-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, gwhva0HlanBRKQYW0w7aI7mw+yWqOw/eQCL5CN6FcGGniL9F7HBfeFciBan/8nGD fDh1acFMQIEXtU2Bh/rEOQ== 0000063073-95-000019.txt : 19950508 0000063073-95-000019.hdr.sgml : 19950508 ACCESSION NUMBER: 0000063073-95-000019 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 19950505 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MASSACHUSETTS ELECTRIC CO CENTRAL INDEX KEY: 0000063073 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 041988940 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 033-59145 FILM NUMBER: 95535053 BUSINESS ADDRESS: STREET 1: 25 RESEARCH DR CITY: WESTBOROUGH STATE: MA ZIP: 01582 BUSINESS PHONE: 5083669011 S-3 1 Registration No. 33-________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 ------------------------ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ MASSACHUSETTS ELECTRIC COMPANY (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MASSACHUSETTS 04-1988940 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 25 RESEARCH DRIVE, WESTBOROUGH, MASSACHUSETTS 01582 508-389-2000 (ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICE) MICHAEL E. JESANIS ROBERT KING WULFF TREASURER CORPORATION COUNSEL 25 RESEARCH DRIVE 25 RESEARCH DRIVE WESTBOROUGH, MASSACHUSETTS 01582 WESTBOROUGH, MASSACHUSETTS 01582 508-389-2000 508-389-2000 (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENTS FOR SERVICE) ------------------------ PLEASE SEND COPIES OF ALL COMMUNICATIONS TO: GEORGE J. FORSYTH, ESQ. MILBANK, TWEED, HADLEY & MCCLOY 1 CHASE MANHATTAN PLAZA NEW YORK, NEW YORK 10005 ------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: to be determined by market conditions after the effective date of this Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. /X/ ------------------------ CALCULATION OF REGISTRATION FEE ============================================================================= TITLE OF EACH PROPOSED PROPOSED CLASS OF MAXIMUM MAXIMUM SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF BEING BEING PRICE OFFERING REGISTRATION REGISTERED REGISTERED PER UNIT* PRICE* FEE First $100,000,000 100% $100,000,000 $34,483 Mortgage Bonds ============================================================================= *Used only for the purpose of calculating the amount of registration fee. The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. The total number of pages contained in this Registration Statement is 18. The Exhibit Index appears on page 18. ################################################## # SUBJECT TO COMPLETION, DATED # ################################################## PROSPECTUS (LOGO) MASSACHUSETTS ELECTRIC COMPANY (A SUBSIDIARY OF NEW ENGLAND ELECTRIC SYSTEM) $100,000,000 FIRST MORTGAGE BONDS BOND INTEREST WILL BE PAYABLE SEMIANNUALLY. THE BONDS WILL BE ISSUED ONLY AS FULLY REGISTERED BONDS IN DENOMINATIONS OF $1,000 OR ANY INTEGRAL MULTIPLE THEREOF. Massachusetts Electric Company (the Company) intends to offer, from time to time, not exceeding $100 million aggregate principal amount of its First Mortgage Bonds (the New Bonds). The New Bonds will be issued under a supplement to the Company's First Mortgage Indenture and Deed of Trust dated as of July 1, 1949. The New Bonds may be offered as one or more series and/or issues, and each series and/or issue of New Bonds will bear interest at a fixed rate, which, together with the series designation, principal amount, purchase price, maturity, interest payment dates, redemption terms, and any other specific provisions, will be established at the time of issuance and set forth in a prospectus supplement (Prospectus Supplement) for that series and/or issue. Interest on the New Bonds will be payable semiannually, and upon maturity or earlier redemption. The New Bonds will be secured by a direct first mortgage lien on substantially all of the Company's properties. See "Description of the New Bonds". The Company may sell the New Bonds by publicly inviting bids for the purchase of the New Bonds, through negotiation with one or more underwriters, through agents designated from time to time, or directly to other purchasers. See "Plan of Distribution". The names of the purchasers, underwriters or agents, the initial public offering price, any applicable discounts or commissions and the proceeds to the Company with respect to the New Bonds will be set forth in a Prospectus Supplement. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH SUCH OFFER MAY NOT LAWFULLY BE MADE. ############################################################################### # A registration statement relating to these securities has been filed # # with the Securities and Exchange Commission but has not yet become # # effective. Information contained herein is subject to completion or # # amendment. These securities may not be sold nor may offers to buy be # # accepted prior to the time the registration statement becomes effective. # # This prospectus shall not constitute an offer to sell or the solicitation # # of an offer to buy nor shall there be any sale of these securities in any # # state in which such offer, solicitation or sale would be unlawful prior to # # registration or qualification under the securities laws of any such state. # ############################################################################### THE DATE OF THIS PROSPECTUS IS __________, 1995 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE AND ADDITIONAL INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934 and, in accordance therewith, files reports and other information with the Securities and Exchange Commission (SEC). Certain information, as of particular dates, with respect to the Company's directors and officers, their remuneration, and their material interest in transactions with the Company, if any, is disclosed in the Company's Annual Report on Form 10-K. The following documents, which have heretofore been filed by the Company with the SEC pursuant to the Securities Exchange Act of 1934, are incorporated by reference in this prospectus and shall be deemed to be a part hereof: (1) Annual Report on Form 10-K for the year ended December 31, 1994 which contains financial statements of the Company as of December 31, 1994, and for the three years ended December 31, 1994 and incorporates by reference or includes the related reports of Coopers & Lybrand L.L.P., independent accountants. All documents filed by the Company with the SEC pursuant to section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 subsequent to the date of this prospectus and prior to the termination of the offering made by this prospectus shall be incorporated herein by reference and shall be deemed to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part hereof. Such documents and other information can be inspected and copied at the Public Reference Room in the office of the SEC at 450 Fifth Street, N.W., Washington, D.C. or at SEC Regional Offices at 7 World Trade Center, New York, New York and 500 West Madison Street, Chicago, Illinois. Copies of such material can be obtained from the Public Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED BY REFERENCE IN THIS PROSPECTUS, OTHER THAN EXHIBITS TO SUCH DOCUMENTS. WRITTEN OR ORAL REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO THE TREASURER, MASSACHUSETTS ELECTRIC COMPANY, 25 RESEARCH DRIVE, WESTBOROUGH, MASSACHUSETTS 01582 (TELEPHONE 508-389-2000). SUMMARY INFORMATION The following material is qualified in its entirety by the information and financial statements appearing elsewhere in this prospectus and in the documents and information incorporated herein by reference. Company.........................Massachusetts Electric Company. Parent..........................New England Electric System. Business........................Retail electric utility. Power Supply....................New England Power Company, an affiliated wholesale generation company. Service Area....................Covers approximately 43% of Massachusetts with Worcester, Massachusetts, the largest city served. Customers.......................Approximately 940,000 as of December 31, 1994. Revenue Distribution............For the 12 months ended December 31, 1994, the Company's revenues from the sale of electricity were derived 41% from residential customers, 37% from commercial customers, 21% from industrial customers, and 1% from others. Securities Offered..............Not exceeding $100,000,000 principal amount of First Mortgage Bonds, in one or more series. Payment of Interest.............Semiannually on dates to be determined. Maturity........................To be determined. Security Interest...............Secured, together with all other outstanding First Mortgage Bonds, by a mortgage on substantially all of the Company's properties. Replacement Fund................For all the Company's First Mortgage Bonds, the Company will make mandatory annual replacement fund payments equal to 2.4% of the average investment in depreciable property during the preceding year, to be satisfied by First Mortgage Bonds of any issue or series (including the New Bonds), cash, or additional property. See "Description of the New Bonds -- Replacement Fund". Redemption......................To be determined for each series and/or issue of New Bonds. See "Description of the New Bonds -- Redemption". MASSACHUSETTS ELECTRIC COMPANY SELECTED FINANCIAL INFORMATION (DOLLARS IN THOUSANDS)
Years Ended December 31, -------------------------------------------------------- 12 Months Ended March 31, 1995 (Unaudited) 1994 1993 1992 1991 1990 --------------- ---- ---- ---- ---- ---- STATEMENT OF INCOME DATA: Operating Revenue................$1,473,450 $1,482,070$1,468,540$1,412,948$1,363,888$1,242,945 Net Income.......................$ 30,280 $ 34,726$ 23,779$ 34,905$ 25,243$ 35,192 Ratio of Earnings to Fixed Charges: (1) 2.64 3.06 2.29 3.15 2.66 3.25 Utility Plant, net (end of period) (2).......................$1,005,333$ 995,995$ 945,285$ 906,293$ 865,018$ 827,915 AS OF MARCH 31, 1995 (UNAUDITED) ------------------------ AMOUNT RATIO -------- ------- CAPITAL STRUCTURE: First Mortgage Bonds (3) ....... $338,413 43.90% Cumulative Preferred Stock...... 50,000 6.49 Common Stock Equity............. 382,389 49.61 -------- ------ Total...................... $770,802 100.00% ======== ====== - --------------- (1)In determining the ratios of earnings to fixed charges, earnings were arrived at by adding to net income all income taxes and fixed charges. Fixed charges consist of interest and amortization of debt premiums, discounts and expense on all indebtedness. (2)Includes construction work in progress. (3)Includes $25 million of long-term debt due within one year. The Company had $68,725,000 of short-term indebtedness outstanding as of March 31, 1995.
THE COMPANY The Company, incorporated in Massachusetts in 1887, is a retail electric utility subsidiary of New England Electric System (NEES), a registered holding company under the Public Utility Holding Company Act of 1935 (the 1935 Act). NEES owns all of the Company's common stock. The executive offices of the Company are at 25 Research Drive, Westborough, Massachusetts 01582 (telephone 508-389-2000). USE OF PROCEEDS The proceeds from the sale of the New Bonds will be applied to the cost of, or the reimbursement of the treasury for, or to the payment of short-term borrowings incurred for (i) capitalizable additions and improvements to the plant and property of the Company, (ii) other capitalizable expenditures, or (iii) if market conditions warrant, the redemption of or the retirement of outstanding First Mortgage Bonds of the Company. CONSTRUCTION AND FINANCING The Company's construction expenditures, excluding allowance for funds used during construction, were $94 million in 1994, and are estimated to be approximately $105 million in 1995 and $95 million in 1996 and 1997. These construction expenditures are incurred principally for improvements and additions to the Company's distribution system. The Company conducts a continuing review of its construction program. This program and the above estimates relating thereto are subject to revisions based upon changes in assumptions concerning, among other things, load growth and rates of inflation. The funds needed to pay for the Company's construction expenditures will be provided from internal sources and from external financing. The Company estimates that 90% of its 1995-1997 construction requirements will be provided from internal sources or from anticipated capital contributions made by NEES. The balance will be provided initially from short-term borrowings, to be repaid from the proceeds of the sale of long-term securities (First Mortgage Bonds, including the New Bonds, or preferred stock sold to the public, or common stock sold to NEES). The Company's preferred stock preference provisions limit the amount of short-term unsecured indebtedness which may be outstanding after September 30, 1998 to 10% of the sum of secured indebtedness, capital, premiums, and retained earnings, unless a higher amount is authorized by vote of the preferred stockholders; prior to such date, the limit is 20%. At March 31, 1995, this limit was approximately $154 million. Under its Articles of Organization and By-Laws, the Company may issue additional preferred stock, absent a vote of a majority of the holders of preferred stock, (a) in the case of a refunding issue, or (b) when (i) gross income, as defined therein, for any twelve consecutive calendar months within the preceding fifteen months available for interest on indebtedness and dividends on its preferred stock is at least 1-1/2 times the annual interest charges and dividend requirements on all interest bearing indebtedness and all preferred stock including the new issue, (ii) the aggregate outstanding par value of all series of preferred stock, including the new issue, does not exceed $120 million, and (iii) the equity of stock junior to the preferred stock is at least equal to the par value of the preferred stock. Under the provision that is currently the most restrictive (the aggregate par value provision), as of March 31, 1995, the Company could issue $70 million of new preferred stock. For information on limitations on the Company's ability to issue First Mortgage Bonds, see "Description of the New Bonds -- Additional First Mortgage Bonds" in this prospectus. DESCRIPTION OF THE NEW BONDS GENERAL The New Bonds will be issued under and secured by a First Mortgage Indenture and Deed of Trust dated as of July 1, 1949, from the Company to State Street Bank and Trust Company (formerly Second Bank -- State Street Trust Company, successor to The Second National Bank of Boston), Boston, Massachusetts, as Trustee, and indentures supplemental thereto, including a Twenty-First Supplemental Indenture to State Street Bank and Trust Company, as Trustee, with respect to the New Bonds (collectively, the Indenture). Each series and/or issue of the New Bonds will mature in the year shown in its title, and will bear interest beginning from the date as of which such issue of New Bonds is first certified and delivered, at the rate per annum shown in its title. Interest will be payable semiannually. Principal and premium, if any, will be payable at the office of the Trustee. Interest will be payable at the office of the Trustee or, at the Company's option, by mailing checks to registered owners at their addresses set forth in the bond register. It is the Company's general practice to mail interest checks to registered owners. The designation and principal amount of the New Bonds, the date of maturity (which date will not be more than thirty years from the date on which such New Bonds were first certified and delivered), the interest rate, the interest payment dates, and the provisions for redemption (including any premium or premiums payable thereon) will be separately established for each series and/or issue and set forth in the applicable prospectus supplement. The New Bonds will be issued only in the form of fully registered bonds without coupons in denominations of $1,000 or any integral multiple thereof. Any of the New Bonds may be presented at the office of the Trustee for exchange for a like aggregate principal amount of New Bonds of the same series and/or issue of other authorized denominations or for transfer, without payment in either case of any charge other than stamp taxes or other governmental charges, if any, required to be paid by the Company. The brief summary herein of certain provisions of the Indenture is merely an outline and does not purport to be complete. It uses defined terms and is qualified in its entirety by reference to the Indenture which is filed as an exhibit to the Registration Statement. REDEMPTION The redemption provisions of each series and/or issue of the New Bonds will be described in the prospectus supplement relating thereto. SECURITY AND PRIORITY The New Bonds, when duly issued, will be secured, together with all other outstanding First Mortgage Bonds, by a direct first mortgage lien on substantially all the properties and franchises then owned by the Company, subject only to liens permitted by the Indenture. Certain types of property are excepted from the lien of the Indenture, including consumable property, fuel, automotive and office equipment, merchandise held for sale, supplies, cash, receivables, and securities. The after-acquired property clause of the Indenture, by its terms and to the extent permitted by law, applies the lien of the Indenture to property subsequently acquired by the Company. The Indenture provides for the release or substitution of property subject to the lien of the Indenture under certain circumstances provided that specific conditions are met. No other securities may be issued ranking prior to or on a parity with the New Bonds with respect to the security provided by the Indenture, except additional First Mortgage Bonds issued in the manner summarized below under "Additional First Mortgage Bonds" and obligations existing or created in connection with the acquisition of after-acquired property, which may not exceed 60% of the cost or fair value, whichever is less, of such property. REPLACEMENT FUND There is a replacement fund applicable to all outstanding Bonds of the Company with an annual requirement, payable August 1, computed on the basis of 2.4% of the average gross plant investment in depreciable electric utility property at the beginning and end of each month during the preceding calendar year. The annual replacement fund requirement may be satisfied in cash or First Mortgage Bonds (including the New Bonds) of any series or by the allocation of an amount of additional property (as defined in the Indenture). The aggregate amount of additional property used to satisfy the replacement fund requirement may be used to offset net retirements in computing the net amount of additional property. Any series and/or issue of New Bonds may be redeemed at special redemption prices to satisfy the annual replacement fund requirement. However, the use of cash for redemptions of New Bonds may be restricted by any noncallability or nonrefundability provisions that may be established for that series and/or issue of New Bonds. ADDITIONAL FIRST MORTGAGE BONDS Additional Bonds of any series may be issued as follows: (A) against 60% of the net amount of additional property (70% after the Series R and S First Mortgage Bonds are retired); (B) to refund a like amount of First Mortgage Bonds of any series which are not then funded; or (C) against the deposit of cash (to a limit of $10 million held by the Trustee at any one time). When the Series R First Mortgage Bonds are retired, there will be no limit on the amount of cash that may be deposited with the Trustee. Cash so deposited with the Trustee may be withdrawn in amounts equal to the principal amount of First Mortgage Bonds otherwise issuable against additional property or retired First Mortgage Bonds. In connection with the issue of First Mortgage Bonds against additional property or cash (other than cash provided for the retirement of First Mortgage Bonds) the Company must demonstrate that net earnings for any 12 consecutive calendar months within the preceding 15 months are at least twice the annual interest charges on all First Mortgage Bonds outstanding and applied for and on all equal or prior lien indebtedness. For the twelve months ended March 31, 1995, the ratio of net earnings to annual interest charges on all Bonds outstanding was 2.91. Except under limited circumstances, no earnings test is required in connection with the refunding of a like amount of First Mortgage Bonds. The Company has the option of using a two-step process in connection with an issuance of additional First Mortgage Bonds against additional property. In exercising such option, the Company first must demonstrate to the satisfaction of the Trustee that the requirements for such an issue (described in clause (A) immediately above) have been satisfied and then, subject to further demonstrations in accordance with the Indenture, the Company may request the issuance of such additional Bonds from time to time. The New Bonds will be issued against additional property or against First Mortgage Bonds theretofore retired. As of March 31, 1995, the Company had approximately $400 million net amount of additional property against which $240 million of additional First Mortgage Bonds could be issued. Pursuant to the limitations described above (the Net Earnings requirement being most restrictive), the Company, as of March 31, 1995, could have issued approximately $135 million of additional First Mortgage Bonds. DIVIDEND RESTRICTION The Twenty-First Supplemental Indenture for the New Bonds does not contain provisions restricting the payment of dividends on common stock by the Company. Dividend restrictions dependent upon earned surplus are binding on the Company so long as certain prior series of the Company's First Mortgage Bonds are outstanding. The most restrictive provisions currently binding on the Company are set forth in the supplemental indenture relating to the Series R First Mortgage Bonds. Under these provisions, which are applicable so long as any Series R First Mortgage Bonds are outstanding, approximately $30 million of the Company's retained earnings were unavailable for dividends on common stock at March 31, 1995. So long as any preferred stock is outstanding, certain restrictions on payment of dividends on the common stock would come into effect if the junior stock equity were, or by reason of payment of such dividends became, less than 25% of total capitalization. However, the junior stock equity at March 31, 1995, was 50% of total capitalization and, accordingly, none of the Company's retained earnings at March 31, 1995, was restricted as to dividends on common stock under the foregoing restrictions. PERIODIC INSPECTION OF PROPERTY Inspection by an independent engineer is required at least once every five years or more often if requested by the holders of not less than 25% of the aggregate principal amount of the Bonds at the time outstanding. The Company is to make good any maintenance deficiency and to record retirements as called for by the engineer's report. MODIFICATION OF THE INDENTURE Any provision of the Indenture may be modified with the consent of the holders of not less than 66-2/3% of the aggregate principal amount of the Bonds at the time outstanding (and, if one or more series of Bonds are differently affected, with the consent of the holders of 66-2/3% of the aggregate principal amount of the Bonds of each series so affected). No such modification may (a) affect certain provisions protecting the Trustee without the Trustee's assent, (b) affect the payment of principal, premium, or interest on any Bonds, or extend the maturity or time of payment, without the consent of the Bondholders affected, (c) permit the creation by the Company of any lien ranking prior to or on a parity with the lien of the Indenture except as expressly authorized in the Indenture, (d) reduce the above specified percentages of Bondholders, or (e) permit, in the opinion of the Trustee, a substantial impairment of the benefits or lien of the Indenture. No such modification may be made which would conflict with the Trust Indenture Act of 1939, as at the time in effect. THE TRUSTEE The Trustee acts as trustee for an affiliate's general and refunding mortgage bonds. The Trustee also participates in a line of credit of the parent and an affiliate of the Company. The Trustee is also dividend paying and transfer agent for the Company's preferred stock. The Trustee may become the owner or pledgee of First Mortgage Bonds with the same rights as if it were not the Trustee. The holders of a majority in aggregate principal amount of the First Mortgage Bonds outstanding may require the Trustee to take certain action, except when the action would be unlawful, would involve the Trustee in personal liability, or would be unjustifiably prejudicial to the nonassenting Bondholders, or when the Trustee would not be sufficiently indemnified for any expenditures in the action. DEFAULTS The following are defaults under the Indenture: (a) failure to pay principal when due; (b) failure for 30 days to pay interest after due; (c) failure to pay any installment of the sinking, replacement, or other analogous fund for 60 days after due; (d) the expiration of 60 days following the bankruptcy of, the reorganization of, or the appointment of a receiver for, the Company; (e) certain other acts of bankruptcy, insolvency, or reorganization; and (f) failure to perform other provisions of the Indenture for 60 days following a demand by the Trustee to the Company to cure such failure. The Trustee may withhold notice to the Bondholders of any default, except default in the payment of principal, interest, or any sinking fund or replacement fund installment, if certain officers and directors of the Trustee determine in good faith that withholding such notice is in the interest of the Bondholders. EVIDENCE TO BE FURNISHED TO TRUSTEE The Company must periodically furnish to the Trustee evidence as to the absence of default in connection with certain annual sinking fund and replacement fund requirements and as to compliance with certain other terms of the Indenture. Furthermore, prior to issuance of additional First Mortgage Bonds, release of property, withdrawal of cash, and various other actions under the Indenture, evidence must be furnished as to the absence of default and as to compliance with certain terms of the Indenture. Whenever all indebtedness secured by the Indenture shall have been paid, or adequate provision therefor made, the Trustee shall, upon request of the Company and receipt by the Trustee of evidence as to compliance with conditions precedent under the Indenture, cancel and discharge the lien of the Indenture. EXPERTS The balance sheets of the Company as of December 31, 1994 and 1993 and the related statements of income, retained earnings, and cash flows for each of the three years in the period ended December 31, 1994, all incorporated by reference in Massachusetts Electric Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994, incorporated by reference in this prospectus, have been incorporated herein in reliance on the reports of Coopers & Lybrand L.L.P., independent accountants, given on the authority of that firm as experts in accounting and auditing. The statements of law and legal conclusions made in this prospectus, not otherwise attributed, have been reviewed by Kirk L. Ramsauer and/or Robert King Wulff and are made upon their authority as experts. LEGAL MATTERS Legal matters in connection with the securities offered hereby will be passed upon for the Company by Kirk L. Ramsauer, Assistant General Counsel, and/or Robert King Wulff, Corporation Counsel, 25 Research Drive, Westborough, Massachusetts, and will be passed upon for the underwriter(s), purchaser(s), or agent(s) by Milbank, Tweed, Hadley & McCloy, 1 Chase Manhattan Plaza, New York, New York. The opinion of Robert King Wulff and/or Kirk L. Ramsauer as to legal matters in connection with the securities offered hereby is filed as an exhibit to the registration statement. PLAN OF DISTRIBUTION The Company may sell the New Bonds in any of the following ways: (i) through competitive bidding; (ii) through negotiation with one or more underwriters; (iii) through one or more agents designated from time to time; (iv) directly to other purchasers; or (v) any combination of the above. The terms of any offering of the New Bonds, including the name or names of any underwriters or agents with whom the Company has entered into arrangements with respect to the sale of such New Bonds, the proceeds to the Company, any underwriting discounts or commissions and other terms constituting underwriters' compensation, the initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers, will be set forth in the prospectus supplement relating to such offering. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. If an underwriter or underwriters are involved in the sale of any New Bonds, the Company will execute an underwriting or purchase agreement with such underwriters at the time of sale, and the names of the underwriters, the principal amount of New Bonds to be purchased thereby and the other terms and conditions of the transaction will be set forth in the prospectus supplement relating to such sale. The New Bonds will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of the sale. Unless otherwise indicated in the prospectus supplement, the underwriting or purchase agreement will provide that the underwriter or underwriters are obligated to purchase all of an issue of the New Bonds offered in the prospectus supplement if any are purchased. If any New Bonds are sold through an agent or agents designated by the Company from time to time, the prospectus supplement will name any such agent, set forth any commissions payable by the Company to any such agent and the obligations of such agent with respect to such New Bonds. Unless otherwise indicated in the prospectus supplement, any such agent will be acting on a best efforts basis for the period of its appointment. In connection with the sale of the New Bonds, any purchasers, underwriters, or agents may receive compensation from the Company or from purchasers in the form of concessions or commissions. The underwriters will be, and any agents and any dealers participating in the distribution of the New Bonds may be, deemed to be underwriters within the meaning of the Securities Act of 1933. The agreement between the Company and any purchasers, underwriters, or agents will contain reciprocal covenants of indemnity between the Company and the purchasers, underwriters, or agents against certain liabilities, including liabilities under the Securities Act of 1933. PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION Filing fees: Securities and Exchange Commission: Registration Statement$ 34,483 Massachusetts Department of Public Utilities. . . . 19,350 *Services of New England Power Service Company (including counsel) . . . . . . . . . . . . . . . . 30,000 *Accountant's fees-Coopers & Lybrand L.L.P.. . . . . . . 30,000 *Trustee's fees (including counsel). . . . . . . . . . . 48,000 *Printing and engraving costs. . . . . . . . . . . . . . 10,000 *Rating agency fees. . . . . . . . . . . . . . . . . . . 48,000 *Miscellaneous (including recording and blue sky expenses, and compensation and disbursements of Agents' counsel) . . . . . . . . . 35,000 *Total expenses . . . . . . . . . . . . . . . . . . $254,833 ======== - ---------- *Estimated Milbank, Tweed, Hadley & McCloy of New York, New York has been selected by the Company as independent counsel for the purchasers, underwriters, or agents, who will pay their compensation and disbursements except as provided in the purchase, underwriting, and distribution agreements. The above expenses include such compensations and disbursements. New England Power Service Company is an affiliated service company operating pursuant to the provisions of the Public Utility Holding Company Act of 1935 and the SEC's rules thereunder. The services of New England Power Service Company are performed at the actual cost thereof. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 67 of Chapter 156B of the General Laws of Massachusetts permits a corporation to indemnify its directors and officers for good faith actions to the extent such indemnification is authorized by the corporation's Articles of Organization, By-Laws, or a vote of a majority of the corporation's shareholders entitled to elect directors. M.G.L. c. 156B, Sec. 67 is applicable to the Company by virtue of M.G.L. c. 164, Sec. 4(a). Under the provisions of the Articles of Organization and By-Laws of the Company, as amended, the Company will indemnify its directors and officers against liabilities and expenses, including counsel fees reasonably incurred, resulting from litigation or threatened litigation in which the director or officer may be involved by reason of his or her position. Indemnification is withheld whenever the director or officer is adjudicated "not to have acted in good faith in the reasonable belief that his action was in the best interests" of the Company. The Agreement and Declaration of Trust of New England Electric System (NEES) contains similar provisions for the indemnification by NEES of the Company's directors and officers. Officers' and directors' insurance is also provided. ITEM 16. EXHIBIT INDEX EXHIBIT PREVIOUSLY FILED - ------- ---------------- 1-A - Form of Confirmation of Bid with schedules constituting the form of Purchase Agreement 1-B - Form of Underwriting Agreement 1-C - Form of Distribution Agreement WITH REGISTRATION NUMBER AS EXHIBIT ------ -------- 4-A 1-8019 7-A - First Mortgage Indenture and Deed of Trust dated as of July 1, 1949 4-B - Supplemental Indentures to First Mortgage NUMBER DATE ------ ---- 2-8836 7-B First March 1, 1951 2-9593 4-C Second May 1, 1952 WITH 1980 FORM 10-K ------------ 2-8019 4 Third October 1, 1955 2-8019 4 Fourth December 1, 1959 2-8019 4 Fifth July 1, 1961 2-8019 4 Sixth September 1, 1962 2-8019 4 Seventh December 1, 1963 2-8019 4 Eighth March 1, 1966 2-8019 4 Ninth April 1, 1968 2-8019 4 Tenth May 1, 1969 2-8019 4 Eleventh October 1, 1970 2-8019 4 Twelfth October 1, 1972 2-8019 4 Thirteenth October 1, 1975 WITH 1982 FORM 10-K ------------ 0-5464 4 Fourteenth October 1, 1982 WITH 1986 FORM 10-K ------------ 0-5464 4 Fifteenth June 1, 1986 WITH 1988 FORM 10-K ------------ 0-5464 4 Sixteenth December 1, 1988 WITH 1989 NEES FORM 10-K ------------ 1-3446 4(a) Seventeenth July 1, 1989 WITH 1992 NEES FORM 10-K ------------ 1-3446 4(a) Eighteenth March 1, 1992 1-3446 4(a) Nineteenth January 1, 1993 WITH 1993 NEES FORM 10-K ------------ 1-3446 4(a) Twentieth September 1, 1993 4-C - Form of Supplemental Indenture 4-D - Certificate as to Form 5 - Opinion of Kirk L. Ramsauer, Esq. and/or Robert King Wulff, Esq. with respect to the legality of the securities being registered, containing consent 12 - Statement re: computation of ratios 23 - Consent of Coopers & Lybrand L.L.P. - Consent of counsel: See Exhibit 5 24-A - Certified copy of vote of Board of Directors, containing power of attorney 24-B - Power of Attorney 25 - Statement of eligibility and qualification of State Street Bank and Trust Company (Form T-1) 26 - Form of Public Invitation for bids 27 - Financial Data Schedule UNDERTAKINGS The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made of the securities registered hereby, a post-effective amendment to this registration statement; (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement; provided, however, that the undertakings set forth in paragraphs (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by these paragraphs is contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (5) To use its best efforts to distribute prior to the opening of bids, to prospective bidders, underwriters, and dealers, a reasonable number of copies of a prospectus which at that time meets the requirements of section 10(a) of the Securities Act of 1933, and relating to the securities offered at competitive bidding, as contained in this registration statement, together with any supplements thereto. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the Registrant pursuant to the provisions described under Item 15 above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer, or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act, and will be governed by the final adjudication of such issue. SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE TOWN OF WESTBOROUGH, THE COMMONWEALTH OF MASSACHUSETTS, ON THE FIFTH DAY OF MAY, 1995. MASSACHUSETTS ELECTRIC COMPANY s/ JOHN H. DICKSON JOHN H. DICKSON, PRESIDENT PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED. WE, THE UNDERSIGNED OFFICERS AND DIRECTORS OF MASSACHUSETTS ELECTRIC COMPANY, HEREBY AUTHORIZE AND DIRECT ROBERT K. WULFF, JOHN G. COCHRANE, AND JAMES P. MEEHAN, OR SEVERAL OF THEM, AS ATTORNEYS-IN-FACT, TO EXECUTE IN THE NAME AND ON BEHALF OF EACH OF THE UNDERSIGNED PERSONS, IN THE RESPECTIVE CAPACITIES INDICATED BELOW, ANY AMENDMENT OR AMENDMENTS TO THIS REGISTRATION STATEMENT OF MASSACHUSETTS ELECTRIC COMPANY UNDER THE SECURITIES ACT OF 1933. SIGNATURE AND TITLE (I) PRINCIPAL EXECUTIVE OFFICER: s/ JOHN H. DICKSON JOHN H. DICKSON, PRESIDENT (II) PRINCIPAL FINANCIAL OFFICER: s/ MICHAEL E. JESANIS MICHAEL E. JESANIS, TREASURER (III) PRINCIPAL ACCOUNTING OFFICER: s/ HOWARD W. MCDOWELL HOWARD W. MCDOWELL, CONTROLLER (IV) DIRECTORS: (A MAJORITY) URVILLE J. BEAUMONT JOAN T. BOK SALLY L. COLLINS JOHN H. DICKSON PATRICIA MCGOVERN ALL BY: s/JOHN G. COCHRANE JOHN F. REILLY, JR. JOHN W. ROWE JOHN G. COCHRANE RICHARD P. SERGEL ATTORNEY-IN-FACT RICHARD M. SHRIBMAN ROSLYN M. WATSON DATE (AS TO ALL SIGNATURES ON THIS PAGE) May 5, 1995 EX-99 2 Page 18 of 18 EXHIBIT INDEX Exhibit Description Page - ------- ----------- ---- 1-A Form of Confirmation of Bid with schedulesFiled herewith constituting the form of Purchase Agreement 1-B Form of Underwriting Agreement Filed herewith 1-C Form of Distribution Agreement Filed herewith 4-C Form of Supplemental Indenture Filed herewith 4-D Certificate as to Form Filed herewith 5 Opinion of Counsel Filed herewith 12 Statement re computation of ratios Filed herewith 23 Consent of Coopers & Lybrand L.L.P. Filed herewith 24-A Certified copy of vote of Board of Filed under cover Directors, containing power of attorney of Form SE 24-B Power of Attorney Filed under cover of Form SE 25 Statement of eligibility and Filed under cover qualification of State Street Bank of Form SE and Trust Company (Form T-1) 26 Form of Public Invitation for Bids Filed herewith 27 Financial Data Schedule Filed herewith EX-20 3 EXHIBIT 1-A Exhibit 1-A to Form S-3 CONFIRMATION OF BID AND, IF BID ACCEPTED, PURCHASE AGREEMENT FOR PURCHASE OF $* FIRST MORTGAGE BONDS, SERIES *, **%, DUE * (ORIGINAL ISSUE DATE ***) OF MASSACHUSETTS ELECTRIC COMPANY Date: _____________, ____ MASSACHUSETTS ELECTRIC COMPANY Ladies and Gentlemen: In accordance with the Terms and Conditions referred to in the Public Invitation for Bids, dated , for the purchase of $* principal amount of First Mortgage Bonds, Series *, **%, due * (Original Issue Date ***) (the Bonds) of Massachusetts 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 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, * The series designation, aggregate principal amount, and the year in which the 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. *** Original Issue Date shall be the Closing Date. 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 Bonds, subject, however, to such modification of the Purchase Agreement as is contemplated by the Terms and Conditions. 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 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: MASSACHUSETTS ELECTRIC COMPANY By: Date: THIS CONFIRMATION OF BID MUST BE SIGNED AND SUBMITTED WITH SCHEDULE A COMPLETED IN FULL. SCHEDULE A PRINCIPAL AMOUNT NAME OF BONDS TOTAL $ SCHEDULE B TERMS OF PURCHASE RELATING TO FIRST MORTGAGE BONDS, SERIES *, **%, DUE * (ORIGINAL ISSUE DATE ***) OF MASSACHUSETTS ELECTRIC COMPANY TERMS OF PURCHASE between Massachusetts Electric Company (the Company), a Massachusetts 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. * The series designation, aggregate principal amount, and the year in which the 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. *** Original Issue Date shall be the Closing Date. 2. DESCRIPTION OF THE BONDS. The Company proposes to issue and sell $* principal amount of its First Mortgage Bonds, Series *, **%, due * (Original Issue Date ***) (the Bonds), to be issued under an indenture supplemental to the First Mortgage Indenture and Deed of Trust dated as of July 1, 1949, (as heretofore and hereafter supplemented, the Indenture), from the Company to State Street Bank and Trust Company (the Trustee), formerly Second Bank-State Street Trust Company, successor to The Second National Bank of Boston. The terms and provisions of the 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 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 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 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 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 Purchasers, 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 L. L. P., 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 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 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 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 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. 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 other date as shall be specified in the notice referred to in Section 1 of the Terms and Conditions, or 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 Bonds, as provided in Section 5 hereof, shall be made at the office of Peabody & Arnold, Boston, Massachusetts, at 10 a.m., Boston 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, State Street Bank and Trust Company, or in Boston Federal Reserve Bank Funds. Payment for the Bonds may also be made by a FedWire electronic funds transfer to Massachusetts Electric Company's General Funds Account, Number 514-22952, at Bank of Boston, Boston, Massachusetts. Such payment shall be made upon delivery of the Bonds to the Representative for the respective accounts of the Purchasers, such delivery to be made at the offices of State Street Bank and Trust Company, N.A., 61 Broadway, New York, New York 10006. The 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 Bonds for fully-registered Bonds in definitive form will be made as soon as practicable and without charge to the holders thereof. If delivered in definitive form, the 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., Boston time, on the third full business day prior to the Closing Date. If no such direction is received, the Bonds will be registered in the names of the respective Purchasers in denominations selected by the Company. The Company will make such Bonds available to the Representative for examination at the place of delivery, not later than 2 p.m., Boston 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 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 certified copy of the registration statement with respect to the 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 Boston, 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 Massachusetts Department of Public Utilities (MDPU) of any order altering, suspending, supplementing, or otherwise affecting its order permitting the issue and sale of the 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 provided under Rule 52 promulgated thereunder; and (v) of the commencement of any litigation in connection with the Bonds against the Company or any of its directors or any signer of the Registration Statement. (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 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 Bonds, and (iii) the printing of the Prospectus and any supplement and 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 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 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 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 Bonds shall be subject to the performance by the Company of its obligations hereunder and the following conditions: (a) Prior to 7 P.M., Boston 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 MDPU, to the extent it has jurisdiction, permitting the issue and sale of the 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 does 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 Bonds shall be satisfactory to Purchasers' Counsel. Prior to or concurrently with the delivery of the 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 Robert King Wulff, Esquire and/or Kirk L. Ramsauer, Esquire, counsel for the Company, substantially in the form attached hereto as Exhibit 1; (ii) Opinion of Purchasers' Counsel substantially in the form attached hereto as Exhibit 2; and (iii) Letter of Coopers & Lybrand L. L. P., 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 ____, 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: (i) that the unaudited financial statements included or incorporated by reference in the Registration Statement comply as to form in all material respects with the applicable accounting requirements of the Exchange Act and the published rules and regulations thereunder, and that said financial statements are in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements included or incorporated by reference in the Registration Statement; (ii) 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; (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 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 of the MDPU referred to in paragraph (a) of this Section shall remain in force and effect; and (iii) the representations and warranties of the Company herein shall be true and correct; and 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 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 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 Bonds is subject to the following conditions: (a) The conditions set forth in paragraphs (a), (c)(i), and (c)(ii) of Section 8 hereof. (b) Concurrently with the delivery of the Bonds, the Company shall receive the full purchase price for all of the Bonds. If any provision of this Section is not fulfilled at or prior to the delivery of the 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 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 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 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 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) 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 Bonds and the price paid for the 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 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 Bonds that it or they agreed to purchase under this Purchase Agreement and the aggregate principal amount of Bonds which all such defaulting Purchasers shall have failed to purchase does not exceed ten percent of the aggregate principal amount of the 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 Bonds set forth opposite their respective names in Schedule A to the Confirmation of Bid) the total principal amount of 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 Bonds of denominations smaller than $1,000 are to be delivered and, if 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 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 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 Bonds which it or they have agreed to purchase under this Purchase Agreement and the aggregate principal amount of Bonds which all such defaulting Purchasers shall have failed to purchase exceeds ten percent of the aggregate principal amount of the Bonds, the nondefaulting Purchasers, or any one or more of them, at 10 A.M., Boston 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 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 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 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 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 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 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 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 Agreement shall be governed by and construed in accordance with the laws of The Commonwealth of Massachusetts. 17. 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 counterparts shall together constitute one and the same instrument. Exhibit 1 to Terms of Purchase PROPOSED FORM OF OPINION OF (ORIGINAL ISSUE DATE: ) COUNSEL FOR THE COMPANY , 19 As Representative(s) of the Several Purchasers Re: MASSACHUSETTS ELECTRIC COMPANY First Mortgage Bonds, Series , %, due Dear Representative(s): We have acted as counsel for Massachusetts Electric Company (the Company) in connection with the issue by it of $ principal amount of First Mortgage Bonds, Series , %, due (Original Issue Date: ) (the 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)(i) of the Purchase Agreement which became effective on , 19 , between you as purchaser of the Bonds and the Company and is being delivered on the Closing Date referred to therein, concurrently with said issuance of Bonds. The Bonds are being issued under the Company's First Mortgage Indenture and Deed of Trust dated as of July 1, 1949 (the Original Indenture), as supplemented and amended by 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 the laws of The Commonwealth of Massachusetts, has the corporate power to transact the electric business in which it is now engaged, and has franchises adequate for carrying on such business. 2. The Company had full power and authority to accept your bid for the 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 A thereto, contains a correct and adequate description of the real estate, rights or interests in real estate, and fixed property of the Company acquired up to , 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 Bonds under the Indenture 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, the Bonds have been duly issued and are valid and binding obligations of the Company and entitled to the benefits and security of the Indenture (subject to the qualification stated in paragraph 4 above). 6. The Bonds, together with all other now outstanding First Mortgage Bonds of the Company, are secured by a 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 Bonds ranking prior to or on a parity with the lien securing such 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 (c) of the paragraph in the Original Indenture beginning "But Specifically Reserving, Excepting and Excluding," and as to the remainder of the properties described in said schedules the exclusions, if any, by virtue of said clause (c) are minor. 8. The principal substations of the Company are in general on land owned by the Company, the balance being upon land of others pursuant to lease or other arrangements. The electric lines and related equipment of the Company are in general on land of others, being in substantial part located upon, over, or under public streets or highways and in part upon, over, or under private ways or other property not owned by the Company, such occupation of private property in general pursuant to easements, licenses, or permits from owners thereof, but without examination of titles, or pursuant to long user, a majority of the poles being owned jointly with others, principally telephone companies. 9. With respect to the issue and sale of the Bonds, an appropriate order has been issued by the Massachusetts Department of Public Utilities, to the extent it has jurisdiction, authorizing the issue and sale of the Bonds; the Company is exempted by Rule 52 under the Public Utility Holding Company Act of 1935 (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 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 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 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 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 Commission thereunder; and the 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 by reference 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 the 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, or that the Prospectus, as amended and supplemented, contains an untrue statement of a material fact necessary to make the statements therein, in light of the circumstances under which they were made, 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, including Alan J. Rabinowitz, Esquire, General Property Counsel of the Company, or by local counsel of good standing and experienced in the examination of titles and reviewed by us or counsel associated with us. 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 and the Federal Law of the United States of America. Yours very truly, ROBERT KING WULFF* Corporation Counsel KIRK L. RAMSAUER* Assistant General Counsel *To be signed by ROBERT KING WULFF AND/OR KIRK L. RAMSAUER Exhibit 2 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: MASSACHUSETTS ELECTRIC COMPANY First Mortgage Bonds, Series , %, due Dear Sirs: We have acted as your counsel in connection with your purchase from Massachusetts Electric Company, a Massachusetts 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 (the Bonds) of the Company, issued under and pursuant to the First Mortgage Indenture and Deed of Trust dated as of July 1, 1949, as supplemented and modified by supplemental indentures (collectively, the Mortgage), between the Company and State Street Bank and Trust Company, successor to The Second National Bank of Boston, 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 originals, the conformity with the original documents of all documents submitted to us as copies, and the authenticity of the originals of such latter 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 , Boston, Massachusetts, in the course of which the Company caused to be delivered to you $ aggregate principal amount of 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 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 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 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 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 the New Bonds" (except the financial data included thereunder as to which we express no opinion), subject to the concluding paragraph 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 Bonds. 4. The Massachusetts Department of Public Utilities has issued an appropriate order with respect to the issue and sale of the 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 regulatory body is legally required under federal law for the issue and sale of the 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 of the Company, and/or Kirk L. Ramsauer, Esq., Assistant General Counsel of 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 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, and subject also to the possible inefficacy of certain provisions of the Mortgage, whereby the Company undertakes, upon the happening of an event of default, to create a lien upon certain property theretofore expressly excluded from the Mortgage. The Mortgage has been duly qualified under the Trust Indenture Act of 1939, as amended. 7. The Bonds purchased by you conform to the terms of the Purchase Agreement and to the statements with respect thereto 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 liens created by the Mortgage or the franchises or licenses 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 upon said opinion of Counsel for the Company. With respect to the filing and recording of the Mortgage, we have also relied upon said opinion of Counsel for the Company. In rendering the opinions hereinabove expressed, we have relied upon said opinion of Counsel to the Company as to all matters governed by the law of The Commonwealth of Massachusetts, 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 do not express any opinion herein concerning any laws other than the law of the State of New York, the federal law of the United States and, to the extent hereinabove stated in reliance on said opinions of Counsel to the Company, the law of The Commonwealth of Massachusetts. Very truly yours, MILBANK, TWEED, HADLEY & MCCLOY EX-4 4 EXHIBIT 1-B Exhibit 1-B to Form S-3 UNDERWRITING AGREEMENT FOR PURCHASE OF $__________ FIRST MORTGAGE BONDS, SERIES ___, _____%, DUE __________ OF MASSACHUSETTS ELECTRIC COMPANY Date: Massachusetts Electric Company 25 Research Drive Westborough, MA 01582 Ladies and Gentlemen: We (the Underwriters) understand that Massachusetts 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 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 Bonds, and each of the Underwriters agrees, severally and not jointly, to purchase the respective principal amount of the Bonds set forth opposite its name below, in each case at a purchase price of _____% of the principal amount of such Bonds. Principal Name Amount of Bonds ____ _______________ ____________________ Total $ The Underwriters will pay for such Bonds upon delivery thereof in accordance with the Terms of Purchase. The Bonds shall have the terms set forth in the Prospectus dated _______________, and the Prospectus Supplement dated _______________, including the following: Maturity: Interest Rate: Redemption Provisions: 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 MASSACHUSETTS 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: MASSACHUSETTS ELECTRIC COMPANY By_________________________________ Name: Title: TERMS OF PURCHASE RELATING TO FIRST MORTGAGE BONDS, SERIES *, **%, DUE * (ORIGINAL ISSUE DATE ***) OF MASSACHUSETTS ELECTRIC COMPANY TERMS OF PURCHASE between Massachusetts Electric Company (the Company), a Massachusetts 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 BONDS. The Company proposes to issue and sell $* principal amount of its First Mortgage Bonds, Series *, **%, due * (Original Issue Date ***) (the Bonds), to be issued under an indenture supplemental to the First Mortgage Indenture and Deed of Trust dated as of July 1, 1949, (as heretofore and hereafter supplemented, the Indenture), from the Company to State Street Bank and Trust Company (the Trustee), ______________________ * The series designation, aggregate principal amount, and the year in which the Bonds mature are as specified in the Confirmation. ** The percentage is the interest rate specified in the Confirmation. *** Original Issue Date shall be the Closing Date. formerly Second Bank-State Street Trust Company, successor to The Second National Bank of Boston. The terms and provisions of the 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 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 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 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 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 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 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 L. L. P., 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 provisions, or any order of any court or administrative agency by which the Company is bound. (f) The issue and sale of the 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 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 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 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 Bonds, as provided in Section 6 hereof, shall be made at the principal office of State Street Bank and Trust Company, Boston, Massachusetts, at 10 a.m., Boston 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, State Street Bank and Trust Company, or in Boston Federal Reserve Bank Funds. Payment for the Bonds may also be made by a FedWire electronic funds transfer to Massachusetts Electric Company's General Funds Account, Number 514-22952, at Bank of Boston, Boston, Massachusetts. Such payment shall be made upon delivery of the Bonds to the Representative for the respective accounts of the Underwriters, such delivery to be made at the offices of State Street Bank and Trust Company, N.A., 61 Broadway, New York, New York 10006. The 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 Bonds for fully-registered Bonds in definitive form will be made as soon as practicable and without charge to the holders thereof. If delivered in definitive form, the 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., Boston time, on the third full business day prior to the Closing Date. If no such direction is received, the Bonds will be registered in the names of the respective Underwriters in denominations selected by the Company. The Company will make such Bonds available to the Representative for examination at the place of delivery, not later than 2 p.m., Boston 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 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 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 Boston, 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 Massachusetts Department of Public Utilities (MDPU) of any order altering, suspending, supplementing, or otherwise affecting its order permitting the issuance and sale of the Bonds; (iv) of any action by the Commission which has the effect of eliminating the exemption from the requirements of the Public Utility Holding Company Act of 1935 provided under Rule 52 promulgated thereunder; and (v) of the commencement of any litigation in connection with the Bonds against the Company or any of its directors or any signer of the Registration Statement. (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 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 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 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 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 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 Bonds shall be subject to the performance by the Company of its obligations hereunder and the following conditions: (a) Prior to 7 P.M., Boston 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 MDPU, to the extent that it has jurisdiction, permitting the issuance and sale of the 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 does 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 Bonds shall be satisfactory to Underwriters' Counsel. Prior to or concurrently with the delivery of the 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 Robert King Wulff, Esq. and/or Kirk L. Ramsauer, Esq., counsel for the Company, substantially in the form attached hereto as Exhibit 1; (ii) Opinion of Underwriters' Counsel substantially in the form attached hereto as Exhibit 2; and (iii) Letter of Coopers & Lybrand L. L. P., 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 199__, 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: (i) that the unaudited financial statements included or incorporated by reference in the Registration Statement are in conformity as to form in all material respects with the applicable accounting requirements of the Exchange Act and the published rules and regulations thereunder, and that said financial statements are in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements incorporated by reference in the Registration Statement; (ii) that, during the period from the date of the latest financial statements included or incorporated by reference in the Registration Statement through a specified date not more than five business days prior to the date of their letter, there was no change in the capital stock and no increase in long-term debt of the Company; except in all instances as set forth or incorporated by reference 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 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 of the MDPU referred to in paragraph (a) of this Section shall remain in force and effect; and (iii) the representations and warranties of the Company herein shall be true and correct; and 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 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 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 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 Bonds, the Company shall receive the full purchase price for all of the Bonds. If any provision of this Section is not fulfilled at or prior to the delivery of the 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 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 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 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 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 Bonds and the price paid for the 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 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 Bonds that it or they agreed to purchase under this Underwriting Agreement and the aggregate principal amount of Bonds which all such defaulting Underwriters shall have failed to purchase does not exceed ten percent of the aggregate principal amount of the 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 Bonds set forth opposite their respective names in the Confirmation) the total principal amount of 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 Bonds of denominations smaller than $1,000 are to be delivered and, if 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 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 Bonds which he or they have agreed to purchase under this Underwriting Agreement and the aggregate principal amount of Bonds which all such defaulting Underwriters shall have failed to purchase exceeds ten percent of the aggregate principal amount of the Bonds, the nondefaulting Underwriters, or any one or more of them, at 10 A.M., Boston 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 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 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 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 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 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 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 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 COUNSEL FOR THE COMPANY _____________, 19__ As Representatives of the Several Underwriters Re: MASSACHUSETTS ELECTRIC COMPANY First Mortgage Bonds, Series ___, _____%, due __________ (Original Issue Date: _______________) Dear Representatives: We have acted as counsel for Massachusetts Electric Company (the Company) in connection with the issue by it of $__________ principal amount of First Mortgage Bonds, Series ___, _____%, due __________ (Original Issue Date: __________) (the 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)(i) of the Underwriting Agreement which became effective on __________, 19__, between you as underwriter of the Bonds and the Company and is being delivered on the Closing Date referred to therein, concurrently with said issue of Bonds. The Bonds are being issued under a First Mortgage Indenture and Deed of Trust dated as of July 1, 1949 (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 the laws of The Commonwealth of Massachusetts, has the corporate power to transact the electric business in which it is now engaged, and has franchises adequate for carrying on such business. 2. The Company had full power and authority to accept your offer for the purchase of the Bonds, and the Underwriting 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 __ 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 Bonds under the Indenture in an aggregate principal amount not exceeding $__________ 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 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 Bonds, together with all other now outstanding First Mortgage Bonds of the Company, 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 Bonds ranking prior to or on a parity with the lien securing such 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 (c) of the paragraph in the Original Indenture beginning "But Specifically Reserving, Excepting and Excluding," and as to the remainder of the properties described in said schedules the exclusions, if any, by virtue of said clause (c) are minor. 8. The principal substations of the Company are in general on land owned by the Company, the balance being upon land of others pursuant to lease or other arrangements. The electric lines and related equipment of the Company are in general on land of others, being in substantial part located upon, over, or under public streets or highways and in part upon, over, or under private ways or other property not owned by the Company, such occupation of private property in general pursuant to easements, licenses, or permits from owners thereof, but without examination of titles, or pursuant to long user, a majority of the poles being owned jointly with others, principally telephone companies. 9. With respect to the issue and sale of the Bonds, an order has been issued by the Massachusetts Department of Public Utilities, to the extent it has jurisdiction, authorizing the issue and sale of the Bonds 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 1935 (the 1935 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 Bonds or the carrying out of the provisions of the Underwriting 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 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 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 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 Commission thereunder; and the 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 by reference 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 the 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 and the Federal Law of the United States of America. Yours very truly, ROBERT KING WULFF* Corporation Counsel KIRK L. RAMSAUER* Assistant General Counsel ______________________ *To be signed by ROBERT KING WULFF and/or KIRK L. RAMSAUER. Exhibit 2 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: MASSACHUSETTS ELECTRIC COMPANY First Mortgage Bonds, Series ___, _____%, due __________ Dear Sirs: We have acted as your counsel in connection with your purchase from Massachusetts Electric Company, a Massachusetts corporation (the Company), pursuant to a Underwriting Agreement dated __________, 19__ (the Underwriting Agreement) made with the Company, of $__________ aggregate principal amount of First Mortgage Bonds, Series ___, _____%, due __________ (the Bonds) of the Company, issued under and pursuant to the First Mortgage Indenture and Deed of Trust dated as of July 1, 1949, as supplemented and modified by __________ supplemental indentures (collectively, the Mortgage), between the Company and State Street Bank and Trust Company, successor to The Second National Bank of Boston, 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 originals, the conformity with the original documents of all documents submitted to us as copies, and the authenticity of the originals of such latter 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 State Street Bank and Trust Company, 225 Franklin Street, Fourth Floor, Boston, Massachusetts, in the course of which the Company caused to be delivered to you $__________ aggregate principal amount of 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 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 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 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 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 ___ Bonds", (except the financial data included thereunder as to which we express no opinion), subject to the concluding paragraph 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 1935 from the requirement for an order of the Commission under said Act with respect to the issue and sale of the Bonds. 4. The Massachusetts Department of Public Utilities has issued an appropriate order with respect to the issue and sale of the 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 Bonds pursuant to the Underwriting Agreement or the carrying out of the provisions of the Underwriting 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 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 relating to 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, and subject also to the possible inefficacy of certain provisions of the Mortgage, whereby the Company undertakes, upon the happening of an event of default, to create a lien upon certain property theretofore expressly excluded from the Mortgage. The Mortgage has been duly qualified under the Trust Indenture Act of 1939, as amended. 7. The 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 upon the opinion of Robert King Wulff, Esq. and Kirk L. Ramsauer, Esq., addressed to you on this date. Furthermore, with respect to the filing and recording of the Mortgage, we have also relied upon said opinion of counsel for the Company. 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 Commonwealth of Massachusetts 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., the law of the Commonwealth of Massachusetts. Very truly yours, MILBANK, TWEED, HADLEY & MCCLOY EX-4 5 EXHIBIT 1-C Exhibit 1-C to Form S-3 $ MASSACHUSETTS ELECTRIC COMPANY (a Massachusetts corporation) First Mortgage Bonds, Series Due from 9 Months to 30 Years from Date of Issue DISTRIBUTION AGREEMENT [DATE] [Name of Agent] [Address of Agent] Dear Agent: Massachusetts Electric Company (the Company) agrees with you with respect to the issue and sale by the Company of up to $ aggregate principal amount of its First Mortgage Bonds, Series (the Bonds). The Bonds are to be issued pursuant to an indenture supplemental (the Supplemental Indenture) to the First Mortgage Indenture and Deed of Trust dated as of July 1, 1949 (the Original Indenture) between the Company and State Street Bank and Trust Company (the Trustee), formerly Second Bank - - State Street Trust Company, successor to The Second National Bank of Boston (such Original Indenture as heretofore and hereafter supplemented, the Indenture). Subject to the terms and conditions stated herein, the Company hereby (i) appoints you as agent of the Company for the purpose of soliciting purchases of the Bonds from the Company by others and (ii) agrees that whenever the Company determines to sell Bonds directly to you as principal for resale to others, it will enter into a Terms Agreement relating to such sale in accordance with the provisions of Section 2(b) hereof. The Bonds shall have the maturities, interest rates, provisions for redemption, and other terms set forth in the Prospectus referred to below, as it may be supplemented from time to time. The Company has filed with the Securities and Exchange Commission (the SEC) a registration statement on Form S-3 for the registration of First Mortgage Bonds, including the Bonds, and the offering thereof from time to time in accordance with Rule 415 under the Securities Act of 1933, as amended (the Securities Act). Such registration statement has been declared effective by the SEC, and the Indenture has been qualified under the Trust Indenture Act of 1939 (the Trust Indenture Act). Such registration statement and the prospectus filed pursuant to Rule 424 under the Securities Act, including all documents incorporated therein by reference, as from time to time amended or supplemented by the filing of documents pursuant to the Securities Exchange Act of 1934 (the Exchange Act), the Securities Act, or otherwise, are referred to herein as the Registration Statement and the Prospectus, respectively. The Company may from time to time appoint one or more other persons as agents for soliciting purchases of the Bonds from the Company by entering into distribution agreements substantially similar to this Agreement. The Company will notify you prior to making any such appointment and will notify you of any proposed additions, modifications, amendments, waivers, or changes of any nature with respect to any such distribution agreement. The Company reserves the right to sell, and may accept offers to purchase, Bonds directly on its own behalf. As used herein, Commencement Date shall have the meaning set out in Section 2(d) hereof and Settlement Date shall mean the time and date for the delivery of and payment for Bonds, whether sold under Section 2(b) hereof and the applicable Terms Agreement or under Section 2(a) hereof and the Administrative Procedures set out in Exhibit B hereto. SECTION 1. Representations and Warranties. (a) The Company represents and warrants to you, as of the Commencement Date and each Settlement Date with respect to any applicable Terms Agreement, and as of the times referred to in Sections 6(a) and 6(b) hereof (in each case the Representation Date), as follows: (i) The Registration Statement and the Prospectus, at the time the Registration Statement became effective, complied, and as of the applicable Representation Date will comply, in all material respects with the requirements of the Securities Act and the rules and regulations thereunder (the Regulations) and the Trust Indenture Act. The Registration Statement, at the time the Registration Statement became effective did not, and as of the applicable Representation Date will not, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus, at the time the Registration Statement became effective did not, and as of the applicable Representation Date will not, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or Prospectus made in reliance upon information furnished to the Company in writing by you for use in the Registration Statement or Prospectus or to that part of the Registration Statement which shall constitute the Statement of Eligibility and Qualification under the Trust Indenture Act (Form T-1) of the Trustee. (ii) The documents incorporated by reference in the Prospectus, at the time they were or hereafter are filed with the SEC, complied and will comply in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder (the Exchange Act Regulations), and, when read together and with the other information in the Prospectus, at the time the Registration Statement became, and any amendments thereto become, effective, did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were or are made, not misleading. (iii) Coopers & Lybrand L. L. P., who have certified certain financial statements included or incorporated by reference in the Prospectus, are independent public accountants as required by the Securities Act and the Regulations. (iv) The financial statements of the Company included or incorporated by reference in the Registration Statement will be correct and complete and will truly present the financial position of the Company as at the dates stated therein and the results of the operations of the Company for the periods stated therein. The Company had, on the date of the latest financial statements included or incorporated by reference in the Registration Statement, no material liabilities or obligations, fixed or contingent, other than those disclosed in the Prospectus or such financial statements, and since that date the Company has not incurred any material liabilities or obligations still outstanding, fixed or contingent, other than (i) in the ordinary course of business, (ii) as a result of transactions disclosed in the Prospectus, or (iii) short-term borrowings which result in short-term note indebtedness of not exceeding, in the aggregate at any one time outstanding, the limitations then authorized for the Company by the SEC under the Public Utility Holding Company Act of 1935 (the 1935 Act). Since the date of the latest financial statements included or incorporated by reference in the Registration Statement, there has not been any material adverse change in the financial condition of the Company not disclosed in the Prospectus. Except as disclosed in said Prospectus, there are no proceedings at law or in equity or before any Federal or state commission or other public authority the result of which might have a material adverse effect upon the financial condition of the Company. (v) The consummation of the transactions herein contemplated and the performance by the Company of the terms of this Distribution Agreement and each applicable Terms Agreement will not violate any of the terms, conditions, or provisions of, or constitute a default under, any franchise, indenture, or other contract or agreement to which the Company is now a party or by which the Company or its property may be bound or affected, or the Company's articles of organization, by-laws, or preferred stock provisions, or any order of any court or administrative agency by which the Company is bound. (vi) The issue and sale of the Bonds are solely for the purpose of financing the business of the Company. (b) Any certificate signed by any officer of the Company and delivered to you or to your counsel in connection with an offering of Bonds shall be deemed a representation and warranty of and by the Company to you as to the matters covered thereby. SECTION 2. Solicitations as Agent; Purchases as Principal. (a) Solicitations as Agent. On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, you agree, as agent of the Company to use your reasonable best efforts to solicit offers to purchase the Bonds upon the terms and conditions set forth in the Prospectus. You are hereinafter sometimes referred to, in your capacity as agent, as the Agent. The Company reserves the right, in its sole discretion, to suspend solicitation of purchases of the Bonds commencing at any time for any period of time or permanently. Upon receipt of instructions from the Company, you will forthwith suspend solicitation of purchases from the Company until such time as the Company has advised you that such solicitation may be resumed. The Company agrees to pay you a commission, in the form of a discount, equal to the percentage of the principal amount of each Bond sold by the Company as a result of a solicitation made by you as set forth in Schedule A hereto. As Agent, you are authorized to solicit orders for the Bonds only in denominations of $1,000 or any integral multiple thereof. You shall communicate to the Company, orally or in writing, each reasonable offer to purchase Bonds received by you as Agent. The Company shall have the sole right to accept offers to purchase the Bonds and may reject any such offer in whole or in part. You shall have the right, in your discretion reasonably exercised, to reject any offer to purchase the Bonds received by you in whole or in part, and any such rejection shall not be deemed a breach of your agreement contained herein. The Company reserves the right to sell, and may solicit and accept offers to purchase, Bonds directly on its own behalf, and, in the case of any such sale not resulting from a solicitation made by you, no commission will be payable with respect to such sale. (b) Purchases as Principal. Each sale of Bonds to you as principal shall be made in accordance with the terms of this Agreement and a separate agreement which will provide for the sale of such Bonds to, and the purchase by, you. Each such separate agreement (which shall be substantially in the form of Exhibit A hereto and which may take the form of an exchange of any standard form of written telecommunication between you and the Company) is herein referred to as a Terms Agreement. Your commitment to purchase Bonds pursuant to any Terms Agreement shall be deemed to have been made on the basis of the representations and warranties of the Company herein contained and shall be subject to the terms and conditions herein set forth. Each Terms Agreement shall specify the principal amount of Bonds to be purchased by you pursuant thereto, the price to be paid to the Company for such Bonds, the initial public offering price, if any, at which the Bonds are proposed to be reoffered, the Settlement Date, the place of delivery of and payment for such Bonds, and any other particular terms of the Bonds. Such Terms Agreement shall also specify any requirements for opinions of counsel, letters from Coopers & Lybrand L. L. P., and certificates of officers of the Company pursuant to Section 5 hereof. (c) Procedures. Procedural details relating to the issue and delivery of Bonds, and solicitation of offers to purchase Bonds, and the payment in each case therefor, shall be as set forth in the Administrative Procedures attached hereto as Exhibit B (the Procedures). You and the Company agree to perform the respective duties and obligations specifically provided to be performed by each of us herein and in the Procedures, as amended from time to time. The Procedures may be amended only by written agreement of you and the Company. (d) Delivery. The documents required to be delivered by Section 5 hereof shall be delivered at the office of Peabody & Arnold, counsel for State Street Bank and Trust Company, on the date hereof, or at such other time as you and the Company may agree upon in writing, which in no event shall be later than the time at which you commence solicitation of purchases of Bonds hereunder. Such time and date are herein called the Commencement Date. SECTION 3. Covenants of the Company. The Company covenants with you as follows: (a) If, at any time when the Prospectus is required by the Securities Act to be delivered in connection with sales of the Bonds, any event shall occur or condition exist as a result of which it is necessary, in the reasonable opinion of your counsel or counsel for the Company, to further amend or supplement the Prospectus in order that the Prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in the reasonable opinion of either such counsel, at any such time to amend or supplement the Registration Statement or the Prospectus in order to comply with the requirements of the Securities Act or the Regulations, immediate notice shall be given, and confirmed in writing, to you to cease the solicitation of offers to purchase the Bonds in your capacity as Agent and to cease sales of any Bonds you may then own as principal, and the Company will promptly prepare and file with the SEC such amendment or supplement, whether by filing documents pursuant to the Exchange Act or the Securities Act or otherwise, as may be necessary to correct such untrue statement or omission or to make the Registration Statement comply with such requirements. (b) On or prior to the date on which there shall be released to the general public interim financial statement information related to the Company with respect to each of the first three quarters of any fiscal year or preliminary financial statement information with respect to any fiscal year, the Company shall furnish such information to you, confirmed in writing, and shall cause the Prospectus to be amended or supplemented to include or incorporate by reference full or capsule financial information with respect to the results of operations of the Company for the period between the end of the preceding fiscal year and the end of such quarter or for such fiscal year, as the case may be, and corresponding information for the comparable period of the preceding fiscal year, as well as such other information and explanations as shall be necessary for an understanding of such financial information or as shall be required by the Securities Act or the Regulations; provided, however, that if on the date of such release you shall have suspended solicitation of purchases of the Bonds in your capacity as Agent pursuant to a request from the Company and shall not then hold any Bonds as principal, the Company shall not be obligated so to amend or supplement the Prospectus until such time as the Company shall determine that solicitation of purchases of the Bonds should be resumed or shall subsequently enter into a new Terms Agreement with you. (c) On or prior to the date on which there shall be released to the general public financial information included in or derived from the audited financial statements of the Company for the preceding fiscal year, the Company shall cause the Registration Statement and the Prospectus to be amended, whether by the filing of documents pursuant to the Exchange Act or the Securities Act or otherwise, to include or incorporate by reference such audited financial statements and the report or reports, and consent or consents to such inclusion or incorporation by reference, of the independent accountants with respect thereto, as well as such other information and explanations as shall be necessary for an understanding of such financial statements or as shall be required by the Securities Act or the Regulations; provided, however, that if on the date of such release you shall have suspended solicitation of purchases of the Bonds in your capacity as Agent pursuant to a request from the Company, and shall not then hold any Bonds as principal, the Company shall not be obligated so to amend or supplement the Prospectus until such time as the Company shall determine that solicitation of purchases of the Bonds should be resumed or shall subsequently enter into a new Terms Agreement with you. (d) The Company will make generally available to its security holders as soon as practicable, but not later than 18 months after the effective date of the Registration Statement and of each post-effective amendment thereto and after the date of each Terms Agreement, an earnings statement of the Company (which need not be audited) complying with Section 11(a) of the Securities Act and the Regulations (including, at the option of the Company, Rule 158 under the Act). (e) The Company will give to you notice of its intention to file any amendment to the Registration Statement or any amendment or supplement to the Prospectus, whether by the filing of documents pursuant to the Exchange Act or the Securities Act or otherwise (other than by the filing of an amendment or supplement relating solely to the terms of an issue of Bonds, a change in the principal amount of Bonds remaining to be sold, or similar changes) and will furnish your counsel with copies of any such amendment or supplement or other documents proposed to be filed, other than a current report on Form 8-K, a reasonable time in advance of filing, and will afford your counsel a reasonable opportunity to examine such amendment or supplement or other document and to make objections of substance thereto. (f) The Company will advise you immediately, (i) of the effectiveness of any amendment to the Registration Statement, (ii) of the filing with the SEC of any supplement to the Prospectus or any document to be filed pursuant to the Exchange Act or the Securities Act which will be incorporated by reference in the Prospectus, (iii) of the receipt of any comments from the SEC with respect to the Registration Statement or the Prospectus, (iv) of any request by the SEC for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, (v) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, (vi) of the issuance by the Massachusetts Department of Public Utilities (MDPU) of any order altering, suspending, supplementing, or otherwise affecting any of its order permitting the issuance and sale of the Bonds, (vii) of any action by the SEC which has the effect of eliminating the exemption from the requirement of obtaining an order under the 1935 Act pursuant to Rule 52 promulgated thereunder, and (viii) of the commencement of any litigation in connection with the Bonds against the Company or any of its directors or any signer of the Registration Statement. (g) The Company will promptly deliver to you a certified copy of the Registration Statement, as originally filed, and of all amendments thereto heretofore or hereafter made, including a copy of each consent included or incorporated by reference therein or filed as an exhibit thereto (but excluding any other exhibit thereto unless specifically requested by you) all to the extent not previously delivered. The Company will deliver to you in New York or Boston, as requested, as many unsigned copies of the Prospectus (as supplemented or amended, if the Company shall have made any supplements or amendments thereto) and any documents incorporated by reference therein as you may reasonably request so long as you are required to deliver a Prospectus in connection with the sale or solicitation of offers to purchase the Bonds. (h) The Company will furnish to you, at the earliest time the Company makes the same available to others, copies of its annual reports and other financial reports furnished or made available to the public generally. (i) The Company will endeavor, in cooperation with you, to qualify the Bonds for offering and sale under the applicable securities laws of such states and other jurisdictions of the United States as you may designate, and will maintain such qualifications in effect for as long as may be required for the distribution of the Bonds; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation in any jurisdiction in which it is not so qualified. The Company will file such statements and reports as may be required by the laws of each jurisdiction in which the Bonds have been qualified as above provided. (j) The Company, during the period when the Prospectus is required to be delivered under the Securities Act, will file promptly all documents required to be filed with the SEC pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act. (k) Between the date of any Terms Agreement and the Settlement Date with respect to such Terms Agreement, the Company will not, without your prior consent, offer or sell, or enter into any agreement to sell, any debt securities of the Company (other than the Bonds) of the same or substantially similar maturity to the Bonds, except as may otherwise be provided in any such Terms Agreement. SECTION 4. Payment of Expenses. The Company covenants and agrees with you that the Company will pay or cause to be paid expenses incident to its performance of its obligations under this Agreement, including the following: (i) the preparation and filing of the Registration Statement and all amendments thereto, (ii) the preparation, issuance, and delivery of the Bonds if in certificated form, (iii) the fees and disbursements of the Company's accountants and of the Trustee and its counsel, (iv) the qualification of the Bonds under securities laws in accordance with the provisions of Section 3(i), including filing fees and the reasonable fees and disbursements of your counsel in connection therewith and in connection with the preparation of any Blue Sky Survey and any Legal Investment Survey, (v) the printing and delivery to you in quantities as hereinabove stated of copies of the Registration Statement and all amendments thereto, and of the Prospectus and any amendments or supplements thereto, (vi) the printing and delivery to you of copies of the Indenture and any Blue Sky Survey and any Legal Investment Survey, (vii) any fees charged by rating agencies for the rating of the Bonds, (viii) the fees and expenses, if any, incurred with respect to any filing with the National Association of Securities Dealers, Inc., and (ix) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided in this subsection. The Company shall also reimburse you [the Agents] for the reasonable fees and disbursements of your counsel [for the Agents] and any out-of-pocket expenses, including advertising expenses, incurred with the approval of the Company. SECTION 5. Conditions of Obligations. Your obligations to solicit offers to purchase the Bonds as agent of the Company and your obligations to purchase Bonds pursuant to any Terms Agreement will be subject to the accuracy of the representations and warranties on the part of the Company herein, to the accuracy of the statements of the Company's officers made in any certificate furnished pursuant to the provisions hereof, to the performance and observance by the Company of all covenants and agreements herein contained on its part to be performed and observed and to the following additional conditions precedent: (a) Prior to the Commencement Date, the Indenture shall have been qualified under the Trust Indenture Act; there shall have been issued an order of the MDPU, to the extent that it has jurisdiction, permitting the issuance and sale of the Bonds, and at such time and at each Settlement Date with respect to any applicable Terms Agreement such order shall not contain any provision which, in your opinion or the opinion of the Company, is unduly burdensome to the Company. (b) At the Commencement Date and at each Settlement Date with respect to any applicable Terms Agreement, if called for by such Terms Agreement, you shall have received: (i) The opinion, dated as of such date, of Robert King Wulff, Esquire, and/or Kirk L. Ramsauer, Esquire, Counsel for the Company, in form and substance satisfactory to you and your counsel, to the effect that: (A) The Company is a corporation validly organized and duly existing under the laws of The Commonwealth of Massachusetts, has the corporate power to transact the electric business in which it is now engaged, and has franchises adequate for carrying on such business. (B) This Agreement (and, if the opinion is being given pursuant to Section 6(c) hereof on account of the Company having entered into a Terms Agreement, the applicable Terms Agreement) has been duly authorized, executed, and delivered by the Company. (C) The Company had corporate power proper and adequate for making the Indenture which was duly executed and delivered in accordance with proper authority from the stockholders and directors of the Company. (D) The Supplemental Indenture, including Schedule A thereto, contains a correct and adequate description of the real estate, rights or interests in real estate, and fixed property of the Company acquired up to __________, and not included in the Original Indenture or the previous supplemental indentures, and then owned of record, except for the properties expressly excluded from the Indenture. (E) All filings and recordings of or in respect of the Indenture have been duly made where such filings and recordings are necessary for the preservation or protection of the lien thereof, and the Indenture is a valid, binding, and enforceable instrument subject to laws of general application affecting the rights and remedies of mortgagees and creditors. (F) The Company has corporate power proper and adequate for the execution and issuance of the Bonds under the Indenture in the aggregate principal amount of $ , and, in accordance with due authorization from the stockholders and directors of the Company, when executed and certified as specified in the Indenture and delivered against payment therefor in accordance with this Agreement, will be duly issued and valid and binding obligations of the Company and entitled to the benefits and security of the Indenture. (G) The Bonds are secured by a direct first mortgage lien on substantially all the properties and franchises now owned by the Company, subject to the property specifically excepted in the granting clauses of, and to the liens permitted by, the Indenture, including the prior lien of the Trustee for compensation, expenses, and liabilities; and, except as disclosed in the Prospectus, there is no existing indebtedness secured by lien on the property securing such Bonds ranking prior to or on a parity with the lien securing the Bonds. (H) The property specifically described as mortgaged property in the Indenture constitutes substantially all of the property owned by the Company and used by, or useful to, it in its business, except for the property expressly excepted from the Indenture. None of the real estate and rights in real estate described in the schedules to the Indenture and which constitute the principal properties of the Company is excluded from the lien of the Indenture by virtue of the provisions of clause (c) of the paragraph in the Original Indenture beginning "But Specifically Reserving, Excepting and Excluding," and as to the remainder of the properties described in said schedules the exclusions, if any, by virtue of said clause (c) are minor. (I) The principal substations of the Company are in general on land owned by the Company, the balance being upon land of others pursuant to lease or other arrangements. The electric lines and related equipment of the Company are in general on land of others, being in substantial part located upon, over, or under public streets or highways and in part upon, over, or under private ways or other property not owned by the Company, such occupation of private property being in general pursuant to easements, licenses, or permits from owners thereof, but without examination of titles, or pursuant to long user, a majority of the poles being owned jointly with others, principally telephone companies. (J) With respect to the issue and sale of the Bonds, an appropriate order has been issued by the MDPU, to the extent it has jurisdiction, authorizing the issue and sale of the Bonds; the Company is exempted by Rule 52 under the 1935 Act from the requirement of an order of the SEC; the Indenture has been qualified under the Trust Indenture Act of 1939; the Registration Statement has become effective under the Securities Act; said order and said Registration Statement remain, to the best of such counsel's knowledge, in effect at this date; and no other approval, consent, or action of any governmental or regulatory authority is required for the issue and sale of the Bonds or the carrying out of the provisions of this Agreement (except that such counsel need express no opinion concerning the applicability of the blue-sky or securities laws of the several states in connection with sales by you and others of the Bonds). (K) The statements upon such counsel's authority made or incorporated by reference in the Registration Statement and in the Prospectus, relating to the Bonds are correct; the Registration Statement and the Prospectus, including all documents incorporated by reference therein in accordance with the requirements of Form S-3 under the Securities Act (except for the financial statements contained or incorporated by reference therein, as to which such counsel need express no opinion), comply as to form in all material respects with the relevant requirements of the Securities Act and the Exchange Act, as amended, and of the applicable rules, regulations, and releases of the SEC thereunder; and the Bonds conform to the description thereof in the Registration Statement and Prospectus. (L) Nothing has come to the attention of such counsel which leads them to believe that either the Registration Statement, or the documents incorporated by reference therein, contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus, as amended or supplemented at the Commencement Date or said Settlement Date, as the case may be, contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading. (ii) The opinion of Milbank, Tweed, Hadley & McCloy, counsel to the Agent, with respect to the validity of the Indenture, the Bonds, the Registration Statement, the Prospectus, and other related matters as you may reasonably request. (c) At the Commencement Date and at each Settlement Date with respect to any Terms Agreement, (i) no stop order suspending the effectiveness of the Registration Statement shall have been entered and be in effect, no proceeding for that purpose shall be pending, and any request on the part of the SEC for amendments or additional information shall have been complied with to its satisfaction; (ii) the order of the MDPU referred to in paragraph (a) of this Section shall remain in force and effect; and (iii) the representations and warranties of the Company herein shall be true and correct; and you shall have received a certificate of an officer of the Company, dated as of the Commencement Date or such Settlement Date, if called for by the applicable Terms Agreement, to such effect to the best of his knowledge, information and belief. (d) At the Commencement Date and at each Settlement Date with respect to any Terms Agreement, if called for by such Terms Agreement, you shall have received from Coopers & Lybrand L. L. P., a letter, dated as of the Commencement Date or such Settlement Date, in form and substance satisfactory to you, to the effect that: (i) They are independent certified public accountants with respect to the Company within the meaning of the Securities Act and the and the applicable published rules and regulations thereunder; (ii) In their opinion the financial statements and financial schedules (included or incorporated by reference in the Registration Statement) examined by them as stated in their report (incorporated by reference in the Registration Statement) comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Exchange Act and of the published rules and regulations thereunder; (iii) On the basis of reading the minutes of the meetings of the stockholders and the Board of Directors of the Company held during any period subsequent to 199 , and not covered by the financial statements referred to in paragraph (ii) of this clause, as set forth in the minute books through a specified date not more than five business days prior to the date of their letter, a reading of the unaudited financial statements of the Company included or incorporated by reference in the Registration Statement, and inquiries of officials of the Company who have responsibility for financial and accounting matters (which procedures do not constitute an examination made in accordance with generally accepted standards), they agree that if any unaudited amounts of total operating revenue and net income are set forth or incorporated by reference in the Registration Statement, including amounts set forth under "Selected Financial Information", they agree with the corresponding amounts set forth in the unaudited financial statements for that period. Those officials of the Company who have responsibility for financial and accounting matters stated that: (A) that the unaudited financial statements included or incorporated by reference in the Registration Statement are in conformity as to form in all material respects with the applicable accounting requirements of the Exchange Act and the published rules and regulations thereunder, and that said financial statements are in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements included or incorporated by reference in the Registration Statement; (B) that, during the period from the date of the latest financial statements included or incorporated by reference in the Registration Statement through a specified date not more than five business days prior to the date of their letter, there was no change in the capital stock and no increase in long-term debt of the Company; and (iv) That they have compared the dollar amounts contained in Exhibit 12 (Computation of Ratio of Earnings to Fixed Charges) to the Registration Statement with such dollar amounts derived from the general accounting records of the Company or from schedules prepared by the Company or derived directly from such records or schedules by analysis or computation, and have found such dollar amounts to be in agreement, and have recalculated the ratios contained in Exhibit 12 and have found the calculation of such ratios to be mathematically correct, except in each case as otherwise stated in said letter. (e) At the Commencement Date and at each Settlement Date with respect to any applicable Terms Agreement, your counsel shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the issuance and sale of the Bonds as herein contemplated and related proceedings, or in order to evidence the accuracy and completeness of any of the representations and warranties, or the fulfillment of any of the conditions, herein contained and all proceedings taken by the Company in connection with the issuance and sale of the Bonds as herein contemplated shall be satisfactory in form and substance to you and your counsel. (f) Your obligations to purchase Bonds pursuant to any Terms Agreement will be subject to the following further conditions: (i) the rating assigned by any nationally recognized securities rating agency to any debt securities of the Company as of the date of the applicable Terms Agreement shall not have been lowered since that date; (ii) there shall not have occurred, since the date of the applicable Terms Agreement or since the respective dates as of which information is given in the Registration Statement, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business; (iii) there shall not have come to your attention any facts that would cause you to believe that the Prospectus, at the time it was required to be delivered to a purchaser of the Bonds, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at such time, not misleading; (iv) there shall not have occurred any suspension or limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum prices for trading on such exchange, or any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (v) there shall not have occurred any banking moratorium declared by Federal or New York authorities; or (vi) there shall not have occurred any outbreak or escalation of major hostilities in which the United States is involved, any declaration of war by Congress, or any other substantial national or international calamity or emergency if, in the judgment of the Agent, the effect of such outbreak, escalation, declaration, calamity, or emergency makes it impracticable or inadvisable to proceed. If any condition specified in this Section shall not have been fulfilled, this Agreement (and, at your option, any Terms Agreement) may be terminated by you by notice to the Company at any time at or prior to the applicable Settlement Date, and such termination shall be without liability of any party to any other party, except that the covenants set forth in Section 3(d) hereof, the provisions of Section 4 hereof, the indemnity and contribution agreement set forth in Section 7 hereof, and the provisions of Sections 8 and 12 hereof shall remain in effect. SECTION 6. Additional Covenants of the Company. The Company covenants and agrees that: (a) Each acceptance by it of an offer for the purchase of Bonds, and each sale of Bonds to you pursuant to a Terms Agreement, shall be deemed to be an affirmation that the representations and warranties of the Company contained in this Agreement and in any certificate theretofore delivered to you pursuant hereto are true and correct at the time of such acceptance or sale, as the case may be, and an undertaking that such representations and warranties will be true and correct at the time of delivery to the purchaser or his agent, or you, of the Bond or Bonds relating to such acceptance or sale, as the case may be, as though made at and as of each such time (and it is understood that such representations and warranties shall relate to the Registration Statement and the Prospectus as amended and supplemented to each such time); (b) Within five business days after the Registration Statement or the Prospectus shall be amended or supplemented (other than by an amendment or supplement relating solely to the terms of an issue of Bonds, a change in the principal amount of Bonds remaining to be sold, or similar changes) or there is filed with the SEC any document incorporated by reference into the Prospectus, and, if so indicated in the applicable Terms Agreement, each time the Company sells Bonds to you pursuant to a Terms Agreement, the Company shall furnish or cause to be furnished to you forthwith a certificate in form satisfactory to you to the effect that the statements contained in the certificate referred to in Section 5(c) hereof which were last furnished to you are true and correct at the time of such amendment or supplement or filing or sale, as the case may be, as though made at and as of such time (except that such statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such time) or, in lieu of such certificate, certificates of the same tenor as the certificates referred to in said Section 5(c), modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such certificates; (c) Within five business days after the Registration Statement or the Prospectus shall be amended or supplemented (other than by an amendment or supplement (i) relating solely to the terms of an issue of Bonds, a change in the principal amount of Bonds remaining to be sold, or similar changes or (ii) setting forth or incorporating by reference financial statements or other information as of and for a fiscal quarter) or there is filed with the SEC any document (other than a document setting forth or incorporating by reference only financial statements or other financial information) incorporated by reference into the Prospectus, and, if so indicated in the applicable Terms Agreement, each time the Company sells Bonds to you pursuant to a Terms Agreement, the Company shall furnish or cause to be furnished forthwith to you and your counsel a written opinion of Robert King Wulff and/or Kirk L. Ramsauer, Counsel for the Company, or other counsel satisfactory to you, dated the date of delivery of such opinion, in form satisfactory to you, of the same tenor as the opinion referred to in paragraphs (K) and (L) of Section 5(b)(i) hereof and as to such other matters referred to in Section 5(b)(i) hereof as you may request but modified, as necessary, to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such opinion or, in lieu of such opinion, counsel last furnishing such opinion to you shall furnish you with a letter to the effect that you may rely on such last opinion to the same extent as though it was dated the date of such letter authorizing reliance (except that statements in such last opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such letter authorizing reliance); and (d) Within five business days after the filing with the SEC of each of the Company's annual report on Form 10-K, the Company's quarterly reports on Form 10-Q, and any of the Company's current reports on Form 8-K which contain financial information, and each other time that the Registration Statement or the Prospectus shall be amended or supplemented to include additional financial information or there is filed with the SEC any document incorporated by reference into the Prospectus which contains additional financial information or, if so indicated in the applicable Terms Agreement, the Company sells Bonds to you pursuant to a Terms Agreement, the Company shall cause Coopers & Lybrand L. L. P. forthwith to furnish you a letter, dated no earlier than the date of filing of such amendment, supplement or document with the SEC, or the date of such sale, as the case may be, in form satisfactory to you, of the same tenor as the portions of the letter referred to in clauses (i) and (ii) of Section 5(d) hereof but modified to relate to the Registration Statement and Prospectus, as amended and supplemented to the date of such letter, and of the same general tenor as the portions of the letter referred to in clauses (iii) and (iv) of said Section 5(d) with such changes as may be necessary to reflect changes in the financial statements and other information derived from the accounting records of the Company; provided, however, that if the Registration Statement or the Prospectus is amended or supplemented solely to include financial information as of and for a fiscal quarter, Coopers & Lybrand L. L. P. may limit the scope of such letter to the unaudited financial statements included in such amendment or supplement unless any other information included therein of an accounting, financial or statistical nature is of such a nature that, in your reasonable judgment, such letter should cover such other information; provided, further, that with respect to the filing of any of the Company's reports on Form 8-K containing only financial information which does not in any way reflect any material change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, the Company may provide you with a certificate of its Treasurer, Assistant Treasurer, or a principal accounting officer to such effect in lieu of the letter from Coopers & Lybrand L. L. P. referred to above in this paragraph (d). SECTION 7. Indemnification. (a) The Company will indemnify and hold harmless you and each person, if any, who controls you within the meaning of Section 15 of the Securities Act against any loss, claim, or liability, joint or several (including the reasonable cost of investigating or defending any such alleged loss, claim, or liability and reasonable counsel fees incurred in connection therewith), arising by reason of any person acquiring any of the Bonds, on the ground that the Registration Statement or the Prospectus, or any amendment or supplement thereto, includes or included an untrue statement of a material fact or omits or omitted to state a material fact which (in the case of the Registration Statement, or any amendment thereto) is or was required to be stated therein or is or was necessary to make the statements therein not misleading or which (in the case of the Prospectus, or any amendment or supplement thereto) is or was necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission was made in reliance upon written information furnished to the Company by you, for use therein, or unless such statement or omission shall occur in the Statement of Eligibility and Qualification under the Trust Indenture Act (Form T-1) of the Trustee under the Indenture. Upon commencement of any such suit, if you or any controlling person wish to make a claim in respect thereof against the Company under its agreement herein contained, you or such controlling person, as the case may be, shall, within thirty days after the summons or other first legal process giving information of the nature of the claim shall have been served upon you or upon such controlling person (or after he shall have received notice of such service on any designated agent), give notice in writing of such suit to the Company; but failure so to notify the Company shall not relieve it from any liability which it may have to the person against whom such suit is brought, otherwise than on account of its indemnity agreement contained in this paragraph. The Company will be entitled to participate at its own expense in the defense or, if it so elects, to assume the defense of any such suit, and, if the Company elects to assume the defense, the defendant or defendants therein will be entitled to participate in the defense but shall bear the fees and expenses of any additional counsel retained by them, unless the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnity by the Company hereunder shall apply in respect of (i) any Prospectus used at a time not authorized under the Securities Act or this Agreement, (ii) any Prospectus used in unamended or unsupplemented form after the same has been amended or supplemented, provided the Company has supplied such amendment or supplement to you, or (iii) you, or any person controlling you, on account of any loss, claim, or liability arising by reason of any person acquiring any of the Bonds, if a copy of the Prospectus has not been sent or given by you or a securities dealer to such person with or prior to the written confirmation of the sale involved. (b) You will indemnify and hold harmless the Company and each of its officers and directors and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, to the same extent as the Company in the foregoing paragraph (a) agrees to indemnify and hold harmless you, but only with respect to any written information furnished to the Company by you for use in the Prospectus, or any amendment or supplement thereto. If any action shall be brought hereunder against the Company or any such officer, director, or controlling person, you shall have the rights and duties given to the Company by paragraph (a), and the Company or such officer, director, or controlling person shall have the rights and duties given to you by said paragraph. (c) If the indemnification provided for in this Section 7 is unavailable to an indemnified party, each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, or liability, in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand and by you on the other but also the relative fault of the Company on the one hand and of you on the other in connection with the statement or omission that resulted in such loss, claim, or liability, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and you on the other in connection with the sale of the Bonds shall be deemed to be in the same proportion as the total sales price received by the Company from the sale of the Bonds to the date of liability, before deducting expenses, bear to the total discounts or commissions, if any, received by you to the date of such liability. The relative fault of the Company on the one hand and of you on the other shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by you and the parties' relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. SECTION 8. Status of the Agent. In soliciting purchases of the Bonds from the Company, you are acting solely as agent for the Company and not as principal. You will make reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer to purchase Bonds from the Company has been solicited by you and accepted by the Company but you shall not have any liability to the Company in the event any such purchase is not consummated for any reason. SECTION 9. Representations, Warranties and Agreement to Survive Delivery. All representations, warranties and agreements contained in this Agreement or any Terms Agreement, or contained in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of you or any controlling person, or by or on behalf of the Company, and shall survive each delivery of and payment for any of the Bonds. SECTION 10. Termination. This Agreement may be terminated for any reason, at any time by either party hereto upon the giving of 30 days' written notice of such termination to the other party hereto. In the event of any such termination, neither party will have any liability to the other party hereto, except that (i) you shall be entitled to any commissions earned in accordance with the third paragraph of Section 2(a) hereof, (ii) if at the time of termination (A) you shall own any of the Bonds with the intention of reselling them or (B) an offer to purchase any of the Bonds has been accepted by the Company but the time of delivery to the purchaser or his agent of the Bond or Bonds relating thereto has not occurred, the covenants set forth in Sections 3 and 6 hereof shall remain in effect until such Bonds are so resold or delivered, as the case may be, and (iii) the covenant set forth in Section 3(d) hereof, the provisions of Section 4 hereof, the indemnity agreement set forth in Section 7 hereof, and the provisions of Sections 8 and 12 hereof shall remain in effect. SECTION 11. Notices. Any request, consent, notice, or other communication on your behalf shall be given in writing addressed to the Treasurer of the Company at 25 Research Drive, Westborough, Massachusetts 01582, and any notice or other communications by the Company to you shall be given in writing addressed to ___________________. SECTION 12. Parties. This Agreement and any Terms Agreement shall inure to the benefit of and be binding on the Agent and the Company and their respective successors. Nothing expressed or mentioned in this Agreement or any Terms Agreement is intended or shall be construed to give any person, firm, or corporation, other than the parties hereto and their respective successors and the controlling persons, officers, and directors referred to in Section 7, and their heirs and legal representatives, any legal or equitable right, remedy, or claim under or in respect of this Agreement or any Terms Agreement or any provision herein or therein contained. This Agreement and any Terms Agreement and all conditions and provisions hereof and thereof are intended to be for the sole and exclusive benefit of the parties hereto and their respective successors and said controlling persons, officers, directors, and their heirs and legal representatives, and for the benefit of no other person, firm, or corporation. No purchaser of Bonds shall be deemed to be a successor by reason merely of such purchase. SECTION 13. Governing Law. This Agreement and the rights and obligations of the parties created hereby shall be governed by the laws of The Commonwealth of Massachusetts. If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument along with all counterparts will become a binding agreement between you and the Company in accordance with its terms. Very truly yours, MASSACHUSETTS ELECTRIC COMPANY By_________________________________ Name: Title: CONFIRMED AND ACCEPTED, as of the date first above written: _________________________________ By________________________________________ Name: Title: EXHIBIT A MASSACHUSETTS ELECTRIC COMPANY (A Massachusetts corporation) First Mortgage Bonds, Series TERMS AGREEMENT , 199 Massachusetts Electric Company 25 Research Drive Westborough, Massachusetts 01582 Attention: Treasurer Re: Distribution Agreement dated __________,19__ Subject to the terms and conditions of the Distribution Agreement dated __________, 19__ between Massachusetts Electric Company (the Company) and the undersigned, the undersigned agrees to purchase the following Bonds: $ Original Issue Date: Principal Amount: Purchase Price: % Original Issue Discount, if any: Maturity Date: Interest Rate: % Redemption Provisions: Method of and Specified Funds for Payment of Purchase Price: [By certified or official bank check or checks, payable to the order of the Company in Boston Federal Reserve Bank (same day) Funds.] [By wire to a bank account specified by the Company in immediately available funds.] Settlement Date: Exceptions, if any, to Section 3(k) of the Distribution Agreement: [The following documents referred to in the Distribution Agreement shall be delivered as a condition to the Closing: [The certificate referred to in Section [5(c)][6(b)].] [The opinion referred to in Section [5(b)(i)][6(c)].] [The opinion referred to in Section 5(b)(ii).] [The accountants' letter referred to in Section [5(d)][6(d)].] Syndicate Provisions: [Set forth any provisions relating to underwriters' default and step-up of amounts to be purchased by underwriters acting with [Agent]]. [NAME OF AGENT] By_________________________________ Name: Title: Accepted: MASSACHUSETTS ELECTRIC COMPANY By________________________________________ Name: Title: Schedule A Medium Term Note Programs ------------------------- Fee Schedule ------------ EXHIBIT B MASSACHUSETTS ELECTRIC COMPANY First Mortgage Bonds, Series Administrative Procedures First Mortgage Bonds, Series (the Bonds) in the aggregate principal amount of up to $__________ are to be offered from time to time by Massachusetts Electric Company (the Company). _____________________ as agent (the Agent) has agreed to use its reasonable best efforts to solicit purchases of the Bonds directly from the Company, and may also purchase Bonds, as principal, for resale. The Bonds are being offered and sold pursuant to a Distribution Agreement between the Company and the Agent, dated __________ (the Distribution Agreement). The Bonds have been registered with the Securities and Exchange Commission (the SEC). The Bonds will be issued pursuant to an indenture supplemental to the First Mortgage Indenture and Deed of Trust dated as of July 1, 1949 (the Indenture) between the Company and State Street Bank and Trust Company (formerly Second Bank - State Street Trust Company, successor to The Second National Bank of Boston), as trustee (in its capacity as trustee under the Indenture and otherwise, referred to herein as State Street). Each Bond will be represented by either a Global Security (as defined hereinafter) delivered to State Street, as agent for the Depository Trust Company (DTC), and recorded in the book-entry system maintained by DTC (a Book-Entry Bond) or a certificate delivered to the holder thereof or a person designated by such holder (a Certificated Bond). In the event that Book-Entry certificates are to be delivered to other depositaries or their agents, the administrative procedures will be appropriately amended or supplemented at that time. An owner of a Book-Entry Bond will not be entitled to receive a certificate representing such Bond. Book-Entry Bonds will be issued in accordance with the administrative procedures set forth in Part I hereof and Certificated Bonds will be issued in accordance with the administrative procedures set forth in Part II hereof. To the extent the procedures set forth below conflict with the provisions of the Bonds, the Indenture, or the Distribution Agreement, the relevant provisions of the Bonds, the Indenture, and the Distribution Agreement shall control. Unless otherwise defined herein, terms defined in the Indenture shall be used herein as therein defined. PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY BONDS In connection with the qualification of the Book-Entry Bonds for eligibility in the book-entry system maintained by DTC, State Street will perform the custodial, document control, and administrative functions described below, in accordance with its respective obligations under a Letter of Representations from the Company and State Street to DTC, dated as of __________, and a Medium-Term Note Certificate Agreement between State Street and DTC, dated as of August 21, 1989, and its obligations as a participant in DTC, including DTC's Same-Day Funds Settlement System (SDFS). Issuance: On any date of settlement (as defined under Settlement below) for one or more Book-Entry Bonds, the Company will issue a single global security in fully registered form without coupons (a Global Security) representing up to $__________ principal amount of all such Bonds that have the same maturity, interest rate, redemption, and, in the case of original issue discount Bonds, original issue discount provisions (collectively, the Terms). Each Global Security will be dated and issued as of the date of its certification by State Street. No Global Security will represent any Certificated Bond. CUSIP The Company has arranged with the CUSIP Numbers: Service Bureau of Standard & Poor's Corporation (the CUSIP Service Bureau) for the reservation of one series of CUSIP numbers (including tranche numbers). This series consists of approximately 900 CUSIP numbers and relates to Global Securities representing the Book-Entry Bonds. The Company has delivered to State Street and to DTC a written list of the numbers in such series. State Street will assign CUSIP numbers to Global Securities as described below under Settlement Procedure "B". DTC will notify the CUSIP Service Bureau periodically of the CUSIP numbers that State Street has assigned. At any time when fewer than 100 of the reserved CUSIP numbers of the series remain unassigned, and if it deems necessary, the Company will reserve additional CUSIP numbers for assignment to Global Securities. Upon obtaining such additional CUSIP numbers, the Company shall deliver a list thereof to State Street and DTC. Registration: Each Global Security will be registered in the name of Cede & Co., as nominee for DTC, on the transfer registry maintained under the Indenture. The beneficial owner of a Book- Entry Bond (or one or more indirect participants in DTC designated by such owner) will designate one or more participants in DTC (with respect to such Bond, the Participant) to act as agent or agents for such owner in connection with the book-entry system maintained by DTC, and DTC will record in book-entry form, in accordance with instructions provided by such Participant, a credit balance with respect to such Bond in the account of such Participant. The ownership interest of such beneficial owner in such Bond will be recorded through the records of such Participant or through the separate records of such Participant and one or more indirect participants in DTC. Transfers: Transfers of a Book-Entry Bond will be accomplished by book entries made by DTC and, in turn, by the Participant (and in certain cases, one or more indirect participants in DTC) acting on behalf of beneficial transferees and transferors of such Bond. Consolidations: State Street may deliver to DTC and the CUSIP Service Bureau at any time, but at least 30 days before the consolidation is to be effective, a written notice of consolidation specifying (i) the CUSIP numbers of two or more outstanding Global Securities that represent Book-Entry Bonds having the same Terms and for which interest has been paid to the same date, (ii) a date, occurring at least thirty days before the next Interest Payment Date for such Book-Entry Bonds, on which such Global Securities shall be exchanged for a single replacement Global Security, and (iii) a new CUSIP number to be assigned to such replacement Global Security. Upon receipt of such a notice, DTC will send to each Participant (including State Street) a written reorganization notice to the effect that such exchange will occur on such date. Prior to the specified exchange date, State Street will deliver to the CUSIP Service Bureau a written notice setting forth such exchange date and the new CUSIP number and stating that, as of such exchange date, the CUSIP numbers of the Global Securities to be exchanged will no longer be valid. On the specified exchange date, State Street will exchange such Global Securities for a single Global Security bearing the new CUSIP number, and the CUSIP numbers of the exchanged Global Securities will be cancelled and not immediately reassigned. Denominations: Book-Entry Bonds will be issued in principal amounts of $1,000 or any integral multiple thereof. Interest: Each Book-Entry Bond will bear interest from the date as of which the Global Security representing such Book-Entry Bond was first certified, at the annual rate stated on the face thereof, payable on __________ and __________ of each year (the Interest Payment Dates) and at maturity or, upon earlier redemption, the date of redemption. Each payment of interest shall include interest accrued to but excluding the Interest Payment Date. Calculation of Interest (including payments for partial Interest: periods) will be calculated on the basis of a 360-day year of twelve 30-day months. Interest will not accrue on the 31st day of any month. Payments of Promptly after the close of business on _____ Interest: or __________ (the Record Dates), State Street will deliver to the Company and DTC a written notice specifying by CUSIP number the amount of interest to be paid on each Global Security on the following Interest Payment Date (other than an Interest Payment Date coinciding with a maturity date or a redemption date) and the total of such amounts. Standard & Poor's Corporation will use the information received in the pending deposit message described under Settlement Procedure "C" below in order to include the amount of any interest payment and certain other information regarding the related Global Security in the appropriate daily bond report published by Standard & Poor's Corporation. DTC will confirm the amount payable on each Global Security on such Interest Payment Date by reference to the appropriate bond reports published by Standard & Poor's Corporation. The Company will pay to State Street the total amount of interest due on such Interest Payment Date (other than on a maturity date or a redemption date), and State Street will pay such amount to DTC at the times and in the manner set forth below. If any Interest Payment Date for a Book-Entry Bond is not a Business Day, the payment due on such day shall be made on the next succeeding Business Day and no interest shall accrue on such payment for the period from and after such Interest Payment Date. On each Interest Payment Date, interest payments shall be made to DTC in same day funds in accordance with existing arrangements between State Street and DTC. Thereafter, on each such date, DTC will pay, in accordance with its SDFS operating procedures then in effect, such amounts in funds available for immediate use to the respective Participants in whose names the Book-Entry Bonds represented by such Global Securities are recorded in the book- entry system maintained by DTC. Neither the Company, nor State Street, nor the Agent shall have any direct responsibility or liability for the payment by DTC to such Participants of the principal of and interest on the Book-Entry Bonds. The amount of any taxes required under applicable law to be withheld from any interest payment on a Book-Entry Bond will be determined and withheld by the Participant, indirect participant in DTC, or other person responsible for forwarding payments and materials directly to the beneficial owner of such Bond. The first payment of interest on any Bond originally issued between a Record Date and an Interest Payment Date will be made on the Interest Payment Date following the next succeeding Record Date. Payment at Maturity On or about the first Business Day of each and Redemption: month, State Street will deliver to the Company and DTC a written list of principal and interest to be paid on each Global Security maturing either on a maturity date or any redemption date in the following month. The Company and DTC will confirm with State Street the amounts of such principal and interest payments with respect to each such Global Security on or about the fifth Business Day preceding any such maturity date or redemption date, as the case may be, of such Global Security. The Company will pay to State Street the principal amount of such Global Security, together with interest due on such maturity date or redemption date. State Street will pay such amounts to DTC at the times and in the manner set forth below. If the maturity date or the redemption date of a Global Security representing Book-Entry Bonds is not a Business Day, the payment due on such day shall be made on the next succeeding Business Day and no interest shall accrue on such payment for the period from and after such maturity date or the redemption date. Promptly after payment to DTC of the principal and interest due on the maturity date or the redemption date of such Global Security and its return by DTC, State Street will cancel such Global Security in accordance with the terms of the Indenture. The total amount of any principal and interest due on Global Securities on any Interest Payment Date or on the maturity date or a redemption date shall be paid by the Company to State Street in immediately available funds for use by State Street on such date. Prior to 10 A.M. (New York City time) on each maturity date or redemption date or as soon as possible thereafter, State Street will pay by separate wire transfer (using Fedwire message entry instructions in a form previously agreed to with DTC) to an account at the Federal Reserve Bank of New York previously agreed to with DTC, in funds available for immediate use by DTC, each payment of principal (together with interest thereon) due on Global Securities on any maturity date or redemption date. Rate Setting and The Company and the Agent will discuss from Posting: time to time the aggregate principal amount of, the issuance price of, and the interest rates to be borne by, Bonds that may be sold as a result of the solicitation of offers by the Agents. If the Company decides to set prices of, and rates borne by, any Bonds in respect of which the Agent is to solicit offers (the setting of such prices and rates to be referred to herein as "posting") or if the Company decides to change prices or rates previously posted, it will promptly advise the Agent of the prices and rates to be posted. The Bonds will be sold at a price, exclusive of accrued interest, which will be not less than 95% nor more than 100% of the principal amount and at an interest rate which will be a multiple of 1/8 of 1%. Any discount will not be greater than 1/4 of 1% for each year to maturity. Acceptance and The Company shall have the sole right to Rejection of accept offers to purchase Bonds from the Offers: Company and may reject any such offer in whole or in part. The Agent shall communicate to the Company, orally or in writing, each reasonable offer to purchase Bonds from the Company received by it, other than those rejected by such Agent. The Agent shall have the right, in its discretion reasonably exercised, to reject any offer in whole or in part. Settlement: The receipt of immediately available funds by the Company in payment for a Book-Entry Bond and the certification and issuance of the Global Security representing such Bond shall, with respect to such Bond, constitute settlement. The date of such settlement is herein referred to as the Settlement Date. All offers accepted by the Company will be settled on the fifth business day next succeeding the date of acceptance unless otherwise agreed by the purchaser and the Company. The Settlement Date shall be specified upon acceptance of an offer. Settlement In the event of a purchase of Bonds by the Procedures: Agent, as principal, appropriate settlement details will be set forth in the applicable Terms Agreement to be entered into between the Agent and the Company pursuant to the Distribution Agreement. Settlement Procedures with regard to each Book-Entry Bond sold by the Agent, as agent, shall be as follows: A. The Agent will advise the Company of the following settlement information: 1. Principal Amount. 2. Price of the Bonds. 3. Original Issue Discount, if any. 4. Maturity Date. 5. Interest Rate. 6. Redemption Provisions. 7. Agent's Commission. 8. Settlement Date. B. The Company will notify State Street by telephone of the information set forth in Settlement Procedure "A" above and the original issue date of the Bond. State Street will assign a CUSIP number to the Global Security representing such Bond. State Street will also notify the Company and the Agent of such CUSIP number by telephone as soon as practicable. C. State Street will enter a pending deposit message through DTC's Participant Terminal System, providing the following settlement information to DTC, such information will be routed to Standard & Poor's Corporation through DTC: 1. The information set forth in Settlement Procedure "A". 2. Initial Interest Payment Date for such Bond, number of days by which such date succeeds the related Record Date and amount of interest payable on such Interest Payment Date. 3. CUSIP number of the Global Security representing such Bond. 4. Whether such Global Security will represent any other Book-Entry Bond (to the extent known at such time). D. The Company shall telecopy (promptly followed by the original) to State Street the certificate as to form relating to the Global Security representing such Bonds. As soon as practicable thereafter, the Company will provide State Street with any additional information set forth above. E. The Company will prepare the Global Security in the form set forth in the Indenture, with specific terms as pre- approved by the Company, the Agent, and State Street. F. The Company will cause State Street to issue, certify, and deliver the Global Security representing such Bonds. State Street will hold the Global Security as DTC's agent. G. DTC will credit such Bond to the participant account of State Street, acting as DTC's agent, at DTC. H. State Street will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC to (i) debit such Bond to State Street's participant account and credit such Bond to the Agent's participant account and (ii) debit the Agent's settlement account and credit State Street's settlement account for an amount equal to the price of such Bond less the Agent's commission. The entry of such a deliver order shall constitute a representation and warranty by State Street to DTC that (a) the Global Security representing such Book- Entry Bond has been issued and certified and (b) State Street is holding such Global Security pursuant to the Medium- Term Note Certificate Agreement between State Street and DTC. I. The Agent will enter an SDFS deliver order through DTC's Participation Terminal System instructing DTC (i) to debit such Bond to the Agent's participant account and credit such Bond to the participant accounts of the Participant with respect to such Bond and (ii) to debit the settlement accounts of such Participant and credit the settlement account of the Agent for an amount equal to the price of such Bond. J. State Street will transfer to the account of the Company maintained at the Bank of Boston in Boston, Massachusetts in immediately available funds in the amount transferred to State Street in accordance with Settlement Procedure "H". K. The Agent will confirm the purchase of such Bond to the purchaser either by transmitting to the Participants with respect to such Bond a confirmation order or orders through DTC's institutional delivery system or by mailing a written confirmation to such purchaser. L. Transfers of funds in accordance with SDFS deliver orders described in Settlement Procedures "H" and "I" will be settled in accordance with SDFS operating procedures in effect on the Settlement Date. M. Upon written request by the Company, State Street will send to the Company a statement setting forth the principal amount of the Bonds outstanding as of that date, after giving effect to such transaction and all other orders of which the Company has advised State Street but which have not yet been settled. Settlement Procedures For offers of Book-Entry Bonds solicited Timetable: by the Agent and accepted by the Company, Settlement Procedures "A" through "M" set forth above shall be completed on or before the respective times set forth below: Settlement Procedure Time __________ ____ A 11:00 A.M. on the acceptance date B 12:00 Noon on the acceptance date C 2:00 P.M. on the acceptance date D-E 9:00 A.M. on the Settlement Date F-G 11:00 A.M. on the Settlement Date H-I 2:00 P.M. on the Settlement Date J-K 4:45 P.M. on the Settlement Date L-M 5:00 P.M. on the Settlement Date If a sale is to be settled more than one Business Day after the sale, Settlement Procedures "A", "B" and "C" shall be completed as soon as practicable, but not later than 11:00 A.M., 12:00 Noon and 2:00 P.M., respectively, on the first Business Day after the acceptance date. Settlement Procedures "J" and "L" are subject to extension in accordance with any extension of Fedwire closing deadlines and in the other events specified in the SDFS operating procedures in effect on the Settlement Date. If a sale is to be settled on a date after the fifth Business Day next succeeding the date of acceptance, Settlement Procedures "A" through "C" shall be completed no later than the fifth Business Day immediately preceding the Settlement Date. If settlement of a Book-Entry Bond is rescheduled or cancelled, the Company will instruct State Street to deliver to DTC a cancellation message to such effect by no later than 12:00 Noon on the Business Day immediately preceding the scheduled Settlement Date and State Street will enter such order by 2:00 P.M. through DTC's Participation Terminal System. Failure to If after entry of a deliver order under Settle: Settlement Procedure "H" or "I", a trade does not settle, State Street may deliver to DTC, through DTC's Participant Terminal System, as soon as practicable, a withdrawal message instructing DTC to debit such Bond to State Street's participant account, provided that State Street's participant account contains a principal amount of the Global Security representing such Bond that is at least equal to the principal amount to be debited. If a withdrawal message is processed with respect to all the Book-Entry Bonds represented by a Global Security, State Street will mark such Global Security "cancelled", make appropriate entries in State Street's records and send such cancelled Global Security to the Company. The CUSIP number assigned to such Global Security shall be cancelled and not immediately reassigned. If a withdrawal message is processed with respect to one or more, but not all, of the Book-Entry Bonds represented by a Global Security, State Street will exchange such Global Security for another Global Security, which shall represent the Book-Entry Bonds previously represented by the surrendered Global Security with respect to which a withdrawal message has not been processed and shall bear the CUSIP number of the surrendered Global Security. If the purchase price for any Book-Entry Bond is not timely paid to the Participant with respect to such Bond by the beneficial purchaser thereof (or a person, including an indirect participant in DTC, acting on behalf or such purchaser), such Participant and, in turn, the Agent for such Bond may enter SDFS deliver orders through DTC's Participant Terminal System reversing the orders entered pursuant to Settlement Procedures "I" and "H", respectively. Thereafter, State Street will deliver the withdrawal message and take the related actions described in the preceding paragraph. Notwithstanding the foregoing, upon any failure to settle with respect to a Book- Entry Bond, DTC may take any actions in accordance with its SDFS operating procedures then in effect. In the event of a failure to settle with respect to one or more, but not all, of the Book-Entry Bonds to have been represented by a Global Security, State Street will provide, in accordance with Settlement Procedure "F", for the certification and issuance of a Global Security representing the other Book-Entry Bonds to have been represented by such Global Security and will make appropriate entries in its records. Suspension of Subject to its representations, warranties Solicitation; and covenants contained in the Distribution Amendment or Agreement, the Company may instruct the Agent Supplement: to suspend solicitation of purchases at any time. Upon receipt of such instructions the Agent will forthwith suspend solicitation of purchases from the Company until such time as the Company has advised them that solicitation of purchases may be resumed. If the Company decides to amend or supplement the Registration Statement or the Prospectus relating to the Bonds (other than by the filing of an amendment or supplement relating solely to the terms of an issue of Bonds, a change in the principal amount of Bonds remaining to be sold, or similar changes) it will promptly advise the Agent and State Street and will furnish counsel to the Agent with copies of the proposed amendment or supplement, other than a current report on Form 8-K. In the event that at the time the solicitation of purchases from the Company is suspended there shall be any offers outstanding which have not been settled, the Company will promptly advise the Agent and State Street whether such offers may be settled and whether copies of the Prospectus as theretofore amended and/or supplemented as in effect at the time of the suspension may be delivered in connection with the settlement of such offers. The Company will have the sole responsibility for such decision and for any arrangements which may be made in the event that the Company determines that such offers may not be settled or that copies of such Prospectus may not be so delivered. Preparation of If any offer to purchase a Bond is accepted Pricing Supplement: by or on behalf of the Company, the Company, with the approval of the Agent, will prepare a pricing supplement (a Pricing Supplement) reflecting the terms of such Bond and will arrange to file the Pricing Supplement with the Securities and Exchange Commission in accordance with the applicable paragraph of Rule 424(b) under the Act and will supply at least 10 copies thereof (or additional copies if requested) to the Agent. The Agent will cause a Prospectus and the appropriate Pricing Supplement to accompany or precede each written confirmation of a sale sent to each purchaser or his agent. In each instance that a Pricing Supplement is prepared, the Agent will affix the Pricing Supplement to Prospectuses prior to their use. Outdated Pricing Supplements (other that those retained for files) will be destroyed. State Street not Nothing herein shall be deemed to require to risk own funds: State Street to risk its own funds in connection with any payment to the Company, or the Agent, or the purchaser, it being understood by all parties that payments made by State Street to either the Company, the Agent or the purchaser shall be made only to the extent that funds are provided to State Street for such purpose. Duties of State Street, in its capacity as trustee and State Street: otherwise, undertakes to perform such duties and only such duties as are specifically set forth in these Administrative Procedures and in the Indenture, as they may from time to time be supplemented, and no implied covenants or obligations shall be read into these Administrative Procedures against it. Nothing herein shall diminish any right or immunity that State Street shall have in its capacity as trustee under the Indenture. Advertising Cost: The Company will determine and approve, with the Agent, the amount of advertising, if any, that is appropriate in offering the Bonds. Any advertising expenses which are approved by the Company will be paid by the Company. PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED BONDS Date of Issuance: Each Bond will initially be dated and issued as of the date of its certification by State Street. Registration: Bonds will be issued only in fully registered form. Denominations: Bonds will be issued in principal amounts of $1,000 or any integral multiple thereof. Interest: Each Bond will bear interest from its original issue date, at the annual rate stated on the face thereof, payable on and of each year (the Interest Payment Dates) and at maturity or, upon earlier redemption, the date of redemption. Each payment of interest shall include interest accrued to but excluding the Interest Payment Date. Calculation of Interest: Interest (including payments for partial periods) will be calculated on the basis of a 360-day year of twelve 30-day months. Interest will not accrue on the 31st day of any month. Payments of Interest: Interest will be payable to the person in whose name the Bond is registered at the close of business on or (the Record Dates) next preceding the Interest Payment Date; provided, however, that interest payable on a maturity date or a redemption date will be payable to the person to whom principal shall be payable. State Street, as paying agent, will be responsible for withholding taxes on interest paid as required by law. The first payment of interest on any Bond originally issued between a Record Date and an Interest Payment Date will be made on the Interest Payment Date following the next succeeding Record Date. Payment at Maturity and Upon presentation of each Bond at Redemption: maturity or upon maturity or upon redemption, State Street will pay the principal amount thereof, together with accrued interest due at maturity or the date of such redemption, as the case may be. Such payment shall be made in immediately available funds, provided that the Bond is presented to State Street in time for State Street to make payments in such funds in accordance with its normal procedures. The Company will provide State Street with funds available for immediate use for such purpose. Bonds presented at maturity or upon redemption will be cancelled by State Street as provided in the Indenture. Rate Setting and Posting: The Company and the Agent will discuss from time to time the aggregate principal amount of, the issuance price of, and the interest rates to be borne by, Bonds that may be sold as a result of the solicitation of offers by the Agents. If the Company decides to set prices of, and rates borne by, any Bonds in respect of which the Agent is to solicit offers (the setting of such prices and rates to be referred to herein as "posting") or if the Company decides to change prices or rates previously posted, it will promptly advise the Agent of the prices and rates to be posted. The Bonds will be sold at a price, exclusive of accrued interest, which will be not less than 95% nor more than 100% of the principal amount and at an interest rate which will be a multiple of 1/8 of 1%. Any discount will not be greater than 1/4 of 1% for each year to maturity. Acceptance and The Company shall have the sole Rejection of Offers: right to accept offers to purchase Bonds from the Company and may reject any such offer in whole or in part. The Agent shall communicate to the Company, orally or in writing, each reasonable offer to purchase Bonds from the Company received by it, other than those rejected by such Agent. The Agent shall have the right, in its discretion reasonably exercised, to reject any order in whole or in part. Settlement: The receipt of immediately available funds by the Company in payment for a Bond and the certification and issuance of such Bond shall, with respect to such Bond, constitute settlement. The date of such settlement is herein referred to as the Settlement Date. All offers accepted by the Company will be settled on the fifth business day next succeeding the date of acceptance unless otherwise agreed by the purchaser and the Company. The Settlement Date shall be specified upon acceptance of an offer. Settlement Procedures: In the event of a purchase of Bonds by the Agent, as principal, appropriate settlement details will be set forth in the applicable Terms Agreement to be entered into between the Agent and the Company pursuant to the Distribution Agreement. Settlement Procedures with regard to each Bond sold by the Agent, as agent, shall be as follows: A. The Agent will advise the Company of the following settlement information: 1. Principal Amount. 2. Exact name in which the Bonds are to be registered (Registered Owner). 3. Exact address of the Registered Owner and address for payment of principal and interest. 4. Taxpayer identification number of the Registered Owner (if available). 5. Principal amount of each Bond to be delivered to the Registered Owner. 6. Price of the Bonds. 7. Original Issue Discount, if any. 8. Maturity Date. 9. Interest Rate. 10. Redemption Provisions. 11. Agent's Commission. 12. Settlement Date. B. The Company shall telecopy (promptly followed by the original) to State Street the certificate as to form relating to the Bonds. As soon as practicable thereafter, the Company will provide State Street with any additional information set forth above. C. The Company will prepare the Bonds in the form set forth in the Indenture, with specific terms as pre-approved by the Company, the Agent, and State Street. D. The Company will cause State Street to issue, certify, and deliver Bonds. E. State Street will deliver the Bonds in accordance with the Company's instructions provided in the settlement information (with confirmation) to the Agent against written evidence of receipt by the Agent. F. The Agent will deliver the Bonds (with confirmation) to the purchaser against payment in immediately available funds. G. The Agent will deposit, in funds available for immediate use, an amount equal to the price of the Bond, less the applicable commission, received under Settlement Procedure "F", into the Company's account at Bank of Boston, Boston, Massachusetts. H. The Agent will obtain a written acknowledgement of receipt of the Bonds by the purchaser. I. Upon written request by the Company, State Street will send to the Company a statement setting forth the principal amount of the Bonds outstanding as of that date, after giving effect to such transaction and all other orders of which the Company has advised State Street but which have not yet been settled. Settlement Procedures For offers accepted by the Company, Timetable: Settlement Procedures "A" through "I" set forth above shall be completed on or before the respective times set forth below: Settlement Procedure Time ---------- ---- A 11:00 A.M. on the first Business Day after the acceptance date. B 3:00 P.M. on the first Business Day after the acceptance date. C-E 11:00 A.M. on the Settlement Date. F-I 4:00 P.M. on the Settlement Date. If a sale is to be settled on a date after the fifth Business Day next succeeding the date of acceptance, Settlement Procedures "A" through "B" shall be completed no later than the fifth Business Day immediately preceding the settlement date. Failure to Settle: In the event that a purchaser of a Bond from the Company shall fail to accept delivery of a Bond on the Settlement Date, the Agent will forthwith notify State Street and the Company by telephone, confirmed in writing, of such failure, and return the Bond to State Street. Upon receipt by State Street of the Bond from the Agent, State Street will immediately advise the Company of such receipt and the Company will promptly arrange to credit the account of the Agent in an amount of immediately available funds equal to the amount previously paid by the Agent in respect of the Bond. Such debits and credits will be made on the Settlement Date, if possible, and in any event not later than the business day following the Settlement Date. Upon receipt of the Bond in respect of which the default occurred, State Street will cancel the Bond in accordance with the Indenture. Use of Funds: If after payment for a Bond having been made by the Agent to the Company's account, a failure occurs for any reason other than default by the Agent in the performance of its obligations hereunder or under the Distribution Agreement, the Company will reimburse the Agent on an equitable basis for its loss of the use of the funds during the period when the funds were credited to the account of the Company. If the Agent fails to perform its obligations hereunder or under the Distribution Agreement, which results in the Company's loss of the use of funds, including, without limitation, failure to credit to the Company's account the appropriate amount of the payment of a Bond in funds available for immediate use in accordance with the above specified timetable, the Agent will reimburse the Company on an equitable basis for its loss of the use of the funds resulting from such default by the Agent. Suspension of Subject to its representations, Solicitation; warranties and covenants contained Amendment or in the Distribution Agreement, the Supplement: Company may instruct the Agent to suspend solicitation of purchases at any time. Upon receipt of such instructions the Agent will forthwith suspend solicitation of purchases from the Company until such time as the Company has advised them that solicitation of purchases may be resumed. If the Company decides to amend or supplement the Registration Statement or the Prospectus relating to the Bonds (other than by the filing of an amendment or supplement relating solely to the terms of an issue of Bonds, a change in the principal amount of Bonds remaining to be sold, or similar changes), it will promptly advise the Agent and State Street and will furnish counsel to the Agent with copies of the proposed amendment or supplement, other than a Current Report on Form 8-K. In the event that at the time the solicitation of purchases from the Company is suspended there shall be any offers outstanding which have not been settled, the Company will promptly advise the Agent and State Street whether such offers may be settled and whether copies of the Prospectus as theretofore amended and/or supplemented as in effect at the time of the suspension may be delivered in connection with the settlement of such offers. The Company will have the sole responsibility for such decision and for any arrangements which may be made in the event that the Company determines that such offers may not be settled or that copies of such Prospectus may not be so delivered. Preparation of If any offer to purchase a Bond is Pricing Supplement; accepted by or on behalf of the Delivery of Company, the Company, with the Prospectus: approval of the Agent, will prepare a pricing supplement (a Pricing Supplement) reflecting the terms of such Bond and will arrange to file the Pricing Supplement with the Securities and Exchange Commission in accordance with the applicable paragraph of Rule 424(b) under the Act and will supply at least 10 copies thereof (or additional copies if requested) to the Presenting Agent. The Agent will cause a Prospectus and the appropriate Pricing Supplement to accompany or precede (a) each written confirmation of a sale sent to a purchaser or his agent and (b) each Bond delivered to a customer or his agent. In each instance that a Pricing Supplement is prepared, the Agent will affix the Pricing Supplement to Prospectuses prior to their use. Outdated Pricing Supplements (other than those retained for files) will be destroyed. State Street not to Nothing herein shall be deemed to risk own funds: require State Street to risk its own funds in connection with any payment to the Company, or the Agent, or the purchaser, it being understood by all parties that payments made by State Street to either the Company, the Agent or the purchaser shall be made only to the extent that funds are provided to State Street for such purpose. Duties of State Street: State Street, in its capacity as trustee and otherwise, undertakes to perform such duties and only such duties as are specifically set forth in these Administrative Procedures and in the Indenture, as they may from time to time be supplemented, and no implied covenants or obligations shall be read into these Administrative Procedures against it. Nothing herein shall diminish any right or immunity that State Street shall have in its capacity as trustee under the Indenture. Advertising Cost: The Company will determine and approve, with the Agent, the amount of advertising, if any, that is appropriate in offering the Bonds. Any advertising expenses which are approved by the Company will be paid by the Company. EX-4 6 EXHIBIT 4-C Exhibit 4-C to Form S-3 - ----------------------------------------------------------------- - ----------------------------------------------------------------- MASSACHUSETTS ELECTRIC COMPANY (FORMERLY WORCESTER COUNTY ELECTRIC COMPANY) TO STATE STREET BANK AND TRUST COMPANY (FORMERLY SECOND BANK-STATE STREET TRUST COMPANY SUCCESSOR TO THE SECOND NATIONAL BANK OF BOSTON) TRUSTEE --------------- SUPPLEMENTAL INDENTURE Dated as of --------------- Supplementing FIRST MORTGAGE INDENTURE and DEED OF TRUST To The Second National Bank of Boston, Trustee Dated as of July 1, 1949 --------------- To Secure First Mortgage Bonds --------------- ISSUE First Mortgage Bonds - Series - ----------------------------------------------------------------- - ----------------------------------------------------------------- MASSACHUSETTS ELECTRIC COMPANY SUPPLEMENTAL INDENTURE Dated as of --------------- TABLE OF CONTENTS (Not part of the Indenture) Page CAPTIONS AND RECITALS. . . . . . . . . . . . . . . . . . . . . .1 Form of Series Bond [Face] . . . . . . . . . . . . .3 Form of Trustee's Certificate. . . . . . . . . . . . . .6 Form of Series Bond [Reverse]. . . . . . . . . . . .7 GRANTING CLAUSES . . . . . . . . . . . . . . . . . . . . . . . 10 Recital of Consideration.. . . . . . . . . . . . . . . 10 Grant. . . . . . . . . . . . . . . . . . . . . . . . . 11 Reservations and Exceptions. . . . . . . . . . . . . . 11 Habendum . . . . . . . . . . . . . . . . . . . . . . . 12 Trust Declaration. . . . . . . . . . . . . . . . . . . 12 ARTICLE 1. Covenants Regarding the Trust Estate. . . . . . . . 12 1.01 Covenant against encumbrances. . . . . . . . . . 12 1.02 Covenant of seisin; warranty . . . . . . . . . . 13 ARTICLE 2. Particular Provisions Concerning the Series Bonds13 2.01 Issue of Series Bonds. . . . . . . . . . . . 13 2.02 Form of Bond . . . . . . . . . . . . . . . . . . 14 2.03 Dating and Interest Payments . . . . . . . . . . 14 2.04 Limitations on amount. . . . . . . . . . . . . . 17 2.05 Execution. . . . . . . . . . . . . . . . . . . . 17 2.06 Transfer and exchange, etc.. . . . . . . . . . . 17 2.07 Redemption . . . . . . . . . . . . . . . . . . . 18 2.08 Replacement Fund and "net earnings" definition . 19 2.09 Covenant with respect to section 13.03 of Original Indenture. . . . . . . . . . . . . . 19 ARTICLE 3. Amendment to the Indenture. . . . . . . . . . . . . 20 3.01 Section 3.03 of the Original Indenture . . . . . 20 3.02 Section 3.04 of the Original Indenture . . . . . 20 3.03 Section 3.04 of the Original Indenture . . . . . 21 Page ARTICLE 4. Concerning the Trustee; Defeasance; Miscellaneous Provisions. . . . . . . . . . . 21 4.01 Concerning the Trustee . . . . . . . . . . . . . 21 4.02 Defeasance . . . . . . . . . . . . . . . . . . . 22 4.03 Supplemental to Original Indenture . . . . . . . 22 4.04 No default under Original Indenture; corporate authority . . . . . . . . . . . . . 22 4.05 For benefit of parties and Bondholders only. . . 22 4.06 Approval by Trustee of Bond form . . . . . . . . 22 4.07 Date of Supplemental Indenture . . . . . . . . . 22 4.08 Counterparts . . . . . . . . . . . . . . . . . . 23 4.09 Cover, headings, etc.. . . . . . . . . . . . . . 23 TESTIMONIUM AND EXECUTION. . . . . . . . . . . . . . . . . . . 24 SCHEDULE A . . . . . . . . . . . . . . . . . . . . . . . . . . 25 ACKNOWLEDGMENTS. . . . . . . . . . . . . . . . . . . . . . . . 33 CERTIFICATE OF VOTES . . . . . . . . . . . . . . . . . . . . . 34 SUPPLEMENTAL INDENTURE, dated as of , between MASSACHUSETTS ELECTRIC COMPANY (formerly Worcester County Electric Company and hereinafter generally called the Company), a corporation duly organized and existing under the laws of The Commonwealth of Massachusetts, having its principal place of business and mailing address at 25 Research Drive, Westborough, Massachusetts, and STATE STREET BANK AND TRUST COMPANY (formerly Second Bank-State Street Trust Company, successor to The Second National Bank of Boston, and hereinafter generally called the Trustee), a corporation duly organized and existing under the laws of The Commonwealth of Massachusetts, having its principal place of business and address at 225 Franklin Street, Boston, Massachusetts, and duly authorized to execute the trusts hereof. WHEREAS the Company has heretofore executed and delivered to State Street Bank and Trust Company, and its predecessors, as Trustee, its First Mortgage Indenture and Deed of Trust, dated as of July 1, 1949, and recorded, among other places, with Worcester District Deeds, of Worcester County, Massachusetts, Book 3201, Page 1 and Worcester Registry District of the Land Court as Document #12516 (hereinafter singly generally called the Original Indenture, and with this and all other indentures supplemental thereto collectively called the Indenture), whereby the Company has given, granted, bargained, sold, warranted, pledged, assigned, transferred, mortgaged, and conveyed to the Trustee all and singular the property therein described, whether then owned or thereafter acquired, to secure its First Mortgage Bonds (hereinafter generally called the Bonds) of an unlimited (except as therein provided) permitted aggregate principal amount, to be issued in one or more series as provided in the Original Indenture; and WHEREAS the Original Indenture has heretofore been supplemented and amended by Supplemental Indentures, viz.: Supplemental Indenture Dated as of ---------------------- ----------- First Supplemental Indenture March 1, 1951 Second Supplemental Indenture May 1, 1952 Third Supplemental Indenture October 1, 1955 Fourth Supplemental Indenture December 1, 1959 Fifth Supplemental Indenture July 1, 1961 Sixth Supplemental Indenture September 1, 1962 Seventh Supplemental Indenture December 1, 1963 Eighth Supplemental Indenture March 1, 1966 Ninth Supplemental Indenture April 1, 1968 Tenth Supplemental Indenture May 1, 1969 Eleventh Supplemental Indenture October 1, 1970 Twelfth Supplemental Indenture October 1, 1972 Thirteenth Supplemental Indenture October 1, 1975 Fourteenth Supplemental Indenture October 1, 1982 Fifteenth Supplemental Indenture June 1, 1986 Sixteenth Supplemental Indenture December 1, 1988 Seventeenth Supplemental Indenture July 1, 1989 Eighteenth Supplemental Indenture March 1, 1992 Nineteenth Supplemental Indenture January 1, 1993 Twentieth Supplemental Indenture September 1, 1993 (hereinafter referred to as the Prior Supplemental Indentures) whereby the Company has given, granted, bargained, sold, warranted, pledged, assigned, transferred, mortgaged, and conveyed to the Trustee all and singular the property therein specified, whether owned at the time of the execution or thereafter acquired by the Company, to secure its Bonds issued or to be issued in one or more series as provided in the Original Indenture; and WHEREAS the Company has heretofore issued under the Indenture and had outstanding as of , the following aggregate principal amount of First Mortgage Bonds: Series Percent Due Amount ------ ------- --- ------ R various various$ S various various$ T various various$ U various various$ (hereinafter referred to as the Outstanding Bonds); and WHEREAS the Company proposes to issue under the Indenture an additional series of Bonds, to be designated First Mortgage Bonds, Series (hereinafter generally called Series Bonds or Bonds of Series ); and WHEREAS sections 4.07 and 4.17 of the Original Indenture provide that the Company will from time to time give further assurances to the Trustee, and will from time to time subject to the lien of the Indenture all after-acquired property included or intended to be included in the trust estate, and section 12.01 of the Original Indenture provides that the Company and the Trustee may from time to time enter into indentures supplemental to the Original Indenture for certain purposes as therein specifically set forth, among other things to provide for the issue of Bonds of a series other than Series A and the forms and provisions of such other series pursuant to the provisions of section 2.02 of the Original Indenture; and to add to the covenants and agreements of the Company such further covenants and agreements as the board of directors of the Company shall consider to be for the protection of the holders of the Bonds outstanding under the Indenture and for the protection of the trust estate; and WHEREAS section 3.04 of the Original Indenture makes provision for the application by the Company, upon compliance with the applicable provisions of the Indenture, for the certification and delivery of additional Bonds against the retirement of Bonds bearing a higher interest rate, which have not been bona fide sold, pledged or otherwise negotiated by the Company, and whereas the parties hereto desire to amend the Indenture in order to add provisions, not inconsistent with the security and protection intended for the protection of the Bondholders, to clarify such provisions and to better provide for the certification and delivery of additional Bonds based upon the retirement of Unissued Bonds; and WHEREAS the Company has determined to execute and the Trustee, at the request of the Company, has further determined to join in this Supplemental Indenture to make certain changes in the Indenture which shall not relieve the Company or the Trustee of any obligation which it would otherwise have to any holder, or in any manner impair the rights and remedies of any holder, of any of the Outstanding Bonds; and WHEREAS the Company desires to issue from time to time an unlimited aggregate principal amount of Series Bonds; and currently, the Company has approval, to the extent required by law, from the Massachusetts Department of Public Utilities to issue from time to time $100,000,000 aggregate principal amount of Series Bonds and execute and deliver this Supplemental Indenture; and all things necessary to make such issues of Series Bonds, in aggregate principal amount not in excess of $100,000,000, when executed by the Company and certified by the Trustee and delivered as herein and in the Original Indenture provided, the legal, valid, and binding obligations of the Company according to their tenor, and to make this Supplemental Indenture a legal, valid, and binding instrument supplemental to the Original Indenture, have in all respects been duly authorized; and WHEREAS the Series Bonds and the Trustee's certificate and the form of endorsement thereon are to be in substantially the following form: [Form of Series Bond] [Face] [IF APPLICABLE, INSERT - Unless this certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payments are made to Cede & Co., any TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.] NUMBER REGISTERED $ CUSIP MASSACHUSETTS ELECTRIC COMPANY First Mortgage Bond, Series %, Due Original Issue Date: MASSACHUSETTS ELECTRIC COMPANY, a Massachusetts corporation (hereinafter, with its successors and assigns as defined in the Indenture mentioned below, generally called the Company), for value received, hereby promises to pay to or registered assigns, on , (or earlier as hereinafter referred to) the principal sum of _______________________ DOLLARS ($ ) in lawful money of the United States of America, at the corporate trust office in Boston, Massachusetts, of State Street Bank and Trust Company (hereinafter with its successors generally called the Trustee) or at the corporate trust office of its successor in the trusts created by the Indenture mentioned below, and in such other places, if any, as may be authorized for the purpose, and to pay interest thereon, in like lawful money, from the original issue date specified above, if the date hereof is prior to ____________, ____, or, if thereafter, from the first day of May or November, as the case may be, next preceding the date hereof to which interest has been paid or duly provided for (or from the date hereof if such date be either of said days and interest has been paid or duly provided for to such date), at the rate per annum specified below the title of this Bond, at said office of the Trustee, semiannually, on May 1 and November 1 of each year until payment of the principal hereof. Interest so payable, and punctually paid or duly provided for, on the first day of May or November will be paid to the person in whose name this Bond (or one or more Predecessor Bonds, as defined in said Indenture) is registered at the close of business on April 15 or October 15 (whether or not a business day) next preceding such first day of May or November. However, any such interest installment that is not punctually paid or duly provided for shall forthwith cease to be payable to the registered owner on such April 15 or October 15, as the case may be, and may be paid to the person in whose name this Bond (or one or more Predecessor Bonds) is registered at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Bondholders not less than fifteen days prior to such special record date, or may be paid, at any time and without prior notice to Bondholders, to the person in whose name this Bond is registered at the close of business on the day next preceding the date of such payment, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Series Bonds may at the time be listed and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. Interest payable at maturity or upon earlier redemption will be payable to the person to whom the principal will be payable. At the option of the Company, interest may be paid by check payable to the order of and mailed to the address of the person entitled thereto as the name and address of such person shall appear on registration books maintained pursuant to said Indenture. Interest (including payments for partial periods) will be calculated on the basis of a 360-day year of twelve 30-day months. Interest will not accrue on the 31st day of any month. The provisions of this Bond are continued on the reverse hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the certificate hereon shall have been signed by the Trustee. IN WITNESS WHEREOF, Massachusetts Electric Company has caused this Bond to be executed, either manually or by facsimile, under its corporate seal by its officers thereunto duly authorized. Dated: MASSACHUSETTS ELECTRIC COMPANY By And By President Treasurer TRUSTEE'S CERTIFICATE This is one of the First Mortgage Bonds - Series referred to in the within mentioned Indenture. STATE STREET BANK AND TRUST COMPANY, As Trustee, By Authorized Signature [Form of Series Bond] [Reverse] MASSACHUSETTS ELECTRIC COMPANY First Mortgage Bond, Series %, Due Original Issue Date: This Bond is one of a duly authorized issue of First Mortgage Bonds of the Company, issued or to be issued in one or more series, the series, of which this Bond is one, being designated First Mortgage Bonds, Series , and all of said Bonds of all series and forms being issued or to be issued under and secured by a certain First Mortgage Indenture and Deed of Trust (herein, with all indentures stated to be supplemental thereto to which the Trustee shall be a party, including a Supplemental Indenture dated as of , generally called the Indenture), to which Indenture, an executed counterpart of which is on file with the Trustee, reference is hereby made for a description of the property mortgaged and pledged to the Trustee as security for said Bonds, and for a statement of the nature and extent of the security, the terms and conditions upon which said Bonds are or are to be issued and secured, the rights and remedies under the Indenture of the holders of all of said Bonds, and the rights and obligations under the Indenture of the Company and of the Trustee; but neither the foregoing reference to the Indenture, nor any provision of this Bond or of the Indenture, shall affect or impair the obligation of the Company, which is absolute, unconditional, and unalterable, to pay, at the stated or accelerated maturities herein provided, the principal of and premium, if any, and interest on this Bond as herein provided. In certain events, on the conditions, in the manner, to the extent, and with the effect set forth in the Indenture, (1) the principal of this Bond may be declared and/or may become due and payable before the stated maturity hereof, together with the interest accrued hereon; (2) the Company and the Trustee may make modifications or alterations of the provisions of the Indenture and of this Bond with the consent of the holders of the percent of the principal amount of the Bonds at the time outstanding provided in the Indenture; provided, however, that no such alteration or modification shall (a) impair the obligation of the Company in respect of the principal of or premium or interest on any Bond, or extend the maturity or reduce the rate or extend the time of payment of interest thereon, or modify the terms of payment of such principal or interest without the consent of the holder thereof, (b) permit the creation of any lien prior to or on a parity with the lien of the Indenture except as expressly authorized by the Indenture, or (c) reduce the percentage of the principal amount of Bonds with the consent of the holders of which modifications or alterations may be made as aforesaid; (3) the holders of the percent of the principal amount of the Bonds at the time outstanding provided in the Indenture, may waive any existing default under the Indenture and the consequences of any such default, except a default in the payment of the principal of, premium, if any, or interest on any of the Bonds, and except a default arising from the creation of any lien prior to or on a parity with the lien of the Indenture; [IF APPLICABLE, INSERT - and] (4) upon payment of charges and compliance with other conditions as provided in the Indenture, the Series Bonds [IF APPLICABLE, INSERT - not drawn for redemption] are interchangeable, at the principal office of the Trustee and at such other offices or agencies of the Trustee or of the Company as may be designated for the purpose, for like aggregate principal amounts of Bonds of the same series and original issue date with identical terms and provisions, in denominations of $1,000 or any integral multiples thereof (provided, however, the Company shall not be required to make transfers or exchanges during the 15 days preceding any interest payment date [IF APPLICABLE, INSERT - and during any reasonable period which may be necessary in connection with the selection by lot of Bonds to be redeemed]); and, except as aforesaid, this Bond [IF APPLICABLE, INSERT - , if not drawn for redemption,] is transferable on books to be kept by the Company at said office of the Trustee and at such other offices or agencies, upon surrender and cancellation hereof at any such office or agency, duly endorsed or accompanied by a duly executed instrument of transfer, and thereupon a new Bond or Bonds of the same series and original issue date with identical terms and provisions, for a like aggregate principal amount will be issued to the transferee or transferees in exchange for this Bond [IF APPLICABLE INSERT -; and (5) this Bond singly or together with all or less than all other Bonds of the same series, original issue date, and identical terms and provisions, or, if this Bond is for a principal amount exceeding $1,000, any part of the principal amount hereof constituting $1,000 or any integral multiple thereof, may be called for redemption at any time prior to maturity, whether or not on an interest payment date, upon prior notice given by a mailing thereof to the respective registered owners of such Bonds not less than thirty days prior to the redemption date [IF APPLICABLE, INSERT - (a) if at the option of the Company or through the application of moneys deposited with the Trustee as the basis for the issuance of Bonds, at the respective general redemption prices, stated as percentages of the called principal amount, set forth in Column A below [IF APPLICABLE, INSERT - provided, however, that neither this Bond nor any portion hereof shall be so redeemed prior to , , if such redemption is for the purpose or in anticipation of refunding such Bond, or any portion hereof, through the use, directly or indirectly, of funds borrowed by the Company at an effective interest cost to the Company (computed in accordance with generally accepted financial practice) of less than % per annum,] and (b) if] through the application of replacement fund, release, insurance, eminent domain, or other moneys held by the Trustee, at the respective special redemption prices, stated as percentages of the called principal amount, set forth [IF APPLICABLE, INSERT - in Column B] below: IF REDEEMED AT ANY TIME IN THE RESPECTIVE [COLUMN A] [COLUMN B] TWELVE MONTHS' PERIOD BEGINNING GENERAL SPECIAL IN EACH OF THE REDEMPTION REDEMPTION FOLLOWING YEARS PRICES PRICES --------------- ---------- --------------- [Table to be completed as provided in the certificate as to form.] together in each case with accrued and unpaid interest to the date fixed for redemption [IF APPLICABLE, INSERT -, provided, however, that neither this Bond nor any portion hereof shall be so redeemed prior to , ]. If this Bond is called in whole or in part, and if provision has been duly made for notice of such call and for payment as required in the Indenture, thereafter this Bond, or such called part of the principal amount hereof, shall cease to be secured by the lien of the Indenture, no interest shall accrue on this Bond or such called part hereof on and after the date fixed for redemption, and the Company after said date fixed for redemption shall be under no further liability in respect of the principal of or premium, if any, or interest on this Bond or such called part hereof (except as expressly provided in the Indenture); and if less than the whole principal amount hereof shall be so called, the registered owner hereof shall be entitled, in addition to the sums payable on account of the part called, to receive, without expense to such owner, on surrender of this Bond duly endorsed or accompanied by a duly executed instrument of transfer, one or more Series Bonds of the same series and original issue date with identical terms and provisions, for an aggregate principal amount equal to that part of the principal amount hereof not then called and paid]. Payment of the principal of and/or premium, if any, on this Bond to the registered owner (or his registered assigns) hereof and payment of the interest on this Bond as hereinabove provided shall be a discharge of the Company, the Trustee, and any paying agent in respect of such principal, premium, and/or interest, as the case may be. No recourse shall be had for the payment of the principal of or premium, if any, or interest on this Bond against any incorporator, stockholder, director, officer, employee, or agent, past, present, or future, as such, of the Company or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, under any rule of law, statute, or constitution or by the enforcement of any assessment or otherwise, all such liability of incorporators, stockholders, directors, officers, employees, and agents being waived and released. [End of Form of Bond] NOW, THEREFORE, this Supplemental Indenture witnesseth that, pursuant to and in execution of the powers, authorities, and obligations conferred, imposed, and reserved in the Original Indenture, and every other power, authority, and obligation thereto appertaining and/or enabling, and in consideration of the premises, of the sum of $10 duly paid to the Company by the Trustee, and of other good and valuable considerations, receipt whereof upon the delivery of this Supplemental Indenture the Company hereby acknowledges, and for the purpose of confirming the Original Indenture as heretofore supplemented, and as an indenture hereby expressly stated to be supplemental to the Original Indenture, and in order to secure the equal pro rata payment (except as in the Indenture otherwise provided) of both the principal of and the interest on all of the Bonds at any time certified, issued, and outstanding under the Indenture according to their tenor and the provisions of the Indenture, and to secure the faithful performance and observance of all the covenants, obligations, conditions, and provisions contained in the Bonds and in the Indenture, and in order to provide for the forms, provisions, and issue of the Series Bonds; THE COMPANY HEREBY gives, grants, bargains, sells, warrants, pledges, assigns, transfers, mortgages, and conveys unto the Trustee, and its successors in the trusts of the Indenture, and its and their assigns, all and singular the property and rights and interests in property included in the trust estate and given, granted, bargained, sold, warranted, pledged, assigned, transferred, mortgaged, and conveyed, by the Original Indenture and the Prior Supplemental Indentures, or intended or required so to be, whether then or now owned or thereafter or hereafter acquired, except such properties or rights or interests in property as may have been released by the Trustee or sold or disposed of in whole or in part as permitted by the Original Indenture as heretofore supplemented and amended, including, without limiting the generality of the foregoing, the property and rights and interests in property specifically described in Schedule A hereto; SUBJECT, HOWEVER, in so far as affected thereby, to any mortgages or other encumbrances or liens constituting permitted liens as defined in the Original Indenture, the Prior Supplemental Indentures, or herein, to the liens, encumbrances, reservations, restrictions, limitations, covenants, interests, and exceptions, if any, set forth or referred to in the descriptions of such property contained in Schedules A thereto and hereto, none of which substantially interferes with the free use and enjoyment by the Company of the property and rights and interests in property hereinbefore described for the general purposes and uses of the Company's electric business; AND SUBJECT FURTHER, as to all property of any character acquired after the respective dates of the Original Indenture, the Prior Supplemental Indentures, and this Supplemental Indenture, in so far as affected thereby, to any mortgages, encumbrances, or liens on such after-acquired property existing at the time of such acquisition or contemporaneously created, conforming to the provisions of section 4.16 of the Original Indenture; BUT SPECIFICALLY RESERVING AND EXCEPTING from the foregoing grant, pledge, assignment, transfer, mortgage, and conveyance, all property and rights and interests in property of the character specifically reserved and excepted from the grant, pledge, assignment, transfer, mortgage, and conveyance of the Original Indenture; TO HAVE AND TO HOLD the trust estate, with all of the privileges and appurtenances thereunto belonging, unto the Trustee, its successors in the trusts hereof, and its and their assigns, to its and their own use, forever; BUT IN TRUST NEVERTHELESS for the equal pro rata benefit, security and protection (except as provided in sections 2.09 and 2.10 of the Original Indenture, and except in so far as a sinking, improvement, or analogous fund or funds, established in accordance with the provisions of the Original Indenture, may afford particular security for Bonds of one or more series, and except for independent security as provided in section 2.02 of the Original Indenture) of the bearers and the registered owners of the Bonds from time to time certified, issued, and outstanding under the Indenture, and the bearers of the coupons appertaining thereto, without (except as aforesaid) any preference, priority, or distinction whatever of any one Bond over any other Bond by reason of priority in the issue, sale, or negotiation thereof, or otherwise; PROVIDED, HOWEVER, and these presents are upon the condition, that if the Company shall pay or cause to be paid the principal of and premium, if any, and interest on the Bonds at the times and in the manner therein and in the Indenture provided, and shall keep, perform, and observe all and singular the covenants, agreements and provisions in the Bonds and in the Indenture expressed to be kept, performed, and observed by or on the part of the Company, then the Indenture and the estate and rights thereby and hereby granted shall, pursuant to the provisions of Article 15 of the Original Indenture, cease, determine, and be void, but otherwise shall be and remain in full force and effect. AND IT IS HEREBY COVENANTED, DECLARED, AND AGREED, upon the trusts and for the purposes aforesaid, as set forth in the following covenants, agreements, conditions, and provisions, viz.: ARTICLE 1. COVENANTS REGARDING THE TRUST ESTATE. 1.01. The Company covenants that the property specifically described in the granting clauses hereof, including Schedule A hereto, and now owned by the Company, is wholly free from and unencumbered by any defect, mortgage, pledge, charge, or other encumbrance or lien, of any kind, superior to or on a parity with the lien of the Indenture, except only taxes for the current year not yet due, and those liens, encumbrances, and defects, if any, referred to in said granting clauses; and the Company will duly and punctually remove, perform, pay, and discharge or, if it contests, will stay (and indemnify the Trustee from time to time to the satisfaction of the Trustee against) the enforcement of all obligations and claims arising or to arise out of or in connection with each and all thereof. The Company will not create or suffer any other mortgage, pledge, charge, or material encumbrance or lien, of any kind, superior to or on a parity with the lien of the Indenture, upon the property included in the trust estate, or any part thereof, now owned or hereafter acquired, except only such as are permitted by the provisions of section 4.16 of the Original Indenture. 1.02. The Company covenants that it is lawfully seised in fee simple of the real estate, and owns outright and is lawfully possessed in its own right, absolutely, and unconditionally, of the other property and rights constituting the trust estate, described in the granting clauses hereof, including Schedule A hereto, and now owned by the Company, and has good title to, and full power and authority to give, grant, bargain, sell, warrant, pledge, assign, transfer, mortgage, and convey the property, rights, and interests hereby presently given, granted, bargained, sold, warranted, pledged, assigned, transferred, mortgaged, and conveyed or purported or intended so to be, all subject only to taxes for the current year not yet due, and to those liens, encumbrances, and defects, if any, referred to in said granting clauses; and the Company will warrant and defend the title to the property from time to time included in the trust estate, and every part thereof, to the Trustee, against all claims and demands whatsoever of any person and all persons claiming or to claim the same or any interest therein, subject only as aforesaid, to permitted liens, and to mortgages, encumbrances, and liens on after-acquired property of the character permitted by section 4.16 of the Original Indenture. ARTICLE 2. PARTICULAR PROVISIONS CONCERNING THE SERIES BONDS In addition to the provisions of the Indenture applicable by their terms, the following provisions relating to the form and provisions of the Series Bonds are established as follows: 2.01. The Series Bonds shall be issued from time to time upon delivery to the Trustee of a certificate as to form signed by the president or the treasurer of the Company setting forth the matters described below. Each issue of the Series Bonds shall be designated in such manner as to distinguish it from all other issues. Bonds of each such issue shall be identical in tenor and effect. The certificates as to form shall designate, within such limits as may be from time to time established by a directors' resolution, the designation and amount of the issue, the date of maturity (which date shall be not less than nine months nor more than thirty years from the original issue date of such issue of Bonds), the interest rate, the provisions for call and redemption, if any, including any premium or premiums payable thereon. 2.02. The Series Bonds shall consist of fully registered Bonds without coupons in denominations of $1,000 or any integral multiple thereof authorized by a certificate as to form, with distinguishing letters and/or numbers as may be determined by a certificate as to form, and all as approved by the Trustee. The permanent Series Bonds and Trustee's certificate shall be substantially in the forms hereinbefore recited, with appropriate insertions, omissions, and variations approved by the Trustee for the different issues and denominations. The permanent Series Bonds shall be lithographed on steel engraved tints (or, (i) if so authorized by the certificate as to form, engraved either fully or partially in such manner as to meet the listing requirements of any securities exchange on which such Series Bonds may at the time be listed or (ii) if so authorized by the certificate as to form, printed, photocopied, or otherwise reproduced in such manner as to meet the requirements of a depository with which the Series Bonds may be placed). The certificate as to form may also provide that ownership of all of such Series Bonds shall be evidenced by one or more certificates placed with a depository. If, after the initial issuance of an issue of the Series Bonds which had been placed with a depository, the depository is no longer willing or able to hold such issue of the Series Bonds, the Company may determine that ownership of such Series Bonds shall be evidenced in the usual certificated form and shall advise the Trustee of its determination. In such event, the Company shall take actions necessary to withdraw such Series V Bonds from the depository and shall prepare and execute and cause to be authenticated and delivered replacement Series V Bonds, in certificate form, to the beneficial owners thereof. No provision of the certificate as to form with respect to matters referred to in this paragraph shall be made applicable to the holder of a Bond or Bonds of Series the original issue date of which is prior to the date of the certificate as to form, except at the option of such holder. 2.03. Notwithstanding the provisions of the third paragraph of section 2.01 of the Original Indenture, each Series Bond shall be dated and bear interest as set forth in this section 2.03. Each Series Bond shall be dated the date of its certification and delivery. Interest will be payable from the interest payment date next preceding the date thereof to which interest has been paid or duly provided for, (i) unless the date thereof is an interest payment date to which interest has been paid or duly provided for, in which case the interest shall be payable from such date, or (ii) unless the date thereof is prior to the first interest payment date for that issue, in which case the interest shall be payable from the original issue date of such issue of Series Bonds. Interest (including payments for partial periods) will be calculated on the basis of a 360-day year of twelve 30-day months. Interest will not accrue on the 31st day of any month. Except as hereinafter provided, the interest installment on any Series Bond which is payable, and is punctually paid or duly provided for, on any first day of May or November shall be paid to the person in whose name that Bond (or one or more Predecessor Bonds) is registered at the close of business on the relevant regular record date, namely, April 15 or October 15 (whether or not a business day) next preceding. All Series Bonds with an original issue date which is after the record date for a particular interest payment date shall bear interest from such original issue date, but payment of interest shall commence on the second interest payment date succeeding said original issue date. Any interest installment on any Series Bond which is payable, but is not punctually paid or duly provided for (in whole or in part), on any first day of May or November (herein called Defaulted Interest) shall forthwith cease to be payable to the registered owner on the relevant regular record date, and such Defaulted Interest may be paid by the Company, at its election in each case, in either of the ways provided in clause (i) or clause (ii) below: (i) The Company may elect to make payment of any Defaulted Interest to the persons in whose names the Series Bonds (or their respective Predecessor Bonds) are registered at the close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Series Bond and the date of the proposed payment which shall be not less than forty-five days after the receipt by the Trustee of such notice of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest, or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a special record date for the payment of such Defaulted Interest which shall be not more than fifteen days nor less than five days prior to the date of the proposed payment. The Trustee shall promptly notify the Company of such special record date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the special record date therefor to be mailed, first-class postage prepaid, to each owner of Series Bonds, at the owner's address on the transfer registry, not less than fifteen days prior to such special record date. The Trustee may, in its discretion, in the name and at the expense of the Company, cause a similar notice to be published at least once in a newspaper or newspapers printed in the English language, customarily published on each business day, of general circulation in each city or place where interest is payable, but such publication shall not be a condition precedent to the establishment of such special record date. Notice of the proposed payment of such Defaulted Interest and the special record date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the persons in whose names the Series Bonds (or their respective Predecessor Bonds) are registered on such special record date and shall no longer be payable pursuant to the following clause (ii). (ii) The Company may elect to make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which Series Bonds may at the time be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such payment shall be deemed practicable by the Trustee. Interest payable at maturity or upon earlier redemption will be payable to the person to whom the principal will be payable in accordance with the provisions of the Indenture. As used herein "Predecessor Bonds" of any particular Bond means every previous Bond evidencing all or a portion of the same debt as that evidenced by such particular Bond; and, for the purposes of this definition, any Bond certified and delivered in lieu of a destroyed or lost Bond shall be deemed to evidence the same debt as the destroyed or lost Bond. Subject to the foregoing provisions of this section 2.03, each Series Bond upon transfer of or exchange for or in lieu of any other Series Bond of the same original issue date and identical terms and provisions shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Series Bond. Payment of the principal of and/or premium, if any, on any Series Bond to the registered owner (or the owner's registered assigns) thereof and payment of the interest on any such Bond as therein and in this section 2.03 provided shall be a discharge of the Company, the Trustee, and any paying agent in respect of such principal, premium and/or interest, as the case may be. 2.04. The permitted aggregate principal amount of Series Bonds which may be executed by the Company and certified by the Trustee shall not be limited except as otherwise provided in Article 3 of and elsewhere in the Original Indenture, and except that the aggregate principal amount of Bonds certified, delivered and outstanding at any time shall never in any event exceed the amount at that time permitted by law. 2.05. All of the Series Bonds shall be executed, in the name and on behalf of the Company and under its corporate seal impressed or imprinted thereon, by its president or one of its vice-presidents, and by its treasurer or one of its assistant treasurers, and shall be expressed to take effect as sealed instruments. The signature of any or all of these officers on the Series Bonds may be either manual or facsimile. In case any officer of the Company who shall have signed or sealed any of the Series Bonds shall not have been such officer on the date borne by the Bonds, or shall cease to be such officer before the Bonds so signed or sealed shall have been actually certified and/or delivered, such Bonds, nevertheless, by presentation to the Trustee for certification, or by delivery, shall be adopted by the Company and may be certified and delivered as herein provided, and thereupon shall be issued hereunder and shall be as binding upon the Company as though the person who signed or sealed such Bonds had been such officer of the Company on the date borne by the Bonds and on the date of certification and delivery. 2.06. The Series Bonds shall be transferable and exchangeable for other fully registered bonds of the same series, original issue date and identical terms and provisions, and may be presented for payment, and notices, requests, and demands in respect of the Series Bonds may be served or made, in the manner and upon the conditions, including the payment of applicable charges, set forth in the form of Series Bonds hereinbefore recited and in section 2.06 of and elsewhere in the Original Indenture; provided, however, that the owner of any Series Bond shall be entitled to transfer or exchange such Bond without charge (except for any stamp tax or other governmental charge incident thereto); and provided, further, that the Company shall not be required (i) to issue, transfer or exchange any Series Bond during the fifteen days next preceding any interest payment date and during any reasonable period which may be necessary in connection with the selection by lot of Bonds to be redeemed, or (ii) to transfer or exchange any Series Bond so selected for redemption in whole or in part. 2.07. The certificate as to form shall provide, as to an issue of Series Bonds, whether such Bonds may be called, as a whole or in part, and whether any part of the principal amount thereof, may be called, at the option of the Company or pursuant to any applicable provision of the Original Indenture or this Supplemental Indenture, for redemption at any time prior to maturity, whether or not on an interest payment date, in each case upon not less than 30 days' prior notice given as hereinafter provided, at the applicable redemption price, together in each case with accrued and unpaid interest to the redemption date. The certificate as to form may provide, as to any issue of Series Bonds, that none of such Bonds shall be so called for a period of years, as set forth in the certificate. The applicable redemption price shall be as set forth in the certificate as to form. The certificate as to form may provide, as to any issue of Series Bonds, that none of such Bonds shall be redeemed prior to a stated date at general redemption prices if such redemption is for the purpose or in anticipation of refunding such Bonds, or any part thereof, through the use, directly or indirectly, of funds borrowed by the Company at an effective interest cost to the Company (computed in accordance with generally accepted financial practice) of less than the effective interest cost to the Company of such Bonds. Notice of such redemption shall be given, money for such redemption shall be deposited with and held and applied by the Trustee, and such redemption shall be carried out in the manner and with the effect specified in sections 5.02, 5.03, and 5.04 of the Original Indenture, subject to the provisions of this paragraph. "Published Notice" with respect to any redemption of Series Bonds need not be given but a similar notice shall be mailed, first-class postage prepaid, at least thirty days prior to any redemption date of Series Bonds, to each owner of the Bonds to be redeemed, at such owner's address on the transfer registry. As a convenience, but not as a condition precedent to a redemption, the Trustee may, in its discretion, in the name and at the expense of the Company, cause a similar notice of redemption to be published at least once in a newspaper or newspapers printed in the English language, customarily published on each business day and of general circulation in each city or place where the principal of the Bonds is payable. In case the Company shall have elected to redeem less than all the outstanding Series Bonds, it shall, in each such instance, at least fifteen days before the date upon which mailing of the notice of redemption herein mentioned is required to be made, notify the Trustee in writing of such election and of the aggregate principal amount of Bonds to be redeemed and the original issue date or dates of the Series Bonds from which redemption is to be made, and the Trustee shall thereupon select the Bonds to be redeemed from the outstanding Series Bonds of the appropriate issue or issues not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection or redemption of portions of the principal of Bonds of denominations greater than $1,000 the portions of the principal of the Bonds so selected for partial redemption to equal $1,000 or an integral multiple thereof (provided, however, no remaining part of such bond shall be less than $1,000), and within ten days after receiving the aforesaid notice shall notify the Company in writing of the Bonds selected for redemption and, in the case of any Bond selected for partial redemption, the principal amount thereof to be redeemed. In case the Company shall have elected to redeem less than all of an issue of the outstanding Series Bonds, the notice of redemption shall state, among other things, the identification (by numbers, groups of numbers ending in the same digit, or series of digits, or otherwise) and, in the case of partial redemption of Bonds of denominations greater than $1,000, the respective principal amounts of the Bonds to be redeemed. Installments of interest on any Series Bonds maturing on or prior to the redemption date of such Bond shall continue to be payable as provided in section 2.03 of this Supplemental Indenture. 2.08. The provisions of section 5.06 of the Original Indenture (as amended by section 3.01 of the Second Supplemental Indenture and sections 2.07 of the Fourth and Sixth Supplemental Indentures) shall be operative so long as any Series Bonds are outstanding; and the provisions of sections 2.07 and 2.08 of the Fourth Supplemental Indenture, which by said sections are expressed to be operative so long as any Series E Bonds are outstanding, shall be operative so long as any Series Bonds are outstanding, but subject to the provision of section 2.07 of the Sixth Supplemental Indenture. 2.09. The Company covenants that so long as any Series Bonds are outstanding it will not request a successor corporation to deliver Bonds to the Trustee in the manner and with the effect set forth in paragraphs (2), (3), and (4) of section 13.03 of the Original Indenture. ARTICLE 3 AMENDMENT TO THE INDENTURE 3.01 There is hereby added to Article 3 section 3.02 of the Original Indenture two new paragraphs at the conclusion of section 3.02 reading as follows: "The Company may, from time to time, and upon furnishing the Trustee with the documents set forth in this section and in section 3.03, direct the Trustee to acknowledge on its books the right of the Company to request the certification and delivery of Bonds pursuant to section 3.04 up to the amount set forth in such direction. Such rights are hereinafter called "Unissued Bonds." Any additional property used as the basis for the acknowledgment of the Unissued Bonds shall be deemed funded for the purposes of any certificate required under any section of this Indenture, and such Unissued Bonds shall be deemed to be Bonds outstanding hereunder for the purposes of this section, section 3.03 and section 3.04 (including in any application or certificate required hereby or thereby) in the principal amounts and having the interest rates and maturity dates as set forth in the written application therefor but shall not have any voting rights or be deemed to be Bonds outstanding hereunder for any other purpose. The Trustee, upon being furnished by the Company with an officers' certificate surrendering the rights evidenced by any Unissued Bonds, shall acknowledge upon its books the cancellation of said Unissued Bonds. Any canceled Unissued Bonds not used theretofore against the issuance of Bonds pursuant to section 3.04 shall thereafter be treated as though they had never been outstanding. The authorizing directors' resolutions and forms required by paragraph (a) of this section 3.02 and the authorizations and forms in the documents required by paragraphs (b), (e), and (f) of this section as applicable to Unissued Bonds shall be considered subsumed in the authorizations and forms for the Bonds to be ultimately issued pursuant to section 3.04. The opinion required pursuant to paragraph (d) of this section shall be appropriately modified to reflect the use of the Unissued Bonds as herein provided." 3.02 Section 3.04 of Article 3 of the Original Indenture is hereby amended by adding in the 1st line after "and delivered" the following: "and Unissued Bonds may be acknowledged by the Trustee." 3.03 There is added to Article 3 section 3.04 of the Original Indenture two new paragraphs at the conclusion of section 3.04 reading as follows: "References herein to the certification and delivery of Bonds to the aggregate amount of Bonds which shall have been retired and which are unfunded shall be considered to include the aggregate amount of Unissued Bonds which the Trustee has acknowledged pursuant to section 3.02 and section 3.03 and which are unfunded and not otherwise cancelled. Such Unissued Bonds shall be deemed to be funded to the extent that they have been used as the basis for the certification and delivery of Bonds pursuant to this section. Any application of the Company for the authentication and delivery of Bonds pursuant to this section against "Unissued Bonds" created in accordance with section 3.02 shall be accompanied by an officers' certificate stating that retirements since July 1, 1949, were not greater than the amount payable as an improvement fund since July 1, 1949, and, unless there has been filed a net earnings certificate including the interest charges on the Unissued Bonds within the calendar year preceding the date of the application, shall be accompanied by a net earnings certificate satisfying the requirement of paragraph (d) of section 3.03 as far as applicable." ARTICLE 4. CONCERNING THE TRUSTEE; DEFEASANCE; MISCELLANEOUS PROVISIONS 4.01. The Trustee accepts the trusts under this Supplemental Indenture, and shall be entitled to, may exercise and shall be protected by all the rights, powers, privileges, immunities, and exemptions provided in the Original Indenture, and the provisions concerning the same are adopted and made applicable to this Supplemental Indenture as fully as if set forth herein at length. The recitals of fact contained herein and in the Series Bonds (except the Trustee's certificate upon said Bonds) shall be taken as the statements of the Company and the Trustee assumes no responsibility for the same. The Trustee makes no representations as to the value of the trust estate or any part thereof, or as to the title of the Company thereto, or as to the validity or adequacy of the security afforded thereby or by the Indenture, or as to the validity of this Supplemental Indenture or of the Series Bonds. The Trustee shall not be taken impliedly to waive hereby any right it would otherwise have. 4.02. This Supplemental Indenture shall become void when the Original Indenture shall become void. 4.03. This Supplemental Indenture is hereby expressly stated to be supplemental to the Original Indenture and, as provided in the Original Indenture, shall form a part thereof and shall be so construed. Except as herein expressly otherwise defined, the use of terms and expressions herein is in accordance with the definitions, uses and expressions contained in the Original Indenture. 4.04. The Company warrants that at the date of execution and delivery hereof the Company is not in default in any respect under any of the provisions of the Original Indenture as heretofore supplemented or of the Outstanding Bonds, and covenants that it will perform and fulfill all the terms, covenants, and conditions of the Indenture to be performed and fulfilled by the Company. The Company is duly organized and existing under the laws of The Commonwealth of Massachusetts and is duly authorized under all applicable provisions of law to create and issue the Series Bonds and to execute this Supplemental Indenture. All corporate action on its part for the creation and issue of the Series Bonds and for the execution and delivery of this Supplemental Indenture has been duly and effectively taken. The Series Bonds in the hands of the holders thereof, and this Supplemental Indenture, are and will be, respectively, the legal, valid, and binding obligations of the Company. 4.05. All the covenants and provisions of this Supplemental Indenture and of the Series Bonds are for the sole and exclusive benefit of the parties hereto and the holders of the Bonds, and no others shall have any legal, equitable, or other right, remedy, or claim under or by reason of this Supplemental Indenture or of the Series Bonds. 4.06. The Trustee hereby approves the form of the permanent Series Bonds and the form of Trustee's certificate pertaining thereto, all as hereinbefore recited, and the form of this Supplemental Indenture. 4.07. This Supplemental Indenture is stated to be dated as of . This is intended as and for a date for reference and for identification, the actual time of the execution hereof being the date set forth in the testimonium clause hereof. 4.08. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be deemed an original; and such counterparts shall constitute but one and the same instrument, which shall for all purposes be sufficiently evidenced by any such original counterpart. 4.09. The cover of this Supplemental Indenture and all article and description headings, and the table of contents and marginal headings and notes, if any, are inserted for convenience only, and shall not affect any construction or interpretation hereof. IN WITNESS WHEREOF, Massachusetts Electric Company has caused this Supplemental Indenture to be executed, and its corporate seal to be hereto affixed, by its officers thereunto duly authorized, and State Street Bank and Trust Company has caused this Supplemental Indenture to be executed, and its corporate seal to be hereto affixed, by its officers thereunto duly authorized, all as of the day and year first above written, but actually executed on the day of . MASSACHUSETTS ELECTRIC COMPANY, By: _______________ _______________ ATTEST: _______________ _______________ STATE STREET BANK AND TRUST COMPANY, As Trustee, By: _________________ _________________ ATTEST: _________________ _________________ SCHEDULE A THE COMMONWEALTH OF MASSACHUSETTS ) ) ss. COUNTY OF ) On this day of , before me personally appeared and , to me personally known, who, being by me duly sworn, did say that they are and , respectively, of Massachusetts Electric Company, that the seal affixed to the foregoing instrument is the corporate seal of said corporation, and that said instrument was signed and sealed by them on behalf of said corporation by authority of its Board of Directors; and the said and acknowledged said instrument to be the free act and deed of said corporation. Notary Public My commission expires THE COMMONWEALTH OF MASSACHUSETTS ) ) ss. COUNTY OF ) On this day of , before me personally appeared and , to me personally known, who, being by me duly sworn, did say that they are and , respectively, of State Street Bank and Trust Company, that the seal affixed to the foregoing instrument is the corporate seal of said trust company and that said instrument was signed and sealed on behalf of said trust company by authority of its Board of Directors; and the said and acknowledged said instrument to be the free act and deed of said trust company. Notary Public My Commission expires I, , of Massachusetts Electric Company, a corporation duly organized under the laws of The Commonwealth of Massachusetts and having its principal place of business in Westborough, Massachusetts, hereby certify that at a special meeting of the stockholders of said Company, duly called and held at 25 Research Drive, Westborough, Massachusetts, on October 18, 1982, by the affirmative action of at least a majority of the Company's shares outstanding and entitled to vote thereon, upon motion duly made and seconded, the following vote was duly adopted: Voted: That the Board of Directors of the Company is authorized to vote to mortgage all or substantially all of the Company's property, including its franchises, in connection with the issue from time to time of the Company's bonds and other actions under the Company's First Mortgage Indenture and Deed of Trust and supplements thereto. I further certify that at a regular meeting of the Board of Directors of said Company, duly called and held at 25 Research Drive, Westborough, Massachusetts, on , at which meeting a quorum was present and acting throughout, by the affirmative action of all the directors present, upon motions duly made and seconded, the following votes were duly passed: Voted: That this Company mortgage all or substantially all of its property, including its franchises, in connection with the issue of the New Bonds and other actions under the Indenture. Voted: That the form, terms, and provisions of the supplemental indentures created for each additional issue and/or series of New Bonds, a form of which is presented to this meeting, and hereby ordered filed as Exhibit "_" with the minutes of the meeting, are hereby approved; and the President, any Vice President, the Treasurer, and any Assistant Treasurer are severally authorized, in the name and on behalf of the Company, to execute, under the corporate seal attested by the Clerk or any Assistant Clerk, to acknowledge and to deliver, an instrument in substantially the form of said Exhibit "_", with appropriate provisions relating to principal amounts, maturity dates, interest rates, interest payment dates, provisions for redemption, and refunding provisions, as well as other terms and conditions for the specific issue and/or series of New Bonds, within such limits as may be established from time to time by this Board, the total principal amount of New Bonds to be issued under said supplemental indentures to be unlimited, and with such further modifications as the officers executing said supplemental indentures shall approve, in as many counterparts as the officer so acting may deem advisable, and to cause the same to be filed and recorded and refiled and rerecorded as they or any one or more of them shall deem advisable, such execution and delivery to be conclusive evidence that same is authorized by this vote. Voted: That the Board of Directors considers the additions to and amendment of the covenants and agreements of the Indenture, as contained in the form of the supplemental indenture attached hereto as Exhibit "__", to be for the protection of the holders of the Bonds outstanding under said Indenture and for the protection of the trust estate. And I further certify that, as appears from the records of said Company, is the , being duly authorized to execute in the name and on behalf of said Company the foregoing Supplemental Indenture dated as of , and I am of said Company, duly authorized to attest the ensealing of said Supplemental Indenture; that the foregoing Supplemental Indenture, to which this Certificate is attached, is substantially in the form presented to and approved at said directors' meeting held on ; that the foregoing is a true and correct copy of the votes passed at each of said meetings as recorded in the records of said Company; and that said votes remain in full force and effect without alteration. WITNESS my hand and the corporate seal of Massachusetts Electric Company on . (Assistant) Clerk EX-4 7 EXHIBIT 4-D Exhibit 4-D to Form S-3 Certificate as to Form First Mortgage Bonds, Series Supplemental Indenture: 2.01 Original Issue Date: (Mass. Electric Letterhead) (Date) State Street Bank and Trust Company, Trustee under First Mortgage Indenture and Deed of Trust of Worcester County Electric Company, dated as of July 1, 1949 as supplemented (the Indenture), including the Supplemental Indenture 225 Franklin Street Boston, Massachusetts 02110 Dear Sir or Madam: The undersigned, of Massachusetts Electric Company (the Company), formerly Worcester County Electric Company, in connection with the certification and delivery of the Company's First Mortgage Bonds, Series , hereby establishes the following terms and conditions pursuant to Section 2.01 of the Supplemental Indenture for a new issue thereof: Issue Designation: . Principal Amount: . Date of Maturity: . Interest Rate: . Certificated or Book-Entry Only: . Bond Form: . (lithographed on steel engraved tints) Distinguishing Letters/Numbers: . CUSIP Number: . Date of First Certification and Delivery: . Original Issue Discount: ; if applicable, Total Amount of Discount: . Date of First Interest Payment: . Initial Price to Public: . (percentage) Restrictions on Call: . Restrictions on Refunding: . (rate of effective interest cost) Provisions for Redemption: . (years of par call) Applicable Redemption Prices for Redemption: If redeemed at any time in the respective twelve months' period beginning (Date) in each of the General Special following year Redemption Prices Redemption Prices - ---------------------- ----------------- ------------------ I have read the applicable provisions of the Indenture, particularly Section 3.02 of the Indenture and Section 2.01 of the Supplemental Indenture, compliance with which is a condition precedent to certification and delivery of the Series Bonds, requested by the Company's application and have made such examination and investigation as in my opinion is necessary to enable me to express an informed opinion as to the matters covered in this certificate. In my opinion, there has been compliance with all requirements of the Indenture with respect to the furnishing of this certificate. All statements made in this certificate are true with reference to all pertinent definitions and uses of terms in the Indenture. Very truly yours, Name: Title: THE COMMONWEALTH OF MASSACHUSETTS Worcester, ss. Subscribed and sworn to before me by on . Notary Public EX-5 8 EXHIBIT 5 Exhibit 5 to Form S-3 25 Research Drive, Westborough, Massachusetts 01582 =================================================== May 5, 1995 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Re: Massachusetts Electric Company First Mortgage Bonds Dear Commissioners: We have acted as counsel for Massachusetts Electric Company (the Company) in connection with the proposed issuance, from time to time, of one or more series of First Mortgage Bonds in an aggregate principal amount not exceeding $100,000,000 (the New Bonds). We have reviewed the various documents and proceedings relating to the New Bonds, including the registration statement on Form S-3 (and all documents incorporated by reference therein and the exhibits thereto), the prospectus, and the proposed form of supplemental indenture supplementing the Company's First Mortgage Indenture and Deed of Trust, as previously amended and supplemented (collectively, the Indenture). We have also reviewed the corporate and regulatory authority for the issuance of the New Bonds, and have examined such other documents and records and have made such other examination of law as we deem relevant and necessary in order to give this opinion. Based on the foregoing, and subject to the additional actions yet to be taken indicated below, it is our opinion: 1. That the Company is a corporation duly organized, existing, and in good standing under the laws of The Commonwealth of Massachusetts; 2. That the Company has proper and adequate powers for supplementing the Indenture; for executing and issuing the New Bonds thereunder; and for mortgaging under the Indenture the property therein described; 3. That the issuance of the New Bonds has been duly authorized by the board of directors of the Company, subject to approval of governmental authorities having jurisdiction; and that the authority to establish particular terms for each issue of New Bonds is properly delegated to the officers of the Company; 4. That the Company has obtained an order from the Massachusetts Department of Public Utilities approving the proposed issuance of bonds and related matters; 5. That the Company is exempted by Rule 52 under the Public Utility Holding Company Act of 1935 (the 1935 Act) from the requirement of obtaining an order of the Commission; that the sale of the New Bonds is subject to the registration statement with respect thereto becoming effective under the Securities Act of 1933, as amended, and to the qualification of each supplemental indenture pertaining to the New Bonds under the Trust Indenture Act of 1939; and 6. That, when each supplemental indenture pertaining to the New Bonds has been duly executed and delivered, and the New Bonds issued thereunder have been duly executed, certified, and delivered against payment therefor, and subject to the continuation of the above described corporate and regulatory authority, such New Bonds will be legally issued, fully paid and non-assessable binding obligations of the Company, subject to laws of general application affecting the rights and remedies of mortgagees and creditors. We have reviewed the statements made upon our authority in the registration statement and in the prospectus with respect to the New Bonds, and in our opinion such statements are correct. We hereby consent to the use of our names in the registration statement and each related prospectus of the Company with respect to the New Bonds and to the use of this opinion in connection therewith. Very truly yours, s/Robert King Wulff Robert King Wulff Corporation Counsel s/Kirk L. Ramsauer Kirk L. Ramsauer Assistant General Counsel EX-12 9 EXHIBIT 12 MASSACHUSETTS ELECTRIC COMPANY Computation of Ratio of Earnings to Fixed Charges (SEC Coverage) (Unaudited)
12 Months Ended March 31, 1995 Years Ended December 31, Actual ------------------------------------------------------------- (Unaudited) 1994 1993 1992 1991 1990 -------------- ---- ---- ---- ---- ---- (In Thousands) Net Income $30,280 $34,726 $23,779 $34,905 $25,243 $35,192 - ---------- Add income taxes and fixed charges - ---------------------------------- Current federal income taxes (7,621) (6,762) 5,606 3,977 8,568 14,681 Deferred federal income taxes 23,410 24,932 3,430 13,451 3,889 1,044 Investment tax credits - net (1,204) (1,228) (1,228) (1,228) (1,194) (1,225) Massachusetts franchise tax 4,230 4,681 3,348 3,858 2,920 3,765 Interest on long-term debt 22,069 20,967 23,403 21,910 20,157 20,626 Interest on short-term debt and other7,840 6,366 3,638 3,657 3,643 3,090 ------- ------- ------- ------- ------- ------- Net earnings available for fixed charges$79,004$83,682 $61,976 $80,530 $63,226 $77,173 ------- ------- ------- ------- ------- ------- Fixed charges: Interest on long-term debt $22,069 $20,967 $23,403 $21,910 $20,157 $20,626 Interest on short-term debt and other7,840 6,366 3,638 3,657 3,643 3,090 ------- ------- ------- ------- ------- ------- Total fixed charges $29,909 $27,333 $27,041 $25,567 $23,800 $23,716 ======= ======= ======= ======= ======= ======= Ratio of earnings to fixed charges 2.64 3.06 2.29 3.15 2.66 3.25 - ----------------------------------
EX-23 10 EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in this registration statement on Form S-3 of our report dated February 27, 1995, on our audits of the financial statements of Massachusetts Electric Company. We also consent to the reference to our firm under the caption "Experts". s/Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Boston, Massachusetts May 5, 1995 EX-26 11 EXHIBIT 26 Exhibit 26 to Form S-3 MASSACHUSETTS ELECTRIC COMPANY INVITATION FOR BIDS FOR PURCHASE OF FIRST MORTGAGE BONDS Massachusetts Electric Company (the Company) is inviting bids, subject to the terms and conditions for bids attached hereto (the Terms and Conditions), for the purchase of not exceeding $ million aggregate principal amount of its First Mortgage Bonds (the Bonds). The series designation, principal amount, maturity date, provisions for redemption, and interest payment dates of each issue of Bonds, the time, date, and place for the submission of bids therefor, and the place for delivery of Confirmations of Bids therefor, shall be designated by the Company by prior notice given pursuant to the Terms and Conditions. Copies of the registration statement, the Terms and Conditions, and the form of confirmation of bid may be obtained from the Company's Corporate Finance Department at the offices of New England Power Service Company, 25 Research Drive, Westborough, Massachusetts 01582. Bids will be considered only if made in accordance with, and subject to, the Terms and Conditions. Prior to the acceptance of any bid, the bidder or bidders will be furnished with a copy of a prospectus relating to the Bonds which meets the requirements of Section 10(a) of the Securities Act of 1933 at that time. The issue of a particular series or issue of Bonds shall not be contingent upon the issue of any other series or issue. A bidder may bid for any one or more series or issue of Bonds, but shall submit a separate bid for each such series or issue. The bidding for each series or issue shall be a separate transaction, and a bidder shall fully and timely comply with the Terms and Conditions separately for such series or issue. Inquiries and requests for additional information with respect to the bidding for the Bonds may be directed to the Company's Corporate Finance Department at 25 Research Drive, Westborough, Massachusetts 01582 (telephone 508-389-2000). MASSACHUSETTS ELECTRIC COMPANY By: MICHAEL E. JESANIS Treasurer Westborough, Massachusetts Date: MASSACHUSETTS ELECTRIC COMPANY TERMS AND CONDITIONS FOR BIDS FOR PURCHASE OF FIRST MORTGAGE BONDS Massachusetts Electric Company (the Company) is inviting bids, subject to the following terms and conditions, for the purchase of its First Mortgage Bonds (the Bonds). Details concerning the Bonds and the submission of bids therefor will be designated in a notice given to prospective bidders as set forth in Section 1 hereof. The registration statement referred to below contains brief summaries of some of the terms of the Bonds and of the Indenture (as defined below) under which the Bonds are to be issued. These summaries use terms defined in the Indenture and are qualified in their entirety by reference to the Indenture. The Company may invite bids for more than one series or issue of Bonds. The issue of a particular series or issue of Bonds shall not be contingent upon the issue of any other series or issue. A bidder may bid for any one or more series or issues of Bonds, but shall submit a separate bid for each such series or issue. The bidding for each series or issue shall be a separate transaction, and a bidder shall fully and timely comply with the Terms and Conditions separately for each such series. 1. Information and Forms Available to Prospective Bidders The following documents relating to the Bonds may be examined by prospective bidders at the offices of New England Power Service Company, Corporate Finance Department, 25 Research Drive, Westborough, Massachusetts, on any business day between 10 A.M. and 4 P.M.: (a) the registration statement on Form S-3 (including the financial statements, exhibits, any documents incorporated therein by reference, and any amendments or supplements thereto), as filed with the Securities and Exchange Commission, and the prospectus included therein; (b) the First Mortgage Indenture and Deed of Trust, dated as of July 1, 1949, from the Company to State Street Bank and Trust Company (formerly Second Bank-State Street Trust Company, successor to The Second National Bank of Boston), as Trustee, the outstanding indentures supplemental thereto and the form of the supplemental indenture thereto relating to the Bonds (collectively, the Indenture); (c) the form of confirmation of bid to be used in confirming the telephonic submissions of bids (the Confirmation of Bid) which, together with all schedules thereto, constitutes the form of purchase agreement (the Purchase Agreement); (d) the form of questionnaire referred to in Section 2 hereof (the Questionnaire) to be used by prospective bidders in furnishing certain information to the Company and to the Trustee under the Indenture and, in the case of a group of bidders, in designating the Representative (as defined below) of such group; (e) the order of the Massachusetts Department of Public Utilities; and (f) the surveys by Milbank, Tweed, Hadley & McCloy (referred to in Section 8 hereof) with respect to the necessity for qualification of the Bonds for sale under securities or "blue sky" laws of the various states and with respect to legality of the Bonds for investment in certain states by savings banks, life insurance companies, and trustees. Copies in reasonable quantities of Item (a) above, excluding any exhibits incorporated therein, and of Items (c), (d), and (f) above will be supplied to prospective bidders upon request. No later than 4 P.M., Boston time, on the day immediately preceding the day for submission of bids for the Bonds, the Company shall designate to prospective bidders, by telephone, telecopy, or telegram: (i) the series designation of the Bonds to be issued; (ii) the aggregate principal amount of the Bonds to be issued; (iii) the maturity date of the Bonds, which maturity date shall be not later than 30 years from the date as of which the Bonds are first issued; (iv) the redemption provisions; (v) the dates on which interest shall be paid; and (vi) the date, time, and place for submission of bids and the place for delivery of the Confirmations of Bids. The Company reserves the right to amend and/or supplement the registration statement and prospectus and to make changes in these Terms and Conditions and in the documents referred to in this Section, including the forms of supplemental indentures, and will give notice of the making of any such amendment, supplement, or change that, in the opinion of the Company, is material. Upon request, the Company will furnish copies of any amendment, supplement, or change to each prospective single bidder or to the Representative of any group of prospective bidders. Any notice given by the Company under these Terms and Conditions need be sent only to prospective bidders who have filed Questionnaires as provided in Section 2 hereof. If a group of bidders shall have designated a Representative, such notice need be sent only to said Representative. 2. General Provisions with Respect to Bidders In case of a bid by a group of bidders, the several bidders in the group shall act through a duly authorized representative or representatives (the Representative), who shall be a member of such group and who shall be designated and authorized as Representative by each member of such group in the Questionnaire filed by such member, or who may be substituted for a named Representative in accordance with the terms of said Questionnaire. (If a Representative ceases to be duly authorized by reason of substitution, withdrawal from the group, or otherwise, any action by the Representative while duly authorized shall continue in full force and effect, unless expressly modified or terminated.) No bid for the Bonds will be considered unless the bidder (or, in the case of a group of bidders, each bidder) shall have filed with the Company's Corporate Finance Department, at the offices of New England Power Service Company, 25 Research Drive, Westborough, Massachusetts 01582, before noon, Boston time, seven days prior to the date of bid opening (or such later date as may be fixed by the Company), a Questionnaire properly filled in and signed in duplicate. Notwithstanding the filing of such Questionnaire, any prospective bidder may thereafter determine not to bid. The Company reserves the right to waive any irregularity in any Questionnaire or in the filing thereof and to obtain by telephone or other means of communication any information required by a Questionnaire. New Questionnaires properly filled in and signed in duplicate shall be submitted from time to time as necessary to reflect any changes in the information contained therein. 3. Form and Content of Bids and Confirmations of Bids Each bid may be made by a single bidder or by a group of bidders and shall be for the purchase of all of the Bonds. No bidder may submit or participate in more than one bid for the Bonds. If any bidder participating in the winning bid for the Bonds shall have submitted or participated in another bid, said bidder shall be deemed a defaulting bidder and the provisions of Section 12 of the Purchase Agreement shall apply to its participation. If a bid is made by a representative on behalf of a group of bidders, the obligations of the members of the group shall be several, and not joint or joint and several. All bids must be submitted by telephone and confirmed in writing in the manner set forth below on a Confirmation of Bid signed by the Representative on behalf of the members of a group of bidders, or in the case of a single bidder, by such bidder. Each bid must specify: (a) the interest rate, which shall be a multiple of 1/8 of 1%; and (b) the price to be paid to the Company for the Bonds, which shall be expressed as a percentage of the principal amount of the Bonds and shall not be less than 95% nor more than 100% thereof. If the Confirmation of Bid is not signed by a partner or executive officer of the bidder or Representative, authority to sign and deliver said bid must be appended thereto unless previously furnished to the Company. The Confirmation of Bid shall specify the same interest rate and price specified in the telephonic bid and, if submitted by a Representative on behalf of a group of bidders, the principal amount of the offering of Bonds to be purchased by each member of the group. 4. Submission of Bids and Delivery of Confirmations of Bids All bids must be submitted by telephone, in the manner hereinafter set forth, at the time designated by the Company. Each Representative or single bidder, by submission of a bid, agrees to confirm the bid in writing, within one hour after the time designated for the submission of bids, by delivery of a Confirmation of Bid meeting the requirements of Section 3, at the place (which shall be in New York City) designated by the Company for delivery of the Confirmations of Bids, if notified that such bidder has tentatively been identified as the lowest bidder, or by telecopy if not so notified. The Company reserves the right at any time and from time to time to postpone the bidding date or time. Not less than one hour prior to the time designated by the Company for submission of bids, the Representative or single bidder shall notify the Company's Corporate Finance Department, at the offices of New England Power Service Company, 25 Research Drive, Westborough, Massachusetts, by telephone (508-389-2000), of the name and telephone number of the person or persons (the Authorized Telephonic Bidder) designated by the Representative or the single bidder to submit its bid. Not more than fifteen nor less than five minutes prior to the time designated for submission of bids, a representative of the Company shall establish telephonic contact with the Authorized Telephonic Bidder. Promptly at the time designated for submission of bids, the representative of the Company shall request the Authorized Telephonic Bidder to state the bid. The representative of the Company shall then repeat the bid to the Authorized Telephonic Bidder to verify its accuracy. Upon such verification of the accuracy of the bid, the representative of the Company shall make a record of the bid. Such record of the Company shall be controlling, except in the case of manifest error, for all purposes hereunder. After the closing of bids, information as to bids submitted by other bidders or groups of bidders will be furnished upon request. 5. Opening and Acceptance or Rejection of Bids Each Confirmation of Bid will be examined by the Company promptly upon receipt at the place designated for the delivery thereof. Each bid, as evidenced by such confirmation, will be accepted or rejected in its entirety by the Company within four hours after the time designated for submission of bids, and each bid not accepted within such four-hour period shall be deemed to have been rejected. Acceptance of a bid will be evidenced by endorsement by the Company upon the applicable Confirmation of Bid of its acceptance thereof and announcement thereof at said place and within such period. The Company reserves the right: (a) not to receive any bids; (b) to waive any irregularities in the form or submission of bids or the form or delivery of Confirmations of Bids; (c) to reject all bids after the submission thereof; and (d) to disqualify and reject the bid of any bidder or group of bidders (i) if the Company, in the opinion of its counsel, may not lawfully sell the Bonds to such bidder or to one or more members of such group, (ii) if the Company is not satisfied with the financial responsibility of such bidder or of one or more members of such group, or (iii) if, in the opinion of counsel for the Company, such bidder or one or more members of such group is in such relationship with State Street Bank and Trust Company, Boston, Massachusetts, as would disqualify said bank from acting as trustee under the Indenture, if such bid were accepted (unless, in the case of a group of bidders, within two hours after the time designated for submission of bids, each such member shall have withdrawn from the group and the remaining members shall have agreed to purchase the Bonds which such withdrawing member or members had offered to purchase); and any bid so disqualified and rejected by the Company shall be disregarded in determining the bid to be accepted. If, in a Confirmation of Bid submitted by a Representative, the total of the principal amounts designated to be purchased by the various members of the group does not equal the aggregate principal amount of the Bonds, the Representative executing such bid may, forthwith upon notice of the discrepancy, correct any error in the Confirmation of Bid. If after any such correction is made there remains a discrepancy, the Representative's allocable share shall be increased or decreased by an amount necessary to eliminate such discrepancy; provided that, if the Representative's allocable share is eliminated entirely and the total of the principal amounts allocable to the remaining members of the group still exceeds the aggregate principal amount of the Bonds, the remaining members' shares shall be ratably reduced by an amount necessary to eliminate the discrepancy. If, in a Confirmation of Bid submitted by a Representative, any bidder designated shall not have filed a Questionnaire as provided in Section 2 hereof, and such filing shall not have been expressly waived by the Company, said bidder's name shall be stricken from the list and the Representative's allocable share shall be increased by the amount designated for the bidder whose name is stricken. (If there is more than one Representative, such increases or decreases shall be divided among them in proportion to the amount of Bonds initially specified to be taken by each.) Any other errors with respect to the amounts allocable to various members of a group of bidders may be corrected by the Representative at any time prior to the acceptance of a bid by the Company. The Company shall be entitled to note any correction or change made pursuant to this paragraph on Schedule A to the Confirmation of Bid. If the interest rate or price specified in a Confirmation of Bid is not identical to that shown on the record of bid maintained by the Company, the Representative or single bidder, forthwith upon notice of the discrepancy, shall correct the Confirmation of Bid to conform to said record except if there shall be manifest error in such record. If any bid is accepted, the qualified bid resulting in the lowest cost of money to the Company (the Best Bid) will be accepted. The Best Bid will be that bid which, as determined by the Company, results in the lowest yield on the Bonds based on the term of the Bonds, the interest rate, and the bid price to the Company. The determination by the Company of the Best Bid shall be final. If two or more bids would yield the same lowest cost of money to the Company, the Company may, in its discretion, accept any one of such bids or may give the makers of such bids an opportunity to improve their bids within a designated time. If the Representative of any group of bidders which has submitted one of such bids shall within the designated time submit an improved bid for all of the Bonds that does not include all members of the original bidding group, the Company shall be entitled to accept the improved bid, provided that the bidders shall thereafter be limited to those designated in the improved bid. If no improved bid is submitted within the designated time, or if there are submitted two or more improved bids yielding the same lowest cost of money to the Company, the Company may in its discretion accept any one of such bids. Prior to acceptance of any bid, each bidder designated therein will be furnished a prospectus relating to the Bonds which meets the requirements of Section 10(a) of the Securities Act of 1933 at that time. 6. Determination of Redemption Prices for the Bonds Forthwith upon the acceptance of a bid, the successful bidder or, if a group of bidders, the Representative, shall specify in writing the proposed initial public offering price of the Bonds or shall state that no public offering of the Bonds is intended to be made. The redemption prices for a redemption of the Bonds will thereupon be determined by the Company in the following manner, which determination shall be final. The Initial Public Offering Price shall be the price at which the Bonds are to be initially offered for sale to the public, as specified by the successful bidder or the Representative of the successful bidders; provided that, in the event the successful bidder or the Representative shall have stated as aforesaid that no public offering of the Bonds is intended, the Initial Public Offering Price shall be deemed to be the price to be paid by the successful bidder or bidders to the Company for the Bonds. The Annual Redemption Period shall be the twelve-month period beginning on the first day of the month as of which the Bonds are first issued in each year, commencing with the year the Bonds are first issued. Special Redemption Prices The special redemption price applicable to each Annual Redemption Period shall be 100% of the principal amount of the Bonds. General Redemption Prices The initial general redemption price applicable during the twelve-month period beginning on the date as of which the Bonds are first issued shall be the Initial Public Offering Price plus a percentage of the principal amount thereof equal to the interest rate of the Bonds, which total, if not a multiple of 1/100 of 1%, shall be increased to the next higher multiple of 1/100 of 1%. Such initial general redemption price shall be reduced annually on the first day of the month as of which the Bonds are first issued, commencing the year immediately following the year in which the Bonds are first issued, by 1/* of the amount by which the initial general redemption price exceeds the principal amount of the Bonds; provided, however: (a) that, if any general redemption price so determined is not a multiple of 1/100 of 1%, such redemption price shall be increased to the next higher multiple of 1/100 of 1%; (b) that the general redemption price applicable to any Annual Redemption Period shall not in any event be lower than the special redemption price applicable to such Annual Redemption Period; and (c) that the Company may designate additional terms, such as restrictions on redemption, as set forth in Section 1. 7. The Purchase Agreement Forthwith upon the acceptance by the Company of a bid for the Bonds, the accepted Confirmation of Bid together with all schedules thereto shall become a binding contract, which shall be the Purchase Agreement between the Company and the successful bidder or bidders, all of whose rights shall thereupon be determined solely in accordance with the terms thereof, subject to such changes therein as may be appropriate if the successful bidder or bidders shall not contemplate a public offering. The __________ * The denominator of the fraction is two-thirds of the number of years from the first day of the month as of which the Bonds are first issued to the maturity date specified by the Company in the notice given pursuant to Section 1 hereof, or, if such calculation does not produce an integer, the denominator shall be the next higher integer. Company shall, upon request, indicate its acceptance of the accepted bid by signing and delivering to the successful bidder or Representative of the successful bidders a duplicate copy of the Confirmation of Bid. 8. Counsel for the Successful Bidder or Bidders Milbank, Tweed, Hadley & McCloy, 1 Chase Manhattan Plaza, New York, New York 10005, have been selected by the Company as counsel for the successful bidder or bidders for the Bonds to give opinions with respect to the Bonds. Such counsel have prepared surveys for prospective bidders contemplating a reoffering of Bonds, with respect to the necessity for qualification of the Bonds for sale under securities or "blue sky" laws of various states and with respect to the legality of the Bonds for investment in certain states by savings banks, life insurance companies, and trustees. The successful bidder or bidders are to pay the compensation and disbursements of such counsel, except as otherwise provided in the Purchase Agreement. Such counsel will, on request, advise any prospective bidder who has filed a Questionnaire as provided in Section 2 hereof of the amounts of such compensation and estimates of the disbursements. MASSACHUSETTS ELECTRIC COMPANY By:MICHAEL E. JESANIS Treasurer Westborough, Massachusetts Date: EX-27 12 EXHIBIT 27
UT THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AND RELATED STATEMENTS OF INCOME, RETAINED EARNINGS AND CASH FLOWS OF MASSACHUSETTS ELECTRIC COMPANY, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 DEC-31-1994 MAR-31-1995 3-MOS PER-BOOK 1,005,333 0 228,320 61,232 0 1,294,885 59,953 187,172 135,264 382,389 0 50,000 313,413 68,725 0 0 25,000 0 0 0 455,358 1,294,885 373,092 3,062 356,681 359,743 13,349 326 13,675 8,549 5,126 778 4,348 5,995 6,105 9,896 0 0 Total deferred charges includes other assets. Short-term notes includes commercial paper obligations and short-term debt to affiliates. Per share data is not relevant because the Company's stock is wholly owned by New England Electric System. -----END PRIVACY-ENHANCED MESSAGE-----