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 a reading of 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:
(A) that the unaudited financial statements incorporated by
reference in the Registration Statement are in conformity
as to form in all material respects with the applicable
accounting requirements of the Exchange Act and the
published rules and regulations thereunder, and that said
financial statements are in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements 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 order or 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 Underwriting Agreement may be terminated by the
Representative (with the consent of Underwriters, 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 8.
10. 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)(ii) of Section 9 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 Underwriting 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 8.
11. TERMINATION. This Underwriting Agreement may be terminated at any
time prior to the Closing Date by the Representative (with the consent of
Underwriters 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, (c) there shall have come to the
attention of any Underwriter any facts that would cause the Representative to
believe that the Prospectus contained an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at such time, not misleading,
or (d) 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 (d) 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 Underwriting 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 8.
12. INDEMNIFICATION. (a) The term Preliminary Prospectus as used in
this Section 12 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 Underwriting Agreement
becomes effective and shall also include all preliminary prospectuses. The
terms Registration Statement and Prospectus as used in this Section 12 shall
mean said documents as defined, respectively, in Sections 4(a) and 4(b) hereof
and shall also include each and every amendment of and supplement to said
documents, respectively, furnished by the Company to the Underwriters or to the
Representative for distribution to the Underwriters. No indemnity by the
Company hereunder shall apply in respect of (i) any Prospectus or Preliminary
Prospectus used at a time not authorized under the Securities Act or this
Underwriting Agreement, (ii) any Prospectus or Preliminary 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 Underwriters or to the Representative for distribution to the
Underwriters, or (iii) any Underwriter, or any person controlling such
Underwriter, 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 an Underwriter or a securities dealer to such person with
or prior to the written confirmation of the sale involved. No use of any
Preliminary Prospectus is authorized after the date hereof.
(b) The Company will indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter 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
Preliminary 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
Preliminary 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 Underwriter, or by and through the
Representative on behalf of any Underwriter, 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 Underwriter 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 Underwriter
or any such controlling person wishes to make a claim in respect thereof
against the Company under its agreement herein contained, such Underwriter 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 Underwriter 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 Underwriter 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 Underwriter, but only with respect to any written
information furnished to the Company by such Underwriter, or by and through the
Representative on behalf of such Underwriter, for use in the Prospectus. If
any action shall be brought hereunder against the Company or any such officer,
director, or controlling person, such Underwriter 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
Underwriter by said paragraph.
(d) If the indemnification provided for in this Section 12 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 Underwriter on the other but
also the relative fault of the Company on the one hand and of the Underwriter
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 Underwriter 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
Underwriters, 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 Underwriter shall be the
difference between the price received by the Underwriter upon sale of the New
Bonds and the price paid for the New Bonds pursuant to this Underwriting
Agreement. The relative fault of the Company on the one hand and of the
Underwriter 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 Underwriter 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 Underwriting Agreement shall
survive the delivery of the New Bonds.
13. SUBSTITUTION OF UNDERWRITERS. (a) If one or more Underwriters 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 Underwriting Agreement and the
aggregate principal amount of New Bonds which all such defaulting Underwriters
shall have failed to purchase does not exceed ten percent of the aggregate
principal amount of the New Bonds, the nondefaulting Underwriters 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 the Confirmation) the total principal amount of New Bonds agreed to be
purchased by all such defaulting Underwriters in the respective proportions
which the principal amounts set forth opposite the names of the nondefaulting
Underwriters in the Confirmation bear to the aggregate principal amount so set
forth opposite the names of all such nondefaulting Underwriters; 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 bond or bonds shall be delivered to, and shall be purchased
by, such Underwriter or Underwriters as the Representative shall designate.
In such event, the Representative, for the accounts of the several
nondefaulting Underwriters, may take up and pay for all or any part of such
principal amount of New Bonds to be purchased by each remaining Underwriter
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 Underwriters 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 Underwriting Agreement and the aggregate
principal amount of New Bonds which all such defaulting Underwriters shall have
failed to purchase exceeds ten percent of the aggregate principal amount of the
New Bonds, the nondefaulting Underwriters, 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 Underwriter or Underwriters to take up
and pay for, the total principal amount of New Bonds agreed to be purchased by
all such defaulting Underwriters. In the event that the nondefaulting
Underwriters shall not take up and pay for all the New Bonds which the
defaulting Underwriters shall have agreed but failed to purchase, or substitute
another Underwriter or Underwriters, as aforesaid, the Company shall have the
privilege of finding and substituting within a further 24-hour period another
Underwriter or Underwriters to purchase the principal amount of New Bonds which
the defaulting Underwriters agreed but failed to purchase. (The term
Underwriter as used in this Underwriting Agreement shall refer to and include
each Underwriter substituted under this paragraph with the same effect as if
said substituted Underwriter had originally been named in the Confirmation.)
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
Underwriters shall not take up and pay for such principal amount of New Bonds,
or substitute another Underwriter or Underwriters therefor, and the Company
shall not substitute another Underwriter or Underwriters therefor, all as
aforesaid, then this Underwriting Agreement shall terminate without any
liability on the part of the Company (except as otherwise provided in paragraph
(e) of Section 8) or of any nondefaulting Underwriter. Nothing contained in
this paragraph shall obligate any Underwriter to purchase or find underwriters
for any principal amount of New Bonds in excess of the amount agreed to be
purchased by such Underwriter under the terms of Section 6, nor shall anything
in this paragraph relieve any defaulting Underwriter of any liability to the
Company which it might otherwise have.
14. PERSONS ENTITLED TO BENEFIT OF UNDERWRITING AGREEMENT. This
Underwriting Agreement shall inure to the benefit of the Company and the
Underwriters (and, as to the provisions of Section 12, the other persons
indemnified thereunder) and their respective successors and assigns. Nothing
in this Underwriting 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 Underwriting Agreement or any provision
herein contained. The term "successors and assigns" as used in this
Underwriting Agreement shall not include any purchaser, as such purchaser, of
any of the New Bonds from any of the Underwriters.
15. NOTICES. Any request, consent, notice, or other communication on
behalf of the Underwriters 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 Underwriters shall be given in writing to the Representative, at its
address stated in the Confirmation.
16. EFFECTIVENESS OF UNDERWRITING AGREEMENT. The date on which this
Underwriting Agreement is effective is the date stated in the Confirmation.
17. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of The Commonwealth of Massachusetts.
18. COUNTERPARTS. This 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 9(b)(ii) of the
Underwriting Agreement which became effective on ________________, 19__,
between you as underwriter 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 Underwriters
named in the Underwriting 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 an Underwriting Agreement dated ____________, 19__ (the
Underwriting 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 Underwriting 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 or 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