<PAGE>
As filed with the Securities and Exchange Commission on _________________.
Registration No. 33-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
-----------------------------
CENTRAL MAINE POWER COMPANY
(Exact name of registrant as specified in its charter)
MAINE 01-0042740
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
83 EDISON DRIVE, AUGUSTA, MAINE 04336 (207) 623-3521
(Address, including zip code, and telephone number, including
area code, of registrant's principal office)
------------------------------
DAVID E. MARSH
Vice President, Corporate Services and Chief Financial Officer
and
WILLIAM M. FINN, ESQ.
Corporate Counsel
Central Maine Power Company
83 Edison Drive
Augusta, Maine 04336
(207) 623-3521
(Name, address, including zip code, and telephone number,
including area code, of agents for service)
COPIES TO:
E. ELLSWORTH MCMEEN, III, ESQ. FRANK B. PORTER, JR., ESQ.
SUSAN A. MARSHALL, ESQ. LAURA C. GLYNN, ESQ.
LeBoeuf, Lamb, Greene & MacRae, L.L.P Choate, Hall & Stewart
125 West 55th Street Exchange Place
New York, New York 10019 53 State Street
(212) 424-8000 Boston, Massachusetts 02109
(617) 248-5000
-----------------------------
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement as determined by
market conditions.
------------------------------
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, please check the following box. [X]
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED UNIT* PRICE* REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MEDIUM-TERM NOTES,
SERIES C $150,000,000 100% $150,000,000 $51,724
==============================================================================================================
</TABLE>
* Estimated solely for purposes of calculation 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.
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<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. 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.
SUBJECT TO COMPLETION DATED DECEMBER 16, 1994
PROSPECTUS
$150,000,000
CENTRAL MAINE POWER COMPANY
MEDIUM-TERM NOTES, SERIES C
DUE FROM NINE MONTHS TO THIRTY YEARS FROM DATE OF ISSUE
===============
Central Maine Power Company (the "Company") may offer from time to time its
Medium-Term Notes, Series C (the "Notes"), in an aggregate principal amount of
up to $150,000,000. Each Note will mature from nine months to thirty years from
its date of issue, as selected by the initial purchaser and agreed to by the
Company. Unless otherwise set forth in an accompanying Pricing Supplement (the
"Pricing Supplement") to this Prospectus, the Notes will not be redeemable at
the option of the Company or subject to repayment at the option of the Holder
thereof prior to the maturity date thereof set forth in the accompanying Pricing
Supplement (the "Specified Maturity"). See "Description of Notes".
Unless otherwise specified in the applicable Pricing Supplement, each Note
will be registered and will be issued either (i) in book-entry form and
represented by a global security (a "Global Security") registered in the name of
a nominee of The Depository Trust Company, as Depository (the "Depository")
(each such Note represented by a Global Security being referred to herein as a
"Book-Entry Note") or (ii) in certificated form and represented by a certificate
issued in definitive form (a "Certificated Note"), and registered in the name of
the Holder thereof. Beneficial interests in a Global Security representing
Book-Entry Notes will be shown on, and transfers thereof will be effected only
through, records maintained by the Depository (with respect to beneficial
interests of its participants) and its participants. See "Description of Notes-
- -Book-Entry System". Unless otherwise indicated in the applicable Pricing
Supplement, Notes will be issued only in denominations of $25,000 and integral
multiples of $1,000 in excess thereof.
The interest rate on, or interest rate formula pertaining to, each Note will
be established by the Company at the date of issuance of such Note and will be
indicated in an accompanying Pricing Supplement. Interest rates and interest
rate formulas are subject to change by the Company, but, except as otherwise set
forth herein, no such change will affect the interest rate or interest rate
formula pertaining to any Note theretofore issued or which the Company has
agreed to sell. Unless otherwise indicated in the applicable Pricing
Supplement, each Note will bear interest at a fixed rate (a "Fixed Rate Note"),
which may be zero in the case of a Note issued at a price representing a
discount from the principal amount payable at Specified Maturity, or at a
floating rate determined by reference to the CD Rate, the Commercial Paper Rate,
the Federal Funds Rate, LIBOR, the Prime Rate, the Treasury Rate or such other
interest rate formula as may be designated in an accompanying Pricing
Supplement, as adjusted by the Spread and/or Spread Multiplier, if any,
applicable to such Notes (a "Floating Rate Note"). The Notes may be issued as
Original Issue Discount Notes or Extendible Notes. See "Description of Notes".
Unless otherwise specified in the applicable Pricing Supplement, interest on
Fixed Rate Notes will be payable each September 1 and March 1 and at maturity or
upon earlier redemption or repayment. Interest on Floating Rate Notes will be
payable on the dates indicated therein and in the applicable Pricing 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.
=================================
<TABLE>
<CAPTION>
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PRICE TO AGENT'S PROCEEDS TO
PUBLIC (1) COMMISSION (2) THE COMPANY (2)(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
PER NOTE 100.00% .125%-.750% 99.875%-99.250%
TOTAL $150,000,000 $187,500-$1,125,000 $149,812,500-$148,875,000
================================================================================
</TABLE>
(1) Unless otherwise specified in the Pricing Supplement relating thereto, each
Note will be issued at 100% of the principal amount thereof.
(2) The Company will pay Lehman Brothers, Lehman Brothers Inc. (including its
affiliate, Lehman Government Securities Inc.) or PaineWebber Incorporated
or other agents, (each an "Agent," and collectively, the "Agents"), a
commission, in the form of a discount ranging from .125% to .750%, of the
principal amount of any Note, depending on its Specified Maturity, sold
through such Agent. Any Agent, acting as principal, may also purchase
Notes at a discount for resale to one or more investors or one or more
broker-dealers (acting as principal for purposes of resale) at varying
prices related to prevailing market prices at the time of resale, as
determined by such Agent, or if so agreed, at a fixed public offering
price. The Company has agreed to indemnify the Agents against certain
liabilities, including liabilities under the applicable Federal and state
securities laws.
(3) Before deducting offering expenses payable by the Company estimated at
$368,000.
------------------------------------------
The Notes may be offered on a continuing basis by the Company through the
Agents, each of which has agreed to use its reasonable efforts to solicit offers
to purchase the Notes. The Company also may sell Notes to any Agent acting as
principal for resale to one or more investors, or one or more broker-dealers.
The Company has reserved the right to sell Notes directly to investors on its
own behalf and on such sales no commission will be paid. The Notes will not be
listed on any securities exchange, and there can be no assurance that the Notes
offered by this Prospectus will be sold or that there will be a secondary market
for the Notes. The Company reserves the right to withdraw, cancel or modify the
offer made hereby without notice. The Company or any Agent who solicited an
offer to purchase Notes may reject any such offer in whole or in part. See
"Plan of Distribution".
-----------------------------------
LEHMAN BROTHERS PAINEWEBBER INCORPORATED
The date of this Prospectus is ______________, 1994.
<PAGE>
AVAILABLE INFORMATION
Central Maine Power Company (the "Company") is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports and other information with the
Securities and Exchange Commission (the "Commission"). Information, as of
particular dates, concerning directors and officers of the Company, their
remuneration, the principal holders of securities of the Company and any
material interest of such persons in transactions with the Company is disclosed
in proxy statements distributed to shareholders of the Company and filed with
the Commission. Such reports, proxy statements and other information filed by
the Company can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's regional offices at 7 World Trade Center, Suite 1300,
New York, New York 10048, and Suite 1400, Northwestern Atrium Center, 500 West
Madison Street, Chicago, Illinois 60661-2511. Copies of such material can also
be obtained at prescribed rates from the Public Reference Section of the
Commission at its principal office at 450 Fifth Street, N.W., Washington, D.C.
20549. Certain securities of the Company are listed on the New York Stock
Exchange, where reports, proxy statements and other information concerning the
Company can also be inspected.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have heretofore been filed by the Company
with the Commission pursuant to the Exchange Act, are hereby incorporated by
reference in this Prospectus:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1993.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1994, June 30, 1994 and September 30, 1994.
3. The Company's Current Reports on Form 8-K dated January 5, 1994,
January 13, 1994 (as amended by Amendment No. 1 on Form 8-K/A dated January
13, 1994), February 3, 1994, April 4, 1994, April 6, 1994, May 16, 1994,
July 5, 1994, October 14, 1994, October 17, 1994 and November 22, 1994.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Notes shall be
deemed to be incorporated by reference in this Prospectus and 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 for purposes of this Prospectus 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 of this Prospectus.
The Company hereby undertakes to provide without charge to each person 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 in this Prospectus by reference,
other than exhibits to such documents (unless such exhibits are specifically
incorporated by reference in such documents). Requests for such copies should
be directed to William M. Finn, Esq., Secretary and Clerk, Central Maine Power
Company, 83 Edison Drive, Augusta, Maine 04336, telephone number: (207) 623-
3521.
<PAGE>
THE COMPANY
The Company, a Maine corporation organized in 1905, is an investor-owned
electric utility engaged in the generation, purchase, transmission, distribution
and sale of electric energy for the benefit of retail customers in southern and
central Maine and wholesale customers, principally other utilities. The
principal executive offices of the Company are located at 83 Edison Drive,
Augusta, Maine 04336, and the Company's telephone number is (207) 623-3521.
The Company serves more than 500,000 customers in its 11,000 square
mile service area in southern and central Maine. The Company's service area
contains the bulk of Maine's industrial centers and includes about 77 percent of
the total population of the State. The Company's industrial and commercial
customers include major producers of pulp and paper products, producers of
chemicals, plastics, electric components, processed food and footwear, and
shipbuilders.
RATIO OF EARNINGS TO FIXED CHARGES
As computed in accordance with Item 503(d) of Regulation S-K of the
Commission, the Company's unaudited ratio of earnings to fixed charges for the
twelve-month period ended September 30, 1994 was 2.8, and such ratio for each of
the calendar years (the Company's fiscal year being a calendar year) in the
period 1989 through 1993, inclusive, was 2.3, 2.0, 2.4, 2.5 and 2.7,
respectively.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale or sales of
the Notes will be used for general corporate purposes, including, but not
limited to, construction financing, funding of energy management and customer
conservation programs, and the repayment of short-term borrowings and other
forms of indebtedness.
DESCRIPTION OF NOTES
The following description sets forth certain general terms and provisions
of the Notes. The particular terms of any Notes will be described in the
Pricing Supplement relating to such Notes. The statements made herein are a
summary only, do not purport to be complete, and are qualified in their entirety
by the detailed provisions of an Indenture between the Company and The Bank of
New York (the "Trustee"), dated as of August 1, 1989, as supplemented by the
First Supplemental Indenture, dated as of August 7, 1989, the Second
Supplemental Indenture dated as of January 10, 1992 and the Third Supplemental
Indenture, dated as of December 15, 1994 (collectively, the "Indenture").
Copies of the Indenture, including supplemental indentures, are filed or
incorporated by reference as exhibits to the Registration Statement, and such
exhibits are incorporated herein by reference. All article and section
references are references to articles and sections of the Indenture.
-2-
<PAGE>
GENERAL
The Notes will be issued under the Indenture, will be unsecured and will
rank equally with the Company's other unsecured senior indebtedness. The Notes
are limited to an aggregate principal amount of $150,000,000 and will constitute
the third series of Securities (as defined below) issued under the Indenture.
Under the Indenture, the Company may issue from time to time its notes,
debentures or other evidences of indebtedness, in one or more series
(hereinafter referred to as the "Securities"). The Indenture does not limit the
amount of Securities which may be issued thereunder and additional Securities
may be issued thereunder up to the aggregate principal amount which may be
authorized from time to time by the Company. Capitalized terms used but not
otherwise defined herein have the meanings specified in the Indenture.
The holders of the Company's Preferred Stock have specifically consented to
the issuance of unsecured medium-term notes in an aggregate principal amount of
$150,000,000 outstanding at any one time. Medium-term notes in such an amount
are therefore not subject to the Company's charter restriction on the issuance
of unsecured securities, which (except in the case of certain refundings) limits
such unsecured securities to an amount equal to 20 percent of the aggregate of
all outstanding secured indebtedness, plus capital and surplus (with certain
adjustments). The Notes offered hereby and the Medium-Term Notes, Series A and
the Medium-Term Notes, Series B previously issued under the Indenture constitute
unsecured medium-term notes for the purpose of the foregoing consent. As of the
date of this Prospectus, $135,000,000 in aggregate principal amount of medium-
term notes is outstanding.
In the event that the aggregate principal amount of unsecured medium-term
notes at any time outstanding (including, without limitation, the Notes, the
Medium-Term Notes, Series A and the Medium-Term Notes, Series B) exceeds
$150,000,000, the excess of such amount would be subject to the charter
restriction described above. The Company's Board of Directors and the Maine
Public Utilities Commission ("MPUC") have approved the issuance of up to
$150,000,000 in aggregate principal amount of medium-term notes of any series at
any one time outstanding and the issuance of medium-term notes in excess of that
amount would require further approvals. The MPUC order relating to the Notes
provides that the interest rate on any Medium-Term Notes, Series C, shall not
exceed 12 percent per annum unless the MPUC approves such rate.
The Notes may be offered on a continuing basis and each Note will mature
from nine months to thirty years from its date of issue, as selected by the
initial purchaser and agreed to by the Company, and may be subject to redemption
at the option of the Company or repayment at the option of the holder prior to
Maturity (as set forth below under "Optional Redemption" and "Repayment at
Holder's Option") at the price or prices specified in the applicable Pricing
Supplement. Each Note will be either (i) a Fixed Rate Note, which may bear
interest at a rate of zero in the case of certain Notes issued at an Issue Price
(as defined below) representing a discount from the principal amount payable at
its Specified Maturity (a "Zero-Coupon Note"), or (ii) a Floating Rate Note
which will bear interest at a rate determined by reference to an interest rate
basis or combination of interest rate bases (the "Base Rate") specified in the
applicable Pricing Supplement that may be adjusted by a Spread and/or Spread
Multiplier (each as defined below).
Each Note will be issued initially as either a Book-Entry Note or a
Certificated Note in fully registered form without coupons. Except as set forth
below under "Book-Entry System", Book-Entry Notes will not be exchangeable for
Certificated Notes.
The authorized denominations of the Notes will be $25,000 or any larger
amount that is an integral multiple of $1,000.
-3-
<PAGE>
"Business Day" means any day, other than a Saturday or Sunday, that meets
each of the following applicable requirements: the day is (a) not a day on which
banking institutions are authorized or required by law or regulation to be
closed in The City of New York and (b) with respect to LIBOR Notes, a London
Banking Day. "London Banking Day" means any day on which dealings in deposits
in U.S. dollars are transacted in the London interbank market.
"Index Maturity" means, with respect to a Floating Rate Note, the period to
maturity of the instrument or obligation on which the interest rate formula is
based, as specified in the applicable Pricing Supplement.
"Original Issue Discount Note" means, (i) a Note, including any Zero Coupon
Note, that has a stated redemption price at Maturity that exceeds its Issue
Price (as defined for U.S. Federal Income tax purposes) by at least 0.25% of its
principal amount multiplied by the number of full years from the Original Issue
Date to the Specified Maturity for such Note and (ii) any other Note designated
by the Company as issued with original issue discount for United States Federal
income tax purposes.
The Pricing Supplement relating to each Note will describe the following
terms: (1) whether such Note is a Fixed Rate Note or a Floating Rate Note, (2)
the price (expressed as a percentage of the aggregate principal amount thereof)
at which such Note will be issued (the "Issue Price"); (3) the date on which
such Note will be issued (the "Original Issue Date"); (4) the date on which such
Note will mature (the "Specified Maturity"); (5) if such Note is a Fixed Rate
Note, the rate per annum at which such Note will bear interest, if any, and the
date or dates on which interest will be payable (each, an "Interest Payment
Date"), if other than March 1 and September 1 and, if so stated in the
applicable Pricing Supplement, that such rate may be changed by the Company
prior to the Specified Maturity, and, if so, the Optional Reset Dates (as
defined below) and the basis or formula for such change, if any; (6) if such
Note is a Floating Rate Note, the Base Rate, the Initial Interest Rate, if
available, the Interest Reset Period, the Interest Reset Dates, the Interest
Determination Dates, the Calculation Dates, the Interest Payment Period, the
Interest Payment Dates, the Index Maturity, the Maximum Interest Rate and the
Minimum Interest Rate, if any, and the Spread and/or Spread Multiplier, if any
(all as defined below), and any other terms relating to the particular method of
calculating the interest rate for such Note and, if so specified in the
applicable Pricing Supplement, that any such Spread and/or Spread Multiplier may
be changed by the Company prior to the Specified Maturity and, if so, the
Optional Reset Dates (as defined below) and the basis or formula for such
change, if any; (7) whether such Note is an Original Issue Discount Note, and if
so, the yield to maturity; (8) the regular record date or dates (a "Regular
Record Date") if other than as set forth below with respect to Fixed Rate Notes
and Floating Rate Notes; (9) certain specified United States Federal income tax
consequences of the purchase, ownership and disposition of such Note, if
applicable; (10) whether such Note may be redeemed at the option of the Company
or repaid at the option of the Holder prior to the Specified Maturity and, if
so, the provisions relating to such redemption or repayment; (11) whether such
Note will be issued initially as a Book-Entry Note or a Certificated Note; and
(12) any other terms of such Note not inconsistent with the provisions of the
Indenture.
PAYMENT OF PRINCIPAL AND INTEREST
Until the Notes are paid, or payment thereof is provided for, the Company
will, at all times, maintain a paying agent (the "Paying Agent") in The City of
New York capable of performing the duties described herein to be performed by
the Paying Agent. The Company has initially appointed The Bank of New York as
Paying Agent.
-4-
<PAGE>
Payments of principal and interest (and premium, if any) to Beneficial
Owners (as defined below) of Book-Entry Notes are expected to be made in
accordance with the Depository's and its participants' procedures in effect from
time to time as described below under "Book-Entry System".
Unless otherwise specified in the applicable Pricing Supplement, payments
of interest on Certificated Notes (other than interest payable at Maturity (as
defined below)), will be made by mailing a check to the Holder at the address of
such Holder appearing on the Register on the applicable Regular Record Date.
Unless otherwise specified in the applicable Pricing Supplement, principal and
any premium and interest payable with respect to any Certificated Note at
Maturity (as defined below) will be paid in immediately available funds upon
surrender of such Note at the office of the Paying Agent. "Maturity" means the
date on which the principal of a Note becomes due and payable in full in
accordance with its terms and the terms of the Indenture, whether at Specified
Maturity or earlier by declaration of acceleration, call for redemption or
otherwise.
Any payment required to be made in respect of a Note on a day that is not a
Business Day for such Note need not be made on such date, but may be made on the
next succeeding Business Day (except that in the case of a LIBOR Note, if such
Business Day is in the next succeeding calendar month, such payment shall be
made on the immediately preceding Business Day) with the same force and effect
as if made on such date, and no additional interest shall accrue as a result of
such delayed payment.
Unless otherwise specified in the applicable Pricing Supplement, if the
principal of any Original Issue Discount Note is declared to be due and payable
immediately as described under "Events of Default" below, the amount of
principal due and payable with respect to such Note shall be limited to the
Amortized Face Amount of such Note as of the date of such declaration. The
"Amortized Face Amount" of an Original Issue Discount Note that does not bear
stated interest shall be an amount equal to the sum of (i) the principal amount
of such Note multiplied by the Issue Price set forth in the applicable Pricing
Supplement plus (ii) the portion of the difference between the dollar amount
determined pursuant to the preceding clause (i) and the principal amount of such
Note that has accrued at the yield to maturity set forth in the Pricing
Supplement (computed in accordance with generally accepted financial practices)
to such date of declaration, but in no event shall the Amortized Face Amount of
an Original Issue Discount Note exceed its principal amount.
INTEREST AND INTEREST RATES
Each Note other than certain Original Issue Discount Notes will bear
interest from its Original Issue Date or from the most recent Interest Payment
Date to which interest on such Note has been paid or duly provided for at a
fixed rate or rates per annum, or at a rate or rates per annum determined
pursuant to a Base Rate or Rates stated therein and in the applicable Pricing
Supplement that may be adjusted by a Spread and/or Spread Multiplier, until the
principal thereof is paid or made available for payment. Interest will be
payable on each Interest Payment Date and at Maturity. Interest rates, Base
Rates, Spreads and Spread Multipliers are subject to change by the Company from
time to time but no such change will affect any Note theretofore issued or which
the Company has agreed to sell, except as otherwise set forth herein.
Interest payable and punctually paid or duly provided for on any Interest
Payment Date will be paid to the person in whose name a Note is registered at
the close of business on the Regular Record Date next preceding such Interest
Payment Date; provided, however, that the first payment of interest on any Note
with an Original Issue Date between a Regular Record Date and the succeeding
Interest Payment
-5-
<PAGE>
Date will be made on the Interest Payment Date following the next succeeding
Regular Record Date to the registered owner on such next succeeding Regular
Record Date; and provided, further, that interest payable at Maturity will be
payable to the person to whom principal shall be payable. The "Regular Record
Date" with respect to any Interest Payment Date shall be the date fifteen
calendar days immediately preceding such Interest Payment Date whether or not
such date shall be a Business Day.
All percentages resulting from any calculations will be rounded upwards, if
necessary, to the nearest one hundred-thousandth of a percentage point
(.0000001), with five one-millionths of a percentage point being rounded upwards
(e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and
all dollar amounts used in or resulting from such calculations on the Notes will
be rounded to the nearest one cent (with one-half cent being rounded upwards).
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from its Original Issue Date at the
rate per annum stated in the applicable Pricing Supplement and on the face
thereof until the principal amount thereof is paid or made available for
payment. Payments of interest on any Fixed Rate Note with respect to any
Interest Payment Date and at Maturity will include interest from and including
the Original Issue Date or the next preceding Interest Payment Date to which
interest has been paid or duly provided for, to but excluding the applicable
Interest Payment Date or the date of Maturity. Unless otherwise set forth in an
applicable Pricing Supplement, interest on each Fixed Rate Note will be payable
semi-annually each September 1 and March 1 and at Maturity. Interest on Fixed
Rate Notes will be computed on the basis of a 360-day year of twelve 30-day
months.
FLOATING RATE NOTES
Each Floating Rate Note will bear interest at a rate or rates determined by
reference to the Base Rate plus or minus the Spread, if any, and/or multiplied
by the Spread Multiplier, if any (each as specified in the applicable Pricing
Supplement) until the principal thereof is paid or made available for payment.
The "Spread" is the number of basis points (one basis point equals one one-
hundredth of a percentage point) specified in the applicable Pricing Supplement
as being applicable to such Floating Rate Note, and the "Spread Multiplier" is
the percentage specified in the applicable Pricing Supplement as being
applicable to such Note. Any Floating Rate Note may also have either or both of
the following: (i) a maximum numerical interest rate limitation, or ceiling, on
the rate of interest which may accrue during any interest period (the "Maximum
Interest Rate"); and (ii) a minimum numerical interest rate limitation, or
floor, on the rate of interest which may accrue during any interest period (the
"Minimum Interest Rate"). The applicable Pricing Supplement will designate one
of the following Base Rates as applicable to each Floating Rate Note: (a) the
CD Rate (a "CD Rate Note"), (b) the Commercial Paper Rate (a "Commercial Paper
Rate Note"), (c) the Federal Funds Rate (a "Federal Funds Rate Note"), (d) LIBOR
(a "LIBOR Note"), (e) the Prime Rate (a "Prime Rate Note"), (f) the Treasury
Rate (a "Treasury Rate Note"), or (g) such other Base Rate as is set forth in
the Pricing Supplement and on the face of such Floating Rate Note.
Each Floating Rate Note will bear interest from its Original Issue Date to
the first Interest Reset Date (as defined below) for such Note at the Initial
Interest Rate (the "Initial Interest Rate") set forth on the face thereof and in
the applicable Pricing Supplement. Thereafter, the interest rate on each
Floating Rate Note for each Interest Reset Period (as defined below) will be
equal to the interest rate calculated by reference to the Base Rate or Rates
specified on the face thereof and in the applicable Pricing
-6-
<PAGE>
Supplement plus or minus the Spread, if any, and/or times the Spread Multiplier,
if any. The Spread and/or Spread Multiplier for a Floating Rate Note may be
subject to adjustment during an Interest Reset Period under circumstances
specified therein and in the applicable Pricing Supplement.
The Company will appoint, and enter into an agreement with, an agent (a
"Calculation Agent") to calculate interest rates on Floating Rate Notes. Unless
otherwise specified in the applicable Pricing Supplement, the Calculation Agent
for each Floating Rate Note will be the Trustee. All determinations to be made
by the Calculation Agent shall be at its sole discretion and shall, in the
absence of manifest error, be conclusive for all purposes and binding on the
Holders of Notes.
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semi-annually or annually (each an "Interest Reset
Period"), as specified in the applicable Pricing Supplement and on the face of
such Floating Rate Note. Unless otherwise specified in the applicable Pricing
Supplement, the date or dates on which interest will be reset (each an "Interest
Reset Date") will be, in the case of Floating Rate Notes that reset daily, each
Business Day; in the case of Floating Rate Notes that reset weekly (other than
Treasury Rate Notes), Wednesday of each week; in the case of Treasury Rate Notes
that reset weekly, Tuesday of each week, except as provided below; in the case
of Floating Rate Notes that reset monthly, the third Wednesday of each month; in
the case of Floating Rate Notes that reset quarterly, the third Wednesday of
each of the four months specified in the applicable Pricing Supplement and on
the face of such Floating Rate Note; in the case of Floating Rate Notes that
reset semi-annually, the third Wednesday of each of the two months specified in
the applicable Pricing Supplement and on the face of such Floating Rate Note;
and in the case of Floating Rate Notes that reset annually, the third Wednesday
of the month specified in the applicable Pricing Supplement and on the face of
such Floating Rate Note. If any Interest Reset Date for any Floating Rate Note
is not a Business Day, such Interest Reset Date shall be postponed to the next
day that is a Business Day, except, in the case of a LIBOR Note, if such
Business Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Business Day. If an auction for Treasury
bills (as described below) falls on a day that is an Interest Reset Date for
Treasury Rate Notes, the Interest Reset Date shall be the following day that is
a Business Day.
The interest rate for each Interest Reset Period will be the rate
determined by the Calculation Agent on the Calculation Date (as defined below)
pertaining to the Interest Determination Date pertaining to the Interest Reset
Date for such Interest Reset Period. Unless otherwise specified in the
applicable Pricing Supplement, the "Interest Determination Date" pertaining to
an Interest Reset Date for CD Rate Notes, Commercial Paper Rate Notes, Federal
Funds Rate Notes and Prime Rate Notes will be the second Business Day next
preceding such Interest Reset Date. Unless otherwise specified in the
applicable Pricing Supplement, the Interest Determination Date pertaining to an
Interest Reset Date for a LIBOR Note will be the second London Banking Day next
preceding such Interest Reset Date. Unless otherwise specified in the
applicable Pricing Supplement, the Interest Determination Date pertaining to an
Interest Reset Date for a Treasury Rate Note will be the day of the week in
which such Interest Reset Date falls on which Treasury bills of the Index
Maturity specified on the face of the Treasury Rate Notes would normally be
auctioned. Treasury bills are normally sold at auction on Monday of each week,
unless that day is a legal holiday, in which case the auction is usually held on
the following Tuesday, except that such auction may be held on the preceding
Friday. If, as the result of a legal holiday, an auction is so held on the
preceding Friday, such Friday will be the Interest Determination Date pertaining
to the Interest Reset Date for Treasury Rate Notes occurring in the next
succeeding week. If an auction falls on a day that is an Interest Reset Date
for Treasury Rate Notes, such Interest Reset Date will be the first Business Day
immediately following such auction date.
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Unless otherwise specified in the applicable Pricing Supplement, the
"Calculation Date", where applicable, pertaining to an Interest Determination
Date will be the earlier of (i) the tenth calendar day after such Interest
Determination Date or if such day is not a Business Day, the next succeeding
Business Day or (ii) the Business Day preceding the applicable Interest Payment
Date or Maturity, as the case may be.
Unless otherwise indicated in the applicable Pricing Supplement, interest
on each Floating Rate Note will be payable monthly, quarterly, semi-annually or
annually (the "Interest Payment Period"). Except as provided below or in the
applicable Pricing Supplement, the Interest Payment Dates will be, (i) in the
case of Floating Rate Notes with a daily, weekly or monthly Interest Reset
Period, on the third Wednesday of each month or on the third Wednesday of March,
June, September and December of each year, as specified in the applicable
Pricing Supplement and on the face of such Floating Rate Note; (ii) in the case
of Floating Rate Notes with a quarterly Interest Reset Period, on the third
Wednesday of March, June, September and December of each year; (iii) in the case
of Floating Rate Notes with a semi-annual Interest Reset Period, on the third
Wednesday of each of two months of each year specified in the applicable Pricing
Supplement and on the face of such Floating Rate Note; and (iv) in the case of
Floating Rate Notes with an annual Interest Reset Period, on the third Wednesday
of one month of each year specified in the applicable Pricing Supplement and on
the face of such Floating Rate Note and, in each case, at Maturity. If any
Interest Payment Date other than Maturity for any Floating Rate Note would
otherwise be a day that is not a Business Day, such Interest Payment Date shall
be postponed to the next day that is a Business Day, except that in the case of
a LIBOR Note, if such Business Day is in the next succeeding calendar month,
such Interest Payment Date shall be the immediately preceding Business Day. If
Maturity for any Floating Rate Note falls on a day that is not a Business Day,
payment of principal, premium, if any, and interest with respect to such Note
will be made on the next succeeding Business Day with the same force and effect
as if made on the due date, and no interest shall be payable on the date of
payment for the period from and after the due date.
Unless otherwise indicated in the applicable Pricing Supplement, interest
payments on each Interest Payment Date and at Maturity for Floating Rate Notes
will include accrued interest from and including the Original Issue Date or the
next preceding Interest Payment Date to which interest has been paid or duly
provided for, to but excluding the applicable Interest Payment Date or the date
of Maturity. Accrued interest will be calculated by multiplying the principal
amount of a Floating Rate Note by an accrued interest factor. This accrued
interest factor will be computed by adding the interest factor calculated for
each day in the period for which accrued interest is being calculated. The
interest factor (expressed as a decimal rounded upwards, if necessary, to the
next higher one hundred-thousandth of a percentage point) for each such day will
be computed by dividing the interest rate applicable to such day by 360 in the
case of CD Rate Notes, Commercial Paper Rate Notes, Federal Funds Rate Notes,
LIBOR Notes and Prime Rate Notes, or by the actual number of days in the year,
in the case of Treasury Rate Notes. The interest rate in effect on each day
will be (a) if such day is an Interest Reset Date, the interest rate with
respect to the Interest Determination Date pertaining to such Interest Reset
Date, or (b) if such day is not an Interest Reset Date, the interest rate with
respect to the Interest Determination Date pertaining to the next preceding
Interest Reset Date, subject in either case to any Maximum or Minimum Interest
Rate limitation referred to above and to any adjustment by a Spread and/or a
Spread Multiplier referred to above; provided, however, that the interest rate
in effect for the period from the Original Issue Date to the first Interest
Reset Date set forth in the Pricing Supplement with respect to a Floating Rate
Note will be the "Initial Interest Rate" specified in the applicable Pricing
Supplement. The interest rate on the Floating Rate Notes will in no event be
higher than the maximum rate permitted by applicable law.
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CD RATE NOTES
Each CD Rate Note will bear interest at the interest rate (calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any)
specified in such CD Rate Note and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "CD Rate"
means, with respect to any applicable Interest Determination Date, the rate on
such date for negotiable certificates of deposit having the Index Maturity
designated in the applicable Pricing Supplement, as such rate is published by
the Board of Governors of the Federal Reserve System in "Statistical Release
H.15(519), Selected Interest Rates", or any successor publication of the Board
of Governors of the Federal Reserve System ("H.15(519)") under the heading "CDs
(Secondary Market)" or, if such rate is not published by 3:00 P.M., New York
City time, on the Calculation Date pertaining to such Interest Determination
Date, the CD Rate for such Interest Determination Date will be the rate on such
Interest Determination Date for negotiable certificates of deposit having the
Index Maturity designated in the applicable Pricing Supplement as published by
the Federal Reserve Bank of New York in its daily statistical release "Composite
3:30 P.M. Quotations for U.S. Government Securities" or any successor
publication of the Federal Reserve Bank of New York ("Composite Quotations")
under the heading "Certificates of Deposit". If such rate is not published in
either H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such Interest Determination Date, then the CD
Rate for such Interest Determination Date will be calculated by the Calculation
Agent and will be the arithmetic mean of the secondary market offered rates as
of 10:00 A.M., New York City time, on such Interest Determination Date of three
leading nonbank dealers in negotiable U.S. dollar certificates of deposit in The
City of New York selected by the Calculation Agent for negotiable certificates
of deposit of major United States money center banks of the highest credit
standing (in the market for negotiable certificates of deposit) with a remaining
maturity closest to the Index Maturity designated in the applicable Pricing
Supplement in a denomination of $5,000,000; provided, however, that if the
dealers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the CD Rate with respect to such Interest
Determination Date will be the CD Rate in effect on such Interest Determination
Date.
COMMERCIAL PAPER RATE NOTES
Each Commercial Paper Rate Note will bear interest at the interest rate
(calculated with reference to the Commercial Paper Rate and the Spread and/or
Spread Multiplier, if any) specified in such Commercial Paper Rate Note and in
the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement,
"Commercial Paper Rate" means, with respect to any applicable Interest
Determination Date, the Money Market Yield (calculated as described below) of
the rate on such date for commercial paper having the Index Maturity designated
in the applicable Pricing Supplement, as such rate is published in H.15(519),
under the heading "Commercial Paper" or, if such rate is not published by 3:00
P.M., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Commercial Paper Rate for such Interest Determination
Date will be the Money Market Yield of the rate on such Interest Determination
Date for commercial paper having the Index Maturity designated in the applicable
Pricing Supplement as published in Composite Quotations under the heading
"Commercial Paper". If such rate is not published in either H.15(519) or
Composite Quotations by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, then the Commercial Paper Rate
for such
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Interest Determination Date shall be calculated by the Calculation Agent and
shall be the Money Market Yield of the arithmetic mean of the offered rates as
of 11:00 A.M., New York City time, on such Interest Determination Date of three
leading dealers of commercial paper in The City of New York selected by the
Calculation Agent for commercial paper having the Index Maturity designated in
the applicable Pricing Supplement, placed for an industrial issuer whose bond
rating is "AA", or the equivalent, from a nationally recognized rating agency;
provided, however, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Commercial Paper Rate
with respect to such Interest Determination Date will be the Commercial Paper
Rate in effect on such Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage rounded to
the nearest one hundred-thousandth of a percentage point) calculated in
accordance with the following formula:
D X 360
Money Market Yield = ------------------ X 100
360 - (D X M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal, and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
FEDERAL FUNDS RATE NOTES
Each Federal Funds Rate Note will bear interest at the interest rate
(calculated with reference to the Federal Funds Rate and the Spread and/or
Spread Multiplier, if any) specified in such Federal Funds Rate Note and in the
applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any applicable Interest Determination Date,
the rate on such date for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)" or, if such rate is not published by 3:00
P.M., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Federal Funds Rate for such Interest Determination Date
will be the rate on such Interest Determination Date as published in Composite
Quotations under the heading "Federal Funds/Effective Rate". If such rate is
not published in either H.15(519) or Composite Quotations by 3:00 P.M., New York
City time, on the Calculation Date pertaining to such Interest Determination
Date, then the Federal Funds Rate for such Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the
rates, as of 9:00 A.M., New York City time, on such Interest Determination Date,
for the last transaction in overnight Federal Funds arranged by three leading
brokers of Federal Funds transactions in The City of New York selected by the
Calculation Agent; provided, however, that if the brokers selected as aforesaid
by the Calculation Agent are not quoting as mentioned in this sentence, the
Federal Funds Rate with respect to such Interest Determination Date will be the
Federal Funds Rate in effect on such Interest Determination Date.
LIBOR NOTES
Each LIBOR Note will bear interest at the interest rate (calculated with
reference to LIBOR and the Spread and/or Spread Multiplier, if any) specified in
such LIBOR Note and in the applicable Pricing Supplement.
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Unless otherwise specified in the applicable Pricing Supplement, "LIBOR"
means, with respect to any applicable Interest Determination Date, the rate
determined in accordance with the following provisions:
(i) With respect to any such Interest Determination Date, LIBOR will
be either: (a) if "LIBOR Reuters" is specified in the LIBOR Note and the
applicable Pricing Supplement, the arithmetic mean of the offered rates
(unless the specified designated LIBOR Page (as defined below) by its terms
provides only for a single rate, in which case such single rate shall be
used) for deposits in United States dollars having the Index Maturity
designated in such LIBOR Note and the applicable Pricing Supplement,
commencing on the second London Banking Day immediately following the
Interest Determination Date, which appear on the Designated LIBOR Page
specified in such LIBOR Note and the applicable Pricing Supplement as of
11:00 A.M., London time, on that Interest Determination Date, if at least
two such offered rates appear (unless, as aforesaid, only a single rate is
required) on such Designated LIBOR Page, or (b) if "LIBOR Telerate" is
specified in such LIBOR Note and the applicable Pricing Supplement, the
rate for deposits in United States dollars having the Index Maturity
specified in such LIBOR Note and the applicable Pricing Supplement,
commencing on the second London Banking Day immediately following such
Interest Determination Date, which appears on the Designated LIBOR Page
designated in such LIBOR Note and the applicable Pricing Supplement as of
11:00 A.M. London time on that Interest Determination Date.
Notwithstanding the foregoing, if fewer than two offered rates appear on
the Designated LIBOR Page with respect to LIBOR Reuters (unless the
specified Designated LIBOR Page with respect to LIBOR Reuters by its terms
provides only for a single rate, in which case such single rate shall be
used), or if no rate appears on the Designated LIBOR Page with respect to
LIBOR Telerate, whichever may be applicable, LIBOR in respect of the
related Interest Determination Date will be determined as if the parties
had specified the rate described in clause (ii) below.
(ii) With respect to any such Interest Determination Date on which
fewer than two offered rates appear on the Designated LIBOR Page with
respect to LIBOR Reuters (unless the Designated LIBOR Page by its terms
provides only for a single rate, in which case such single rate shall be
used), or if no rate appears on the Designated LIBOR Page with respect to
LIBOR Telerate, as the case may be, the Calculation Agent will request the
principal London office of each of four major banks in the London interbank
market selected by the Calculation Agent to provide the Calculation Agent
with its offered rate quotation for deposits in United States dollars for
the period of the Index Maturity designated in such LIBOR Note and the
applicable Pricing Supplement, commencing on the second London Banking Day
immediately following such Interest Determination Date, to prime banks in
the London interbank market as of 11:00 A.M., London time, on such Interest
Determination Date and in a principal amount that is representative for a
single transaction in United States dollars in such market at such time.
If at least two such quotations are provided, LIBOR determined on such
Interest Determination Date will be the arithmetic mean of such quotations.
If fewer than two quotations are provided, LIBOR determined on such
Interest Determination Date will be the arithmetic mean of the rates quoted
as of 11:00 A.M. in The City of New York, on such Interest Determination
Date by three major banks in The City of New York selected by the
Calculation Agent for loans in United States dollars to leading banks,
having the Index Maturity designated in such LIBOR Note and the applicable
Pricing Supplement in a principal amount that is representative for a
single transaction in United States dollars in such market at such time;
provided, however, that if the banks so selected by the Calculation Agent
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are not quoting as mentioned in this sentence, LIBOR
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determined on such Interest Determination Date will be LIBOR in effect on
such Interest Determination Date.
"Designated LIBOR Page" means either (a) the display on the Reuters Monitor
Money Rates Service for the purpose of displaying the London interbank rates of
major banks for United States dollars (if "LIBOR Reuters" is designated in the
LIBOR Note and the applicable Pricing Supplement), or (b) the display on the Dow
Jones Telerate Service for the purpose of displaying the London interbank rates
of major banks for United States dollars (if "LIBOR Telerate" is designated in
the Note and the applicable Pricing Supplement). If neither LIBOR Reuters nor
LIBOR Telerate is specified in the LIBOR Note and the applicable Pricing
Supplement, LIBOR will be determined as if LIBOR Telerate (page 3750) had been
chosen.
PRIME RATE NOTES
Each Prime Rate Note will bear interest at the interest rate (calculated
with reference to the Prime Rate and the Spread and/or Spread Multiplier, if
any) specified in such Prime Rate Note and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any applicable Interest Determination Date, the
rate set forth in H.15(519) for such date opposite the caption "Bank Prime Loan"
or, if such rate is not published by 9:00 A.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the Prime Rate
for such Interest Determination Date shall be calculated by the Calculation
Agent and shall be the arithmetic mean of the rates of interest publicly
announced by each bank named on the Reuters Screen NYMF Page as such bank's
prime rate or base lending rate as in effect for such Interest Determination
Date as quoted on the Reuters Screen NYMF Page on such Interest Determination
Date, or, if fewer than four such rates appear on the Reuters Screen NYMF Page
for such Interest Determination Date, the rate shall be the arithmetic mean of
the prime rates quoted on the basis of the actual number of days in the year
divided by 360 as of the close of business on such Interest Determination Date
by at least two of the three major money center banks in The City of New York
selected by the Calculation Agent from which quotations are requested. If fewer
than two quotations are quoted as aforesaid, the Prime Rate for such Interest
Determination Date shall be calculated by the Calculation Agent and shall be the
arithmetic mean of the prime rates quoted in The City of New York on such date
by the appropriate number of substitute banks or trust companies organized and
doing business under the laws of the United States, or any State thereof, in
each case having total equity capital of at least U.S. $500 million and being
subject to supervision or examination by a Federal or state authority, selected
by the Calculation Agent to quote such rate or rates; provided, however, that if
-------- -------
the Prime Rate is not published in H.15(519) and the banks or trust companies
selected as aforesaid are not quoting as mentioned in this sentence, the Prime
Rate with respect to such Interest Determination Date will be the Prime Rate
otherwise in effect on such Interest Determination Date. "Reuters Screen NYMF
Page" means the display designated as page "NYMF" on the Reuters Monitor Money
Rates Service (or such other page as may replace page NYMF on that service for
the purpose of displaying prime rates or base lending rates of major United
States banks).
TREASURY RATE NOTES
Each Treasury Rate Note will bear interest at the interest rate (calculated
with reference to the Treasury Rate and the Spread and/or Spread Multiplier, if
any) specified in such Treasury Rate Note and in the applicable Pricing
Supplement.
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Unless otherwise specified in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any applicable Interest Determination Date, the
rate applicable to the most recent auction of direct obligations of the United
States ("Treasury bills") having the Index Maturity specified in the applicable
Pricing Supplement and such Treasury Rate Note, as such rate is set forth in
H.15(519) under the heading "Treasury Bills - auction average (Investment)" or,
if not so made available by 3:00 P.M., New York City time, on the Calculation
Date pertaining to such Interest Determination Date, the Treasury Rate for such
Interest Determination Date will be the auction average rate (expressed as a
bond equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States Department
of the Treasury. In the event that the results of the auction of Treasury bills
having the specified Index Maturity are not reported as provided above by 3:00
P.M., New York City time, on such Calculation Date or if no such auction is held
in a particular week, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be the yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 P.M., New York City time, on such Interest
Determination Date, of three leading primary United States government securities
dealers selected by the Calculation Agent for the issue of Treasury bills with a
remaining maturity closest to the applicable Index Maturity; provided, however,
that if the dealers selected as aforesaid by the Calculation Agent are not
quoting as mentioned above, the Treasury Rate with respect to such Interest
Determination Date shall be the Treasury Rate in effect on such date.
ORIGINAL ISSUE DISCOUNT NOTES
The Company may from time to time offer Original Issue Discount Notes. The
applicable Pricing Supplement to certain Original Issue Discount Notes may
provide that the Holders of such Notes will not receive periodic payments of
interest. For the purpose of determining whether Holders of the requisite
principal amount of Notes outstanding under the Indenture have made a demand or
given a notice or waiver or taken any other action, the outstanding principal
amount of Original Issue Discount Notes shall be deemed to be the amount of the
principal that would be due and payable upon declaration of acceleration of the
Specified Maturity thereof as of the date of such determination.
Notwithstanding anything in this Prospectus to the contrary, unless
otherwise specified in the applicable Pricing Supplement, if a Note is an
Original Issue Discount Note, the amount payable on such Note in the event of
Maturity prior to the Specified Maturity shall be the Amortized Face Amount of
such Note as of such Maturity.
INTEREST RATE RESET
If the Company has the option with respect to any Note to reset the
interest rate, in the case of a Fixed Rate Note, or to reset the Spread and/or
Spread Multiplier, in the case of a Floating Rate Note, the Pricing Supplement
relating to such Note will indicate such option, and, if so, (i) the date or
dates on which such interest rate or such Spread and/or Spread Multiplier, as
the case may be, may be reset (each an "Optional Reset Date") and (ii) the basis
or formula, if any, for such resetting.
The Company may exercise such option with respect to a Note by notifying
the Paying Agent of such exercise at least 45 but not more than 60 days prior to
an Optional Reset Date for such Note. Not later than 40 days prior to such
Optional Reset Date, the Paying Agent will mail to the Holder of such Note a
Notice (the "Reset Notice"), first class, postage prepaid, setting forth (i) the
election of the Company to reset the interest rate, in the case of a Fixed Rate
Note, or the Spread and/or Spread
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Multiplier, in the case of a Floating Rate Note, (ii) such new interest rate or
such new Spread and/or Spread Multiplier, as the case may be, and (iii) the
provisions, if any, for redemption during the period from such Optional Reset
Date to the next Optional Reset Date or, if there is no such next Optional Reset
Date, to the Specified Maturity of such Note (each period a "Subsequent Interest
Period"), including the date or dates on which or the period or periods during
which and the price or prices at which such redemption may occur during such
Subsequent Interest Period.
Notwithstanding the foregoing, not later than 20 days prior to an Optional
Reset Date for a Note, the Company may, at its option, revoke the interest rate,
in the case of a Fixed Rate Note, or the Spread and/or Spread Multiplier, in the
case of a Floating Rate Note, in either case provided for in the Reset Notice
and establish a higher or lower interest rate, in the case of a Fixed Rate Note,
or a higher or lower Spread and/or Spread Multiplier, in the case of a Floating
Rate Note, for the Subsequent Interest Period commencing on such Optional Reset
Date by mailing or causing the Paying Agent to mail notice of such higher
interest rate or higher Spread and/or Spread Multiplier, as the case may be,
first class, postage prepaid, to the Holder of such Note. Such notice shall be
irrevocable. All Notes with respect to which the interest rate or Spread and/or
Spread Multiplier is reset on an Optional Reset Date will bear such higher
interest rate, in the case of a Fixed Rate Note, or higher Spread and/or Spread
Multiplier, in the case of a Floating Rate Note.
If the Company elects to reset the interest rate or the Spread and/or
Spread Multiplier of a Note on an Optional Reset Date, the Holder of such Note
will have the option to elect repayment of such Note by the Company on any such
Optional Reset Date at a price equal to the principal amount thereof plus any
accrued interest to such Optional Reset Date. In order for a Note to be so
repaid on an Optional Reset Date on which the interest rate or the Spread and/or
Spread Multiplier is reset, the Holder thereof must follow the procedures set
forth below under "Repayment at Holder's Option" for optional repayment, except
that the period for delivery of such Note or notification to the Paying Agent
shall be at least 25 but not more than 35 days prior to such Optional Reset Date
and except that a Holder who has tendered a Note for repayment pursuant to a
Reset Notice may, by written notice to the Paying Agent, revoke any such tender
for repayment until 5:00 p.m. New York City time on the tenth day, whether or
not a Business Day, prior to such Optional Reset Date.
EXTENDIBLE NOTES
The Company may from time to time offer Notes for which the interest rate
or interest rate formula may be adjusted on specified dates and which may be
subject to repayment at certain times at the option of the Holder or to
redemption at certain times at the option of the Company ("Extendible Notes").
The applicable Pricing Supplement will indicate whether the Company has the
option to extend the maturity of an Extendible Note for one or more periods up
to but not beyond a date set forth in such Pricing Supplement, which in no event
will be more than thirty years from the Original Issue Date of such Note. If
the Company has such option with respect to any such Notes, the procedures
relating thereto will be as set forth in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the Extendible
Notes will be repayable in whole or in part on the day immediately following the
end of the initial interest period, as specified in the applicable Pricing
Supplement, and on the day immediately following the end of each Extension
Period, at the option of the Holder, at 100% of the principal amount to be
repaid, in each case plus accrued interest, if any, to the repayment date. The
applicable Pricing Supplement will specify the procedures that must be followed
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in order to effect such a repayment. An "Extension Period' will be a period of
one or more whole calendar periods (e.g., weeks, months, or years) commencing on
the day following the last day of the initial interest period or any subsequent
Extension Period.
COMBINATION OF PROVISIONS
If so specified in the applicable Pricing Supplement, any Note may be
subject to all of the provisions, or any combination of the provisions,
described above under "Interest Rate Reset" and "Extendible Notes".
OPTIONAL REDEMPTION
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be redeemed prior to its Specified Maturity or that such Note will
be redeemable at the option of the Company on a date or dates specified prior to
its Specified Maturity at a price or prices set forth in the applicable Pricing
Supplement, together with accrued interest to the date fixed for redemption.
The Notes will not be subject to any sinking fund, unless specified in the
applicable Pricing Supplement. The Company may redeem any of the Notes which
are redeemable and remain outstanding either in whole or from time to time in
part, upon not less than 30 nor more than 60 days' notice. If fewer than all of
the Notes with like tenor and terms are to be redeemed, the Notes to be redeemed
shall be selected by the Trustee by such method as the Trustee shall deem fair
and appropriate.
REPAYMENT AT HOLDER'S OPTION
The Pricing Supplement relating to each Note will indicate whether such
Note is repayable at the option of the Holder on a date or dates specified prior
to its Specified Maturity at a price or prices set forth in the applicable
Pricing Supplement, together with accrued interest to the date fixed for
repayment.
In order for a Note to be so repaid, the Paying Agent must receive at least
30 days but not more than 45 days prior to the repayment date (i) the Note with
the form entitled "Option to Elect Repayment" on the reverse of the Note duly
completed or (ii) a telegram, telex, facsimile transmission or a letter from a
member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the United
States setting forth the name of the Holder of the Note, the principal amount of
the Note, the principal amount of the Note to be repaid, the certificate number
or a description of the tenor and terms of the Note, a statement that the option
to elect repayment is being exercised thereby and a guarantee that the Note to
be repaid with the form entitled "Option to Elect Repayment" on the reverse of
the Note duly completed will be received by the Paying Agent not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter and such Note and form duly completed are received by the Paying Agent by
such fifth Business Day. Exercise of the repayment option by the Holder of a
Note shall be irrevocable. The repayment option may be exercised by the Holder
of a Note for less than the entire principal amount of the Note provided that
the principal amount of the Note remaining outstanding after repayment is an
authorized denomination.
While the Book-Entry Notes are represented by the Global Securities held by
or on behalf of the Depository, and registered in the name of the Depository or
the Depository's nominee, the option for repayment may be exercised by the
applicable Participant (as defined below) that has an account with the
Depository, on behalf of the Beneficial Owners (as defined below) of the Global
Security or Securities representing such Book-Entry Notes, by delivering a
written notice substantially similar to the above
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mentioned form to the Paying Agent at least 30 days but not more than 45 days
prior to the date of repayment. Notices of elections from Participants on
behalf of Beneficial Owners of the Global Security or Securities representing
such Book-Entry Notes to exercise their option to have such Book-Entry Notes
repaid must be received by the Paying Agent by 5:00 P.M., New York City time, on
the last day for giving such notice. In order to ensure that a notice is
received by the Paying Agent on a particular day, the Beneficial Owner of the
Global Security or Securities representing such Book-Entry Notes must so direct
the applicable Participant before such Participant's deadline for accepting
instructions for that day. Different firms may have different deadlines for
accepting instructions from their customers. Accordingly, Beneficial Owners of
the Global Security or Securities representing Book-Entry Notes should consult
the Participants through which they own their interest therein for the
respective deadlines for such Participants. All notices shall be executed by a
duly authorized officer of such Participant (with signatures guaranteed) and
shall be irrevocable. In addition, Beneficial Owners of the Global Security or
Securities representing Book-Entry Notes shall effect delivery at the time such
notices of election are given to the Depository by causing the applicable
Participant to transfer such Beneficial Owner's interest in the Global Security
or Securities representing such Book-Entry Notes, on the Depository's records,
to the Trustee. See "Book-Entry System".
REPURCHASE
The Company may at any time purchase Notes at any price in the open market
or otherwise. Notes so purchased by the Company may be held or resold or, at
the discretion of the Company, may be surrendered to the Trustee for
cancellation. If any Notes and the applicable Pricing Supplement provide for
mandatory sinking fund payments with respect to such Notes, the Indenture
provides that in lieu of making all or any part of any mandatory sinking fund
payment in cash, the Company may deliver to the Trustee any such Notes
previously purchased or otherwise acquired by the Company (to the extent not
previously credited).
OTHER PROVISIONS
Any provisions with respect to the determination of an interest rate basis,
the specifications of interest rate basis, calculation of the interest rate
applicable to, or the principal payable at Maturity on, any Note, its Interest
Payment Dates or any other matter relating thereto may be modified by the terms
as specified under "Other Provisions" on the face of such Note, or in an
addendum relating thereto if so specified on the face thereof, and in the
applicable Pricing Supplement.
EVENTS OF DEFAULT
The Indenture provides that the following are Events of Default thereunder
with respect to the Notes: (i) default in the payment of the principal of (or
premium, if any, on) any Note when and as the same shall be due and payable;
(ii) default in making a sinking fund payment, if any, when and as the same
shall be due and payable by the terms of any Note; (iii) default for 30 days in
the payment of any installment of interest on any Note; (iv) default for 60 days
after written notice (given to the Company by the Trustee or by the Holders of
at least 25% in aggregate principal amount of the Outstanding Securities of all
series affected) in the performance of any other covenant in respect of the
Notes contained in the Indenture; or (v) certain events of bankruptcy,
insolvency or reorganization, or any related court appointment of a receiver,
liquidator or trustee of the Company or any substantial part of its property.
(Section 6.1) An Event of Default with respect to the Notes does not
necessarily constitute an Event of Default with respect to any other series of
Securities issued under the Indenture. The Trustee
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may withhold notice to the Holders of the Notes of any default with respect to
the Notes (except a default in the payment of principal or premium, if any, or
interest) if it considers such withholding in the interest of such Holders.
(Section 6.11)
If any Event of Default with respect to the Notes shall have occurred and
be continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Outstanding Notes (or, in the case of certain Events of
Default that affect all series of Securities then Outstanding, the Holders of
not less than 25% in aggregate principal amount of all the Securities then
outstanding treated as one class) may declare the principal, or in the case of
discounted Notes, such portion thereof as may be described in the Pricing
Supplement, of all the Notes to be due and payable immediately; however, subject
to certain conditions, any such declaration and its consequences may be
rescinded or annulled by the Holders of not less than a majority in aggregate
principal amount of the Outstanding Notes. (Section 6.1)
Within four months after the close of each year the Company must file with
the Trustee a certificate, signed by specified officers, stating whether or not
such officers have knowledge of any default relating to its covenants,
agreements and obligations with respect to Paying Agents or the maintenance of
its corporate existence, and, if so, specifying each such default and the nature
thereof. (Section 4.6)
Subject to provisions relating to its duties during the continuance of any
Event of Default, the Trustee shall be under no obligation to exercise any of
its rights or powers under the Indenture at the request, order or direction of
any Holders, unless such Holders shall have offered to the Trustee reasonable
indemnity. (Section 7.2) Subject to such provisions for indemnification and
subject to the right of the Trustee to decline to follow any Holders' directions
under specified circumstances, the Holders of a majority in aggregate principal
amount of the Outstanding Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, with respect to the Notes.
(Section 6.9)
TRANSFER
Certificated Notes may be registered for transfer or exchanged at the
Corporate Trust Office of the Trustee or at any other office or agency
maintained by the Company for such purposes, subject to the limitations in the
Indenture, without the payment of any service charge except for any tax or
governmental charge incidental thereto. (Section 3.6)
DEFEASANCE
The Indenture provides that the Company shall be discharged from its
obligations under the Indenture with respect to the Notes at any time prior to
the Stated Maturity or redemption thereof when (a) the Company has irrevocably
deposited with the Trustee, in trust, (i) sufficient funds to pay the principal
of (and premium, if any), and interest to Stated Maturity (or redemption) on,
the Notes, or (ii) such amount of direct obligations of, or obligations the
principal of and interest on which are fully guaranteed by, the United States
Government, and which are not subject to prepayment, redemption or call, as
will, together with the predetermined and certain income to accrue thereon
without consideration of any reinvestment thereof, be sufficient to pay when due
the principal of (and premium, if any), and interest to Stated Maturity (or
redemption) on, the Notes, and (b) the Company has paid all other sums payable
with respect to the Notes. Upon such discharge, the Holders of the Notes shall
no longer be
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entitled to the benefits of the Indenture, except for the purposes of
registration of transfer and exchange of the Notes, and replacement of lost,
stolen or mutilated Notes. (Sections 12.1 and 12.3)
MODIFICATIONS OF INDENTURE
The Indenture, the rights and obligations of the Company thereunder and the
rights of the Holders may be modified with respect to one or more series of
Securities issued under the Indenture with the consent of the Holders of not
less than a majority of the aggregate principal amount of Outstanding Securities
of all series affected by the modification (voting as one class). Without,
however, the consent of the Holder of each Security affected, no modification
shall change the Stated Maturity of any Security, reduce the principal amount or
the amount of premium payable thereon, reduce the rate, extend the time of
payment or change the method of calculation of interest thereon or reduce any
amount payable on redemption thereof or reduce the percentage required for
modification. No modification of the Indenture subordinating the indebtedness
evidenced by any series of Securities issued thereunder to any indebtedness of
the Company is effective against any Holder of Securities without such Holder's
consent. (Section 10.2)
CONCERNING THE TRUSTEE
The Bank of New York is the Trustee under the Indenture. The Bank of New
York has a course of regular dealings with the Company in the ordinary course of
business and from time to time may also make short-term unsecured loans and
secured or unsecured revolving credit and term loans to the Company and
associated companies.
BOOK-ENTRY SYSTEM
The Depository will act as securities depository for the Book-Entry Notes.
The Book-Entry Notes will be issued as fully-registered securities registered in
the name of Cede & Co. (the Depository's partnership nominee). One fully-
registered Global Security will be issued for each issue of the Notes, each in
the aggregate principal amount of such issue, and will be deposited with the
Depository.
The Depository is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository holds securities that its
participants ("Participants") deposit with the Depository. The Depository also
facilitates the settlement among Participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
("Direct Participants") include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations. The
Depository is owned by a number of its Direct Participants and by the New York
Stock Exchange, Inc., the American Stock Exchange, Inc., and the National
Association of Securities Dealers, Inc. Access to the Depository's system is
also available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly ("Indirect Participants"). The rules
applicable to the Depository and its Participants are on file with the
Securities and Exchange Commission.
Purchases of Book-Entry Notes under the Depository's system must be made by
or through Direct Participants, which will receive a credit for the Book-Entry
Notes on the Depository's records. The ownership interest of each actual
purchaser of each Book-Entry Note ("Beneficial Owner") is in turn to
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be recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from the Depository of their purchase, but
Beneficial Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their holdings,
from the Direct or Indirect Participant through which the Beneficial Owner
entered into the transaction. Transfers of ownership interests in the Book-
Entry Notes are to be accomplished by entries made on the books of Participants
acting on behalf of the Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in Book-Entry Notes, except
in the event that use of the book-entry system for one or more Book-Entry Notes
is discontinued.
To facilitate subsequent transfers, all Global Securities deposited by
Participants with the Depository are registered in the name of the Depository's
partnership nominee, Cede & Co. The deposit of Global Securities with the
Depository and their registration in the name of Cede & Co. effect no change in
beneficial ownership. The Depository has no knowledge of the actual Beneficial
Owners of the Book-Entry Notes; the Depository's records reflect only the
identity of the Direct Participants to whose accounts such Book-Entry Notes are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by the Depository to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Book-Entry Notes within an issue are being redeemed, the Depository's current
practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed.
Neither the Depository nor Cede & Co. will consent or vote with respect to
Book-Entry Notes. Under its usual procedures, the Depository will mail an
"Omnibus Proxy" to the Company as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Book-Entry Notes are credited on the record
date (identified in a listing attached to the Omnibus Proxy).
Principal, premium, if any, and interest payments on the Book-Entry Notes
will be made to the Depository. The Depository's practice is to credit Direct
Participants' accounts on the payable date in accordance with their respective
holdings shown on the Depository's records unless the Depository has reason to
believe that it will not receive payment on the payable date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as in the case of securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of the Depository, or the Company,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of principal and interest to the Depository is the
responsibility of the Company, disbursement of such payments to Direct
Participants shall be the responsibility of the Depository, and disbursement of
such payments to the Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
A Beneficial Owner shall give notice to elect to have its Book-Entry Notes
purchased or tendered, through its Participant, to the Paying Agent, and shall
effect delivery of such Book-Entry Notes by causing the Direct Participant to
transfer the Participant's interest in the Book-Entry Notes, on the Depository's
records, to the Paying Agent. The requirement for physical delivery of Book-
Entry Notes in connection with a demand for purchase or a mandatory purchase
will be deemed satisfied when the
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ownership rights in the Book-Entry Notes are transferred by a Direct Participant
on the Depository's records.
The Depository may discontinue providing its services as securities
depository with respect to the Book-Entry Notes at any time by giving reasonable
notice to the Company or the Agents. Under such circumstances, in the event
that a successor securities depository is not obtained, Certificated Notes will
be printed and delivered in exchange for the Book-Entry Notes represented by the
Global Securities held by the Depository.
The Company may decide to discontinue use of the system of book-entry
transfers through the Depository (or a successor securities depository). In
that event, Certificated Notes will be printed and delivered in exchange for the
Book-Entry Notes represented by the Global Securities held by the Depository.
The information in this section concerning the Depository and the
Depository's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
Neither the Company, the Trustee, any Paying Agent nor the registrar for
the Notes will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
In the opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for the
Company, the following summary correctly describes certain United States Federal
income tax considerations as of the date of this Prospectus relating to
ownership of the Notes that may be relevant to an initial Holder of a Note.
This summary is based on laws, regulations, rulings and decisions now in effect
and which are subject to change. This summary deals only with Holders that will
hold Notes as capital assets, and does not address tax considerations applicable
to investors that may be subject to special tax rules, such as banks, insurance
companies, dealers in securities, tax-exempt organizations, foreign investors,
persons that will hold Notes as a position in a "straddle" for tax purposes or
subsequent holders. This summary does not purport to cover all the possible tax
consequences of the purchase, ownership and disposition of Notes, and it is not
intended as tax advice. Investors should consult their own tax advisers in
determining the tax consequences to them of the purchase, ownership and
disposition of Notes, including the application to their particular situation of
the tax considerations discussed below, as well as the application of other
Federal, state, local or other tax laws.
Holders of Original Issue Discount Notes generally will be subject to the
special tax accounting rules for original issue discount obligations provided by
the Internal Revenue Code of 1986 and certain Treasury Regulations issued
thereunder (the "Regulations"). Holders of such Notes should be aware that, as
described in greater detail below, they generally must include original issue
discount in ordinary gross income for Federal income tax purposes as it accrues,
in advance of the receipt of cash attributable to that income.
In general, each Holder of an Original Issue Discount Note, whether such
Holder uses the cash or the accrual method of tax accounting, will be required
to include in ordinary gross income the sum of the "daily portions" of original
issue discount on that Note for all days during the taxable year that the Holder
owns the Note. The daily portions of original issue discount on an Original
Issue Discount Note are determined by allocating to each day in any accrual
period (generally each successive period that ends
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on an Interest Payment Date, or, in the case of an Original Issue Discount Note
having an interest rate equal to zero, each successive six-month period that
begins on the day in each calendar year corresponding to the Specified Maturity
of the Note or the date six months prior thereto) a ratable portion of the
original issue discount allocable to that accrual period. In the case of an
initial Holder, the amount of original issue discount on an Original Issue
Discount Note allocable to each accrual period is determined by (i) multiplying
the "adjusted issue price" (as defined below) of the Note by a fraction, the
numerator of which is the annual yield to maturity of the Note and the
denominator of which is the number of accrual periods in a year and (ii)
subtracting from that product the amount (if any) payable as interest at the end
of that accrual period. In the case of an Original Issue Discount Note that is
a Floating Rate Note, both the "annual yield to maturity" and the "amount
payable as interest" are determined for these purposes as though the Note bore
interest in all periods at a fixed rate equal to the level of the Base Rate (as
adjusted by the applicable Spread or Spread Multiplier, if any) on the Original
Issue Date. The "adjusted issue price" of an Original Issue Discount Note at
the beginning of any accrual period is the sum of its Issue Price (including
accrued interest, if any) and the amount of original issue discount allocable to
all prior accrual periods, reduced by the amount of all payments other than
interest payments (if any) made with respect to such Note in all prior accrual
periods. As a result of this "constant yield" method of including original
issue discount income, the amounts so includible in income by a Holder in
respect of an Original Issue Discount Note are lesser in the early years and
greater in the later years than the amounts that would be includible on a
straight-line basis.
Certain of the Notes may be issued with a long initial interest payment
period (i.e., the period from the Original Issue Date of the Notes to the first
Interest Payment Date may be longer than the period between subsequent Interest
Payment Dates). In addition, Floating Rate Notes with variable interest rates
that are reset either daily or weekly could be considered as issued with a long
final interest payment period (i.e., the period from but excluding the next
preceding Regular Record Date to which interest has been paid to but excluding
the Maturity date may be longer than the period between prior Regular Record
Dates). Under the Regulations, such a long period may cause all interest
payments on the Notes to be treated as original issue discount for Federal
income tax purposes. In general, under the rules discussed above concerning
Original Issue Discount Notes, if the interest payments were so treated, Holders
of the Notes would be required to include such interest as original issue
discount on the Notes in their income for Federal income tax purposes as it
accrues, rather than as interest on the Notes as such interest is paid. This
would result in an acceleration of income to cash-basis Holders for Federal
income tax purposes.
Payments of interest on Floating Rate Notes that are not based on current
values of an objective interest index will be considered contingent payments and
subject to special rules under the Regulations. Under the Regulations, payments
of interest on the CD Rate Notes, Commercial Paper Rate Notes, Federal Funds
Rate Notes, LIBOR Notes, Prime Rate Notes and Treasury Rate Notes should be
considered payments based on current values of objective interest indices, and
therefore the special rules concerning contingent payments should not apply to
such Notes. If any Floating Rate Note specifies a Base Rate other than the CD
Rate, Commercial Paper Rate, Federal Funds Rate, LIBOR, Prime Rate or Treasury
Rate, to the extent the Federal income tax consequences vary from the
consequences described herein, such tax consequences will be described in the
applicable Pricing Supplement.
Notes with a Specified Maturity of one year or less will be subject to
certain tax rules which apply to the timing of inclusion in income of interest
on such obligations ("Short-Term Notes"). Generally, as discussed in more
detail below, for Federal income tax purposes, an individual or other cash
method Holder of a Short-Term Note is not required to accrue any discount on the
Short-Term Note unless an election is made to do so and interest payments on the
Short-Term Note will not be includible in gross income until the taxable year of
receipt. Such a Holder may, however, be required to defer certain interest
deductions.
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An obligation which is issued for an amount less than its "stated
redemption price at maturity" will generally be considered to be issued at a
discount for Federal income tax purposes. Under the Regulations, all payments
(including all stated interest) with respect to an obligation will be included
in the stated redemption price at maturity if the obligation is a Short-Term
Note and, thus, Holders will be taxed on discount in lieu of stated interest.
This discount will be equal to the excess of the stated redemption price at
maturity over the "issue price" of each Short-Term Note, unless a Holder elects
to compute this discount as acquisition discount using tax basis instead of
issue price. The issue price of each Short-Term Note will be the initial
offering price to the public at which a substantial amount of the Short-Term
Notes are sold. As previously noted, an individual or other cash method Holder
of a Short-Term Note is not required to accrue any discount for Federal income
tax purposes unless an election is made to do so. Holders who report income for
Federal income tax purposes on the accrual method and certain other Holders,
including banks and dealers in securities, are required to accrue discount on
such Short-Term Notes (as ordinary income) on a straight-line method unless an
election is made to accrue the discount according to a constant interest method
based on daily compounding. The amount of discount which accrues in respect of
a Short-Term Note while held by a Holder will be added to such Holder's tax
basis for such Note to the extent included in income. In the case of a cash
method Holder who is not required, and does not elect, to include discount in
income currently, any gain realized on the sale, exchange or retirement of the
Short-Term Note will be ordinary income to the extent of the discount accrued on
a straight-line basis (or, if elected, according to a constant interest method
based on daily compounding) through the date of sale, exchange or retirement.
In addition, such non-electing Holders which are not subject to the current
inclusion requirement described in this paragraph will be required to defer
deductions for any interest paid on indebtedness incurred or continued to
purchase or carry such Short-Term Notes in an amount not exceeding the deferred
interest income, until such deferred interest income is realized.
The applicable Pricing Supplement will contain a discussion of any special
United States Federal income tax rules with respect to any Extendible Notes.
In addition, generally, for Federal income tax purposes, the defeasance of
the Indenture pursuant to Section 12.1 thereof should not result in any Federal
income tax consequences to the Holders of the Notes. However, the Internal
Revenue Service could assert that the deposit and discharge of the Indenture
should be treated as a taxable exchange for the amounts deposited pursuant to
Article 12 thereof. If such assertion were made and upheld, each Holder of the
Notes might be required to recognize gain or loss equal to the difference
between the Holder's cost or other tax basis for the Notes and the value of the
Holder's interest in the trust. Such Holders thereafter might be required to
include in income at different times and in a different amount than would be
includible in the absence of the discharge. Holders should consult their tax
advisors in determining the potential tax consequences to them of a defeasance
under the Indenture pursuant to Section 12.1 thereof.
PLAN OF DISTRIBUTION
Under the terms of the Distribution Agreement, the Notes are offered on a
continuing basis by the Company through the Agents, each of which has agreed to
use its reasonable efforts to solicit purchases of the Notes. The Company will
pay each Agent a commission of from .125% to .750% of the principal amount of
each Note, depending upon its Specified Maturity, sold through such Agent. The
Company will have the sole right to accept offers to purchase Notes and may
reject any such offer in whole or in part. Each Agent will have the right, in
its discretion reasonably exercised, to reject in whole or in part any offer to
purchase Notes received by such Agent. The Company also may sell Notes to any
Agent, acting as principal, at a discount to be agreed upon at the time of sale,
for resale to one or more investors or to one or more broker-dealers (acting as
principal for purposes of resale) at varying prices related to prevailing market
prices at the time of resale, as determined by such Agent, or, if so agreed,
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at a fixed public offering price. Unless otherwise indicated in the applicable
Pricing Supplement, if any Note is resold by an Agent to any broker-dealer at a
discount, such discount will not be in excess of the discount or commission
received by such Agent from the Company. In addition, unless otherwise
indicated in the applicable Pricing Supplement, any Note purchased by an Agent
as principal will be purchased at 100% of the principal amount thereof less a
percentage equal to the commission applicable to an agency sale of a Note having
an identical Specified Maturity. After the initial public offering of the
Notes, the public offering price (in the case of Notes to be resold on a fixed
public offering price basis), the concession and the discount may be changed.
The Company also reserves the right to sell the Notes directly to investors on
its own behalf in those jurisdictions where it is authorized to do so or as
otherwise provided in the applicable Pricing Supplement. In such circumstances,
the Company will have the sole right to accept offers to purchase Notes and may
reject any proposed purchase of Notes in whole or in part. In the case of sales
made directly by the Company, no commission will be payable.
Payment of the purchase price of the Notes will be required to be made in
funds immediately available in The City of New York.
The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Act"). The Company has agreed to
indemnify each Agent against certain liabilities, including liabilities under
the Act, or to contribute to payments each Agent may be required to make in
respect thereof. The Company has agreed to reimburse the Agents for certain of
the Agents' expenses, including, but not limited to, the fees and expenses of
counsel to the Agents.
The Company has been advised by each Agent that such Agent may from time to
time purchase and sell Notes in the secondary market, but that it is not
obligated to do so. There can be no assurance that there will be a secondary
market for the Notes or liquidity in the secondary market if one develops. From
time to time, each Agent may make a market in the Notes. The Notes will not be
listed on any securities exchange.
LEGAL OPINIONS
The validity of the Notes will be passed upon for the Company by LeBoeuf,
Lamb, Greene & MacRae, L.L.P., a limited liability partnership including
professional corporations, New York, New York, and by William M. Finn, Esq.,
Corporate Counsel of the Company, and for the Agents, by Choate, Hall & Stewart,
a partnership including professional corporations, Boston, Massachusetts.
William M. Finn, Esq. and LeBoeuf, Lamb, Greene & MacRae, L.L.P. will be passing
upon statements under the caption "Description of Notes". Certain matters
involving Connecticut law will be passed upon for the Company by Day, Berry &
Howard, Hartford, Connecticut. LeBoeuf, Lamb, Greene & MacRae, L.L.P. and
Choate, Hall & Stewart may rely upon the opinion of William M. Finn, Esq., as to
all legal conclusions affected by the laws of Maine (including the organization
and existence of the Company), and the opinion of Day, Berry & Howard as to all
legal conclusions affected by the laws of Connecticut.
EXPERTS
The consolidated financial statements and schedules of the Company, which
are incorporated herein by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 1993, have been audited by Arthur Andersen &
Co., independent public accountants, as indicated in their reports with respect
thereto. Such financial statements and schedules are included herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said reports.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY AGENT, UNDERWRITER OR DEALER. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THOSE DESCRIBED HEREIN OR AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION IN SUCH
JURISDICTION. THIS PROSPECTUS SPEAKS AS OF ITS DATE AND NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR
ITS SUBSIDIARIES SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
__________________
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.............................................. 1
Incorporation of Certain Documents by Reference.................... 1
The Company........................................................ 2
Ratio of Earnings to Fixed Charges................................. 2
Use of Proceeds.................................................... 2
Description of Notes............................................... 2
Certain Federal Income Tax Consequences............................ 20
Plan of Distribution............................................... 24
Legal Opinions..................................................... 25
Experts............................................................ 25
</TABLE>
================================================================================
================================================================================
$150,000,000
CENTRAL MAINE
POWER COMPANY
MEDIUM-TERM NOTES,
SERIES C
__________________
PROSPECTUS
______________, 1994
__________________
LEHMAN BROTHERS
PAINEWEBBER INCORPORATED
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
- ------- -------------------------------------------
<TABLE>
<S> <C>
Filing Fee - Securities and Exchange Commission.................. $ 51,724
Auditors' Fees................................................... 41,000*
Rating Agency Fees............................................... 55,500*
Fees and Expenses of Trustee..................................... 3,000*
Legal Fees and Expenses.......................................... 180,000*
State Securities Law Fees and Expenses........................... 15,000*
Printing and Engraving........................................... 10,000*
Miscellaneous.................................................... 1,786*
Total........................................................ $368,000*
- --------------------------
</TABLE>
* Estimated
Item 15. Indemnification of Directors and Officers.
- ------- -----------------------------------------
Subsection 1 of Section 719 of the Business Corporation Law of Maine empowers
a corporation to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, trustee, partner, fiduciary, employee or agent of another
corporation, partnership, joint venture, trust, pension or other employee
benefit plan or other enterprise, against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding; provided
that no indemnification may be provided for any person with respect to any
matter as to which he shall have been finally adjudicated not to have acted
honestly or in the reasonable belief that his action was in or not opposed to
the best interests of the corporation or its shareholders or, in the case of a
person serving as a fiduciary of an employee benefit plan or trust, in or not
opposed to the best interests of that plan or trust, or its participants or
beneficiaries or, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order or conviction adverse to such
person, or by settlement or plea of nolo contendere or its equivalent, shall
not of itself create a presumption that such person did not act honestly or in
the reasonable belief that his action was in or not opposed to the best
interests of the corporation or its shareholders, or in the case of a person
serving as a fiduciary of an employee benefit plan or trust, in or not opposed
to the best interests of that plan or trust, or its participants or
beneficiaries and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
Section 719 further provides that to the extent that a director, officer,
employee or agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
Subsection 1 of Section 719, or in defense of any claim, issue or matter
referred to therein, he shall be indemnified against expenses, including
attorney's fees, actually and reasonably incurred by
II-1
<PAGE>
him in connection therewith; that the indemnification provided for by Section
719 shall not be deemed exclusive of any other rights to which the indemnified
party may be entitled under any by-law, agreement, vote of stockholders or
disinterested directors or otherwise; and that a corporation shall have the
power to purchase and maintain insurance on behalf of any person who is or was
a director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, trustee, partner,
fiduciary, employee or agent of another corporation, partnership, joint
venture, trust, pension or other employee benefit plan or other enterprise
against any liability asserted against him and incurred by him in such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability under Section 719.
The by-laws of the Company provide, in effect, that the Company will provide
the indemnity described in Section 719 of the Business Corporation Law of
Maine, to the extent and under the circumstances described therein.
The by-laws of the Company also permit the Company to purchase and maintain
insurance to the same extent permitted by Section 719 of the Business
Corporation Law of Maine. The Company has purchased Directors' and Officers'
Liability Insurance insuring the Company and its directors and officers against
Losses (as defined therein) arising from actual or alleged Wrongful Acts (as
defined therein).
Item 16. Exhibits.
------- --------
See Exhibit Index immediately preceding the Exhibits included as part
of this Registration Statement.
Item 17. Undertakings.
------- ------------
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, 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 the 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 the
Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
-------- -------
Registration Statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed by the Company pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the 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
II-2
<PAGE>
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 Company's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement 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.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the provisions described under Item 15
above, or otherwise, the Company has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in said Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company 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 Company 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 said Act
and will be governed by the final adjudication of such issue.
II-3
<PAGE>
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 City of Augusta, Maine, on November 16, 1994.
CENTRAL MAINE POWER COMPANY
By /s/ D. E. Marsh
--------------------------------------------
David E. Marsh
Vice President, Corporate Services
and Chief Financial Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints each of David E. Marsh, Douglas
Stevenson, William M. Finn and E. Ellsworth McMeen, III his or her true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution for him or her and in his or her name, place and stead, in any
and all capacities, to sign any or all amendments (including post-effective
amendments) of and supplements to this Registration Statement and to file the
same, with all exhibits thereto, and any and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto each such
attorney-in-fact and agent, and his substitutes, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, to all intents and purposes and as fully as he or she
might or could do in person, hereby ratifying and confirming all that each such
attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date or dates indicated:
Signature Title Date
/s/ David T. Flanagan President and Chief November 16, 1994
- ----------------------- Executive
David T. Flanagan Officer; Director
(Principal Executive
Officer)
/s/ D. E. Marsh Vice President, Corporate November 16, 1994
- --------------------- Services and Chief
David E. Marsh Financial Officer
(Principal Financial
Officer and Duly
Authorized Officer)
/s/ Robert S. Howe Comptroller November 16, 1994
- ---------------------
Robert S. Howe
(Principal Accounting Officer)
II-4
<PAGE>
/s/ Carlton D. Reed Chairman of the Board November 16, 1994
- ----------------------- of Directors
Carlton D. Reed, Jr.
/s/ Charles H. Abbott Director November 16, 1994
- -----------------------
Charles H. Abbott
/s/ Charleen M. Chase Director November 16, 1994
- ------------------------
Charleen M. Chase
/s/ E. James Dufour Director November 16, 1994
- ------------------------
E. James Dufour
/s/ Robert H. Gardiner Director November 16, 1994
- ------------------------
Robert H. Gardiner
/s/ David M. Jagger Director November 16, 1994
- ------------------------
David M. Jagger
/s/ Charles E. Monty Director November 16, 1994
- ------------------------
Charles E. Monty
/s/ Robert H. Reny Director November 16, 1994
- ------------------------
Robert H. Reny
/s/ Kathryn M. Weare Director November 16, 1994
- ------------------------
Kathryn M. Weare
II-5
<PAGE>
EXHIBIT INDEX
The following exhibits, as indicated below, either are filed herewith
or have been heretofore filed with the Securities and Exchange Commission under
the Securities Act of 1933, the Securities Exchange Act of 1934 or the Public
Utility Holding Company Act of 1935 and are incorporated herein by reference
thereto.
EXHIBIT 1. DISTRIBUTION AGREEMENT
Filed herewith:
1.1 Form of Distribution Agreement.
EXHIBIT 4. INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS
Description Exhibit SEC Docket
----------- ------- ----------
4.1 Indenture dated as of August 1, 4.1 33-29626
1989 between the Company and
The Bank of New York, as
Trustee.
4.2 First Supplemental Indenture 4.1 Current Report Form 8-K,
dated as of August 7, 1989. dated August 7, 1989
4.3 Second Supplemental Indenture 4.1 33-44944
dated as of January 10, 1992
Filed herewith:
4.4 Form of Third Supplemental
Indenture.
EXHIBIT 5. OPINION RE: LEGALITY
Filed Herewith:
5.1 Opinion of William M. Finn, Esquire.
5.2 Opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P.
EXHIBIT 12. RATIO OF EARNINGS TO FIXED CHARGES
Filed herewith:
12.1 Computation of Ratio of Earnings to Fixed Charges.
<PAGE>
EXHIBIT 23. CONSENTS OF EXPERTS AND COUNSEL
Filed herewith:
23.1 The consent of Arthur Andersen & Co. to incorporation by
reference in this Registration Statement of its reports included
in the Company's Form 10-K for the year ended December 31, 1993,
and the reference to its name under the caption "Experts" in the
Prospectus comprising part of this Registration Statement.
23.2 The consent of William M. Finn, Esquire, is contained in his
opinion filed as Exhibit 5.1 to this Registration Statement.
23.3 The consent of LeBoeuf, Lamb, Greene & MacRae, L.L.P. is
contained in their opinion filed as Exhibit 5.2 to this
Registration Statement.
23.4 Consent of Day, Berry & Howard.
EXHIBIT 24. POWER OF ATTORNEY
Filed herewith:
24.1 Power of Attorney is made a part hereof and is contained in the
signature page hereto.
EXHIBIT 25. STATEMENT OF ELIGIBILITY OF TRUSTEE
Filed herewith:
25.1 Statement of Eligibility of Trustee on Form T-1 of The Bank of New
York.
EXHIBIT 99. OTHER EXHIBITS
Description Exhibit SEC Docket
----------- ------- ----------
99.1 Financial Data Schedule Quarterly Report on
Form 10-Q, dated
September 30, 1994
<PAGE>
EXHIBIT 1.1
$150,000,000
CENTRAL MAINE POWER COMPANY
MEDIUM-TERM NOTES, SERIES C
DISTRIBUTION AGREEMENT
----------------------
[Date]
Lehman Brothers Inc.
American Express Tower
3 World Financial Center
New York, New York 10285-1200
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
Central Maine Power Company, a Maine corporation (the "Company"), confirms
its agreement with each of you (individually, an "Agent" and collectively, the
"Agents") (which terms shall, for all purposes of this Agreement, include Lehman
Government Securities Inc., an affiliate of Lehman Brothers Inc.) with respect
to the issue and sale by the Company of up to an aggregate principal amount of
$150,000,000 of its Medium-Term Notes, Series C (the "Notes"). The Notes are to
be issued from time to time pursuant to an indenture, dated as of August 1, 1989
(as supplemented by the First Supplemental Indenture dated as of August 7, 1989,
the Second Supplemental Indenture dated as of January 10, 1992, and as further
supplemented by the Third Supplemental Indenture dated as of December 15, 1994
relating to the Notes (the "Supplemental Indenture") and as it may be further
supplemented or amended from time to time, the "Indenture"), between the Company
and The Bank of New York, as trustee (the "Trustee").
The Notes shall have the maturity ranges, applicable interest rates or
interest rate formulas, issue prices, redemption and repayment provisions and
other terms set forth in the Prospectus referred to in Section l(c) as it may be
amended or supplemented from time to
<PAGE>
time, including any supplement providing for the principal amount, interest
rate, maturity and other terms of any Note (a "Pricing Supplement"). The Notes
will be issued, and the terms thereof established, from time to time, by the
Company in accordance with the Indenture and the Procedures referred to below.
This Agreement shall only apply to sales of the Notes and not to sales of any
other securities or evidences of indebtedness of the Company and only on the
specific terms set forth herein.
Subject to the terms and conditions stated herein and subject to the
reservation by the Company of the right to sell its Notes directly on its own
behalf or to designate or select additional agents as set forth in Section 11
hereof, the Company hereby (i) appoints each of the Agents as the exclusive
agents of the Company for the purpose of soliciting or receiving offers to
purchase Notes from the Company and (ii) agrees that whenever the Company
determines to sell Notes directly to an Agent as principal it will enter into a
separate agreement (each a "Purchase Agreement"). Each such Purchase Agreement,
whether oral (and confirmed in writing, which may be by facsimile transmission)
or in writing, shall be with respect to such information (as applicable) as
specified in Exhibit C hereto, relating to such sale in accordance with Section
2(e) hereof.
SECTION l. Representations and Warranties. The Company represents and
------------------------------
warrants to each Agent as of the date hereof, as of the Closing Date referred to
in Section 2(g) hereof, and as of the times referred to in Sections 6(a) and
6(b) hereof (the Closing Date and each such time being hereinafter sometimes
referred to as a "Representation Date"), as follows:
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Maine, has the corporate
power and authority to own or lease and operate its properties, has the
corporate power, authority and franchises to carry on its business as now
conducted and has the corporate power and authority to carry on its
business as presently proposed to be conducted, all as described in the
Prospectus hereinafter referred to; and has duly qualified and is
authorized to do business and is in good standing as a foreign corporation
in each jurisdiction where the ownership or character of its properties or
the nature of its business or activities makes such qualification necessary
and where the failure so to qualify or be in good standing would have a
material adverse effect on the condition (financial or other), net worth or
results of operations of the Company.
(b) The subsidiaries of the Company as of the Closing Date are Central
Securities Corporation, Cumberland Securities Corporation, Kennebec Hydro
Resources, Inc., Maine Industries, Inc., The Union Water-Power Company,
Maine Electric Power Company, Inc., Integrated Resource Management
Services, Aroostook Valley Electric Company and NORVARCO. The presentation
of the consolidated financial statements of the Company complies with
Regulation S-X of the Securities and Exchange Commission (the
"Commission"). Each of Maine Yankee
2
<PAGE>
Atomic Power Company ("Maine Yankee") and the subsidiaries of the Company
is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, has the corporate
power and authority to own or lease and operate its properties, has the
corporate power, authority and franchises to carry on its business as now
conducted and has the corporate power and authority to carry on its
business as presently proposed to be conducted; neither the ownership or
character of its properties nor the nature of its business or activities
makes it necessary for Maine Yankee or any subsidiary of the Company to
qualify as a foreign corporation to do business in any jurisdiction where
the failure so to qualify or be in good standing would have a material
adverse effect on the condition (financial or other), net worth or results
of operations of the Company; and all of the outstanding shares of capital
stock of Maine Yankee owned by the Company and all of the outstanding
shares of capital stock of each subsidiary of the Company owned by the
Company have been duly authorized and validly issued and are fully paid and
nonassessable.
(c) A registration statement on Form S-3, including a prospectus,
relating to the Notes has been carefully prepared, has been filed with the
Commission and has become effective. No order preventing or suspending the
use of the Prospectus (as defined below) has been issued by the Commission.
Such registration statement in the form in which it became effective, and
as from time to time supplemented, and including all exhibits thereto is
referred to as the "Registration Statement"; the prospectus relating to the
Notes in the form in which it has most recently been filed, or mailed for
filing, with the Commission pursuant to Rule 424 under the Securities Act
of 1933, as amended (the "Act"), together with all amendments or
supplements thereto, is hereinafter referred to as the "Prospectus." Any
reference to the Act shall include the rules and regulations of the
Commission thereunder. Any reference to the Registration Statement or
Prospectus or any amendment or supplement thereto shall include all
documents incorporated by reference therein (the "Incorporated Documents")
pursuant to the applicable form under the Act. The Registration Statement
and the Prospectus comply, and will comply at all times during each period
in which, in the opinion of counsel for the Agents, a prospectus relating
to the Notes is required to be delivered under the Act (each a "Marketing
Period"), in all material respects with the requirements of the Act and do
not and will not contain any 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 not misleading, except that the foregoing does not
apply to statements in or omissions from any such documents made in
reliance upon and in conformity with written information furnished to the
Company by any Agent specifically for use therein, or as to any statement
in or omission from the Statement of Eligibility and Qualification (Form T-
1) of the Trustee under the Indenture.
(d) The Incorporated Documents complied when filed with the
Commission, comply and will comply at all times during each Marketing
Period,
3
<PAGE>
in all material respects with the applicable provisions of the Act,
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
and did not, do not and will not contain any untrue statement of a material
fact and did not, do not and will not omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. All references to the Exchange Act or the Trust Indenture
Act shall include the rules and regulations of the Commission thereunder.
The Incorporated Documents have been and will be at all times during each
Marketing Period timely filed as required by the Exchange Act. There are no
contracts or documents of the Company, Maine Yankee or any subsidiary of
the Company which are required to be filed as exhibits to the Registration
Statement which have not been filed as required.
(e) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
contemplated in the Prospectus, there has not been any material adverse
change in the condition (financial or other), net worth or results of
operations of the Company.
(f) The financial statements in the Registration Statement and the
Prospectus fairly present and will fairly present at all times during each
Marketing Period the financial condition of the Company and the results of
its operations; and said financial statements (including the related notes)
have been and will be at all times during each Marketing Period prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved (except for any changes in which
the independent accountants for the Company have concurred and which have
been specifically disclosed to the Agents).
(g) The Company's outside auditors whose report appears in the
Company's most recent Annual Report on Form 10-K which is incorporated by
reference in the Prospectus, and, if not the same, the Company's outside
auditors as of the applicable Representation Date, are independent public
accountants as required by the Act.
(h) Prior to each issuance and sale of Notes, the Company will have
full corporate power and lawful corporate authority to authorize, issue and
sell the Notes being issued and sold at that time, on the terms and
conditions set forth herein and has taken or will take all corporate action
necessary therefor; the Company has obtained every consent, approval,
authorization or other order of any regulatory body which is required for
such authorization, issue or sale except as may be required under the Act
or state securities laws; and, when duly and validly executed,
authenticated and issued as provided in the Indenture and delivered
pursuant to this Agreement and the Indenture, the Notes will constitute
valid, legal and binding obligations of the Company enforceable against it
in accordance with their respective terms and the terms of the Indenture
and entitled to the benefits of the Indenture. The
4
<PAGE>
Indenture conforms and the Notes will conform in all material respects to
all statements in relation thereto contained in the Registration Statement
and the Prospectus. The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid, legal and binding
instrument of the Company enforceable against the Company in accordance
with its terms. The Indenture has been qualified under the Trust Indenture
Act.
(i) Except as set forth in the Prospectus, the Company is not in
violation of its Articles of Incorporation or by-laws or in default under
any agreement, indenture or instrument, the effect of which violation or
default would be materially adverse to the condition (financial or other),
net worth or results of operations of the Company. The performance of this
Agreement and each applicable Purchase Agreement and the consummation of
the transactions contemplated herein and therein and the fulfillment of the
terms hereof and thereof and compliance by the Company with all the terms
and provisions of the Notes and the Indenture will not result in the
creation or imposition of any lien, charge or encumbrance upon any of the
assets of the Company pursuant to the terms of any agreement, indenture or
instrument, and will not result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any statute,
indenture, mortgage, deed of trust, note agreement or other agreement or
instrument to which the Company is a party, or by which it or any of its
property is bound, or the Articles of Incorporation or by-laws of the
Company or any order, rule or regulation applicable to the Company of any
court or of any federal or state regulatory body or administrative agency
or other governmental body having jurisdiction over the Company or its
property.
(j) Except as set forth in the Prospectus, there is not pending any
action, suit or other proceeding to which the Company is a party or of
which any property of the Company is the subject, before or by any court or
other governmental body, which is likely to result in any material adverse
change in the condition (financial or other), net worth or results of
operations of the Company; and, except as set forth in the Prospectus, no
such action, suit or proceeding is known by the Company to be threatened or
contemplated.
(k) Although the Company is a "holding company" for the purposes of
the Public Utility Holding Company Act of 1935, as amended, by reason of
its ownership of the stock of certain corporations, including Maine Yankee
and Maine Electric Power Company, Inc., it is presently exempt pursuant to
Rule 2, promulgated by the Commission under said Act, from all of the
provisions thereof except Section 9(a)(2) relating to the acquisition of
securities of public utility affiliates or, if the foregoing shall no
longer be true, describing the Company's status under such Act, and
certifying to the compliance of the Company with the provisions of such
Act.
(l) The certificates delivered pursuant to paragraph (g) of Section 5
hereof and all other documents delivered by the Company or its
representatives in connection
5
<PAGE>
with the issuance and sale of the Notes were on the dates on which they
were delivered in all material respects true and complete.
SECTION 2. Solicitations as Agent; Purchases as Principal.
----------------------------------------------
(a) Appointment. Subject to the terms and conditions stated herein,
including, without limitation, the provisions of Section 11 hereof, the Company
hereby appoints each of the Agents as the exclusive agents of the Company for
the purpose of soliciting or receiving offers to purchase the Notes from the
Company by others. On the basis of the representations and warranties contained
herein, but subject to the terms and conditions herein set forth, each Agent
agrees, as the exclusive agents of the Company, to use its reasonable efforts to
solicit offers to purchase the Notes upon the terms and conditions set forth in
the Prospectus. Except as otherwise provided herein, including, without
limitation, the provisions of Section 11 hereof, so long as this Agreement shall
remain in effect with respect to any Agent, the Company shall not, without the
consent of each such Agent, solicit or accept offers to purchase Notes otherwise
than through one of the Agents provided, however, the Company expressly reserves
the right to sell Notes directly to investors. Each Agent may also purchase
Notes from the Company as principal for purposes of resale, as more fully
described in paragraph (e) of this Section.
(b) Suspension of Solicitation. The Company reserves the right, in its
sole discretion, to suspend solicitation of offers to purchase the Notes
commencing at any time for any period of time or indefinitely. Upon receipt of
at least one business day's prior written notice from the Company, the Agents
will forthwith suspend solicitation of offers to purchase Notes from the Company
until such time as the Company has advised the Agents that such solicitation may
be resumed. For the purpose of the foregoing sentence, "business day" shall
mean any day which is not a Saturday or Sunday and which is not a day on which
(i) banking institutions are generally authorized or obligated by law to close
in the City of New York and (ii) The New York Stock Exchange is closed for
trading.
Upon receipt of notice from the Company as contemplated by Section 3(c)
hereof, each Agent shall suspend its solicitation of offers to purchase Notes
until such time as the Company shall have furnished it with an amendment or
supplement to the Registration Statement or the Prospectus, as the case may be,
contemplated by Section 3(c) and shall have advised such Agent that such
solicitation may be resumed.
(c) Agent's Commission. Promptly upon the closing of the sale of any Notes
sold by the Company as a result of a solicitation made by or offer to purchase
received by an Agent, the Company agrees to pay such Agent a commission in
accordance with the schedule set forth in Exhibit A hereto.
(d) Solicitation of Offers. The Agents are authorized to solicit offers to
purchase the Notes only in the denominations specified in the Prospectus, at a
purchase price equal to 100% of the principal amount thereof or such other
principal amount or purchase
6
<PAGE>
price as shall be specified by the Company. Each Agent shall communicate to the
Company, orally or in writing, each reasonable offer to purchase Notes received
by it as an Agent. The Company shall have the sole right to accept offers to
purchase the Notes and may reject any offer in whole or in part. Each Agent
shall have the right, in its discretion reasonably exercised, to reject any
offer to purchase the Notes received by it, without advising the Company, in
whole or in part, and any such rejection shall not be deemed a breach of its
agreement contained herein.
No Note which the Company has agreed to sell pursuant to this Agreement
shall be deemed to have been purchased and paid for, or sold by the Company,
until such Note shall have been delivered to the purchaser thereof against
payment therefor by such purchaser.
(e) Purchases as Principal. Each sale of Notes to any Agent as principal,
for resale to one or more investors or to another broker-dealer (acting as
principal for purposes of resale), shall be made in accordance with the terms of
this Agreement and a Purchase Agreement, whether oral (and confirmed in writing
by such Agent to the Company, which may be by facsimile transmission) or in
writing, which will provide for the sale of such Notes to, and the purchase
thereof by, such Agent. A Purchase Agreement may also specify certain
provisions relating to the reoffering of such Notes by such Agent. The
commitment of any Agent to purchase Notes from the Company as principal 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 Purchase Agreement shall specify the principal amount
and terms of the Notes to be purchased by an Agent, the time and date (each such
time and date being referred to herein as a "Time of Delivery") and place of
delivery of and payment for such Notes and such other information (as
applicable) as is set forth in Exhibit C hereto. The Company agrees that if any
Agent purchases Notes as principal for resale such Agent shall receive such
compensation, in the form of a discount or otherwise, as shall be indicated in
the applicable Purchase Agreement or, if no compensation is indicated therein, a
commission in accordance with Exhibit A hereto. Any Agent may utilize a selling
or dealer group in connection with the resale of such Notes. In addition, any
Agent may offer the Notes it has purchased as principal to other dealers. Any
Agent may sell Notes to any dealer at a discount and, unless otherwise specified
in the applicable Pricing Supplement, such discount allowed to any dealer will
not be in excess of 66 2/3% of the discount to be received by such Agent from
the Company. Such Purchase Agreement shall also specify any requirements for
delivery of opinions of counsel, accountant's letters and officers' certificates
pursuant to Section 5 hereof.
(f) Administrative Procedures. Administrative procedures respecting the
sale of Notes (the "Procedures") are set forth in Exhibit B hereto and may be
amended in writing from time to time by the Agents and the Company. Each Agent
and the Company agree to perform the respective duties and obligations
specifically provided to be performed by each of them herein and in the
Procedures. The Procedures shall apply to all transactions contemplated
hereunder including sales of Notes to any Agent as principal pursuant to a
Purchase Agreement, unless otherwise set forth in such Purchase Agreement.
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(g) Delivery of Documents. The documents required to be delivered by
Section 5 hereof shall be delivered at the offices of Choate, Hall & Stewart, a
partnership including professional corporations, Exchange Place, 53 State
Street, Boston, Massachusetts 02109 not later than 10:00 a.m., New York City
time, on the date of this Agreement or at such later time as may be mutually
agreed upon by the Company and the Agents, which in no event shall be later than
the time at which the Agents commence solicitation of offers to purchase Notes
hereunder (the "Closing Date").
SECTION 3. Covenants of the Company. The Company covenants and agrees:
------------------------
(a) Amendments and Supplements to Registration Statement and
Prospectus. The Company will not file any amendment to the Registration
Statement or supplement to the Prospectus (including any document which
will be an Incorporated Document) of which the Agents shall not previously
have been advised and furnished with a copy, or to which the Agents have
objected in writing or which is not in compliance in all material respects
with the Act. The Company will prepare and file with the Commission,
promptly upon the Agents' request, any amendment to the Registration
Statement or supplement to the Prospectus which, in the opinion of the
Company's counsel and counsel for the Agents, may be necessary or advisable
in connection with the offering of the Notes by the Agents.
(b) Notice to Agents of Certain Events. The Company will notify each
of the Agents immediately and confirm in writing if requested by the Agents
in any particular instance (i) when any post-effective amendment to the
Registration Statement becomes effective or when any supplement to the
Prospectus has been filed, (ii) of the issuance of any stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus relating to
the Notes or the Prospectus or of the initiation known by it of any
proceedings for such purposes, (iii) of the receipt of any comments from
the Commission in respect of the Registration Statement, any such
preliminary prospectus or the Prospectus, or requesting the amendment or
supplementation of the Registration Statement, any such preliminary
prospectus or the Prospectus or additional information, (iv) of any action
by any governmental authority altering, suspending or otherwise affecting
any authorization, consent, approval or waiver issued in connection with
the Notes and (v) of the commencement of any litigation or administrative
proceeding relating to the issue and sale of the Notes. If the Commission
shall enter a stop order or any order preventing or suspending the use of
any such preliminary prospectus or the Prospectus at any time, or shall
initiate any proceedings for such purposes, the Company will make every
reasonable effort to prevent the issuance of such order and, if issued, to
obtain the lifting thereof.
(c) Revisions to Prospectus. During any Marketing Period, the Company
will comply so far as it is able with all requirements imposed upon it by
the Act and the Exchange Act, as now and hereafter amended, as from time to
time in force, so
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far as necessary to permit the continuance of sales of or
dealings in the Notes as contemplated by the provisions hereof and the
Prospectus; and if during any Marketing Period any event occurs as a result
of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
then existing, not misleading, or if during such period it is necessary to
amend or supplement the Registration Statement or the Prospectus to comply
in all material respects with the Act or the Exchange Act, the Company will
promptly notify each of the Agents and will amend or supplement the
Registration Statement or the Prospectus (in form satisfactory to counsel
for the Agents and at the expense of the Company) so as to correct such
statement or omission or effect such compliance.
(d) Earnings Statement. As soon as practicable the Company will make
generally available to its security holders and deliver to each of the
Agents an earning statement which shall satisfy the provisions of Section
11(a) of the Act and, at the option of the Company, Rule 158 issued
thereunder.
(e) Delivery of Signed Registration Statement and Other Documents.
The Company will deliver to each of the Agents and to counsel for the
Agents as promptly as practicable a signed copy of the Registration
Statement and all amendments thereto including all exhibits filed therewith
and signed consents, certificates and opinions of accountants and of any
other persons named in the Registration Statement as having prepared,
certified or reviewed any part thereof, and will deliver to the Agents such
number of unsigned copies of the Registration Statement, without exhibits,
and of all amendments thereto, as the Agents may reasonably request. The
Company will deliver to or upon order of the Agents as many copies of each
preliminary prospectus relating to the Notes as the Agents may reasonably
request and as many copies of the Prospectus in final form, or as
thereafter amended or supplemented, as the Agents may reasonably request.
(f) Blue Sky Qualifications; Legal Investment. The Company will
cooperate with the Agents in connection with (i) the qualification of the
Notes for sale under the securities laws of such jurisdictions as the
Agents may reasonably designate and the continuance of such qualifications
in effect so long as required for the distribution of the Notes, provided
that the Company shall not be required to give a general consent to service
of process or submit to any requirement which it deems unduly burdensome,
and (ii) the determination of the eligibility of the Notes for investment
by savings banks, trustees and life insurance companies under the laws of
such jurisdictions as the Agents may reasonably designate. The Company
will advise each of the Agents promptly of any order or communication of
any public authority addressed to the Company suspending or threatening to
suspend the qualification of the Notes for sale, or the eligibility of the
Notes for purchase by such institutions, in any jurisdiction.
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(g) Copies of Reports and Financial Statements. For a period of five
years from the Closing Date or for a period from the Closing Date until the
last day on which any Notes are outstanding, whichever is longer, the
Company will deliver to each of the Agents (i) as soon as practicable after
the end of each fiscal year, a balance sheet and statement of
capitalization and interim financing as of the end of the fiscal year and
statements of earnings, changes in common stock investment and cash flows
of the Company for each of the respective fiscal years, all in reasonable
detail and certified by independent public accountants, (ii) as soon as
practicable after the end of each quarterly fiscal period (except for the
last quarterly fiscal period of each fiscal year), a balance sheet as of
the end of such quarter and statements of income for such periods of the
Company, all in reasonable detail and certified by the Comptroller or
Treasurer or other responsible financial officer of the Company, (iii) as
soon as available, a copy of each report of the Company mailed to public
security holders or filed with the Commission and (iv) from time to time,
such other information concerning the Company as the Agents may reasonably
request. If at any time the financial statements referred to in (i) and
(ii) above shall be prepared in consolidated form, they shall be furnished
to each of the Agents in such consolidated form.
(h) Application of Net Proceeds. The Company will apply the net
proceeds from the sale of the Notes for the purposes set forth in the
Prospectus.
SECTION 4. Payment of Expenses. The Company will pay (i) the costs
-------------------
incident to the authorization, issuance, sale and delivery of the Notes and any
taxes payable in that connection, (ii) the costs incident to the preparation,
printing and filing under the Act of the Registration Statement and any
amendments and exhibits thereto, (iii) the costs incident to the preparation,
printing and filing of any document and any amendments and exhibits thereto
required to be filed by the Company under the Exchange Act, (iv) the costs of
distributing the Registration Statement, as originally filed, and each amendment
and post-effective amendment thereof (including exhibits), any preliminary
prospectus, the Prospectus, any supplement or amendment to the Prospectus and
any documents incorporated by reference in any of the foregoing documents, (v)
the costs and expenses incident to the preparation, execution and delivery of
the Indenture, (vi) the fees and disbursements of the Trustee, any paying agent,
any calculation agent, and any other agents appointed by the Company, and their
respective counsel, (vii) the costs and fees in connection with the listing of
the Notes on any securities exchange, (viii) the cost of any filings with the
National Association of Securities Dealers, Inc., (ix) the fees and
disbursements of counsel for the Company, counsel for the Agents and counsel for
the Trustee, (x) the fees paid to rating agencies in connection with the rating
of the Notes, (xi) the fees and expenses of qualifying the Notes under the
securities laws of the several jurisdictions as provided in Section 3(f) hereof
and of preparing and printing a Blue Sky Memorandum and a memorandum concerning
the legality of the Notes as an investment by certain specified investors
(including fees and expenses of counsel for the Agents in connection therewith),
(xii) all advertising expenses in connection with the offering of the Notes
incurred with the consent of the Company, (xiii) all reasonable
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<PAGE>
out-of-pocket expenses incurred by the Agents in connection with the
transactions contemplated hereunder and (xiv) other reasonable costs and
expenses incident to the performance of the Company's obligations under this
Agreement.
SECTION 5. Conditions of Obligations of Agents. The obligation of the
-----------------------------------
Agents, as the agents of the Company, under this Agreement to solicit offers to
purchase the Notes, the obligation of any person who has agreed to purchase
Notes to make payment for and take delivery of Notes, and the obligation of any
Agent to purchase Notes pursuant to any Purchase Agreement, is subject to the
accuracy, on each Representation Date, of the representations and warranties of
the Company contained 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 by the Company of its obligations hereunder, and to each of the
following additional terms and conditions:
(a) Registration Statement; PUC Approval. The Registration Statement
shall have become effective under the Act and the Indenture shall have been
qualified under the Trust Indenture Act, and no stop order suspending the
effectiveness of the Registration Statement or the qualification of the
Indenture, or order preventing or suspending the use of any Prospectus,
shall have been issued and no proceeding for that purpose shall have been
initiated or, to the knowledge of the Company or the Agents, contemplated
or threatened by the Commission; any request for additional information on
the part of the Commission (to be included in the Registration Statement or
the Prospectus or otherwise) shall have been complied with to the
satisfaction of Choate, Hall & Stewart, counsel for the Agents; no
amendment to the Registration Statement or Prospectus shall have been filed
to which the Agents shall have reasonably objected, in writing, after
having received reasonable notice; and there shall be in full force and
effect an appropriate decision of the Connecticut Department of Public
Utility Control (the "DPUC") waiving jurisdiction over the issuance and
sale of the Notes and an appropriate order or decree of the Maine Public
Utilities Commission (the "PUC") authorizing to the extent required by law
the offering, issuance and sale of the Notes as herein provided. Any such
decision, order or decree issued after the date hereof shall contain no
condition inconsistent with the provisions hereof or unacceptable to the
Agents, and shall be issued under circumstances which in the Agents'
reasonable judgment are appropriate for the protection of the Agents; and
none of such decisions, orders or decrees shall have been rescinded,
modified or stayed, or the right of the Company to operate thereunder
restrained, or be subject to any litigation or adverse proceeding pending,
or to the knowledge of the Agents or the Company, threatened, in each case,
with an effect reasonably determined by the Agents to be materially adverse
to the offering, issuance and sale of the Notes. No order suspending the
sale of the Notes in any jurisdiction designated by the Agents pursuant to
Section 3(f) hereof shall have been issued, and no proceeding for that
purpose shall have been initiated or threatened.
(b) Absence of Certain Changes. Subsequent to the respective dates as
of
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which information is given in the Registration Statement and the
Prospectus, there shall not have been any downgrading in the ratings
accorded the Company's debt securities by Moody's Investors Service, Inc.,
Standard and Poor's Corporation or Duff & Phelps, Inc., or, except as
contemplated in the Prospectus, any change in the capital stock, short-term
debt or long-term debt of the Company, or any adverse change or any
development involving a prospective adverse change in the condition
(financial or other), net worth or results of operations of the Company,
which, in any such event, in the Agents' judgment, materially impairs the
investment quality of the Notes, and no Agent shall have disclosed in
writing to the Company on or prior to the Closing Date that the
Registration Statement or Prospectus or any amendment or supplement thereto
contained, or at the time of such disclosure contains, an untrue statement
of fact which, in the opinion of Choate, Hall & Stewart, counsel for the
Agents, is material, or omitted or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein
or is necessary to make the statements therein not misleading.
(c) Legal Matters Satisfactory to Counsel. The authorization and
issuance of the Notes, the Indenture, the Registration Statement, the
Prospectus and all corporate proceedings and other legal matters incident
thereto shall be satisfactory in all respects to Choate, Hall & Stewart,
and the Company shall have furnished to Choate, Hall & Stewart such
documents as they may reasonably request to enable them to be satisfied
with respect to the matters referred to in this subparagraph and to pass
upon such matters.
(d) Opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P. At the Closing
Date, the Agents shall have received the opinion, addressed to the Agents
and dated the Closing Date, of LeBoeuf, Lamb, Greene & MacRae, L.L.P.,
counsel for the Company, in form and substance satisfactory to the Agents
and their counsel, to the effect that:
(i) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Maine, with full corporate powers adequate for the making of the
Indenture and this Agreement, the execution and delivery of the
Supplemental Indenture and the issue and sale of the Notes,
provided that immediately after giving effect to such issue and
--------
sale and the retirement of any Medium-Term Notes of the Company
which are concurrently being retired, the aggregate principal
amount of the outstanding Medium-Term Notes of the Company does
not exceed $150,000,000.
(ii) The Notes, up to an aggregate principal amount which
when added to the aggregate principal amount of all other
outstanding Medium-Term Notes of the Company may at no time
exceed $150,000,000, have been duly authorized and are in a form
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<PAGE>
contemplated by the Indenture, and when executed and
authenticated as specified in the Indenture and delivered against
payment therefor in accordance with this Agreement, will be
legal, valid and binding obligations of the Company entitled to
the benefits of the Indenture.
(iii) The Indenture has been duly authorized, executed and
delivered and is a legal, valid and binding instrument of the
Company enforceable against the Company in accordance with its
terms, subject to applicable bankruptcy, insolvency and other
laws of general application affecting the rights and remedies of
creditors from time to time in effect and subject to general
equity principles, including without limitation the principle
that the availability of specific performance or injunctive or
other equitable relief is subject to the discretion of the court
before which any proceeding therefor may be brought.
(iv) The Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended.
(v) The issue of the Notes, up to an aggregate principal
amount which when added to the aggregate principal amount of all
other outstanding Medium-Term Notes of the Company may at no time
exceed $150,000,000, and the sale thereof have been duly approved
to the extent required by law by order or orders of the PUC and
such order or orders remain in full force and effect and are not
being contested, in each case to the best of such counsel's
knowledge after due inquiry of the appropriate Company officials,
and are not subject to review in which the rights of the Agents
under this Agreement, the Indenture or the Notes could be
adversely affected, and except for a Decision or Decisions of the
DPUC (as to which Decision or Decisions such counsel need express
no opinion), no further authorization, consent or approval by any
regulatory authority is required which has not been obtained for
the valid authorization, issuance and sale of the Notes up to the
amount described above (except under state or foreign securities
or "blue sky" laws, as to the applicability of which such counsel
need express no opinion).
(vi) The Notes and the Indenture conform as to legal
matters in all material respects with the statements concerning
them in the Registration Statement and the Prospectus; the
statements under "Description of Notes" in the Prospectus fairly
present the information called for by, and the Registration
Statement and Prospectus (except as to the financial statements
including the notes thereto and other financial, tabular or
statistical data set forth therein, upon which counsel are not
passing) comply as to form in all material respects
13
<PAGE>
with, the requirements of the Act and the applicable published
rules and regulations of the Commission under the Act.
(vii) The Registration Statement has become effective under
the Act, and such counsel have not been advised nor do they
otherwise have knowledge of the issuance of any stop order
suspending the effectiveness thereof by the Commission or that
any proceeding for that purpose has been instituted or is pending
under the Act; at the time the Registration Statement became
effective and on any date after the effective date of the
Registration Statement on which the Registration Statement or the
Prospectus (including the Incorporated Documents) shall be
supplemented or amended, the Registration Statement and the
Prospectus (including the Incorporated Documents), as so
supplemented and amended, complied as to form in all material
respects with the requirements of the Act, the Trust Indenture
Act, and to the extent applicable, the Exchange Act, and the
applicable published rules and regulations of the Commission
under the Act, the Exchange Act, and the Trust Indenture Act
(except that such counsel need express no opinion as to the
financial statements including the notes thereto and other
financial, tabular or statistical data set forth or referred to
therein or the Form T-1); such counsel have no reason to believe
that, at the time the Registration Statement became effective, or
on any date after the effective date of the Registration
Statement on which the Registration Statement or the Prospectus
(including the Incorporated Documents) shall be supplemented or
amended, either the Registration Statement or the Prospectus (or
the Incorporated Documents), as so supplemented and amended,
contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and such
counsel have no reason to believe that it is necessary, as of the
date of such opinion, to supplement or amend the Prospectus (or
the Incorporated Documents), although such counsel assume no
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the
Prospectus (or the Incorporated Documents).
(viii) The performance of this Agreement and the Purchase
Agreements, if any, and the consummation of the transactions
herein and therein contemplated will not result in the creation
or imposition of any lien, charge or encumbrance upon any of the
assets of the Company pursuant to the terms of, or result in a
breach of any of the terms or provisions of, or constitute a
default under, the Articles of Incorporation or by-laws of the
Company, or any indenture, mortgage, deed of trust, note
agreement or other agreement or instrument known
14
<PAGE>
to such counsel to which the Company is a party or by which it is
bound or to which any of its property is subject, or any order,
rule or regulation known to such counsel applicable to the
Company of any court or other governmental body.
(ix) Although the Company is a "holding company" for the
purposes of the Public Utility Holding Company Act of 1935, as
amended, by reason of its ownership of the stock of certain
corporations, it is presently exempt pursuant to Rule 2,
promulgated by the Commission under said Act, from all of the
provisions thereof except Section 9(a)(2) relating to the
acquisition of securities of public utility affiliates, or, if
the foregoing shall no longer be true, describing the Company's
status under such Act, and certifying to the compliance of the
Company with such Act.
(x) This Agreement has been duly authorized, executed and
delivered on behalf of the Company; it being understood that such
counsel will express no opinion as to the binding effect on the
Company of this Agreement.
(e) Opinion of William M. Finn, Esquire. At the Closing Date,
the Agents shall have received the opinion, addressed to the Agents
and dated the Closing Date, of William M. Finn, Esq., counsel for the
Company, in form and substance satisfactory to the Agents and their
counsel, to the same effect as that set forth in subdivisions (i) to
(iv), and (vi) to (x), inclusive, of sub-paragraph (d) above, and to
the effect that:
(i) The issue of the Notes, up to an aggregate principal
amount which when added to the aggregate principal amount of all
other outstanding Medium-Term Notes of the Company may at no time
exceed $150,000,000, and the sale thereof have been duly approved
to the extent required by law by order or orders of the PUC
(which order or orders have been recorded upon the books of the
Company) and a Decision or Decisions of the DPUC which order or
orders and Decision or Decisions remain in full force and effect
and are not being contested and are not subject to review in
which the rights of the Agents under this Agreement, the
Indenture or the Notes could be adversely affected, and no
further authorization, consent or approval by any regulatory
authority is required which has not been obtained for the valid
authorization, issuance and sale of the Notes up to the amount
described above (except under state or foreign securities or
"blue sky" laws, as to the applicability of which such counsel
need express no opinion).
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(ii) The Company has the corporate power and authority to
own or lease and operate the properties now owned and leased by
it and to carry on its business as now conducted and as presently
proposed to be conducted as described in the Prospectus
(including the Incorporated Documents); and to the limited extent
required, the Company has duly qualified and is authorized to do
business and is in good standing as a foreign corporation in each
jurisdiction where the ownership or character of its properties
or nature of its business or activities makes such qualification
necessary and where the failure so to qualify or be in good
standing would have a material adverse effect on the condition
(financial or other), net worth or results of operations of the
Company.
(iii) Maine Yankee and each subsidiary of the Company is a
corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation with
corporate power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as
presently proposed to be conducted; neither the ownership or
character of its properties nor the nature of its business or
activities makes it necessary for Maine Yankee or any subsidiary
of the Company to qualify to do business as a foreign corporation
in any jurisdiction where the failure so to qualify or be in good
standing would have a material adverse effect on the condition
(financial or other), net worth or results of operations of the
Company [or describe any qualification as a foreign corporation];
all of the outstanding shares of capital stock of Maine Yankee
and each subsidiary of the Company, in each case owned by the
Company, have been duly authorized and validly issued and are
fully paid and nonassessable.
(iv) Except as otherwise set forth in the Prospectus
(including the Incorporated Documents), each of the Company,
Maine Yankee and each subsidiary of the Company has such title to
all the real property and such title or other rights to all the
other property which it purports to own as is adequate for the
conduct of its business as presently conducted, with no
imperfections therein which materially impair the use of any such
property for the purposes for which it is held or would have a
material adverse effect on the condition (financial or other),
net worth or results of operations of the Company. Each of the
Company, Maine Yankee and each subsidiary of the Company enjoys
quiet possession under all material leases under which it is
currently operating, and all such leases material to the Company
are valid and subsisting and in full force and effect.
(v) To the best of such counsel's knowledge, except as
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<PAGE>
otherwise set forth in the Prospectus, neither the Company nor
any of its subsidiaries is in violation of its corporate charter
or by-laws.
(vi) Except as otherwise set forth in the Prospectus
(including the Incorporated Documents), each of the Company,
Maine Yankee and each subsidiary of the Company has such valid
material franchises, certificates of convenience and necessity,
operating rights, licenses, permits, consents, approvals,
authorizations and/or orders of governmental bodies, political
subdivisions or regulatory authorities free from unduly
burdensome restrictions or conditions of an unusual character, as
are necessary for the acquisition, construction and ownership of
the properties now owned by it and the maintenance and operation
of the properties now operated by it and the conduct of the
business now carried on by it as described in the Registration
Statement and the Prospectus (including the Incorporated
Documents), and neither the Company, Maine Yankee nor any
subsidiary of the Company is in default or violation of any
thereof, which default would have a material adverse effect on
the condition (financial or other), net worth or results of
operations of the Company, and each is carrying on its business
in accordance therewith and, to the best of the knowledge of such
counsel, with all material applicable federal, state and other
laws and regulations.
(vii) Any necessary stamp taxes in respect of the original
issue of the Notes have been paid.
(viii) Any statements in the Prospectus (or the
Incorporated Documents) which are stated therein to have been
made on the authority of such counsel as an expert have been
reviewed by such counsel and, as to matters of law and legal
conclusions, are correct in all material respects and fairly
present the information required to be shown.
(f) Opinion of Special Connecticut Counsel for the Company. At
the Closing Date, the Agents shall have received the opinion,
addressed to the Agents and dated the Closing Date, of Messrs. Day,
Berry & Howard, special Connecticut counsel for the Company, in form
and substance satisfactory to the Agents and their counsel to the
effect that:
(i) The Company is duly qualified and is in good standing
as a foreign corporation in Connecticut, and under Connecticut
law may own an ownership interest in electric utility facilities
located in Connecticut.
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(ii) The DPUC, by Decision or Decisions has waived the
requirements of Section 16-43 of the General Statutes of
Connecticut with respect to the issue of the Notes subject to
conformity with the pertinent order or orders of the PUC and any
supplemental order thereto. Said Decision or Decisions are the
only orders required under Connecticut law in connection with the
valid issuance and sale of the Notes; said Decision or Decisions
are in full force and effect on the date of such opinion, and
said Decision or Decisions have not been stayed or suspended; in
the absence of such a stay or suspension, the Notes when sold in
reliance on and in accordance with said Decision or Decisions
shall be valid and binding notwithstanding that said Decision or
Decisions may later be vacated, modified or otherwise held to be
wholly or partially invalid, it being understood that such
counsel need express no opinion as to the applicability of state
securities or "blue sky" laws.
(g) Officers' Certificate. The Company shall have furnished to the
Agents on the Closing Date a certificate, dated the Closing Date as though
made at and as of the Closing Date, of its President or a Vice President
and of a principal financial or accounting officer of the Company stating
that:
(i) The representations and warranties of the Company in this
Agreement are true and correct as of the Closing Date, and the Company
has complied with all the agreements and satisfied all the conditions
required by this Agreement to be performed or satisfied by the Company
on or prior to the Closing Date;
(ii) To the best of their knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act;
(iii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion, (A) at the time the
Registration Statement became effective, on each date on which the
Registration Statement or the Prospectus was amended or supplemented,
and on the date of such certificate, neither the Registration
Statement nor the Prospectus contained or contains any untrue
statement of a material fact or omitted or omits to state any material
fact required to be stated therein or necessary to make the statements
therein, not misleading, and (B) since the effective date of the
Registration Statement there has not occurred any event required to be
set forth in an amended or supplemented prospectus which has not been
so set forth; and
(iv) To the best of their knowledge, none of the authorizations,
18
<PAGE>
consents, approvals or waivers obtained from governmental authorities
in connection with the issue and sale of the Notes has been rescinded,
modified or stayed or the right of the Company to operate thereunder
restrained or subjected to any litigation or adverse proceeding
pending or threatened.
(h) Accountant's Letter. The Company shall have furnished to the
Agents on the Closing Date a letter of the Company's outside auditors,
addressed jointly to the Company and the Agents and dated the Closing Date,
of the type described in the American Institute of Certified Public
Accountants Statement on Auditing Standards No. 72, covering specified
financial statement items and procedures set forth in Annex A hereto.
(i) Additional Conditions. There shall not have occurred: a
suspension or material limitation in trading in securities generally on the
New York Stock Exchange, the American Stock Exchange or the over-the-
counter market or the establishment of minimum prices on such exchanges or
market by the Commission, by such exchange or by any other regulatory body
or governmental authority having jurisdiction; a general moratorium on
commercial banking activities declared by either Federal or New York State
authorities; 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 calamity or emergency; any material adverse change in
the existing financial, political or economic conditions in the United
States, including any effect of international conditions on the financial
markets in the United States; if the effect of any such occurrence in the
judgment of the Agents makes it impracticable or inadvisable to proceed
with the solicitation of offers to purchase Notes or the purchase of Notes
from the Company as principal pursuant to the applicable Purchase
Agreement, as the case may be.
(j) Opinion of Choate, Hall & Stewart. At the Closing Date, the Agent
shall have received the opinion, addressed to the Agents and dated the
Closing Date of Choate, Hall & Stewart, counsel for the Agents, in form and
substance satisfactory to the Agents with respect to the sufficiency of all
corporate proceedings and other legal matters relating to the Notes, the
Indenture, the form of the Registration Statement and the Prospectus (not
including the form of the Incorporated Documents) and as to the execution
and authorization of this Agreement and the transactions contemplated
hereby, as the Agents may reasonably require.
(k) Other Information and Documentation. Prior to the Closing Date,
the Company shall have furnished to the Agents such further information,
certificates and documents as the Agents or counsel for the Agents may have
reasonably requested prior to the Closing Date.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in
19
<PAGE>
the form and substance satisfactory to counsel for the Agents. LeBoeuf, Lamb,
Greene & MacRae, L.L.P. and Choate, Hall & Stewart in giving their opinions
pursuant to this Section 5, may rely upon the opinions of William M. Finn, Esq.
and Day, Berry & Howard as to all legal conclusions affected by the laws of
Maine and Connecticut, respectively. William M. Finn, Esq. in giving his opinion
pursuant to this Section 5 may rely upon the opinion of Day, Berry & Howard as
to all legal conclusions affected by the laws of Connecticut.
SECTION 6. Additional Covenants of the Company. The Company covenants and
-----------------------------------
agrees that:
(a) Acceptance of Offer Affirms Representations and Warranties. Each
acceptance by it of an offer for the purchase of Notes shall be deemed to
be an affirmation that the representations and warranties of the Company
contained in this Agreement and in any certificate theretofore given to the
Agents pursuant hereto are true and correct at the time of such acceptance,
and an undertaking that such representations and warranties will be true
and correct at the time of delivery to the purchaser or his agent of the
Notes relating to such acceptance as though made at and as of each such
time (and such representations and warranties shall relate to the
Registration Statement and the Prospectus as amended or supplemented to
each such time).
(b) Subsequent Delivery of Officers' Certificates. The Company agrees
that during each Marketing Period, each time that the Registration
Statement or the Prospectus shall be amended or supplemented (other than by
a Pricing Supplement providing solely for the interest rates or maturities
of the Notes or the principal amount of Notes remaining to be sold or
similar changes), each time the Company sells Notes to an Agent as
principal and the applicable Purchase Agreement specifies the delivery of
an officers' certificate under this Section 6(b) as a condition to the
purchase of Notes pursuant to such Purchase Agreement or the Company files
with the Commission any document incorporated by reference into the
Prospectus, the Company shall submit to the Agents and their counsel a
certificate of the President or a principal financial or accounting officer
of the Company, (i) as of the date of such amendment, supplement, Time of
Delivery relating to such sale or filing or (ii) if such amendment,
supplement or filing was not filed during a Marketing Period, as of the
first day of the next succeeding Marketing Period, representing that the
statements contained in the certificate referred to in Section 5(g) hereof
which was last furnished to the Agents are true and correct at the time of
such amendment, supplement or filing, 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 at such time) or, in lieu of such certificate, a certificate
of the same tenor as the certificate referred to in said Section 5(g),
modified as necessary to relate to the Registration Statement and the
Prospectus as amended and supplemented to the
20
<PAGE>
time of delivery of such certificate.
(c) Subsequent Delivery of Legal Opinions.
(i) The Company agrees that during each Marketing Period, each time
that the Registration Statement or the Prospectus shall be amended or
supplemented (other than by a Pricing Supplement providing solely for the
interest rates or maturities of the Notes or the principal amount of Notes
remaining to be sold or similar changes), each time the Company sells Notes
to an Agent as principal and the applicable Purchase Agreement specifies
the delivery of legal opinions under this Section 6(c) as a condition to
the purchase of Notes pursuant to such Purchase Agreement or the Company
files with the Commission any document incorporated by reference into the
Prospectus, the Company shall (i) concurrently with such amendment,
supplement, Time of Delivery relating to such sale or filing or (ii) if
such amendment, supplement or filing was not filed during a Marketing
Period, on the first day of the next succeeding Marketing Period, furnish
the Agents and their counsel with the written opinion of William M. Finn,
counsel for the Company, addressed to the Agents and dated the date of
delivery of such opinion, in form satisfactory to the Agents, of the same
tenor as the opinion referred to in Section 5(e) hereof, but modified, as
necessary, to relate to the Registration Statement and the Prospectus as
amended or supplemented to the time of delivery of such opinion; provided,
--------
however, that in lieu of such opinion, such counsel may furnish the Agents
-------
and their counsel with a letter to the effect that the Agents may rely on
such prior opinion to the same extent as though it were dated the date of
such letter authorizing reliance (except that statements in such prior
opinion shall be deemed to relate to the Registration Statement and the
Prospectus as amended or supplemented to the time of delivery of such
letters authorizing reliance).
(ii) The Company agrees that during each Marketing Period, each time
that the Registration Statement or the Prospectus shall be amended or
supplemented (other than by (x) a Pricing Supplement providing solely for
the interest rates or maturities of the Notes or the principal amount of
Notes remaining to be sold or similar changes or (y) the filing by the
Company with the Commission of a document incorporated by reference into
the Prospectus), or each time the Company sells Notes to an Agent as
principal and the applicable Purchase Agreement specifies the delivery of
legal opinions under this Section 6(c) as a condition to the purchase of
Notes pursuant to such Purchase Agreement, the Company shall, if requested
by the Agents, (i) concurrently with such amendment, supplement, or Time of
Delivery relating to such sale or (ii) if such amendment or supplement was
not filed during a Marketing Period, on the first day of the next
succeeding Marketing Period, furnish the Agents and their counsel with the
written opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for the
Company, addressed to the Agents and dated the date of delivery of such
opinion, in form satisfactory to the Agents, of the same tenor as the
opinion referred to in Section 5(d) hereof, but modified, as necessary, to
relate to the Registration Statement and the Prospectus as amended or
supplemented to the time of delivery of such opinion; provided, however,
-------- -------
that in lieu of such opinion, such counsel may furnish the Agents and their
counsel with a letter to the effect that the Agents may rely on such prior
opinion to the same extent as though it were dated the date of such letter
authorizing reliance (except that statements in such prior opinion shall be
deemed to relate to the Registration Statement and the Prospectus as
amended or supplemented to the time of delivery of such letter authorizing
reliance).
(d) Subsequent Delivery of Accountant's Letters. The Company agrees
that during each Marketing Period, each time that the Registration
Statement or the Prospectus shall be amended or supplemented to include
additional material financial information derived from the books and
records of the Company, each time the Company sells Notes to an Agent as
principal and the applicable Purchase Agreement specifies the delivery of a
letter under this Section 6(d) as a condition to the purchase of Notes
pursuant to such Purchase Agreement or the Company files with the
Commission any document incorporated by reference into the Prospectus which
contains additional material financial information derived from the books
and records of the Company, the Company shall, if requested by the Agents,
cause its outside auditors to furnish the Agents and their counsel (i)
concurrently with such amendment, supplement, Time of Delivery relating to
such sale or filing or (ii) if such amendment, supplement or filing was not
filed during a Marketing Period, on the first day of the next succeeding
Marketing Period, a letter, addressed jointly to the Company and the Agents
and dated the date of delivery of such letter, in form and substance of the
type described in the relevant statements of auditing standards,
21
<PAGE>
currently American Institute of Certified Public Accountants Statement on
Auditing Standards No. 72, and of the same tenor as the letter referred to
in Section 5(h) hereof but modified to relate to the Registration Statement
and the Prospectus, as amended and supplemented to the date of such letter,
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 material financial
information as of and for a fiscal quarter, the Company's outside auditors
may refer to their previously issued letter, shall reaffirm all statements
made in that letter and may limit the scope of such additional letter to
the unaudited consolidated financial statements included in such amendment
or supplement and certain agreed procedures, if any, of the type described
in the American Institute of Certified Public Accountants Statement on
Auditing Standards No. 72, covering specified financial statement items and
procedures set forth in Annex B hereto.
(e) Opinions on Settlement Date. On any settlement date for the sale
of Notes, the Company shall, if requested by the Agent that solicited or
received the offer to purchase any Notes being delivered on such settlement
date, furnish such Agent and its counsel with the written opinion of
William M. Finn, counsel for the Company, addressed to such Agent and dated
such settlement date, in form satisfactory to such Agent, of the same tenor
as the opinion referred to in Section 5(e) hereof, but modified, as
necessary, to relate to the Prospectus relating to the Notes to be
delivered on such settlement date; provided, however, that in lieu of such
-------- -------
opinion, such counsel may furnish such Agent and its counsel with a letter
to the effect that such Agent may rely on such prior opinion to the same
extent as though it were dated such settlement date (except that statements
in such prior opinion shall be deemed to relate to the Registration
Statement and the Prospectus as amended or supplemented to the time of
delivery of such letter authorizing reliance).
SECTION 7. Indemnification and Contribution.
--------------------------------
(a) The Company will indemnify and hold harmless each Agent and each
person, if any, who controls such Agent within the meaning of the Act
against any losses, claims, damages or liabilities, joint or several, and
any action in respect thereof to which such Agent or such controlling
person may become subject, under the Act or otherwise, with respect to the
Notes or any other securities of the Company, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to
22
<PAGE>
make the statements therein not misleading, and will reimburse each Agent
and each such controlling person for any legal or other expenses reasonably
incurred by such Agent or such controlling person in connection with
investigating or defending against any such loss, claim, damage, liability
or action; provided, however, that the Company will not be liable in any
-------- -------
such case to the extent that any such loss, claim, damage, liability or
action arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in the Registration
Statement, the Prospectus, or such amendment or such supplement, in
reliance upon and in conformity with written information furnished to the
Company by such Agent specifically for use in the preparation thereof. This
indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Agent will indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the Registration
Statement and each person, if any, who controls the Company within the
meaning of the Act, against any losses, claims, damages or liabilities,
joint or several, and any action in respect thereof to which the Company or
any such director, officer or controlling person may become subject, under
the Act or otherwise, insofar as such losses, claims, damages, liabilities
or actions arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, the
Prospectus or such amendment or such supplement, in reliance upon and in
conformity with written information furnished to the Company by such Agent
specifically for use in the preparation thereof; and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company
or any such director, officer or controlling person in connection with
investigating or defending against any such loss, claim, damage, liability
or action. This indemnity agreement will be in addition to any liability
which such Agents may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under this Section 7. In case any such action is
brought against any indemnified party, and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled
to participate in, and, to the extent that it may wish, jointly with any
other indemnifying party, similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party, and after
notice from the indemnifying party to
23
<PAGE>
such indemnified party of its election so to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party under
this Section 7 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation, unless, in the case of an
indemnification obligation arising under subparagraph (a) of this Section
7, (i) the employment of additional counsel has been authorized in writing
by the Company in connection with defending such action, or (ii) the
Company and such Agent or controlling person are advised by such additional
counsel that such Agent or controlling person has available defenses
involving a potential conflict with the interests of the Company, in either
of which events, the fees and expenses of such additional counsel shall be
borne by the Company.
(d) If the indemnification provided for in this Section 7 is
unavailable (or insufficient to hold harmless an indemnified party) under
subparagraph (a) or (b) above (by reason of a failure of the indemnified
party to give a notice required by subparagraph (c) above or for any other
reason whatever) to a party that would have been an indemnified party under
subparagraph (a) or (b) above ("indemnified party") in respect of any
losses, claims, damages, liabilities or actions referred to therein, then
each party that would have been an indemnifying party thereunder
("indemnifying party") shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or actions in such
proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and any Agent on the other from the offering of
the Notes. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the
one hand and any Agent on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
actions, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and any Agent on
the other 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 commissions received by such Agent with respect
to such offering. The relative fault shall be determined by reference to
among other things, whether the untrue or alleged 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 any Agent and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the
Agents agree that it would not be just and equitable if contribution
pursuant to this subparagraph (d) were determined by pro rata allocation
(even if the Agents were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this subparagraph (d). The amount paid
or payable by an indemnified party as a result of
24
<PAGE>
the losses, claims, damages, liabilities or actions referred to above in
this subparagraph (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim (which shall be limited
as provided in subparagraph (c) above if the indemnifying party has assumed
the defense of any such action in accordance with the provisions thereof).
Notwithstanding the provisions of this subparagraph (d), no Agent shall be
required to contribute any amount in excess of the amount by which the
total price at which the Notes sold through such Agent and distributed to
the public were offered to the public exceeds the amount of any damages
which such Agent has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Agents'
obligations in this subparagraph (d) to contribute are several in
proportion to the respective amount of the Notes sold by each and not
joint.
SECTION 8. Status of each Agent. In soliciting offers to purchase the
--------------------
Notes from the Company pursuant to this Agreement (other than in respect of any
Purchase Agreement), each Agent is acting individually and not jointly and is
acting solely as agent for the Company and not as principal. Each Agent will
make reasonable efforts to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes from the Company has been solicited by
such Agent and accepted by the Company but such Agent shall have no liability to
the Company in the event any such purchase is not consummated for any reason.
If the Company shall default in its obligations to deliver Notes to a purchaser
whose offer it has accepted, the Company shall (a) hold the Agents harmless
against any loss, claim or damage arising from or as a result of such default by
the Company and (b), in particular, pay to the Agents any commission to which
they would be entitled in connection with such sale.
SECTION 9. Representations and Warranties to Survive Delivery. All
--------------------------------------------------
representations and warranties of the Company contained in this Agreement, or
contained in certificates of officers of the Company submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of the
termination or cancellation of this Agreement or any investigation made by or on
behalf of any Agent or any person controlling such Agent or by or on behalf of
the Company, and shall survive each delivery of and payment for any of the
Notes.
SECTION 10. Termination. The appointment of an Agent and the obligations
-----------
of such Agent under this Agreement may be terminated at any time either by the
Company or by such Agent upon the giving of one day's written notice of such
termination to such Agent or the Company, as the case may be. The provisions of
Sections 2(c), 3(c), 3(d), 3(f), 3(g), 4, 7, 8, 9, 12 and 13 hereof shall
survive any such termination.
25
<PAGE>
SECTION 11. Additional Agents. The Company may appoint one or more
-----------------
additional agents for the purpose of soliciting or receiving offers to purchase
the Notes from the Company by others; provided that any such additional agent
--------
shall become a party to this Agreement prior to soliciting or receiving offers
to purchase the Notes.
SECTION 12. Notices. Except as otherwise provided herein, all notices and
-------
other communications hereunder shall be in writing and shall be deemed to have
been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Agents shall be directed to them as follows:
Lehman Brothers Inc., 3 World Financial Center, 12th Floor, New York, New York
10285-1200, Attention: Medium-Term Note Department, Telephone No.: (212) 528-
1718; Telecopy No.: (212) 526-2040 and PaineWebber Incorporated, 1285 Avenue of
the Americas, New York, New York, 10019, Attention: Peter H. Kind, Telephone
No.: (212) 713-2000; Telecopy No.: (212) 713-4040; notices to the Company shall
be directed to it as follows: 83 Edison Drive, Augusta, Maine 04336, Attention:
Treasurer (with a copy to William M. Finn, Esq., Corporate Counsel), Telephone
No.: (207) 623-3521; Telecopy No.: (207) 623-5908.
SECTION 13. Binding Effect; Benefits. This Agreement shall be binding
------------------------
upon each Agent, the Company, and their respective successors. This Agreement
and the terms and provisions hereof are for the sole benefit of only those
persons, except that (a) the representations, warranties, indemnities and
agreements of the Company contained in this Agreement shall also be deemed to be
for the benefit of the person or persons, if any, who control any Agent within
the meaning of Section 15 of the Act, and (b) the indemnity agreement of the
Agents contained in Section 7 hereof shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of said Section 15. Nothing in this Agreement is intended or shall be construed
to give any person, other than the persons referred to in this Section, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein. No purchaser of any of the Notes from any
Agent shall be construed as a successor or assign merely by reason of such
purchase .
SECTION 14. Governing Law; Counterparts. This Agreement shall be governed
---------------------------
by and construed in accordance with the laws of New York. This Agreement may be
executed by the parties on separate counterparts and the executed counterparts
shall together constitute a single instrument.
26
<PAGE>
If the foregoing correctly sets forth our agreement, please indicate your
acceptance hereof in the space provided for that purpose below.
Very truly yours,
CENTRAL MAINE POWER COMPANY
By:___________________________
(Title)
CONFIRMED AND ACCEPTED, as of the date first
above written:
LEHMAN BROTHERS INC.
By: _______________________________
(Title)
PAINEWEBBER INCORPORATED
By:
---------------------------------
(Title)
27
<PAGE>
ANNEX A
-------
(1) They are independent certified public accountants with respect to the
Company within the meaning of the Act and the applicable published rules and
regulations of the Commission thereunder.
(2) The consolidated financial statements and schedules audited by them and
included or incorporated by reference in the Registration Statement and the
Prospectus comply in form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and with the applicable
published rules and regulations of the Commission thereunder and, if applicable,
they have made a review in accordance with standards established by the American
Institute of Certified Public Accountants of the unaudited consolidated
condensed interim financial statements of the Company for the periods specified
in such letter, as indicated in their reports thereon, copies of which are to be
furnished to the Agents.
(3) The unaudited selected financial information with respect to the
results of operations and financial position of the Company for the five most
recent fiscal years incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year which is incorporated by
reference in the Prospectus agrees with the corresponding amounts in the audited
consolidated financial statements for such fiscal years which were included or
incorporated by reference in the Company's Annual Reports on Form 10-K for such
five fiscal years.
(4) On the basis of a reading of the latest available unaudited
consolidated interim financial statements prepared by the Company, inquiries of
officers and other employees of the Company responsible for financial and
accounting matters, reading all available minutes of the stockholders, the Board
of Directors and the Executive Committee of the Board of Directors of the
Company (and any other committees of the Board of Directors of the Company which
maintain minutes of their proceedings) and other procedures and inquiries
specified by the Agents, nothing has come to their attention which causes them
to believe that (A) the unaudited consolidated condensed financial statements
included in the Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Registration Statement and the Prospectus do not comply in form
in all material respects with the applicable accounting requirements of the Act
and the Exchange Act as they apply to Form 10-Q and the applicable published
rules and regulations of the Commission thereunder or such unaudited
consolidated condensed financial statements are not in conformity with generally
accepted accounting principles applied on a basis substantially consistent with
that of the audited consolidated financial statements incorporated by reference
in the Registration Statement and the Prospectus; (B) at the date of the latest
available unaudited interim balance sheet of the Company and as of a subsequent
specified date not more than five business days prior to the date of such
letter, there was any change in the capital stock, long-term debt or short-term
debt of the Company or any decrease in its net assets, in each case as compared
with amounts shown in the most recent fiscal year end balance sheet of the
Company incorporated by reference in the Registration Statement and the
Prospectus; (C) for the period from the
1
<PAGE>
end of the Company's most recently ended fiscal year to the date of the latest
available unaudited consolidated interim financial statements of the Company and
to a subsequent specified date not more than five business days prior to the
date of such letter, there were any decreases, as compared with the
corresponding periods in the preceding year, in electric operating revenues,
operating income, net income or earnings per share of common stock of the
Company; or (D) for the twelve-month period ended with the date of the latest
available unaudited consolidated interim financial statements of the Company,
there was a decrease, as compared with the Company's most recently ended fiscal
year in the ratio of earnings to fixed charges of the Company, except in all
instances for changes or decreases which the Prospectus discloses have occurred
or may occur or which are described in such letter. For purposes hereof, "most
recent fiscal year" and "most recently ended fiscal year" shall mean the most
recent fiscal year for which audited consolidated financial statements are
available.
(5) That they carried out certain agreed procedures specified in such
letter for the purpose of comparing certain financial information and certain
dollar amounts (or percentages derived from such dollar amounts) in the
Registration Statement and the Prospectus (and the documents incorporated by
reference therein) to the corresponding amounts in the consolidated financial
statements of the Company audited by them or in the accounting records of the
Company and have found such dollar amounts, percentages and other financial
information to be in agreement with such results.
2
<PAGE>
ANNEX B
-------
(1) If applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of the
unaudited consolidated condensed interim financial statements of the Company for
the periods specified in such letter, as indicated in their reports thereon,
copies of which are to be furnished to the Agents.
(2) On the basis of a reading of the latest available unaudited
consolidated interim financial statements prepared by the Company, inquiries of
officers and other employees of the Company responsible for financial and
accounting matters, reading all available minutes of the stockholders, the Board
of Directors and the Executive Committee of the Board of Directors of the
Company (and any other committees of the Board of Directors of the Company which
maintain minutes of their proceedings) and other procedures and inquiries
specified by the Agents, nothing has come to their attention which causes them
to believe that (A) the unaudited consolidated condensed financial statements
included in the Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Registration Statement and the Prospectus do not comply in form
in all material respects with the applicable accounting requirements of the Act
and the Exchange Act as they apply to Form 10-Q and the applicable published
rules and regulations of the Commission thereunder or such unaudited
consolidated condensed financial statements are not in conformity with generally
accepted accounting principles applied on a basis substantially consistent with
that of the audited consolidated financial statements incorporated by reference
in the Registration Statement and the Prospectus; (B) at the date of the latest
available unaudited interim balance sheet of the Company and as of a subsequent
specified date not more than five business days prior to the date of such
letter, there was any change in the capital stock, long-term debt or short-term
debt of the Company or any decrease in its net assets, in each case as compared
with amounts shown in the most recent fiscal year end balance sheet of the
Company incorporated by reference in the Registration Statement and the
Prospectus; (C) for the period from the end of the Company's most recently ended
fiscal year to the date of the latest available unaudited consolidated interim
financial statements of the Company and to a subsequent specified date not more
than five business days prior to the date of such letter, there were any
decreases, as compared with the corresponding periods in the preceding year, in
electric operating revenues, operating income, net income or earnings per share
of common stock of the Company; or (D) for the twelve-month period ended with
the date of the latest available unaudited consolidated interim financial
statements of the Company, there was a decrease, as compared with the Company's
most recently ended fiscal year in the ratio of earnings to fixed charges of the
Company, except in all instances for changes or decreases which the Prospectus
discloses have occurred or may occur or which are described in such letter. For
purposes hereof, "most recent fiscal year" and "most recently ended fiscal year"
shall mean the most recent fiscal year for which audited consolidated financial
statements are available.
(3) That they carried out certain agreed procedures specified in such
letter for the
3
<PAGE>
purpose of comparing certain financial information and certain dollar amounts
(or percentages derived from such dollar amounts) in the Registration Statement
and the Prospectus (and the documents incorporated by reference therein) to the
corresponding amounts in the consolidated financial statements of the Company
audited by them or in the accounting records of the Company and have found such
dollar amounts, percentages and other financial information to be in agreement
with such results.
4
<PAGE>
EXHIBIT A
Central Maine Power Company
Medium-Term Notes, Series C
Schedule of Payments
The Company agrees to pay each Agent a commission equal to the following
percentage of the aggregate principal amount of Notes sold by such Agent:
Term of Notes Commission Rate
------------- ---------------
9 months to less than 12 months ____%
12 months to less than 18 months ____%
18 months to less than 2 years ____%
2 years to less than 3 years ____%
3 years to less than 4 years ____%
4 years to less than 5 years ____%
5 years to less than 6 years ____%
6 years to less than 7 years ____%
7 years to less than 10 years ____%
10 years to less than 15 years ____%
15 years to less than 20 years ____%
20 years to and including 30 years ____%
<PAGE>
EXHIBIT B
CENTRAL MAINE POWER COMPANY
MEDIUM-TERM NOTES, SERIES C
ADMINISTRATIVE PROCEDURES
Medium-Term Notes, Series C, due from nine months to thirty years from date
of issue (the "Notes") are to be offered on a continuing basis by Central Maine
Power Company (the "Company"). Lehman Brothers Inc. and PaineWebber
Incorporated, as agents (each an "Agent" and collectively, the "Agents", which
shall include Lehman Government Securities Inc., an affiliate of Lehman Brothers
Inc.), have each agreed to use their reasonable efforts to solicit offers to
purchase the Notes. The Notes are being sold pursuant to a Distribution
Agreement among the Company and the Agents dated ___________ __, 199__ (as it
may be supplemented or amended from time to time, the "Distribution Agreement")
to which these administrative procedures are attached as an exhibit. The Notes
will be issued under the Company's Indenture, dated as of August 1, 1989 between
the Company and The Bank of New York, as trustee (the "Trustee"), as heretofore
supplemented. The Notes will rank equally with all other unsecured and
unsubordinated indebtedness of the Company and will have been registered with
the Securities and Exchange Commission (the "Commission"). Terms defined in the
Prospectus relating to the Notes (the "Prospectus", which term shall include any
Prospectus Supplement relating to the Notes and any Pricing Supplement relating
to an applicable Note) and in the Distribution Agreement shall have the same
meaning when used in this exhibit.
The Notes will be issued either (a) in certificated form (each, a
"Certificated Note") delivered to the purchaser thereof or a person designated
by such purchaser or (b) in book-entry form (each, a "Book-Entry Note")
represented by one or more fully registered global Notes (each, a "Global
Security") delivered to the Trustee, as agent for The Depositary Trust Company
("DTC"), and recorded in the book-entry system maintained by DTC. Owners of
beneficial interests in Book-Entry Notes will be entitled to physical delivery
of Certificated Notes equal in principal amount to their respective beneficial
interests only upon certain limited circumstances described in the Prospectus.
General procedures relating to the issuance of all Notes are set forth in
Part I hereof. Certificated Notes will be issued in accordance with the
procedures set forth in Part II, as supplemented, in the case of Certificated
Notes denominated other than in U.S. dollars ("Multi-Currency Notes"), by Part
III. Book-Entry Notes will be issued in accordance with the procedures set
forth in Part IV.
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Administrative responsibilities, document control and record-keeping
functions to be performed by the Company will be performed by its Treasurer or
the Treasurer's designee. Administrative procedures for the offering are
explained below.
PART I: PROCEDURES OF GENERAL APPLICABILITY
PRICE TO PUBLIC
Each Note will be issued at 100% of principal amount, unless otherwise
determined by the Company.
DATE OF ISSUANCE
Each Note will be dated and issued as of the date of its authentication by
the Trustee.
MATURITIES
Each Note will mature on a day at least nine months but not more than 30
years from the date of issuance selected by the purchaser and agreed upon by the
Company. Each Floating Rate Note (as defined below) will mature on an Interest
Payment Date (as defined below).
REGISTRATION
Notes will be issued only in fully registered form as either a Book-Entry
Note or a Certificated Note.
INTEREST PAYMENTS
Each Note bearing interest at a fixed rate (a "Fixed Rate Note") will bear
interest from its issue date at the annual rate stated on the face thereof,
payable in the case of Fixed Rate Notes other than Amortizing Notes, unless
otherwise specified in an applicable Pricing Supplement, on March 1 and
September 1 of each year (each an "Interest Payment Date" with respect to such
Fixed Rate Note) and at Specified Maturity or upon redemption, if applicable.
Special provisions are set forth in the Prospectus relating to Notes
bearing interest at a rate or rates determined by reference to an interest rate
formula ("Floating Rate Notes") at a rate determined pursuant to the formula
stated on the face thereof, payable in arrears on such dates as are specified
therein (each an "Interest Payment Date" with respect to such Floating Rate
Note).
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<PAGE>
Unless otherwise specified in an applicable Pricing Supplement, interest on
Fixed Rate Notes will be calculated and paid on the basis of a 360-day year of
twelve 30-day months. Unless otherwise specified in an applicable Pricing
Supplement, interest will be payable to the person in whose name such Note is
registered at the close of business fifteen calendar days next preceding each
Interest Payment Date (whether or not a Business Day) with respect to Fixed Rate
Notes other than Amortizing Notes (as hereinafter defined) or the fifteenth day
(whether or not a Business Day) next preceding an Interest Payment Date with
respect to Floating Rate Notes (the "Record Dates") next preceding the
respective Interest Payment Date; provided, however, that interest payable at
Specified Maturity will be payable to the person to whom principal shall be
payable. Payments of principal and interest on Notes for which payments of
principal and interest are made in equal installments over the life of the
security ("Amortizing Notes"), will be made either quarterly on each February 1,
May 1, August 1 and November 1 or semiannually on each May 1 and November 1 as
set forth in the applicable Pricing Supplement, and at maturity or upon earlier
redemption or repayment. Payments with respect to Amortizing Notes will be
applied first to interest due and payable thereon and then to the reduction of
the unpaid principal amount thereof. A table setting forth repayment
information in respect of each Amortizing Note will be provided to the original
purchaser and will be available, upon request, to subsequent Holders. Any
payment of principal and interest on any such Note required to be paid on an
Interest Payment Date or at Specified Maturity or upon redemption, if
applicable, which is not a Business Day shall be postponed to the next day which
is a Business Day. The first payment of interest on any Note 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. All interest payments
(and, in the case of Amortizing Notes, principal payments) excluding interest
payments and, in the case of Amortizing Notes, principal payments made at
Specified Maturity or upon redemption, if applicable, will be made by check
mailed to the person entitled thereto as provided above, or, at the option of
the Company, by wire transfer to an account maintained by such person with a
bank located in the United States. Notwithstanding the foregoing, the holder of
$10 million or more in aggregate principal amount of Notes of like tenor and
terms with the same Interest Payment Date may request payment by wire transfers.
On the fifth Business Day immediately preceding each Interest Payment Date,
the Trustee will furnish the Company with the total amount of the interest
payments and, in the case of Amortizing Notes, principal payments, to be made on
such Interest Payment Date. The Trustee (or any duly selected paying agent)
will provide monthly to the Company's Treasury Department a list of the
principal and interest to be paid on Notes maturing in the next succeeding
month. The Company will provide to the Trustee (or any duly selected paying
agent) not later than the payment date sufficient moneys to pay in full all
principal and interest payments due on such payment date. The Trustee will
assume responsibility for withholding taxes on interest paid as required by law.
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<PAGE>
ACCEPTANCE AND REJECTION OF OFFERS
The Company shall have the sole right to accept offers to purchase Notes
and may reject any such offer in whole or in part. Each Agent shall promptly
communicate to the Company, orally or in writing, each reasonable offer to
purchase Notes from the Company received by it other than those rejected by such
Agent. Each Agent shall have the right, in its discretion reasonably exercised
without advising the Company, to reject any offers in whole or in part.
SETTLEMENT
The receipt of immediately available funds in U.S. dollars by the Company
in payment for a Note (less the applicable commission) and the authentication
and issuance of such Note shall, with respect to such Note, constitute
"Settlement." All offers accepted by the Company will be settled from one to
five Business Days from the date of acceptance by the Company pursuant to the
timetable for Settlement set forth below unless the Company and the purchaser
agree to Settlement on a later date; provided, however, that the Company will so
notify the Trustee of any such later date on or before the Business Day
immediately prior to the Settlement date.
PROCEDURES FOR ESTABLISHING THE TERMS OF THE NOTES
The Company and the Agents will discuss from time to time the rates to be
borne by the Notes that may be sold as a result of the solicitation of offers by
the Agents. Once any Agent has recorded any indication of interest in Notes
upon certain terms, and communicated with the Company, if the Company accepts an
offer to purchase Notes upon such terms, it will prepare a Pricing Supplement in
the form previously approved by the Agents, reflecting the terms of such Notes
and, after approval from the Presenting Agent, will arrange to have such
Pricing Supplement (together with the Prospectus, if amended or supplemented)
filed with the Commission and will supply an appropriate number of copies of the
Prospectus, as then amended or supplemented, together with such Pricing
Supplement, to the Presenting Agent. See "Delivery of Prospectus." No
settlements with respect to Notes upon such terms may occur prior to such filing
and the Presenting Agent will not, prior to such filing, mail confirmations to
customers who have offered to purchase Notes upon such terms. After such
filing, sales, mailing of confirmations and settlements may occur with respect
to Notes upon such terms, subject to the provisions of "Delivery of Prospectus"
below.
If the Company decides to post rates and a decision has been reached to
change interest rates, the Company will promptly notify each Agent. Each Agent
will forthwith suspend solicitation of purchases. At that time, the Agents will
recommend and the Company will establish rates to be so "posted." Following
establishment of posted rates and prior to the filing described in the following
sentence, the Agents may only record indications of interest in purchasing Notes
at the posted rates. Once any Agent has recorded any indication of interest in
Notes at the posted rates and communicated with the Company,
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<PAGE>
if the Company accepts an offer at the posted rate, it will prepare a Pricing
Supplement reflecting such posted rates and, after approval from the Presenting
Agent, will arrange to have 10 copies of such Pricing Supplement (together with
the Prospectus if amended or supplemented) filed with the Commission and will
supply an appropriate number of copies of the Prospectus, as then amended or
supplemented, to the Presenting Agent. See "Delivery of Prospectus." No
settlements at the posted rates may occur prior to such filing and the
Presenting Agent will not, prior to such filing, mail confirmations to customers
who have offered to purchase Notes at the posted rates. After such filing,
sales, mailing of confirmations and settlements may resume, subject to the
provisions of "Delivery of Prospectus" below.
SUSPENSION OF SOLICITATION; AMENDMENT OR SUPPLEMENT
In the event that at the time the Agents, at the direction of the Company,
suspend solicitation of offers to purchase from the Company there shall be any
orders outstanding which have not been settled, the Company will promptly advise
the Agents and the Trustee whether such orders 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 orders. 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 orders may not be settled or that copies of such Prospectus
may not be so delivered.
DELIVERY OF PROSPECTUS
A copy of the Prospectus as most recently amended or supplemented on the
date of delivery thereof, together with the applicable Pricing Supplement, must
be delivered to a purchaser prior to or together with the earlier of the
delivery by the Agents of (i) the written confirmation of a sale sent to a
purchaser or his agent and (ii) any Note purchased by such purchaser. The
Company shall ensure that the Presenting Agent receives copies of the Prospectus
and each amendment or supplement thereto (including the applicable Pricing
Supplement) in such quantities and within such time limits as will enable the
Presenting Agent to deliver such confirmation or Note to a purchaser as
contemplated by these procedures and in compliance with the preceding sentence.
Copies of Pricing Supplements should be delivered (i) if to Lehman Brothers, by
telecopy to Lehman Brothers, Inc., c/o Smith Barney Inc., Prospectus Delivery
Department, 140 58th Street, 8th Floor, Brooklyn, New York 11220, Attn: Andrea
Springer, Telecopy: (718) 921-8472, Telephone: (718) 921-8460/61 and by hand
to Lehman Brothers Inc., 3 World Financial Center, 9th Floor, New York, New York
10285-0900, Attention: Brunnie Vasquez, Telephone: (212) 526-8400 and (ii) if
to PaineWebber Incorporated by telecopy to PaineWebber Incorporated, 1285 Avenue
of the Americas, New York, New York 10019, Attention: Peter H. Kind, Telecopy:
(212) 713-4040, Telephone: (212) 713-2000. If, since the date of acceptance of
a purchaser's offer, the Prospectus shall have been supplemented solely to
reflect any sale of Notes on terms different from those agreed to between the
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<PAGE>
Company and such purchaser or a change in posted rates not applicable to such
purchaser, such purchaser shall not receive the Prospectus as supplemented by
such new supplement, but shall receive the Prospectus as supplemented to reflect
the terms of the Notes being purchased by such purchaser and otherwise as most
recently amended or supplemented on the date of delivery of the Prospectus. The
Company will make all such deliveries with respect to all Notes sold directly by
the Company.
REDEMPTION AND REPAYMENT
Unless one or more Redemption Dates are specified in the applicable Pricing
Supplement, the Notes will not be redeemable prior to their Specified Maturity.
If one or more Redemption Dates are so specified with respect to any Note, the
applicable Pricing Supplement will also specify one or more redemption prices
(expressed as a percentage of the principal amount of such Note) ("Redemption
Prices") and the redemption period or periods ("Redemption Periods") during
which such Redemption Prices shall apply. Unless otherwise specified in the
Pricing Supplement, any such Note shall be redeemable at the option of the
Company at the specified Redemption Price applicable to the Redemption Period
during which such Note is to be redeemed, together with interest accrued to the
Redemption Date. Unless otherwise specified in the applicable Pricing
Supplement, the Notes will not be subject to any sinking fund. The Company may
redeem any of the Notes that are redeemable and remain outstanding either in
whole or from time to time in part, upon not less than 30 nor more than 60 days'
notice. In the event of a redemption in part of any Note, a new Note for the
amount of the unredeemed portion shall be issued in the name of the Holder upon
cancellation of the redeemed Note.
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be repaid prior to Specified Maturity or that such Note will be
repayable at the option of the holder on a date or dates specified prior to
Specified Maturity at a price or prices set forth in the applicable Pricing
Supplement, together with accrued interest to the date of repayment.
In order for a Note that is subject to repayment at the option of the
Holder to be repaid, the Paying Agent must receive at least 30 days but not more
than 45 days prior to the repayment date (a) appropriate wire instructions and
(b) either (i) the Note with the form entitled "Option to Elect Repayment"
attached to the Note duly completed or (ii) a telegram, telex, facsimile
transmission or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company in the United States setting forth the name of the Holder of the Note,
the principal amount of the Note, the portion of the principal amount of the
Note to be repaid, the certificate number or a description of the tenor and
terms of the Note, a statement that the option to elect repayment is being
exercised thereby and a guarantee that the Note to be repaid with the form
entitled "Option to Elect Repayment" attached to the Note duly completed will be
received by the Paying Agent not later than five Business Days after the date of
such telegram, telex, facsimile transmission or letter and such Note and form
duly completed must
B-6
<PAGE>
be received by the Paying Agent by such fifth Business Day. Exercise of the
repayment option by the Holder of a Note shall be irrevocable, except as
otherwise described under "Interest Rate Reset" and "Extendible Notes" in the
Prospectus Supplement. The repayment option may be exercised by the Holder of a
Note for less than the entire principal amount of the Note provided that the
principal amount of the Note remaining outstanding after repayment is an
authorized denomination. No transfer or exchange of any Note (or, in the event
that any Note is to be repaid in part, the portion of the Note to be repaid)
will be permitted after exercise of a repayment option. All questions as to the
validity, eligibility (including time of receipt) and acceptance of any Note for
repayment will be determined by the Company, whose determination will be final,
binding and non-appealable.
If a Note is represented by a Global Security, the Depositary's nominee
will be the Holder of such Note and therefore will be the only entity that can
exercise a right to repayment. In order to ensure that the Depositary's nominee
will timely exercise a right to repayment with respect to a particular Note, the
beneficial owner of such Note must instruct the broker or other direct or
indirect participant through which it holds an interest in such Note to notify
the Depositary of its desire to exercise a right to repayment. Different firms
have different cut-off times for accepting instructions from their customers
and, accordingly, each beneficial owner should consult the broker or other
direct or indirect participant through which it holds an interest in a Note in
order to ascertain the cut-off time by which such an instruction must be given
in order for timely notice to be delivered to the Depositary.
Unless otherwise specified in the applicable Pricing Supplement, if a Note
is an Original Issue Discount Note, the amount payable on such Note in the event
of redemption or repayment prior to its Specified Maturity shall be the
Amortized Face Amount of such Note, as specified in the applicable Pricing
Supplement, as of the Redemption Date or the date of repayment, as the case may
be.
AUTHENTICITY OF SIGNATURES
The Company will cause the Trustee to furnish the Agents from time to time
with the specimen signatures of each of the Trustee's officers, employees and
agents who have been authorized by the Trustee to authenticate Notes, but the
Agents will have no obligation or liability to the Company or the Trustee in
respect of the authenticity of the signature of any officer, employee or agent
of the Company or the Trustee on any Note.
ADVERTISING COSTS
The Company will determine with the Agents the amount and nature of
advertising that may be appropriate in offering the Notes. Advertising expenses
incurred with the consent of the Company will be paid by the Company.
B-7
<PAGE>
BUSINESS DAY
"Business Day" shall mean, any day, other than a Saturday or Sunday, that
meets each of the following applicable requirements: the day is (a) not a day
on which banking institutions are authorized or required by law or regulation to
be closed in The City of New York and (b) with respect to LIBOR Notes, a London
Banking Day. "London Banking Day" means any day on which dealings in deposits
in U.S. dollars are transacted in the London interbank market.
PART II: PROCEDURES FOR CERTIFICATED NOTES
CURRENCY
Certificated Notes will be denominated in U.S. dollars or in one or more
foreign currencies or foreign currency units, as specified in the applicable
Pricing Supplement. For special procedures relating to Multi-Currency Notes,
see Part III hereof.
REGISTRATION
Certificated Notes may be presented for registration of transfer or
exchange at the Trustee's New York office.
DENOMINATIONS
Except as provided in the applicable Pricing Supplement, Certificated Notes
will be issued and payable in U.S. dollars in the denominations of $25,000 and
any larger denomination which is an integral multiple of $1,000.
MATURITY
Upon presentation of each Certificated Note at Maturity the Trustee (or any
duly appointed Paying Agent) will pay the principal amount thereof, together
with accrued interest due at maturity. Such payment shall be made in
immediately available funds in U.S. dollars, provided that the Certificated Note
is presented to the Trustee (or any such Paying Agent) in time for the Trustee
(or such Paying Agent) to make payments in such funds in accordance with its
normal procedures. The Company will provide the Trustee (and any such Paying
Agent) with funds available for immediate use for such purpose. Certificated
Notes presented at Maturity will be cancelled by the Trustee as provided in the
Indenture.
B-8
<PAGE>
SETTLEMENT PROCEDURES
In the event of a purchase of Certificated Notes by an Agent, as principal,
appropriate Settlement details will be as set forth below unless such details
are set forth in the applicable Purchase Agreement to be entered into between
such Agent and the Company pursuant to the Distribution Agreement.
In the event of the sale of a Certificated Note that is a Multi-Currency
Note or an Indexed Note, whether the sale is through an Agent or to an Agent, as
principal, additional or different Settlement details may be set forth in an
amendment to these administrative procedures to be entered into between such
Agent and the Company.
Other than as contemplated above, settlement procedures with regard to each
Certificated Note sold through each Agent shall be as follows, as applicable:
A. Such Agent (the "Presenting Agent") will advise the Company by
telephone, telex or facsimile, of the following Settlement information:
1. Exact name in which the Note is to be registered ("Registered Owner").
2. Exact address of the Registered Owner and address for payment of
principal and interest, if any.
3. Taxpayer identification number of the Registered Owner.
4. Principal amount of the Note (and, if multiple Notes are to be issued,
denominations thereof).
5. Settlement date.
6. Specified Maturity and, if the Company has the option to extend the
Specified Maturity, the Extension Periods and the Final Maturity Date.
7. Issue Price and any OID information.
8. Trade Date/Original Issue Date.
9. If such Note is a Fixed Rate Note, whether such Note is an Amortizing
Note.
10. Interest rate (including, if appropriate, such interest rate
information applicable to any Extension Period):
(a) Fixed Rate Certificated Notes:
B-9
<PAGE>
(i) interest rate
(ii) interest payment dates, if other than as specified above
(iii) date or dates, if any, on which the interest rate may be
reset and the basis or formula, if any, for such resetting
(iv) overdue rate, if any
(b) Floating Rate Certificated Notes:
(i) interest rate basis
(ii) initial interest rate
(iii) spread or spread multiplier, if any
(iv) date or dates, if any, on which the spread or spread
multiplier may be reset and the basis or formula, if any for
such resetting
(v) interest rate reset periods
(vi) interest payment dates
(vii) index maturity
(viii) maximum and minimum interest rates, if any
(ix) record dates
(x) interest determination rates
(xi) overdue rate, if any
11. The date on or after which the Certificated Notes are redeemable at
the option of the Company or are to be repaid at the option of the
Holder, and additional redemption or repurchase provisions, if any.
12. Wire transfer information.
13. Presenting Agent's commission (to be paid in the form of a discount
from the proceeds remitted to the Company upon Settlement).
14. That the Note will be a Certificated Note.
B. The Company will confirm the above Settlement information to the
Trustee by telephone, telex or facsimile, and the Trustee will assign
a Note number to the transaction. If the Company rejects an offer,
the Company will promptly notify the Presenting Agent and the Trustee
by telephone.
C. The Trustee will complete the first page of the preprinted 4-ply
Certificated Note packet, the form of which was previously approved by
the Company, the Agents and the Trustee.
D. The Trustee will deliver the Certificated Note (with the attached
white confirmation) and the yellow and blue stubs to the Presenting
Agent. The
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<PAGE>
Presenting Agent will acknowledge receipt of the Certificated Note by
completing the yellow stub and returning it to the Trustee.
E. The Presenting Agent will cause to be wire transferred to a bank
account designated by the Company immediately available funds in U.S.
dollars in the amount of the principal amount of the Certificated
Note, less the applicable commission or discount, if any.
F. The Presenting Agent will deliver the Certificated Note (with the
attached white confirmation) to the purchaser against payment in
immediately available funds in the amount of the principal amount of
the Certificated Note. The Presenting Agent will deliver to the
purchaser a copy of the most recent Prospectus applicable to the
Certificated Note with or prior to any written offer of Certificated
Notes, delivery of the Certificated Note and the confirmation and
payment by the purchaser for the Certificated Note.
G. The Presenting Agent will obtain the acknowledgment of receipt for the
Certificated Note and Prospectus by the purchaser through the
purchaser's completion of the blue stub.
H. The Trustee will mail the pink stub to the Company's Treasurer.
SETTLEMENT PROCEDURES TIMETABLE
For offers to purchase Certificated Notes accepted by the Company,
Settlement procedures "A" through "H" set forth above shall be completed on or
before the respective times set forth below:
<TABLE>
<CAPTION>
SETTLEMENT
PROCEDURE TIME (NEW YORK)
<S> <C>
A 5 PM on the Trade Date
B 3 PM on the Business Day prior
to Settlement Date
C-D 12 Noon on the Settlement Date
E 2:15 PM on the Settlement Date
F-G 3 PM on the Settlement Date
H 5 PM on Business Day after the
Settlement Date
===============================================
</TABLE>
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<PAGE>
FAILS
In the event that a purchaser of a Certificated Note shall either fail to
accept delivery of or make payment for such Certificated Note on the date fixed
by the Company for Settlement, the Presenting Agent will immediately notify the
Trustee and the Company's Treasurer by telephone, confirmed in writing, of such
failure and return the Certificated Note to the Trustee. Upon the Trustee's
receipt of the Certificated Note from the Presenting Agent, the Company will
promptly return to the Presenting Agent an amount of immediately available funds
in U.S. dollars equal to any amount previously transferred to the Company in
respect of the Certificated Note pursuant to advances made by the Agent. Such
returns will be made on the Settlement Date, if possible, and in any event not
later than 12 noon (New York City time) on the Business Day following the
Settlement Date. The Company will reimburse the Presenting 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. Upon receipt of the
Certificated Note in respect of which the default occurred, the Trustee will
mark the Certificated Note "cancelled," make appropriate entries in its records
and deliver the Certificated Note to the Company with an appropriate debit
advice. The Presenting Agent will not be entitled to any commission with
respect to any Certificated Note which the purchaser does not accept or make
payment for.
PART III: SPECIAL ADMINISTRATIVE PROCEDURES FOR MULTI-CURRENCY NOTES
Unless otherwise set forth in an applicable Foreign Currency Amendment, the
following procedures and terms shall apply to Multi-Currency Notes in addition
to, and to the extent inconsistent therewith in replacement of, the procedures
and terms set forth above.
DENOMINATIONS
The authorized denominations of any Multi-Currency Note will be the amount
of the Specified Currency for such Multi-Currency Note equivalent, at the noon
buying rate in the City of New York for cable transfers for such Specified
Currency (the "Market Exchange Rate") on the first Business Day in the City of
New York and the country issuing such currency (or, in the case of ECUs,
Brussels) next preceding the date on which the Company accepts the offer to
purchase such Multi-Currency Note, to U.S. $100,000 (rounded down to an integral
multiple of 10,000 units of such Specified Currency) and any greater amount that
is an integral multiple of 10,000 units of such Specified Currency.
CURRENCIES
Unless otherwise specified in the applicable Pricing Supplement, payments
of principal of (and premium, if any) and interest on all Multi-Currency Notes
will be made in the applicable Specified Currency, provided, however, that
-------- -------
payments of principal of (and premium, if any) and interest on Multi-Currency
Notes denominated in other than U.S.
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<PAGE>
dollars will nevertheless be made in U.S. dollars (i) at the option of the
Holders thereof under the procedures described below and (ii) at the option of
the Company in the case of imposition of exchange controls or other
circumstances beyond the control of the Company as described below.
PAYMENT OF PRINCIPAL AND INTEREST
If so specified in the applicable Pricing Supplement, except as provided in
the next paragraph, payments of interest and principal (and premium, if any)
with respect to any Multi-Currency Note will be made in U.S. dollars if the
Holder of such Note on the relevant Regular Record Date or at Maturity, as the
case may be, has transmitted a written request for such payment in U.S. dollars
to the Trustee at its Corporate Trust Office in The City of New York on or prior
to such Regular Record Date or the date 15 days prior to Maturity, as the case
may be. Such request may be in writing (mailed or hand delivered) or by cable,
telex or other form or facsimile transmission. Any such request made with
respect to any Multi-Currency Note by a Holder will remain in effect with
respect to any further payments of interest and principal (and premium, if any)
with respect to such Multi-Currency Note payable to such Holder, unless such
request is revoked on or prior to the relevant Regular Record Date or the date
15 days prior to Maturity, as the case may be. Holders of Multi-Currency Notes
denominated in other than U.S. dollars whose Notes are registered in the name of
a broker or nominee should contact such broker or nominee to determine whether
and how an election to receive payments in U.S. dollars may be made.
The U.S. dollar amount to be received by a Holder of a Multi-Currency Note
who elects to receive payments in U.S. dollars will be based on the highest bid
quotation in The City of New York received by the Currency Determination Agent
(as defined below) as of noon New York City time on the third Business Day next
preceding the applicable payment date from three recognized foreign exchange
dealers (one of which may be the Currency Determination Agent) for the purchase
by the quoting dealer of the Specified Currency for U.S. dollars for settlement
on such payment date in the aggregate amount of the Specified Currency payable
to all Holders of Multi-Currency Notes electing to receive U.S. dollar payments
and at which the applicable dealer commits to execute a contract. If three such
bid quotations are not available on the third Business Day preceding the date of
payment of principal (and premium, if any) or interest with respect to any such
Multi-Currency Note, such payment will be made in the Specified Currency. All
currency exchange costs associated with any payment in U.S. dollars on any such
Multi-Currency Note will be borne by the Holder thereof by deductions from such
payment. Unless otherwise provided in the applicable Pricing Supplement,
______________ will be the Currency Determination Agent (the "Currency
Determination Agent") with respect to the Multi-Currency Notes.
PAYMENT CURRENCY
If the principal of (and premium, if any) or interest on any Multi-
Currency Note is payable in any currency other than U.S. dollars and such
Specified Currency is not available
B-13
<PAGE>
due to the imposition of exchange controls or other circumstances beyond the
control of the Company, the Company will be entitled to satisfy its obligations
to Holders of the Multi-Currency Notes by making such payment in U.S. dollars on
the basis of the Market Exchange Rate on the last date such Specified Currency
was available (the "Conversion Date"). Any payment made under such
circumstances in U.S. dollars where the required payment is in other than U.S.
dollars will not constitute an Event of Default under the Indenture.
If payment in respect of a Note is required to be made in any currency unit
(e.g., ECU) and such currency unit is unavailable due to the imposition of
exchange controls or other circumstances beyond the Company's control, then all
payments in respect of such Multi-Currency Note shall be made in U.S. dollars
until such currency unit is again available. The amount of each payment in U.S.
dollars shall be computed on the basis of the equivalent of the currency unit in
U.S. dollars, which shall be determined by the Company or its agent on the
following basis. The component currencies of the currency unit for this purpose
(the "Component Currencies") shall be the currency amounts that were components
of the currency unit as of the Conversion Date for such currency unit. The
equivalent of the currency unit in U.S. dollars shall be calculated by
aggregating the U.S. dollar equivalents of the Component Currencies. The U.S.
dollar equivalent of each of the Component Currencies shall be determined by the
Company or such agent on the basis of the Market Exchange Rate for each such
Component Currency that is available as of the third Business Day prior to the
date on which the relevant payment is due and for each such Component Currency
that is unavailable, if any, of the Conversion Date for such Component Currency.
If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of that currency as a Component
Currency shall be divided or multiplied in the same proportion, if two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.
OUTSTANDING MULTI-CURRENCY NOTES
For purposes of calculating the principal amount of any Multi-Currency Note
for any purpose under the Indenture, the principal amount of such Multi-Currency
Note at any time Outstanding shall be deemed to be the U.S. dollar equivalent at
the Market Exchange Rate, determined as of the date of the original issuance of
such Multi-Currency Note, of the principal amount of such Multi-Currency Note.
B-14
<PAGE>
DETAILS FOR SETTLEMENT OF MULTI-CURRENCY NOTES
In addition to the Settlement information specified in "Settlement
Procedures" above, the Presenting Agent shall communicate to the Company in the
manner set forth in "Settlement Procedures" the following information:
1. Specified Currency
2. Denominations
3. Wire transfer and overseas bank account information (if holder has
elected payment in a Specified Currency).
Whether the sale is through an Agent or to an Agent, as principal,
additional or different Settlement details may be set forth in an amendment to
these administrative procedures to be agreed to by such Agent and the Company.
PART IV: SPECIAL ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
or cause to be performed the custodial, document control and administrative
functions described below, in accordance with its respective obligations under a
Letter of Representations from the Company and the Trustee to DTC and a Medium-
Term Note Certificate Agreement previously entered into between the Trustee and
DTC, and its obligations as a participant in DTC, including DTC's Same-Day Funds
Settlement System ("SDFS"). Except as otherwise set forth in this Exhibit B,
Book-Entry Notes will be issued in accordance with the administrative procedures
set forth below.
ISSUANCE
On any date of settlement (as defined under "Settlement" below) for one or
more Fixed Rate Book-Entry Notes, the Company will issue a single Global
Security in fully registered form without coupons representing up to
$150,000,000 principal amount, or the equivalent thereof in any Specified
Currency, other than U.S. dollars, at the Market Exchange Rate used to determine
the denomination of such Book-Entry Note as described below (rounded down to an
integral multiple of 10,000 units of such Specified Currency), of all of such
Notes that have the same original issuance date, interest rate, redemption or
repayment provisions and Specified Maturity. Similarly, on any settlement date
for one or more Floating Rate Book-Entry Notes, the Company will issue a single
Global Security representing up to $150,000,000 principal amount, or the
equivalent thereof in any Specified Currency, other than U.S. dollars, at the
Market Exchange Rate used to determine the denomination of such Book-Entry Note
as described below (rounded down to an integral multiple of 10,000 units of such
Specified Currency), of all of such Notes that have the same interest rate
formula, original issuance date, Initial Interest Rate, Interest Payment Dates,
Index Maturity, Spread, Spread Multiplier, minimum interest rate (if any),
maximum interest
B-15
<PAGE>
rate (if any), redemption or repayment provisions and Specified Maturity. Each
Global Security will be dated and issued as of the date of its authentication by
the Trustee, as Trustee. Each Global Security will have an interest accrual
date (the "Interest Accrual Date"), which will be (i) with respect to any
original Global Security (or any portion thereof), its original issuance date
and (ii) with respect to any Global Security (or portion thereof) issued
subsequently upon exchange of a Global Security or in lieu of a destroyed, lost
or stolen Global Security, the most recent Interest Payment Date to which
interest has been paid or duly provided for on the predecessor Global Security
or Securities (or if no such payment or provision has been made, the original
issuance date of the predecessor Global Security), regardless of the date of
authentication of such subsequently issued Global Security. No Global Security
will represent (i) both Fixed Rate and Floating Rate Book-Entry Notes or (ii)
any Certificated Note.
IDENTIFICATION NUMBERS
The Company will arrange, on or prior to commencement of a program for the
offering of Book-Entry Notes, with the CUSIP Service Bureau of Standard & Poor's
Corporation (the "CUSIP Service Bureau") for the reservation of a series of
CUSIP numbers (including tranche numbers), consisting of approximately 900 CUSIP
numbers and relating to Global Securities representing the Book-Entry Notes.
The Trustee will obtain a written list of such series of reserved CUSIP numbers
and will deliver to the Company and DTC such written list of 900 CUSIP numbers
of such series. The Company 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 the Company has assigned
to Global Securities. When fewer than 100 of the reserved CUSIP numbers remain
unassigned to Global Securities, and if it deems necessary, the Company will
reserve additional CUSIP numbers for assignment to Global Securities
representing Book-Entry Notes. Upon obtaining such additional CUSIP numbers the
Company shall deliver such additional CUSIP numbers to the Trustee and DTC.
REGISTRATION
Each Global Security will be registered in the name of Cede & Co., as
nominee for DTC, on the Securities Register maintained under the Indenture
governing such Global Security. The beneficial owner of a Book-Entry Note (or
one or more indirect participants in DTC designated by such owner) will
designate one or more participants in DTC with respect to such Book-Entry Note
(the "Participants") 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 Participants, a credit balance
with respect to such Book-Entry Note in the account of such Participants. The
ownership interest of such beneficial owner in such Book-Entry Note will be
recorded through the records of such Participants or through the separate
records of such Participants and one or more indirect participants in DTC.
B-16
<PAGE>
VOTING
In the event of any solicitation of consents from or voting by holders of
the Book-Entry Notes, the Company or the Trustee shall establish a record date
for such purposes (with no provision for revocation of consents or votes by
subsequent holders) and shall, to the extent possible, send notice of such
record date to DTC not less than 15 calendar days in advance of such record
date.
TRANSFERS
Transfers of a Book-Entry Note will be accomplished by book entries made by
DTC and, in turn, by Participants (and in certain cases, one or more indirect
participants in DTC) acting on behalf of beneficial transferors and transferees
of such Book-Entry Note.
CONSOLIDATION AND EXCHANGE
The Trustee may deliver to DTC and the CUSIP Service Bureau at any time a
written notice of consolidation specifying (i) the CUSIP numbers of two or more
Outstanding Global Securities that represent (A) Fixed Rate Book-Entry Notes
having the same original issuance date, interest rate, redemption and repayment
provisions and Specified Maturity and with respect to which interest has been
paid to the same date or (B) Floating Rate Book-Entry Notes having the same
interest rate formula, original issuance date, Initial Interest Rate, Interest
Payment Dates, Index Maturity, Spread or Spread Multiplier, minimum interest
rate (if any), maximum interest rate (if any), redemption and repayment
provisions and with respect to which interest has been paid to the same date,
(ii) a date, occurring at least thirty days after such written notice is
delivered and at least thirty days before the next Interest Payment Date for
such Book-Entry Notes, on which such Global Securities shall be exchanged for a
single replacement Global Security and (iii) a new CUSIP number, obtained from
the Company, to be assigned to such replacement Global Security. Upon receipt
of such a notice, DTC will send to its Participants (including the Trustee) a
written reorganization notice to the effect that such exchange will occur on
such date. Prior to the specified exchange date, the Trustee will deliver to
the CUSIP Service Bureau a written notice setting forth such exchange data 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, the Trustee will exchange such Global Securities
for a single Global Security bearing the new CUSIP number and a new Interest
Accrual Date, and the CUSIP numbers of the exchanged Global Securities will, in
accordance with CUSIP Service Bureau procedures, be cancelled and not
immediately reassigned. Notwithstanding the foregoing, if the Global Securities
to be exchanged exceed $150,000,000 (or the equivalent thereof in any Specified
Currency other than U.S. dollars at the Market Exchange Rate used to determine
the denomination of such Book-Entry Note as described below (rounded down to an
integral multiple of 10,000 units of such Specified Currency)) in aggregate
principal amount, one Global Security will be authenticated and issued to
represent each $150,000,000 (or the equivalent thereof in any Specified Currency
B-17
<PAGE>
other than U.S. dollars at the Market Exchange Rate used to determine the
denomination of such Book-Entry Note as described below (rounded down to an
integral multiple of 10,000 units of such Specified Currency)) of principal
amount of the exchanged Global Securities and an additional Global Security will
be authenticated and issued to represent any remaining principal amount of such
Global Securities (see "Denominations" below).
NOTICE OF REDEMPTION AND REPAYMENT DATES
The Trustee will give notice to DTC prior to each redemption date or
repayment date (as specified in the Book-Entry Note), if any, at the time and in
the manner set forth in the letter of redemption.
DENOMINATIONS
Book-Entry Notes denominated in U.S. dollars will be issued in principal
amounts of $25,000 or any amount in excess thereof that is an integral multiple
of $1,000. The authorized denominations of any Book-Entry Notes denominated in
other than U.S. dollars will be the amount of the Specified Currency for such
Book-Entry Note equivalent, at the Market Exchange Rate on the first Business
Day in the City of New York and the country issuing such currency (or, in the
case of ECUs, Brussels) next preceding the date on which the Company accepts the
offer to purchase such Book-Entry Note, to U.S. $25,000 (rounded down to an
integral multiple of 10,000 units of such Specified Currency) and any greater
amount that is an integral multiple of 10,000 units of such Specified Currency.
Global Securities representing one or more Book-Entry Notes will be denominated
in principal amounts not in excess of $150,000,000, or the equivalent thereof in
any Specified Currency other than U.S. dollars at the Market Exchange Rate used
to determine the denomination of such Book-Entry Note (rounded down to an
integral multiple of 10,000 units of such Specified Currency). If one or more
Book-Entry Notes having an aggregate principal amount in excess of $150,000,000
(or the equivalent thereof in any Specified Currency other than U.S. dollars at
the Market Exchange Rate used to determine the denomination of such Book-Entry
Note rounded down to an integral multiple of 10,000 units of such Specified
Currency)) would, but for the preceding sentence, be represented by a single
Global Security, then one Global Security will be issued to represent each
$150,000,000 principal amount, or the equivalent thereof in any Specified
Currency other than U.S. dollars at the Market Exchange Rate used to determine
the denomination of such Book-Entry Note (rounded down to an integral multiple
of 10,000 units of such Specified Currency), of such Book-Entry Note or Notes
and an additional Global Security will be authenticated and issued to represent
any remaining principal amount of such Book-Entry Note or Notes. In such a
case, each of the Global Securities representing such Book-Entry Note or Notes
shall be assigned the same CUSIP number.
B-18
<PAGE>
INTEREST
General. Interest on each Book-Entry Note will accrue from the date of
issue of the Global Security representing such Note. Each payment of interest
on a Book-Entry Note will include interest accrued through the day preceding, as
the case may be, the Interest Payment Date or the date of Maturity, redemption
or repayment; provided, however, that if the Interest Reset Dates with respect
to any such Note are daily or weekly, interest payable on any Interest Payment
Date, other than interest payable on any date on which principal for such Note
is payable, will include interest accrued from but excluding the second
preceding Regular Record Date to and including the next preceding Regular Record
Date. Interest payable at the Maturity or upon earlier redemption or repayment
of a Book-Entry Note will be payable to the Person to whom the principal of such
Note is payable. 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 payable and certain other
information regarding the related Global Security in the appropriate weekly bond
report published by Standard & Poor's Corporation.
Floating Rate Note Notices. On the first Business Day of January, April,
July and October of each year, the Trustee will deliver to the Company and DTC a
written list of Regular Record Dates and Interest Payment Dates that will occur
with respect to Floating Rate Book-Entry Notes during the six-month period
beginning on such first Business Day. Promptly after each Interest
Determination Date (as defined in the Prospectus) for Floating Rate Notes, the
Company will notify the Trustee, and the Trustee in turn will notify Standard &
Poor's Corporation, of the interest rates determined on such Interest
Determination Date.
PAYMENTS OF PRINCIPAL AND INTEREST
Payments of Interest Only. Promptly after each Regular Record Date, the
Trustee 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 Maturity or an earlier redemption or repayment date) and the total of such
amounts. DTC will confirm the amount payable on each Global Security on such
Interest Payment Date by reference to the daily bond reports published by
Standard & Poor's Corporation. The Company will pay to the Trustee, as paying
agent, the total amount of interest due on such Interest Payment Date (other
than at Maturity), and the Trustee will pay such amount to DTC at the times and
in the manner set forth below under "Manner of Payment." Promptly after each
Interest Determination Date for Floating Rate Book-Entry Notes, the Calculation
Agent will notify the Trustee and Standard & Poor's Corporation of the interest
rates determined on such Interest Determination Date.
Payments at Maturity or Upon Redemption or Repayment. On or about the
first Business Day of each month, the Trustee will deliver to the Company and
DTC a written list
B-19
<PAGE>
of principal and interest to be paid on each Global Security maturing either at
maturity or any redemption or repayment date in the following month. The
Company, the Trustee and DTC will confirm the amounts of such principal and
interest payments with respect to each such Global Security on or about the
fifth Business Day preceding the Maturity or redemption or repayment date of
such Global Security. The Company will pay to the Trustee, as the paying agent,
the principal amount of such Global Security, together with interest due at such
Maturity or redemption or repayment date, as the case may be. The Trustee will
pay such amount to DTC at the times and in the manner set forth below under
"Manner of Payment".
Promptly after payment to DTC of the principal and interest due at the
Maturity of such Global Security, the Trustee will cancel such Global Security
and deliver it to the Company with an appropriate debit advice. On the first
Business Day of each month, the Trustee will prepare a written statement
indicating the total principal amount of Outstanding Global Securities for which
it serves as paying agent as of the immediately preceding Business Day.
Manner of Payment. The total amount of any principal and interest due on
Global Securities on any Interest Payment Date or at Maturity or upon redemption
or repayment shall be paid by the Company to the Trustee in funds available for
use by the Trustee as of 9:30 A.M. (New York City time) on such date. The
Company will make such payment on such Global Securities by instructing the
Trustee to withdraw funds from an account maintained by the Company at the
Trustee. For maturity, redemption or any other principal payments: prior to 10
A.M. (New York City time) on such date or as soon as possible thereafter, the
Trustee will make such payments to DTC in same day funds in accordance with
DTC's Same Day Funds Settlement Paying Agent Operating Procedures. For interest
payments: the Trustee will make such payments to DTC in accordance with
existing arrangements between DTC and the Trustee. DTC will allocate such
payments to its Participants in accordance with its existing operating
procedures. Neither the Company, the Trustee (as Trustee or as Paying Agent nor
any other Paying 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 Notes.
Withholding Taxes. The amount of any taxes required under applicable law
to be withheld from any interest payment on a Book-Entry Note 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 Note.
SETTLEMENT PROCEDURES
In the event of a purchase of Book-Entry Notes by an Agent, as principal,
Settlement details will be as set forth below to the extent applicable unless
such details are set forth in the applicable Purchase Agreement to be entered
into between such Agent and the Company pursuant to the Distribution Agreement.
B-20
<PAGE>
In the event of a sale of a Book-Entry Note that is a Multi-Currency Note
or an Indexed Note, whether the sale is through an Agent or to an Agent, as
principal, additional or different Settlement details may be set forth in an
amendment to the administrative procedures to be entered into between such Agent
and the Company.
Other than as contemplated above, settlement procedures with regard to each
Book-Entry Note sold by the Company through an Agent, as agent, shall be as
follows:
A. The Presenting Agent will advise the Company by telephone, telex or
facsimile, of the following settlement information:
1. Principal amount of the Book-Entry Note (and, if multiple Notes are to
be issued, denominations thereof).
2. Settlement date.
3. Specified Maturity and, if the Company has the option to extend the
Specified Maturity, the Extension Periods and the Final Maturity Date.
4. Issue Price and any OID information.
5. Trade date.
6. If such Book-Entry Note is a Fixed Rate Note, whether such Note is an
Amortizing Note.
7. The DTC Participant account number of such Agent.
8. Interest rate (including, if appropriate, such interest rate
information applicable to any Extension Period):
(a) Fixed Rate Notes:
(i) interest rate
(ii) interest payment dates, if other than as specified above
(iii) date or dates, if any, on which the interest rate may be
reset and the basis or formula, if any, for such resetting
(iv) overdue rate, if any
(b) Floating Rate Notes:
(i) interest rate basis
(ii) initial interest rate
(iii) spread or spread multiplier, if any
B-21
<PAGE>
(iv) date or dates, if any, on which the spread or spread
multiplier may be reset and the basis or formula, if any,
for such resetting
(v) interest rate reset periods
(vi) interest payment dates
(vii) index maturity
(viii) maximum and minimum interest rates, if any
(ix) record dates
(x) interest determination dates
(xi) overdue rate, if any
9. The date on or after which the Book-Entry Notes are redeemable at the
option of the Company or are to be repaid at the option of the Holder,
and additional redemption or repurchase provisions, if any.
10. Wire transfer information.
11. Presenting Agent's commission (to be paid in the form of a discount
from the proceeds remitted to the Company upon Settlement).
12. That the Note will be a Book-Entry Note.
B. The Company will assign a CUSIP number to the Global Security representing
such Note and then advise the Trustee by telephone (confirmed in writing at
any time on the same date) or electronic transmission of the information
set forth in Settlement Procedure "A" above, such CUSIP number and the name
of such Agent.
C. The Trustee will enter a pending deposit message through DTC's Participant
Terminal System, providing the following settlement information to DTC, the
Presenting Agent, Standard & Poor's Corporation and, upon request, the
Trustee under the Indenture pursuant to which such Note is to be issued:
1. The information set forth in Settlement Procedure "A".
2. Identification as a Fixed Rate Book-Entry Note or a Floating Rate
Book-Entry Note.
3. Initial Interest Payment Date for such Note, number of days by which
such date succeeds the related "DTC Record Date" (which term means the
Regular Record Date except in the case of floating rate notes which
reset daily or weekly in which case it means the date 5 calendar days
immediately preceding the Interest Payment Date) and amount of
interest payable on such Interest Payment Date.
4. Frequency of interest payments (monthly, semiannually, quarterly,
etc.).
B-22
<PAGE>
5. CUSIP number of the Global Security representing such Book-Entry Note.
6. Whether such Global Security will represent any other Book-Entry Note
(to the extent known at such time).
7. The number of Participant accounts to be maintained by DTC on behalf
of the Agents or the Trustee.
D. The Trustee, as Trustee will complete and authenticate the note certificate
evidencing the Global Security representing such Book-Entry Note.
E. DTC will credit such Book-Entry Note to the Trustee's participant account
at DTC.
F. The Trustee will enter an SDFS deliver order through DTC's Participant
Terminal System instructing DTC to (i) debit such Book-Entry Note to the
Trustee's participant account and credit such Note to the Presenting
Agent's participant account and (ii) debit the Presenting Agent's
settlement account and credit the Trustee's settlement account for an
amount equal to the price of such Book-Entry Note less the Presenting
Agent's commission.
G. The Presenting Agent will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC (i) to debit such Book-Entry
Note to the Presenting Agent's participant account and credit such Note to
the participant accounts of the Participants with respect to such Book-
Entry Note and (ii) to debit the settlement accounts of such Participants
and credit the settlement account of the Presenting Agent for an amount
equal to the price of such Note.
H. Transfers of funds in accordance with SDFS deliver orders described in
Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. The Trustee will credit to an account of the Company maintained at the
Trustee funds available for immediate use in the amount transferred to the
Trustee in accordance with Settlement Procedure "F."
J. The Presenting Agent will deliver to the purchaser a copy of the most
recent Prospectus applicable to the Book-Entry Note with or prior to any
written offer of Book-Entry Notes and the confirmation and payment by the
purchaser of the Book-Entry Note.
The Presenting Agent will confirm the purchase of such Book-Entry Note to
the purchaser either by transmitting to the Participants with respect to
such Book-Entry Note a confirmation order or orders through DTC's
institutional delivery system or by mailing a written confirmation to such
purchaser.
B-23
<PAGE>
SETTLEMENT PROCEDURES TIMETABLE
For offers to purchase the Book-Entry Notes solicited by an Agent, as
agent, and accepted by the Company for settlement, Settlement Procedures "A"
through "J" set forth above shall be completed as soon as possible but not later
than the respective times (New York City time) set forth below:
<TABLE>
<CAPTION>
SETTLEMENT
PROCEDURE TIME
<S> <C>
A-B 11:00 A.M. on the Sale date
C 2:00 P.M. on the Sale date
D 3:00 P.M. on the date before Settlement date
E 10:00 A.M. on Settlement date
F-G 2:00 P.M. on Settlement date
H 4:45 P.M. on Settlement date
I-J 5:00 P.M. on Settlement date
==========================================================
</TABLE>
If a sale is to be settled more than one Business Day after the sale date,
Settlement Procedures "A," "B" and "C" shall be completed as soon as practicable
but no later than 11:00 A.M., 11:00 A.M. and 2:00 P.M., as the case may be, on
the first Business Day after the sale date. If the initial interest rate for a
Floating Rate Book-Entry Note has not been determined at the time that
Settlement Procedure "A" is completed, Settlement Procedures "B" and "C" shall
be completed as soon as such rate has been determined but no later than 11:00
A.M. and 12:00 Noon, respectively, on the second Business Day before the
settlement date. Settlement Procedure "I" is 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 settlement of a Book-Entry Note is rescheduled or canceled, the Trustee
will deliver to DTC, through DTC's Participant Terminal System, a cancellation
message to such effect by no later than 2:00 P.M. on the Business Day
immediately preceding the scheduled settlement date.
FAILURE TO SETTLE
If the Trustee fails to enter an SDFS deliver order with respect to a Book-
Entry Note pursuant to Settlement Procedure "F," the Trustee may deliver to DTC,
through DTC's
B-24
<PAGE>
Participant Terminal System, as soon as practicable a withdrawal message
instructing DTC to debit such Book-Entry Note to the Trustee's participant
account. DTC will process the withdrawal message, provided that the Trustee's
participant account contains a principal amount of the Global Security
representing such Book-Entry Note 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 Notes represented by a Global Security, the Trustee will mark such
Global Security "canceled," make appropriate entries in the Trustee's records
and send such canceled Global Security to the Company. The CUSIP number assigned
to such Global Security shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the Book-Entry Notes
represented by a Global Security, the Trustee will exchange such Global Security
for two Global Securities, one of which shall represent such Book-Entry Note or
Notes and shall be canceled immediately after issuance and the other of which
shall represent the other Book-Entry Notes previously represented by the
surrendered Global Security and shall bear the CUSIP number of the surrendered
Global Security.
If the purchase price for any Book-Entry Note is not timely paid to the
Participants with respect to such Book-Entry Note by the beneficial purchaser
thereof (or a Person, including an indirect participant in DTC, acting on behalf
of such purchaser), such Participants and, in turn, the Agent for such Book-
Entry Note may enter SDFS deliver orders through DTC's Participant Terminal
System reversing the orders entered pursuant to Settlement Procedures "F" and
"G," respectively. Thereafter, the Trustee 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 Note, 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 Notes to have been represented by a
Global Security, the Trustee will provide, in accordance with Settlement
Procedure "D," for the authentication and issuance of a Global Security
representing the other Book-Entry Notes to have been represented by such Global
Security and will make appropriate entries in its records.
B-25
<PAGE>
EXHIBIT C
PURCHASE AGREEMENT
------------------
Central Maine Power Company _______________ __, 19_____
83 Edison Drive
Augusta, Maine 04336
Attention: Treasurer
The undersigned agrees to purchase the following principal amount of the
Notes described in the Distribution Agreement dated ______________ __, 199__ (as
it may be supplemented or amended from time to time, the "Distribution
Agreement"):
Principal Amount: $ _______________________
Interest Rate: ________%
Discount: ________% of Principal Amount
Aggregate Price to be
paid to Company
(in immediately
available funds): $ _______________________
Settlement Date: _______________________
and upon such other terms as are specified in the attached Schedule.
Our obligation to purchase Notes hereunder is subject to the continued
accuracy of your representations and warranties contained in the Distribution
Agreement and to your performance and observance of all applicable covenants and
agreements contained therein, including, without limitation, your obligations
pursuant to Section 7 thereof. Our obligation hereunder is subject to the
further condition that we shall receive (a) the opinions required to be
delivered pursuant to Sections 5(d), (e), (f) and (j) of the Distribution
Agreement, (b) the certificate required to be delivered pursuant to Section 5(g)
of the Distribution Agreement, and (c) the letter referred to in Section 5(h) of
the Distribution Agreement, in each case dated as of the above Settlement Date.
In further consideration of our agreement hereunder, you agree that between
the date hereof and the above Settlement Date, you will not offer or sell, or
enter into any agreement to sell, any debt securities of the Company, other than
borrowings under your revolving credit agreements and lines of credit and
issuances of your commercial paper.
We may terminate this Agreement, immediately upon notice to you, at any
time prior to the Settlement Date, if prior thereto (a) any of the conditions
set forth in Section 5(a), (b),
C-1
<PAGE>
or (i) of the Agency Agreement are not satisfied or (b) you are unable to
provide the certificate required pursuant to Section 5(g) of the Agency
Agreement. In the event of such termination, no party shall have any liability
to the other party hereto, except as provided in Sections 4, 7 and 13 of the
Agency Agreement.
This Agreement shall be governed by and construed in accordance with
the laws of New York.
LEHMAN BROTHERS INC.*
By: _____________________________
(Title)
PAINEWEBBER INCORPORATED
By: _____________________________
(Title)
Accepted: __________________, 19_____
CENTRAL MAINE POWER COMPANY
By _____________________________
(Title)
- ------------------------
*Delete the name of the non-purchasing entity.
C-2
<PAGE>
Schedule to Exhibit C
Additional Terms of the Purchased Notes
Title of Purchased Securities:
[ %] Medium-Term Notes, Series C
[Price to Public:]
Purchase Price by [Lehman Brothers Inc.] [PaineWebber Incorporated]:
% of the principal amount of the Purchased Securities [, plus accrued interest
from to ] [and accrued amortization if any, from to ]
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 [________________ Clearing House] [immediately available] funds]
[By wire transfer to a bank account specified by the Company in [next-day]
[immediately available] funds]
[Supplemental Indenture:]
Closing Location:
Maturity:
Interest Payment Dates:
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the Agents referred to in
Section 5(j).]
[(2) The opinions of counsel to the Company referred to in Section
5(d), (e) and
C-3
<PAGE>
(f).]
[(3) The accountants' letter referred to in Section 5(h).]
((4) The officers' certificate referred to in Section 5(g).]
Other Provisions (including Syndicate Provisions, if applicable):
C-4
<PAGE>
EXHIBIT 4.4
================================================================================
CENTRAL MAINE POWER COMPANY
and
THE BANK OF NEW YORK,
As Trustee
_____________________________________
THIRD SUPPLEMENTAL INDENTURE
Dated as of ____________, 1994
Supplementing the Indenture
Dated as of August 1, 1989
____________________________________
================================================================================
<PAGE>
THIS THIRD SUPPLEMENTAL INDENTURE, dated as of ___________, 1994, is
between CENTRAL MAINE POWER COMPANY, a Maine corporation (hereinafter called the
"Issuer" or the "Company"), having its principal office at 83 Edison Drive,
Augusta, Maine 04336, and THE BANK OF NEW YORK, a New York banking corporation,
as Trustee (hereinafter called the "Trustee"), having its Corporate Trust Office
at 101 Barclay Street, New York, New York 10286.
Recitals of the Issuer
----------------------
The Issuer and the Trustee have heretofore entered into an Indenture, dated
as of August 1, 1989, as supplemented by the First Supplemental Indenture, dated
as of August 7, 1989 and the Second Supplemental Indenture, dated as of January
10, 1992 (such Indenture, as heretofore supplemented and as supplemented by this
supplemental indenture being hereinafter referred to as the "Indenture"),
relating to the issuance at any time or from time to time of its Securities on
terms to be specified at the time of issuance. As of September 30, 1994,
$_____________ in aggregate principal amount of Medium-Term Notes, Series A have
been issued under the Indenture, of which $________________ is outstanding and
$150,000,000 in aggregate principal amount of Medium-Term Notes, Series B have
been issued under the Indenture of which $__________ in aggregate principal
amount is outstanding. Terms used and not otherwise defined herein shall
(unless the context otherwise clearly requires) have the respective meanings
given to them in the Indenture.
The Indenture provides in Article Three thereof that, prior to the issuance
of Securities of any series, the form of such Securities and the terms
applicable to such series shall be established in, or pursuant to, the authority
granted in a resolution of the Board of Directors (delivered to the Trustee in
the form of a Board Resolution) or established in one or more indentures
supplemental thereto. The Issuer desires by this supplemental indenture, among
other things, to establish the form of the Securities of a series, to be titled
"Medium-Term Notes, Series C" of the Issuer, and to establish the terms
applicable to such series, pursuant to Sections 3.1 and 10.1(e) of the
Indenture. The Issuer has duly authorized the execution and delivery of this
supplemental indenture.
Article Ten of the Indenture provides that the Issuer, when authorized by a
resolution of its Board of Directors, and the Trustee may from time to time and
at any time enter into an indenture or indentures supplemental thereto for
certain purposes enumerated in Section 10.1 thereof, including the establishment
of the form or terms of Securities of any series as permitted by Section 3.1
thereof.
<PAGE>
The execution and delivery of this supplemental indenture by the parties
hereto are in all respects authorized by the provisions of the Indenture.
All things necessary have been done to make this supplemental indenture a
valid agreement of the Issuer, in accordance with its terms.
NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises, it is mutually covenanted and
agreed, as follows:
ARTICLE ONE
Establishment of Medium-Term Notes, Series C
--------------------------------------------
Section 1.01. The title of the series of the Securities established by
this supplemental indenture shall be "Medium-Term Notes, Series C" of the Issuer
(hereinafter called the "Series C Notes"). The Series C Notes shall be
substantially in the form set forth in Exhibit A hereto (which is hereby
incorporated herein and made a part hereof), subject to changes in the form
thereof made by the Issuer and acceptable to the Trustee.
Section 1.02. The Series C Notes shall be limited to $150,000,000 in
aggregate principal amount at any time Outstanding, determined in accordance
with the definition of "Outstanding" in Section 1.1 (including the final
paragraph thereof) of the Indenture.
Section 1.03. The Series C Notes may be issued in whole or in part as one
or more Global Securities and The Depository Trust Company, or a nominee
thereof, shall be the Depository for such Global Security or Global Securities,
except in each case as otherwise provided in an Issuer Order with respect to any
Series C Notes. The Depository for such Global Security or Global Securities
representing Series C Notes may surrender one or more Global Securities
representing Series C Notes in exchange in whole or in part for individual
Series C Notes on such terms as are acceptable to the Issuer and such Depository
and otherwise subject to the terms of Section 2.4 of the Indenture.
Section 1.04. The Issuer hereby appoints, or confirms the appointment of,
The Bank of New York as the initial Trustee, Securities Registrar and Paying
Agent, subject to the provisions of the Indenture with respect to resignation,
removal and
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<PAGE>
succession, and subject, further, to the right of the Issuer to appoint
additional agents (including Paying Agents). An Authenticating Agent may be
appointed for the Series C Notes under the circumstances set forth in, and
subject to the provisions of, the Indenture.
Section 1.05. If the Trustee shall cease to be Securities Registrar for
the Series C Notes, the Issuer shall, upon the written request of the Trustee,
establish by an Officers' Certificate the applicable dates for the purpose of
clause (a) of Section 5.1 of the Indenture with respect to any Series C Notes
that do not bear interest.
Section 1.06. The terms of the Series C Notes shall be as set forth in
Exhibit A hereto, and shall include the payment and other terms reflected on the
respective Series C Notes as actually executed, authenticated and delivered
under the Indenture. Without limiting the generality of the foregoing, specific
terms of particular Series C Notes (including any interest rate formulas not
specified in Exhibit A hereto, any redemption, sinking fund or other repayment
terms that differ from the provisions of Article Fourteen or Fifteen of the
Indenture and any terms for satisfaction and discharge of the Indenture that
differ from the provisions of Article Twelve of the Indenture) may be determined
in accordance with or pursuant to the Issuer Order with respect thereto, as
referred to in Section 3.3 of the Indenture.
-3-
<PAGE>
ARTICLE TWO
Miscellaneous
-------------
Section 2.01. The recitals contained herein shall be taken as the
statements of the Issuer, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representation as to the validity
of this supplemental indenture. The Indenture, as supplemented by this
supplemental indenture, is in all respects hereby adopted, ratified and
confirmed.
Section 2.02. This supplemental indenture may be executed in any number of
counterparts, and on separate counterparts, each of which shall be an original;
but such counterparts shall together constitute but one and the same instrument.
Section 2.03. If any provision of this supplemental indenture limits,
qualifies or conflicts with the duties imposed by any of Sections 310 to 317,
inclusive, of the Trust Indenture Act of 1939, as amended by the Trust Indenture
Reform Act of 1990, through operation of Section 318(c), such imposed duties
shall control.
Section 2.04. The Article headings herein are for convenience only and
shall not affect the interpretation hereof.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested (the date of this supplemental indenture being the
date of execution by the Trustee, as indicated in its Acknowledgment).
CENTRAL MAINE POWER COMPANY
By____________________________
Name:
Title:
[Seal]
Attest:
______________________________
Name:
Title:
THE BANK OF NEW YORK
By____________________________
Name:
Title:
[Seal]
Attest:
______________________________
Name:
Title:
-5-
<PAGE>
STATE OF MAINE )
) ss.:
COUNTY OF KENNEBEC )
At Augusta, on this ____ day of __________, 1994, before me, a Notary
Public in and for the County of Kennebec and State of Maine, personally appeared
__________________________ and _______________________, the ___________________
and Secretary, respectively, of Central Maine Power Company, each to me
personally known, who respectively executed, and affixed and attested the
corporate seal on, the foregoing instrument on behalf of said corporation, and
severally acknowledged the same to be their free act and deed in their said
capacities and the free act and deed of Central Maine Power Company.
NOTARIAL SEAL
________________________
Notary Public
My Commission Expires:
STATE OF NEW YORK )
) ss.:
NEW YORK COUNTY )
At The City of New York, on this ____ day of _________, 1994, before me, a
Notary Public in and for the County and State of New York, personally appeared
_______________________ and ________________________, a
________________________, and a ________________________, respectively, of The
Bank of New York, to me personally known, who respectively executed, and affixed
and attested the corporate seal on, the foregoing instrument on behalf of said
corporation, and severally acknowledged the same to be their free act and deed
in their said capacities and the free act and deed of The Bank of New York, as
Trustee.
NOTARIAL SEAL
________________________
Notary Public
My Commission Expires:
-6-
<PAGE>
Exhibit A
[FORM OF FACE OF NOTE]
Registered
No. C- Registered
CUSIP
If this Note is registered in the name of The Depository Trust Company
(the "Depository") (55 Water Street, New York, New York) or its nominee, this
Note may not be transferred except as a whole by the Depository to a nominee of
the Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository unless and until
this Note is presented by an authorized agent of The Depository Trust Company 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 is requested by an authorized representative of The Depository Trust
Company and any payment is made to Cede & Co. ANY TRANSFER, PLEDGE OR OTHER USE
THEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
CENTRAL MAINE POWER COMPANY
MEDIUM-TERM NOTE, SERIES C
If applicable, the "Total Amount of OID", "Yield to Maturity" and
"Initial Accrual Period OID" (computed under the designated method)
below will be completed solely for the purposes of applying the
Federal income tax original issue discount ("OID") rules.
Floating Rate Note [_] ______% Fixed Rate Note [_]
Original Issue Date: Principal Amount:
Interest Accrual Date: Issue Price:
Interest Payment Dates:
Maturity Date:
Redemption Date(s): Redemption Price(s):
Repayment Date(s): Repayment Price(s):
Total Amount of OID:
Yield to Maturity: Optional Interest Rate Reset:
Initial Accrual
Period OID: Extendible:
Other Provisions:
<PAGE>
Only Applicable if this is a Floating Rate Note:
Initial Interest Rate: Spread (plus or minus):
Index Maturity: Spread Multiplier:
Base Rate: Alternate Rate Event Spread:
Interest Reset Period: Maximum Interest Rate:
Interest Reset Dates: Minimum Interest Rate:
Interest Determination Dates:
Calculation Dates:
Central Maine Power Company, a Maine corporation (the "Company", which
term includes any successor issuer under the Indenture hereinafter referred to),
for value received hereby promises to pay to _______ ______________ or
registered assigns, the principal sum of _____ ______________ Dollars on the
"Maturity Date", as set forth above, and to pay interest hereon as described on
the reverse hereof.
The principal of (and premium, if any) and interest on this Note are
payable by the Company in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of public and
private debts.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been manually
executed by or on behalf of the Trustee under the Indenture, this Note shall not
be entitled to any benefit under the Indenture, or be valid or obligatory for
any purpose.
IN WITNESS WHEREOF, CENTRAL MAINE POWER COMPANY has caused this
instrument to be signed in its corporate name by the signatures or facsimile
signatures of its President or a Vice President, and its Treasurer or an
Assistant Treasurer, and its corporate seal or a facsimile thereof to be hereon
impressed,
-2-
<PAGE>
engraved or imprinted and attested by such signature or facsimile signature of
its Secretary or an Assistant Secretary.
Dated: CENTRAL MAINE POWER COMPANY
(Seal)
By:___________________________
Vice President
Attest: ____________________ By:___________________________
Secretary Treasurer
Trustee's Certificate of
Authentication
This is one of the
Securities of the series
designated therein
referred to in the within-
mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By: ________________________
Authorized Signatory
-3-
<PAGE>
[FORM OF REVERSE OF NOTE]
CENTRAL MAINE POWER COMPANY
MEDIUM-TERM NOTE, SERIES C
1. This Note is one of a duly authorized issue of unsecured debt
securities (hereinafter called the "Securities") of the Company of the series
hereinafter specified, all such Securities issued and to be issued under an
Indenture dated as of August 1, 1989 between the Company and The Bank of New
York, as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), as amended and supplemented by the First
Supplemental Indenture, dated as of August 7, 1989, the Second Supplemental
Indenture, dated as of January 10, 1992 and the Third Supplemental Indenture,
dated as of _________, 1994, and as further amended and supplemented (herein
called the "Indenture"), to which Indenture reference is hereby made for a
statement of the rights and limitations of rights thereunder of the Holders of
the Securities and of the rights, obligations, duties and immunities of the
Trustee and of the Company, and the terms upon which the Securities are and are
to be authenticated and delivered. As provided in the Indenture, the Securities
may be issued in one or more series which different series may be issued in
various aggregate principal amounts, may mature at different times, may bear
interest, if any, at different rates, may be subject to different redemption
provisions, if any, may be subject to different sinking, purchase or analogous
funds, if any, may be subject to different covenants and Events of Default and
may otherwise vary as in the Indenture provided or permitted. This Note is one
of a series designated on the face hereof as Medium-Term Notes, Series C (the
"Notes"), limited to $150,000,000 in aggregate principal amount. The Notes of
this series may be issued at various times with different maturity dates and
different principal repayment provisions, may bear interest at different rates,
and may otherwise vary, all as provided in the Indenture.
2.A. The record date (the "Regular Record Date") with respect to any
Interest Payment Date (as defined below) shall be the date fifteen calendar days
immediately preceding such Interest Payment Date, whether or not such date shall
be a Business Day (unless otherwise shown on the face hereof or as specified
---------------------------------------------------------
below). Interest which is payable, and is punctually paid or duly provided for,
- -----
on any Interest Payment Date shall be paid to the person in whose name the Note
is registered at the close of business on the Regular Record Date next preceding
such Interest Payment Date; provided, however, that the first payment of
interest on any Note with an Original Issue Date between a
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<PAGE>
Regular Record Date and the succeeding Interest Payment Date will be made on the
Interest Payment Date following the next succeeding Regular Record Date to the
registered owner on such next succeeding Regular Record Date; and provided,
further, that interest payable at Maturity will be payable to the person to whom
principal shall be payable. "Maturity" means the date on which the principal
amount hereof becomes due and payable, whether at Stated Maturity or earlier by
declaration of acceleration, call for redemption or otherwise. Notwithstanding
the foregoing, any interest that is payable but not punctually paid or duly
provided for on any Interest Payment Date shall forthwith cease to be payable to
the registered owner hereof on such Regular Record Date, and may be paid to the
person in whose name such Note is registered on the close of business on a
subsequent record date established by notice given by mail, by or on behalf of
the Company to such Holder not less than fifteen days preceding such subsequent
record date, such record date to be not less than ten days preceding the date
for payment of such defaulted interest, or may be paid as more fully provided in
the Indenture. "Business Day" means any day, other than a Saturday or Sunday,
that is (a) not a day on which banking institutions are authorized or required
by law or regulation to be closed in The City of New York and (b) with respect
to a LIBOR Note, a London Banking Day. "London Banking Day" means any day on
which dealings in deposits in U.S. Dollars are transacted in the London
interbank market. In connection with any calculations, all percentages will be
rounded upwards, if necessary, to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point being rounded
upwards, and all dollar amounts used in or resulting from such calculations on
the Notes will be rounded to the nearest one cent (with one-half cent being
rounded upwards).
B. If this is a Fixed Rate Note, the Company promises to pay interest
on the principal amount from its Original Issue Date at the rate per annum
stated on the face hereof until the principal amount hereof is paid or made
available for payment. Unless otherwise provided on the face hereof, the
Company will pay interest semi-annually each September 1 and March 1 (each an
"Interest Payment Date"), commencing (except as set forth above in the case of a
Note with an Original Issue Date between a Regular Record Date and an Interest
Payment Date) with the Interest Payment Date immediately following the Original
Issue Date and at Maturity. If any Interest Payment Date would otherwise be a
day that is not a Business Day, such Interest Payment Date shall be postponed to
the next day that is a Business Day, and no interest shall accrue by reason of
such delayed payment. Each payment of interest in respect of an Interest
Payment Date shall include interest accrued to but excluding such Interest
Payment Date. Interest on Fixed Rate Notes shall be computed on the basis of a
360-day year of twelve 30-day months.
-5-
<PAGE>
C. If this is a Floating Rate Note, the Company promises to pay
interest on the principal amount from its Original Issue Date at a rate or rates
determined in accordance with the provisions below under the headings
"Determination of CD Rate", "Determination of Commercial Paper Rate",
"Determination of Federal Funds Rate", "Determination of LIBOR", "Determination
of Prime Rate", or "Determination of Treasury Rate", depending upon whether the
Base Rate specified on the face hereof is CD Rate, Commercial Paper Rate,
Federal Funds Rate, LIBOR, Prime Rate or Treasury Rate, respectively, until the
principal hereof is paid or duly made available for payment.
The rate of interest on each Floating Rate Note shall be reset on the
day or days specified on the face hereof (each an "Interest Reset Date") on a
daily, weekly, monthly, quarterly, semi-annual or annual basis (the "Interest
Reset Period") as specified on the face hereof. If any Interest Reset Date for
any Floating Rate Note is not a Business Day, such Interest Reset Date shall be
postponed to the next day that is a Business Day, except, (i) if the Base Rate
is LIBOR and such Business Day is in the next succeeding calendar month, such
Interest Reset Date shall be the immediately preceding Business Day or (ii) if
the Base Rate is Treasury Rate and the Interest Reset Date falls on a date which
is an auction date (as described below), the Interest Reset Date shall be the
following day that is a Business Day.
The Company will pay interest monthly, quarterly, semi-annually or
annually or otherwise, in each case as specified on the face hereof under
"Interest Payment Period" commencing with the first Interest Payment Date
specified on the face hereof next succeeding the Original Issue Date. Unless
otherwise specified on the face hereof, the date or dates on which interest will
be payable (each an "Interest Payment Date") will be, (i) in the case of
Floating Rate Notes with a daily, weekly or monthly Interest Reset Period, on
the third Wednesday of each month or on the third Wednesday of March, June,
September and December of each year, as specified on the face hereof; (ii) in
the case of Floating Rate Notes with a quarterly Interest Reset Period, on the
third Wednesday of March, June, September and December of each year; (iii) in
the case of Floating Rate Notes with a semi-annual Interest Reset Period, on the
third Wednesday of each of the two months specified on the face hereof; and (iv)
in the case of Floating Rate Notes with an annual Interest Reset Period, on the
third Wednesday of one month of each year specified on the face hereof and, in
each case, at Maturity.
If any Interest Payment Date other than at Maturity for any Floating
Rate Note would otherwise be a day that is not a Business Day, such Interest
Payment Date shall be postponed to the next day that is a Business Day, except
that in the case of a LIBOR Note, if such Business Day is in the next succeeding
calendar month, such Interest Payment Date shall be the
-6-
<PAGE>
immediately preceding Business Day. If Maturity for any Floating Rate Note
falls on a day that is not a Business Day, payment of principal, premium, if
any, and interest with respect to such Note will be made on the next succeeding
Business Day with the same force and effect as if made on the due date, and no
interest shall be payable on the date of payment for the period from and after
the due date.
Unless otherwise indicated on the face hereof, interest payments on
each Interest Payment Date and at Maturity for Floating Rate Notes will include
accrued interest from and including the Original Issue Date or the next
preceding Interest Payment Date to which interest has been paid or duly provided
for, to but excluding the applicable Interest Payment Date or the date of
Maturity. Accrued interest will be calculated by multiplying the principal
amount of a Floating Rate Note by an accrued interest factor. This accrued
interest factor will be computed by adding the interest factor calculated for
each day in the period for which accrued interest is being calculated. The
interest factor (expressed as a decimal rounded upwards, if necessary, to the
next higher one hundred-thousandth of a percentage point) for each such day will
be computed by dividing the interest rate (calculated as set forth below)
applicable to such day by 360 if the Base Rate is the CD Rate, Commercial Paper
Rate, Federal Funds Rate, LIBOR or Prime Rate, or by the actual number of days
in the year, if the Base Rate is Treasury Rate, as indicated on the face hereof.
The interest rate in effect on each day will be (a) if such day is an Interest
Reset Date, the interest rate with respect to the Interest Determination Date
(as defined below) pertaining to such Interest Reset Date, or (b) if such day is
not an Interest Reset Date, the interest rate with respect to the Interest
Determination Date (as defined below) pertaining to the next preceding Interest
Reset Date, subject in either case to any Maximum or Minimum Interest Rate
limitation referred to on the face hereof and to any adjustment by a Spread
and/or a Spread Multiplier referred to on the face hereof; provided, however,
that the interest rate in effect for the period from the Original Issue Date to
the first Interest Reset Date will be the "Initial Interest Rate" set forth on
the face hereof. The interest rate hereon will in no event be higher than the
maximum rate permitted by applicable law.
The interest rate for each Interest Reset Period for a Floating Rate
Note will be the rate determined by the Calculation Agent on the Calculation
Date (as defined below) pertaining to the Interest Determination Date pertaining
to the Interest Reset Date for such Interest Reset Period. Unless otherwise
specified on the face hereof, the "Interest Determination Date" pertaining to an
Interest Reset Date will be, if the Base Rate is the CD Rate, Commercial Paper
Rate, Federal Funds Rate or Prime Rate, the second Business Day next preceding
such Interest Reset Date. Unless otherwise specified on the face hereof, the
Interest
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<PAGE>
Determination Date pertaining to an Interest Reset Date will be, if the Base
Rate is LIBOR, the second London Banking Day next preceding such Interest Reset
Date. Unless otherwise specified on the face hereof, the Interest Determination
Date pertaining to an Interest Reset Date will be, if the Base Rate is Treasury
Rate, the day of the week in which such Interest Reset Date falls on which
direct obligations of the United States ("Treasury bills") of the Index Maturity
specified on the face hereof would normally be auctioned. Treasury bills are
normally sold at auction on Monday of each week, unless that day is a legal
holiday, in which case the auction is usually held on the following Tuesday,
except that such auction may be held on the preceding Friday. If, as the result
of a legal holiday, an auction is so held on the preceding Friday, such Friday
will be the Interest Determination Date pertaining to the Interest Reset Date
for Treasury Rate Notes occurring in the next succeeding week. If an auction
falls on a day that is an Interest Reset Date for Treasury Rate Notes, such
Interest Reset Date will be the first Business Day immediately following such
auction date.
Unless otherwise specified on the face hereof, the "Calculation Date",
where applicable, pertaining to an Interest Determination Date will be the
earlier of (i) the tenth calendar day after such Interest Determination Date or
if such day is not a Business Day, the next succeeding Business Day or (ii) the
Business Day preceding the applicable Interest Payment Date or Maturity, as the
case may be.
Subject to applicable provisions of law and except as specified
herein, on each Interest Reset Date the rate of interest shall be the rate
determined in accordance with the provisions of the applicable heading below.
Determination of CD Rate. If the Base Rate indicated on the face
------------------------
hereof is the CD Rate, the interest rate shall equal the rate on each Interest
Determination Date specified on the face hereof for negotiable certificates of
deposit having the Index Maturity specified on the face hereof, as such rate is
published by the Board of Governors of the Federal Reserve System in
"Statistical Release H.15(519), Selected Interest Rates", or any successor
publication of the Board of Governors of the Federal Reserve System
("H.15(519)") under the heading "CDs (Secondary Market)" or, if such rate is not
so published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the CD Rate for such Interest
Determination Date will be the rate on such Interest Determination Date for
negotiable certificates of deposit of the specified Index Maturity as published
by the Federal Reserve Bank of New York in its daily statistical release
"Composite 3:30 P.M. Quotations for U.S. Government Securities" or any successor
publication of the Federal Reserve Bank of New York ("Composite Quotations")
under the heading "Certificates of Deposit". If
-8-
<PAGE>
such rate is not published in either H.15(519) or Composite Quotations by 3:00
P.M., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, then the CD Rate for such Interest Determination Date will
be calculated by the Calculation Agent and will be the arithmetic mean of the
secondary market offered rates as of 10:00 A.M., New York City time, on such
Interest Determination Date, of three leading nonbank dealers in negotiable U.S.
dollar certificates of deposit in The City of New York selected by the
Calculation Agent for negotiable certificates of deposit of major United States
money center banks of the highest credit standing (in the market for negotiable
certificates of deposit) with a remaining maturity closest to the specified
Index Maturity in a denomination of $5,000,000. In each of the above cases, the
rate shall be adjusted by the addition or subtraction of the Spread, if any,
specified on the face hereof, or by multiplication by the Spread Multiplier, if
any, specified on the face hereof. If the dealers selected as aforesaid by the
Calculation Agent are not quoting as set forth above, the CD Rate with respect
to such Interest Determination Date will be the CD Rate in effect on such
Interest Determination Date.
Determination of Commercial Paper Rate. If the Base Rate indicated on
--------------------------------------
the face hereof is the Commercial Paper Rate, the interest rate shall equal the
Money Market Yield (calculated as described below) of the rate on each Interest
Determination Date specified on the face hereof for commercial paper having the
Index Maturity specified on the face hereof, as such rate is published in
H.15(519), under the heading "Commercial Paper" or, if such rate is not
published by 3:00 P.M., New York City time, on the Calculation Date pertaining
to such Interest Determination Date, the Commercial Paper Rate for such Interest
Determination Date will be the Money Market Yield of the rate on such Interest
Determination Date for commercial paper having the specified Index Maturity as
published in Composite Quotations under the heading "Commercial Paper". If such
rate is not published in either H.15(519) or Composite Quotations by 3:00 P.M.,
New York City time, on the Calculation Date pertaining to such Interest
Determination Date, then the Commercial Paper Rate for such Interest
Determination Date shall be calculated by the Calculation Agent and shall be the
Money Market Yield of the arithmetic mean of the offered rates as of 11:00 A.M.,
New York City time, on such Interest Determination Date of three leading dealers
of commercial paper in The City of New York selected by the Calculation Agent
for commercial paper having the specified Index Maturity, placed for an
industrial issuer whose bond rating is "AA", or the equivalent, from a
nationally recognized rating agency. In each of the above cases, the rate shall
be adjusted by the addition or subtraction of the Spread, if any, specified on
the face hereof, or by multiplication by the Spread Multiplier, if any,
specified on the face hereof. If the dealers selected as aforesaid by the
Calculation Agent are not quoting
-9-
<PAGE>
offered rates as specified herein, the Commercial Paper Rate with respect to
such Interest Determination Date will be the Commercial Paper Rate in effect on
such Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage rounded
to the nearest one hundred-thousandth of a percentage point) calculated in
accordance with the following formula:
D X 360
Money Market Yield = ------------------ X 100
360 - (D X M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
Determination of Federal Funds Rate. If the Base Rate indicated on
-----------------------------------
the face hereof is the Federal Funds Rate, the interest rate shall equal the
rate on each Interest Determination Date specified on the face hereof for
Federal Funds as published in H.15(519) under the heading "Federal Funds
(Effective)" or, if such rate is not so published by 3:00 P.M., New York City
time, on the Calculation Date pertaining to such Interest Determination Date,
the Federal Funds Rate for such Interest Determination Date will then be the
rate on such Interest Determination Date as published in Composite Quotations
under the heading "Federal Funds/ Effective Rate". If such rate is not
published in either H.15(519) or Composite Quotations by 3:00 P.M., New York
City time, on the Calculation Date pertaining to such Interest Determination
Date, then the Federal Funds Rate for such Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the
rates, as of 9:00 A.M., New York City time, on such Interest Determination Date,
for the last transaction in overnight Federal Funds arranged by three leading
brokers of Federal Funds transactions in The City of New York selected by the
Calculation Agent. In each of the above cases the rate shall be adjusted by the
addition or subtraction of the Spread, if any, specified on the face hereof, or
by multiplication by the Spread Multiplier, if any, specified on the face
hereof. If the brokers selected as aforesaid by the Calculation Agent are not
quoting as set forth above, the Federal Funds Rate with respect to such Interest
Determination Date will be the Federal Funds in effect on such Interest
Determination Date.
Determination of LIBOR. If the Base Rate indicated on the face hereof
----------------------
is LIBOR, the interest rate with respect to each Interest Determination Date
specified on the face hereof shall be determined in accordance with the
following provisions:
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<PAGE>
(i) With respect to any such Interest Determination Date, LIBOR will
be either: (a) if "LIBOR Reuters" is specified on the face hereof, the
arithmetic mean of the offered rates (unless the specified designated
LIBOR Page (as defined below) by its terms provides only for a single
rate, in which case such single rate shall be used) for deposits in
United States dollars having the Index Maturity designated on the face
hereof, commencing on the second London Banking Day immediately
following the Interest Determination Date, which appear on the
Designated LIBOR Page specified on the face hereof as of 11:00 A.M.,
London time, on such Interest Determination Date, if at least two such
offered rates appear (unless, as aforesaid, only a single rate is
required) on such Designated LIBOR Page, or (b) if "LIBOR Telerate" is
specified on the face hereof, the rate for deposits in United States
dollars having the Index Maturity specified on the face hereof,
commencing on the second London Banking Day immediately following such
Interest Determination Date, which appears on the Designated LIBOR
Page specified on the face hereof as of 11:00 A.M. London time on that
Interest Determination Date. Notwithstanding the foregoing, if fewer
than two offered rates appear on the Designated LIBOR Page with
respect to LIBOR Reuters (unless the specified Designated LIBOR Page
with respect to LIBOR Reuters by its terms provides only for a single
rate, in which case such single rate shall be used), or if no rate
appears on the Designated LIBOR Page with respect to LIBOR Telerate,
whichever may be applicable, LIBOR in respect of the related Interest
Determination Date will be determined as if the rate described in
clause (ii) below had been specified.
(ii) With respect to any such Interest Determination Date on which
fewer than two offered rates appear on the Designated LIBOR Page with
respect to LIBOR Reuters (unless the Designated LIBOR Page by its
terms provides only for a single rate, in which case such single rate
shall be used), or if no rate appears on the Designated LIBOR page
with respect to LIBOR Telerate, as the case may be, the Calculation
Agent will request the principal London office of each of four major
banks in the London interbank market selected by the Calculation Agent
to provide the Calculation Agent with its offered rate quotation for
deposits in United States dollars for the period of the Index Maturity
specified on the face hereof, commencing on the second London Business
Day immediately following such Interest Determination Date, to prime
banks in the London interbank market as of 11:00 A.M., London time, on
such Interest Determination Date and in a principal amount that is
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<PAGE>
representative for a single transaction in United States dollars in
such market at such time. If at least two such quotations are
provided, LIBOR determined on such Interest Determination Date will be
the arithmetic mean of such quotations. If fewer than two quotations
are provided, LIBOR determined on such Interest Determination Date
will be the arithmetic mean of the rates quoted as of 11:00 A.M. in
The City of New York, on such Interest Determination Date by three
major banks in The City of New York selected by the Calculation Agent
for loans in United States dollars to leading banks, having the Index
Maturity specified on the face hereof in a principal amount that is
representative for a single transaction in United States dollars in
such market at such time.
In each of the above cases the rate shall be adjusted by the addition or
subtraction of the Spread, if any, specified on the face hereof, or by
multiplication by the Spread Multiplier, if any, specified on the face hereof.
If the banks selected as aforesaid by the Calculation Agent are not quoting as
set forth above, LIBOR determined on such Interest Determination Date will be
LIBOR in effect on such Interest Determination Date.
"Designated LIBOR Page" means either (a) the display on the Reuters
Monitor Money Rates Service for the purpose of displaying the London interbank
rates of major banks for United States dollars (if "LIBOR Reuters" is designated
on the face hereof), or (b) the display on the Dow Jones Telerate Service for
the purpose of displaying the London interbank rates of major banks for United
States dollars (if "LIBOR Telerate" is designated on the face hereof). If
neither LIBOR Reuters nor LIBOR Telerate is specified on the face hereof, LIBOR
will be determined as if LIBOR Telerate (page 3750) had been chosen.
Determination of Prime Rate. If the Base Rate indicated on the face
---------------------------
hereof is the Prime Rate, the interest rate shall equal the rate on each
Interest Determination Date specified on the face hereof as published in
H.15(519) opposite the caption "Bank Prime Loan". If such rate is not so
published by 9:00 A.M., New York City time, on the Calculation Date pertaining
to such Interest Determination Date, the Prime Rate for such Interest
Determination Date shall be calculated by the Calculation Agent and shall be the
arithmetic mean of the rates of interest publicly announced by each bank named
on the Reuters Screen NYMF Page as such bank's prime rate or base lending rate
as in effect for such Interest Determination Date as quoted on the Reuters
Screen NYMF Page on such Interest Determination Date, or, if fewer than four
such rates appear on the Reuters Screen NYMF Page for such Interest
Determination Date, the rate shall be the arithmetic mean of the prime rates
quoted on the basis of the actual number of days in the year divided by 360 as
of the close
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<PAGE>
of business on such Interest Determination Date by at least two of the three
major money center banks in The City of New York selected by the Calculation
Agent from which quotations are requested. If fewer than two quotations are
quoted as aforesaid, the Prime Rate for such Interest Determination Date shall
be calculated by the Calculation Agent and shall be determined as the arithmetic
mean of the prime rates quoted in The City of New York on such date by the
appropriate number of substitute banks or trust companies organized and doing
business under the laws of the United States, or any State thereof, in each case
having total equity capital of at least U.S. $500 million and being subject to
supervision or examination by a Federal or state authority, selected by the
Calculation Agent to quote such rate or rates. In each of the above cases, the
rate shall be adjusted by the addition or subtraction of the Spread, if any,
specified on the face hereof, or by multiplication by the Spread Multiplier, if
any, specified on the face hereof.
If the Prime Rate is not published in H.15(519) and the banks or trust
companies selected as aforesaid are not quoting as mentioned in the preceding
paragraph, the Prime Rate with respect to such Interest Determination Date will
be the Prime Rate otherwise in effect on such Interest Determination Date.
"Reuters Screen NYMF Page" means the display designated as page "NYMF" on the
Reuters Monitor Money Rates Service (or such other page as may replace page NYMF
on that service for the purpose of displaying prime rates or base lending rates
of major United States banks).
Determination of Treasury Rate. If the Base Rate indicated on the
------------------------------
face hereof is the Treasury Rate, the interest rate shall equal the rate on each
Interest Determination Date specified on the face hereof applicable to the most
recent auction of direct obligations of the United States ("Treasury bills")
having the Index Maturity specified on the face hereof, as such rate is set
forth in H.15(519) under the heading "Treasury Bills - auction average
(Investment)" or, if not so made available by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such Interest Determination Date, the
Treasury Rate for such Interest Determination Date will be the auction average
rate (expressed as a bond equivalent on the basis of a year of 365 or 366 days,
as applicable, and applied on a daily basis) as otherwise announced by the
United States Department of the Treasury. In the event that the results of the
auction of Treasury bills having the specified Index Maturity are not reported
as provided above by 3:00 P.M., New York City time, on such Calculation Date or
if no such auction is held in a particular week, then the Treasury Rate shall be
calculated by the Calculation Agent and shall be the yield to maturity
(expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates, as of
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<PAGE>
approximately 3:30 P.M., New York City time, on such Interest Determination
Date, of three leading primary United States government securities dealers
selected by the Calculation Agent for the issue of Treasury bills with a
remaining maturity closest to the specified Index Maturity. In each of the
above cases the rate shall be adjusted by the addition or subtraction of the
Spread, if any, specified on the face hereof, or by multiplication by the Spread
Multiplier, if any, specified on the face hereof. If the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
paragraph, the Treasury Rate for such Interest Determination Date will be the
Treasury Rate with respect to such Interest Determination Date shall be the
Treasury Rate in effect on such date.
Initially, The Bank of New York shall be the Calculation Agent. The
Calculation Agent shall calculate the interest rate hereon in accordance with
the foregoing and will confirm in writing such calculation to the Trustee and
any Paying Agent immediately after each determination. Neither the Trustee nor
any Paying Agent shall be responsible for any such calculation. At the request
of the Holder hereof the Calculation Agent will provide to the Holder hereof the
interest rate hereon then in effect and, if determined, the interest rate which
will become effective as of the next Interest Reset Date.
Interest Rate Reset. If specified on the face hereof, the Company has
-------------------
the option to reset the interest rate, in the case of a Fixed Rate Note, or to
reset the Spread and/or Spread Multiplier, in the case of a Floating Rate Note,
on the date or dates specified on the face hereof (each an "Optional Reset
Date") and on the basis or formula, if any, for such resetting specified on the
face hereof.
The Company may exercise such option by notifying the Paying Agent of
such exercise at least 45 but not more than 60 days prior to an Optional Reset
Date for such Note. Not later than 40 days prior to such Optional Reset Date,
the Paying Agent will mail to the Holder hereof a Notice (the "Reset Notice"),
first class, postage prepaid, setting forth (i) the election of the Company to
reset the interest rate, in the case of a Fixed Rate Note, or the Spread and/or
Spread Multiplier, in the case of a Floating Rate Note, (ii) such new interest
rate or such new Spread and/or Spread Multiplier, as the case may be, and (iii)
the provisions, if any, for redemption during the period from such Optional
Reset Date to the next Optional Reset Date or, if there is no such next Optional
Reset Date, to the Specified Maturity of such Note (each period a "Subsequent
Interest Period"), including the date or dates on which or the period or periods
during which and the price or prices at which such redemption may occur during
such Subsequent Interest Period.
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<PAGE>
Notwithstanding the foregoing, not later than 20 days prior to an
Optional Reset Date for a Note, the Company may, at its option, revoke the
interest rate, in the case of a Fixed Rate Note, or the Spread and/or Spread
Multiplier, in the case of a Floating Rate Note, in either case provided for in
the Reset Notice and establish a higher or lower interest rate, in the case of a
Fixed Rate Note, or a higher or lower Spread and/or Spread Multiplier, in the
case of a Floating Rate Note, for the Subsequent Interest Period commencing on
such Optional Reset Date by mailing or causing the Paying Agent to mail notice
of such higher interest rate or higher Spread and/or Spread Multiplier, as the
case may be, first class, postage prepaid, to the Holder hereof. Such notice
shall be irrevocable. All Notes with respect to which the interest rate or
Spread and/or Spread Multiplier is reset on an Optional Reset Date will bear
such higher interest rate, in the case of a Fixed Rate Note, or higher Spread
and/or Spread Multiplier, in the case of a Floating Rate Note.
If the Company elects to reset the interest rate or the Spread and/or
Spread Multiplier on an Optional Reset Date, the Holder will have the option to
elect repayment by the Company on such Optional Reset Date at a price equal to
the principal amount thereof plus any accrued interest to such Optional Reset
Date. In order for a Note to be so repaid on an Optional Reset Date on which
the interest rate or the Spread and/or Spread Multiplier is reset, the Holder
must follow the procedures set forth in paragraph 5 below for optional
repayment, except that the period for delivery of such Note or notification to
the Paying Agent shall be at least 25 but not more than 35 days prior to such
Optional Reset Date and except that a Holder who has tendered a Note for
repayment pursuant to a Reset Notice may, by written notice to the Paying Agent,
revoke any such tender for repayment until 5:00 p.m. New York City time on the
tenth day, whether or not a Business Day, prior to such Optional Reset Date.
Extendible Notes. If specified on the face hereof, the interest rate
----------------
on, or interest rate formula pertaining to, this Note may be subject to
adjustment and may be subject to repayment at certain times at the option of the
Holder or to redemption at certain times at the option of the Company
("Extendible Notes"). If any such options are applicable to this Note, the
terms and procedures relating thereto will be as set forth in Exhibit A hereto.
Unless otherwise specified in Exhibit A hereto, the Extendible Notes
will be repayable in whole or in part on the day immediately following the end
of the initial interest period, as specified in Exhibit A, and on the day
immediately following the end of each Extension Period, at the option of the
Holder, at 100% of the principal amount to be repaid, in each case plus accrued
interest, if any, to the repayment date. An "Extension
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<PAGE>
Period" will be a period of one or more whole calendar periods (e.g., weeks,
months, or years) commencing on the day following the last day of the initial
interest period or any subsequent Extension Period.
Combination of Provisions. If so specified on the face hereof, this
-------------------------
Note may be subject to all of the provisions, or any combination of the
provisions, described above under "Interest Rate Reset" and "Extendible Notes".
3. Payments of interest (other than interest payable at Maturity)
will be made by mailing a check to the Holder at the address of the Holder
appearing on the Securities Register on the applicable Regular Record Date,
unless otherwise agreed to by the Company. The principal amount hereof and any
premium and the interest payable at Maturity will be paid at Maturity against
presentation of this Note at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, The City of New York, or as otherwise
provided in the Indenture.
4. If specified on the face hereof, this Note may be redeemed, as a
whole or from time to time in part, at the option of the Company, on not less
than 30 nor more than 60 days' prior notice given as provided in the Indenture,
on any Redemption Date(s) and at the related Redemption Price(s) (expressed as a
percentage of the principal amount hereof) set forth on the face hereof,
together with interest accrued and unpaid hereon to such Redemption Date. If no
such Redemption Date is set forth on the face hereof, this Note may not be so
redeemed prior to the Maturity Date specified on the face hereof. If fewer than
all the Outstanding Notes of like tenor and terms are to be redeemed, the
particular Notes to be redeemed shall be selected by the Trustee not more than
60 days prior to the Redemption Date from the Outstanding Notes of like tenor or
terms not previously called for redemption. Such selection shall be of
principal amounts in increments of $1,000 (provided that any remaining principal
of any Note shall be at least $25,000). Subject to the immediately preceding
sentence, such selection shall be made by any method as the Trustee deems fair
and appropriate. The notice of such redemption shall specify which Notes are to
be redeemed. In the event of redemption of this Note in part only, a new Note
or Notes of this series of like tenor or terms for the unredeemed portion hereof
will be issued to the Holder hereof upon the cancellation hereof.
5. If specified on the face hereof, this Note will be subject to
repayment at the option of the Holder hereof on the Repayment Date(s) and at the
related Repayment Price(s) (expressed as a percentage of the principal amount
hereof) indicated on the face hereof. If no such Repayment Date is set forth on
the face hereof, this Note may not be so repaid prior to the Maturity Date
specified on the face hereof. On each
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<PAGE>
Repayment Date, if any, this Note shall be repayable in whole or in part at the
option of the Holder hereof at the applicable Repayment Price set forth on the
face hereof, together with interest accrued and unpaid hereon to such Repayment
Date. In order for this Note to be repaid in whole or in part at the option of
the Holder hereof, the Paying Agent must receive not less than 30 but not more
than 45 days prior to the Repayment Date (i) the Note with the form entitled
"Option to Elect Repayment" below duly completed or (ii) a telegram, telex,
facsimile transmission or a letter from a member of a national securities
exchange or the National Association of Securities Dealers, Inc. or a commercial
bank or a trust company in the United States of America setting forth the name
of the Holder of the Note, the principal amount of the Note, the certificate
number of the Note or a description of the Note's tenor or terms, the principal
amount of the Note to be repaid, a statement that the option to elect repayment
is being exercised thereby and a guarantee that the Note to be repaid with the
form entitled "Option to Elect Repayment" on the reverse of the Note duly
completed will be received by such Paying Agent no later than five Business Days
after the date of such telegram, telex, facsimile transmission or letter and
such Note and form duly completed are received by such Paying Agent by such
fifth Business Day. Exercise of such repayment option shall be irrevocable.
Such option may be exercised by the Holder for less than the entire principal
amount provided that the principal amount remaining outstanding after repayment
is an authorized denomination.
6. If an Event of Default with respect to the Notes shall occur and
be continuing, the principal of all of the Notes may be declared due and payable
in the manner and with the effect provided in the Indenture. If this is an
Original Issue Discount Note and the principal amount hereof is declared to be
due and payable, the amount of principal due and payable with respect to this
Note shall be limited to the Amortized Face Amount of this Note as of the date
of such declaration. If this Note is an Original Discount Note that does not
bear stated interest, the "Amortized Face Value" hereof shall be the sum of (i)
the aggregate principal amount of this Note multiplied by the Issue Price
(expressed as a percentage of the aggregate principal amount) indicated on the
face hereof plus (ii) the portion of the difference between the dollar amount
determined pursuant to the preceding clause (i) and the principal amount of this
Note that has accrued at the Yield to Maturity set forth on the face hereof
(computed in accordance with generally accepted financial practices in effect on
the date of declaration) to such date of declaration, but in no event shall the
Amortized Face Amount of this Note exceed the principal amount hereof. An
Original Issue Discount Note is a Note, including any Zero-Coupon Note, that has
a stated redemption price at its Maturity Date that exceeds its Issue Price by
at least 0.25% of its principal amount, multiplied
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<PAGE>
by the number of full years from the Original Issue Date to the Maturity Date
for such Note and any other Note designated by the Company as issued with
original issue discount for United States federal income tax purposes.
7. The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities under
the Indenture at any time by the Company with the consent of the Holders of not
less than a majority in principal amount of the Securities at the time
Outstanding of all series to be affected thereby (voting as one class). The
Indenture also contains provisions permitting the Holders of a majority in
principal amount of the Securities of any series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and past defaults under the
Indenture and their consequences with respect to such series. In the case of
any such waiver, the Holder of this Note shall be restored to his former
position and rights hereunder, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any related Event of Default
shall be deemed to have been cured, and not to have occurred for every purpose
of the Indenture; but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
8. No reference herein to the Indenture and no provision of this Note
or of the Indenture shall affect or impair the obligation of the Company, which
is unconditional and absolute, to pay the principal of and premium, if any, and
interest on this Note at the places, at the times, at the rates, in the amounts
and in the coin or currency as prescribed herein and in the Indenture.
9. Notes will be issued in denominations of $25,000 and integral
multiples of $1,000 in excess thereof.
10. As provided in the Indenture and subject to certain limitations
therein set forth, this Note is transferable on the Securities Register of the
Company, upon surrender of this Note for registration of transfer at the office
or agency of the Company to be maintained for that purpose in The City of New
York. Every Note presented for registration of transfer shall (if so required
by the Company or the Securities Registrar) be duly endorsed, or accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Securities Registrar duly executed, by the Holder hereof or its attorney duly
authorized in writing, and thereupon one or more new Notes of like tenor and
terms of authorized denominations and for the same aggregate principal amount
will be issued to the designated transferee or transferees.
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<PAGE>
The Company shall not be required (i) to issue, register the transfer
of or exchange Notes to be redeemed for a period of fifteen days preceding the
date of the mailing of the notice of redemption, or (ii) to register the
transfer of or to exchange any such Note or portion thereof selected for
redemption, except the unredeemed portion of any such Note being redeemed in
part.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith. Prior to
due presentment of a Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the person in whose name a
Note is registered as the owner hereof for all purposes whether or not such Note
be overdue and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
11. Unless otherwise defined herein, all terms used in this Note
which are defined in the Indenture shall have the meaning assigned to them in
the Indenture.
12. The Indenture and this Note shall for all purposes be governed
by, and construed in accordance with, the laws of the State of Maine, and for
all purposes this Indenture shall be construed in accordance with the laws of
said State, except that the rights and duties of the Trustee shall be governed
by the laws of the State of New York.
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<PAGE>
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
_____________________________ _________________________________________
Please insert social security Please print or typewrite name and
or other identifying number address of assignee
of assignee
_____________________________________________________________________________
_____________________________________________________________________________
the within Note of Central Maine Power Company and does hereby irrevocably
constitute and appoint ______________________________ attorney to transfer the
said Note on the books of the within-mentioned Company, with full power of
substitution in the premises.
Dated: _________________ _________________________________________
Notice: The signature on this assignment
must correspond with the name as written
upon the face of the Note in every
particular without alteration or
enlargement or any change whatsoever.
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<PAGE>
OPTION TO ELECT REPAYMENT*
-------------------------
The undersigned hereby irrevocably requests and instructs the Company
to repay the within Note (or portion hereof specified below) pursuant to its
terms at a price equal to the applicable Repayment Price thereof together with
interest to the Repayment Date, to the undersigned at _________________________
_______________________________________________________________________________
Please print or typewrite name and address of the undersigned
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof that the Holder elects to have repaid
_____________________________________ and specify the denomination or
denominations (which shall be in authorized denominations) of the Notes to be
issued to the Holder for the portion of the within Note not being repaid (in the
absence of any such specification, one such Note will be issued for the portion
not being repaid): ____________________________.
Date: ______________________ _____________________________
Signature
* Note: This option is not available to a holder unless this Note contains an
---- ---
express provision granting to the holder hereof an option to elect
repayment.
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<PAGE>
EXHIBIT 5.1
Central Maine Power Company
Edison Drive, Augusta, Maine 04336 (207) 623-3528
William M. Finn
Secretary, Clerk and Corporate Counsel
December 16, 1994
Central Maine Power Company
83 Edison Drive
Augusta, Maine 04336
Re: Central Maine Power Company - $150,000,000 of Medium-Term Notes,
Series C, Due from Nine Months to Thirty Years from the Date of Issue
---------------------------------------------------------------------
Ladies and Gentlemen:
In connection with the proposed issue and sale of up to $150,000,000
in aggregate principal amount of Medium-Term Notes, Series C (the "Series C
Notes") of Central Maine Power Company (the "Company") to be issued under the
Indenture between the Company and The Bank of New York, as trustee (the
"Trustee"), dated as of August 1, 1989, and indentures supplemental thereto,
including a supplemental indenture to be entered into in connection with the
Series C Notes (collectively, the "Indenture"), I, as your Corporate Counsel,
have examined such corporate records, certificates and other documents as I have
considered necessary for the purpose of this opinion.
Upon the basis of the foregoing, I am of the opinion that:
(a) the Company has been duly organized and is validly existing under
the laws of the State of Maine with powers adequate for the making of the
Indenture and the issue thereunder and the sale of the Series C Notes;
(b) when (i) the Registration Statement that is being filed with the
Securities and Exchange Commission with respect to the Series C Notes has
become effective under the Securities Act of 1933, as amended (the "Act"),
(ii) all orders, consents or other authorizations, approvals or waivers of
jurisdiction of or by the Maine Public Utilities Commission and the
Connecticut Department of Public Utility Control required for the valid
issuance and sale of the
<PAGE>
Central Maine Power Company
December 16, 1994
Page 2
Series C Notes have been obtained, and (iii) the Prospectus relating to the
Series C Notes has been duly supplemented with respect to a particular
Series C Note being issued, and such supplement thereto duly filed under
the Act, no further authorization, consent or approval by any regulatory
authority will be required for the valid issuance and sale of such Series C
Note (except under the so-called "blue-sky" or securities laws of the
several states, as to the applicability of which I do not express an
opinion);
(c) when (i) the Board of Directors of the Company has approved the
terms and conditions relating to the issue and sale of the Series C Notes,
including the terms and conditions of a supplemental indenture relating to
the Series C Notes and (ii) with respect to each Series C Note, such
officer or officers as may be authorized by the Board of Directors has or
have approved the terms of a particular Series C Note being issued, then
such Series C Note will have been duly authorized by the Company;
(d) upon the execution and filing with the Trustee of the proper
papers with respect to the Series C Notes, the Series C Notes will be
issuable under the terms of the Indenture; and
(e) upon the execution and delivery of a supplemental indenture
relating to the Series C Notes and the execution, authentication and
delivery of a particular Series C Note in accordance with the corporate and
governmental authorizations and instruments referred to above, including
the Indenture, such Series C Note will be a valid and legally binding
obligation of the Company and will be entitled to the benefits provided by
the Indenture on a parity with the other series of securities now
outstanding thereunder and with other securities that may hereafter be
issued thereunder pursuant to the terms thereof.
<PAGE>
Central Maine Power Company
December 16, 1994
Page 3
I consent to the filing of this opinion with and as a part of said
Registration Statement and to the use of my name in said Registration Statement
and in the related Prospectus, and in any amendments or supplements to either
thereof, under the caption "Legal Opinions".
Very truly yours,
/s/ William M. Finn
William M. Finn
<PAGE>
EXHIBIT 5.2
LeBOEUF, LAMB, GREENE & MacRAE
L.L.P.
A LIMITED LIABILITY PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
125 West 55th Street
New York, NY 10019-5389
(212) 424-8000
Facsimile: (212) 424-8500
December 16, 1994
Central Maine Power Company
83 Edison Drive
Augusta, Maine 04336
Re: Central Maine Power Company - $150,000,000 of Medium-Term Notes,
Series C, Due from Nine Months to Thirty Years from the Date of Issue
---------------------------------------------------------------------
Ladies and Gentlemen:
We are acting as special counsel for Central Maine Power Company (the
"Company") in connection with the proposed issuance and sale of up to
$150,000,000 in aggregate principal amount of Medium-Term Notes, Series C (the
"Series C Notes") of the Company pursuant to the Indenture between the Company
and The Bank of New York, as trustee (the "Trustee"), dated as of August 1,
1989, and indentures supplemental thereto, including a supplemental indenture to
be entered into in connection with the Series C Notes (collectively, the
"Indenture").
As such special counsel, we have examined such corporate records,
certificates and other documents as we have deemed necessary for the purposes of
this opinion. In performing our examination, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals,
the conformity to the original documents of all documents submitted to us as
copies and the authenticity of the originals of such latter documents. As to
any facts material to our opinion, we have, when relevant facts were not
independently established, relied upon the aforesaid records, certificates and
documents. With respect to matters governed by law other than the law of the
State of New York and the Federal law of the United States of America
(including, without limitation, matters pertaining to the benefits provided by
the Indenture to the holders of the Series C Notes), we have relied solely upon
the opinion being delivered to you on the date hereof by William M. Finn, Esq.,
Corporate Counsel of the Company.
<PAGE>
Security and Exchange Commission
December 16, 1994
Page 2
Based on the foregoing examination and subject to the limitations and
qualifications contained in this letter, we are of the opinion that:
(a) when (i) the Registration Statement that is being filed with the
Securities and Exchange Commission with respect to the Series C Notes has
become effective under the Securities Act of 1933, as amended (the "Act"),
(ii) all orders, consents or other authorizations, approvals or waivers of
jurisdiction of or by the Maine Public Utilities Commission and the
Connecticut Department of Public Utility Control required for the valid
issuance and sale of the Series C Notes have been obtained, and (iii) the
Prospectus relating to the Series C Notes has been duly supplemented with
respect to a particular Series C Note being issued, and such supplement
thereto duly filed under the Act, no further authorization, consent or
approval by any regulatory authority will be required for the valid
issuance and sale of such Series C Note (except under the so-called "blue-
sky" or securities laws of the several states, as to the applicability of
which we do not express an opinion);
(b) when (i) the Board of Directors of the Company has approved the
terms and conditions relating to the issuance and sale of the Series C
Notes, including the terms and conditions of a supplemental indenture
relating to the Series C Notes, and (ii) with respect to each Series C
Note, such officer or officers as may be authorized by the Board of
Directors has or have approved the terms of a particular Series C Note
being issued, then such Series C Note will have been duly authorized by the
Company;
(c) upon the execution and filing with the Trustee of the proper
papers with respect to the Series C Notes, the Series C Notes will be
issuable under the terms of the Indenture; and
(d) upon the execution and delivery of a supplemental indenture
relating to the Series C Notes and the execution, authentication and
delivery of a particular Series C Note in accordance with the corporate and
governmental authorizations and instruments referred to above, including
the Indenture, such Series C Note will be a valid and legally binding
obligation of the Company and will be entitled to the benefits provided by
the Indenture on a parity with the other series of securities now
outstanding thereunder and with other securities that may hereafter be
issued thereunder pursuant to the terms thereof.
<PAGE>
Security and Exchange Commission
December 16, 1994
Page 3
We consent to the filing of this opinion with and as a part of said
Registration Statement and to the use of our name in said Registration Statement
and in the related Prospectus, and in any amendments or supplements to either
thereof, under the captions "Certain Federal Income Tax Consequences" and "Legal
Opinions".
Very truly yours,
/s/ LeBoeuf, Lamb, Greene & MacRae, L.L.P.
LeBoeuf, Lamb, Greene & MacRae
L.L.P.
<PAGE>
EXHIBIT 12.1
------------
Central Maine Power Company
----------------------------
Consolidated Computation of Earnings to Fixed Charges
(Dollars in Thousands)
<TABLE>
<CAPTION>
For Twelve Months Ending
------------------------------------------------------------
Sept. 30, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1994 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Net income $ 53,272 $ 61,302 $ 63,583 $ 59,134 $ 48,795 $ 48,574
Federal and state income
taxes 31,144 22,589 18,435 21,731 5,700 16,785
Fixed charges 48,450 48,944 55,998 58,081 55,076 51,230
-------- -------- -------- -------- -------- --------
Registrant's Subtotal 132,866 132,835 138,016 138,946 109,571 116,589
Majority-owned companies:
Minority interest in
income 23 23 23 23 23 23
Federal and state income
taxes 1,088 874 1,290 404 1,238 1,147
Fixed charges 1 1 1 1 2 4
Less-Undistributed income
of less-than-50%-owned
subsidiaries 85 206 (59) 93 86 165
-------- -------- -------- -------- -------- --------
Total $133,893 $133,527 $139,389 $139,281 $110,748 $117,598
======== ======== ======== ======== ======== ========
Fixed Charges:
Interest on long-term
debt $ 40,093 $ 39,321 $ 44,275 $ 45,888 $ 46,645 $ 43,121
Amortization of debt
discount and expense,
less premium 879 607 522 435 537 439
Interest on short-term
debt and other interest 5,226 6,784 8,844 9,136 5,740 5,440
Interest component of
rental charges (Note A) 2,252 2,232 2,357 2,622 2,154 2,230
-------- -------- -------- -------- -------- --------
Registrant's Subtotal 48,450 48,944 55,998 58,081 55,076 51,230
Fixed charges of
majority-owned companies 1 1 1 1 2 4
-------- -------- -------- -------- -------- --------
$ 48,451 $ 48,945 $ 55,999 $ 58,082 $ 55,078 $ 51,234
======== ======== ======== ======== ======== ========
Ratio of Earnings to Fixed
Charges 2.8 2.7 2.5 2.4 2.0 2.3
======== ======== ======== ======== ======== ========
</TABLE>
Note A: The interest component of rental charges includes the estimated
interest component of certain lease rentals and one-third of all other
rentals.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
As independent public accountants, we hereby consent to the incorporation
by reference in this Form S-3 Registration Statement of our reports dated
February 4, 1994, included in and incorporated by reference in Central Maine
Power Company's Form 10-K for the year ended December 31, 1993 and to all
references to our Firm included in this Registration Statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Boston, Massachusetts,
December 13, 1994
<PAGE>
EXHIBIT 23.4
DAY, BERRY & HOWARD CityPlace
Hartford
Counsellors at Law Connecticut 06103-3499
Hartford, Stamford and Boston Telephone (203) 275-0100
Facsimile (203) 275-0343
Telex 990686
December 6, 1994
Central Maine Power Company
83 Edison Drive
Augusta, Maine 04336
Re: $150,000,000 in Aggregate Principal Amount of Medium-Term Notes, Series C
(the "Notes") of Central Maine Power Company (the "Company")
---------------------------------------------------------------------------
Ladies and Gentlemen:
We hereby consent to the use of our name under the caption "Legal Opinions"
in the Company's Registration Statement on Form S-3 pursuant to which the
offering of the Notes is being registered under the Securities Act of 1933.
Very truly yours,
/s/ Day, Berry & Howard
Day, Berry & Howard
RCM:stmz
<PAGE>
EXHIBIT 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
Central Maine Power Company
(Exact name of obligor as specified in its charter)
Maine 01-0042740
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
83 Edison Drive
Augusta, Maine 04336
(Address of principal executive offices) (Zip code)
______________________
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
----------------------------------------------------------------------------
Name Address
----------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany,
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24
of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
- 3 -
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 7th day of December, 1994.
THE BANK OF NEW YORK
By: /s/ MARY JANE MORRISSEY
-------------------------------
Name: Mary Jane Morrissey
Title: Assistant Vice President
-4-
<PAGE>
---------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of
business September 30, 1994, published in accordance with a
call made by the Federal Reserve Bank of this District pursuant
to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,833,550
Interest-bearing balances .......... 701,828
Securities:
Held-to-maturity securities ........ 1,359,569
Available-for-sale securities ...... 1,725,600
Federal funds sold in domestic
offices of the bank ................ 5,350,368
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................24,252,467
LESS: Allowance for loan and
lease losses ..............629,631
LESS: Allocated transfer risk
reserve .....................30,661
Loans and leases, net of unearned
income, allowance, and reserve 23,592,175
Assets held in trading accounts ...... 1,354,396
Premises and fixed assets (including
capitalized leases) ................ 629,219
Other real estate owned .............. 51,372
Investments in unconsolidated
subsidiaries and associated
companies .......................... 178,742
Customers' liability to this bank on
acceptances outstanding ............ 996,184
Intangible assets .................... 76,599
Other assets ......................... 1,498,770
-----------
Total assets ......................... $40,348,372
===========
LIABILITIES
Deposits:
In domestic offices ................ $19,692,982
Noninterest-bearing .......8,179,472
Interest-bearing .........11,513,510
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,034,789
Noninterest-bearing ..........57,902
Interest-bearing ..........9,976,887
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the bank and
of its Edge and Agreement subsid-
iaries and in IBFs
Federal funds purchased............. 1,240,870
Securities sold under agreements to
repurchase 37,612
Demand notes issued to the U.S. Trea-
sury................................ 197,519
Trading liabilities................... 975,739
Other borrowed money
With original maturity of one year
or less........................... 1,621,466
With original maturity or more than
one year.......................... 33,955
Bank's liability on acceptances exe-
cuted and outstanding............... 997,024
Subordinated notes and debentures..... 1,062,320
Other liabilities..................... 1,450,981
-----------
Total liabilities..................... 37,345,257
-----------
EQUITY CAPITAL
Common stock.......................... 942,284
Surplus............................... 525,666
Undivided profits and capital reserves 1,577,819
Net unrealized holding gains (losses)
on available-for-sale securities.... (36,779)
Cumulative foreign currency transla-
tion adjustments.................... (5,875)
-----------
Total equity capital.................. 3,003,115
-----------
Total liabilities and equity capital.. $40,348,372
===========
I, Robert E. Keilman, Senior Vice President and Comptroller
of the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal
Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined
by us and to the best of our knowledge and belief has been
prepared in conformance with the instructions issued by the
Board of Governors of the Federal Reserve System and is true
and correct.
Thomas A. Renyi
J. Carter Bacot Directors
Alan R. Griffith
---------------------------------------------------------------
