<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 9, 1997.
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 IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
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
Chief Financial Officer
AND
ANNE M. PARE, 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.
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]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED UNIT* PRICE* REGISTRATION FEE
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<S> <C> <C> <C> <C>
Medium-Term Notes, Se-
ries D................ 400,000,000 100% $400,000,000 $121,212
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</TABLE>
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* 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 SEPTEMBER 9, 1997
PROSPECTUS
$400,000,000
CENTRAL MAINE POWER COMPANY
MEDIUM-TERM NOTES, SERIES D
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 D (the "Notes"), in an aggregate principal amount of
up to $400,000,000. 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. Owners of
beneficial interests in Book-Entry Notes will be entitled to physical delivery
of Certificated Notes only under the limited circumstances described herein.
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 Note (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.
------------
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<TABLE>
<CAPTION>
Price to Agent's Proceeds to
Public(1) Commission(2) the Company(2)(3)
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<S> <C> <C> <C>
Per Note........... 100.00% .125%-1.750% 99.875%-98.250%
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Total.............. $400,000,000 $500,000-$7,000,000 $399,500,000-$393,000,000
</TABLE>
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(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., Bear, Stearns &
Co. Inc., Salomon Brothers Inc or other agents, (each an "Agent," and
collectively, the "Agents"), a commission, in the form of a discount
ranging from .125% to 1.750%, of the principal amount of any Note sold
through such Agent, depending on such Note's Specified Maturity and the
credit rating assigned to the Notes. 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
$500,000.
------------
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
BEAR, STEARNS & CO. INC.
SALOMON BROTHERS INC
The date of this Prospectus is , 1997.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES. SUCH
TRANSACTIONS MAY INCLUDE THE PURCHASE OF NOTES FOLLOWING THE PRICING OF THE
OFFERING TO COVER A SYNDICATE SHORT POSITION IN THE NOTES OR FOR THE PURPOSE
OF MAINTAINING THE PRICE OF THE NOTES. FOR A DESCRIPTION OF THESE ACTIVITIES
SEE "PLAN OF DISTRIBUTION".
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 without charge and copied,
upon payment of prescribed rates, 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 Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2551. Copies of such material and any part
thereof are also available by mail from the Public Reference Section of the
Commission at its principal office at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. Copies of such material are also available and can
be copied at the offices of the New York Stock Exchange on which certain of
the Company's securities are listed, at 11 Wall Street, New York, New York
10005. In addition, the Commission maintains a Web site on the Internet at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission, including the Company.
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, 1996.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997 and June 30, 1997.
3. The Company's Current Reports on Form 8-K dated January 29, 1997, May
15, 1997, August 1, 1997 and September 2, 1997.
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 Anne M. Pare, Esq., Corporate Secretary and Clerk, Central
Maine Power Company, 83 Edison Drive, Augusta, Maine 04336, telephone number:
(207) 623-3521.
2
<PAGE>
CERTAIN INVESTMENT CONSIDERATIONS
As set forth in the documents filed by the Company with the Commission under
the Exchange Act and incorporated by reference in this Prospectus, the Company
faces major uncertainties in a number of areas, particularly in connection
with its interest in Maine Yankee Atomic Power Company ("Maine Yankee") and
other nuclear generating plants and with the restructuring of the electric
utility industry in anticipation of full competition. The following is a
summary of certain information contained in such documents and should be read
in conjunction therewith and with any other documents filed with the
Commission under the Exchange Act after the date hereof.
This Prospectus contains forecast information items that are "forward-
looking statements" as defined in the Private Securities Litigation Reform Act
of 1995. All such forward-looking information is necessarily only estimated.
There can be no assurance that actual results will not differ from
expectations. Actual results have varied materially and unpredictably from
expectations.
Factors that could cause actual results to differ materially include, among
other matters, the permanent closure and decommissioning of the Maine Yankee
nuclear generating plant and resulting regulatory proceedings; continuing
outages at other generating units in which the Company holds interests;
electric utility restructuring, including the ongoing state and federal
activities; future economic conditions; earnings-retention and dividend pay-
out policies; developments in the legislative, regulatory and competitive
environments in which the Company operates, including regulatory treatment of
stranded costs; the Company's investments in unregulated businesses; and other
circumstances that could affect anticipated revenues and costs, such as
unscheduled maintenance or repair requirements at nuclear plants and other
facilities and compliance with laws and regulations.
MAINE YANKEE
On August 6, 1997, the Board of Directors of Maine Yankee voted to
permanently cease power operations at its nuclear generating plant at
Wiscasset, Maine (the "Plant") and to begin decommissioning the Plant. As
reported in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, its Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997 and June 30, 1997 and its Current Reports on Form 8-K dated May
15, 1997 and August 1, 1997, the Plant has been shut down since December 6,
1996. The decision to close the Plant permanently was based on an economic
analysis of the costs, risks and uncertainties associated with operating the
Plant compared to those associated with closing and decommissioning it.
Prior to the shutdown vote, the Company had been incurring substantial costs
in connection with its 38% share of Maine Yankee costs, as well as additional
costs for replacement power while the Plant has been out of service. During
the first half of 1997, such costs amounted to approximately $67.4 million for
the Company: $31.8 million due to basic operations and maintenance costs,
$25.7 million due to replacement power costs and $9.9 million associated with
incremental costs of operations and maintenance. The Maine Yankee Board's
decision to close the Plant should mitigate the costs the Company would
otherwise incur in the remainder of 1997 through a phasing down of Maine
Yankee's operations and maintenance costs, but will not reduce the need to buy
replacement energy and capacity. The amount of costs for replacement energy
and capacity will vary during the year based on the Company's power
requirements and market conditions, but the Company expects such costs to be
within a range of approximately $4.5 million to $6.0 million per month during
the remainder of 1997, based on current energy and capacity needs and market
conditions. Under the electric utility restructuring legislation enacted by
the Maine Legislature in May 1997 discussed below, the Company's obligations
to provide replacement power will terminate on March 1, 2000, along with its
other power-supply obligations. In the interim, the termination of a major
non-utility generator ("NUG") contract should result in savings to the Company
at an annual rate of approximately $25 million commencing November 1, 1997.
The impact of the nuclear-related costs on the Company will be a major
obstacle to achieving satisfactory results in 1997, despite the approximately
$75 million in annual Maine Yankee-related costs embedded in the current
determination of the Company's required revenues for ratemaking purposes and
despite success in controlling other operating costs. The higher costs
incurred to date associated with nuclear plant investment and
3
<PAGE>
the costs anticipated to replace energy and capacity needs for the remainder
of the year, as the result of the permanent shutdown of the Plant, will reduce
current earnings to a level that will trigger the low-earnings bandwidth
provisions of the Company's Alternative Rate Plan (the "ARP"). That provision
is activated if actual earnings for 1997 are outside a bandwidth of 350 basis
points above or below a 10.68% percent rate-of-return allowance. A return
below the low end of the range provides for additional revenue through rates
equal to one-half the difference between the actual earned rate of return and
the 7.18% (10.68 minus 350 basis points) low end of the bandwidth. While the
Company believes the mechanism will be triggered in 1997, it cannot predict
the amount of additional revenues that may ultimately result. In any case,
under the ARP the Company would not be likely to start to receive any
additional revenues before July 1, 1998. In addition, the Company has publicly
stated that it intends to limit its electricity price increases under the ARP
to a level at or below the rate of inflation through 1999, the last year of
the term of the ARP, in order to attain its goal of price stability. The
Company believes stable prices are essential to its ability to retain and
promote electricity sales.
The Company's 38% ownership interest in Maine Yankee's common equity
amounted to $28.3 million as of June 30, 1997, and under Maine Yankee's Power
Contracts and Additional Power Contracts, the Company is responsible for 38%
of the costs of decommissioning the Plant. Maine Yankee has been collecting
decommissioning costs in advance pursuant to a 1994 Federal Energy Regulatory
Commission ("FERC") rate order. Maine Yankee's most recent estimate of the
total costs of decommissioning was $316.6 million (in 1993 dollars), of which
approximately $183 million had been collected as of June 30, 1997. Maine
Yankee is in the process of developing an updated decommissioning cost
estimate, which the Company anticipates will be higher than the 1993 estimate,
and expects to file the revised decommissioning cost study with the FERC in
the fall of 1997 as part of a rate filing reflecting the permanent shutdown of
the Plant. Recent legislation enacted in Maine associated with industry
restructuring provides for recovery of decommissioning expense in the rates of
the transmission and distribution entity as required by federal law, rule or
order. Therefore the Company will record a liability for its estimated share
of decommissioning costs and a corresponding regulatory asset in the third
quarter.
On September 2, 1997, the Maine Public Utilities Commission (the "MPUC")
released the report of a consultant it had retained to perform a management
audit of Maine Yankee for the period January 1, 1994, to June 30, 1997. The
report contained both positive and negative conclusions, the latter including:
that Maine Yankee's decision in December 1996 to proceed with the steps
necessary to restart the Plant was "imprudent"; that Maine Yankee's May 27,
1997, decision to reduce restart expenses while exploring a possible sale of
the Plant was "inappropriate", based on the consultant's finding that a more
objective and comprehensive competitive analysis at that time "might have
indicated a benefit for restarting" the Plant; and that those decisions
resulted in Maine Yankee incurring $95.9 million in "unreasonable" costs. The
Company does not know how the MPUC plans to use the consultant's report, but
believes the report's negative conclusions are unfounded and may be
contradictory. The Company has charged its share of the Maine Yankee expenses
to income, but plans to contest the negative conclusions of the report
vigorously if they should be introduced in Maine Yankee's anticipated rate
proceeding before the FERC, which has exclusive jurisdiction over Maine
Yankee's rates, or in any Company ARP proceeding before the MPUC.
Maine Yankee has entered into agreements with the holders of over 80% of its
outstanding First Mortgage Bonds and its lender banks under which those
bondholders and banks agreed that they would not assert that the voluntary
shutdown of the Plant constituted a covenant violation under Maine Yankee's
First Mortgage Indenture or two bank credit agreements and agreed to maintain
Maine Yankee's level of bank borrowing at $67 million, out of aggregate
commitments of $85 million, which Maine Yankee considers adequate for its
needs. The agreements terminate October 31, 1997, by which date Maine Yankee
must reach agreement on restructured debt arrangements reflecting its
decommissioning status. At the same time, Maine Yankee and its sponsors,
including the Company, agreed to amend Maine Yankee's Power Contracts and
Additional Power Contracts, effective upon approval by the FERC, to clarify
and confirm the sponsors' obligations to continue to pay their shares of Maine
Yankee's costs during the decommissioning process. Under the agreements, Maine
Yankee must also file the contract amendments with the FERC as part of a rate
proceeding by October 15, 1997.
4
<PAGE>
Higher nuclear-related costs are affecting other stockholders of Maine
Yankee in varying degrees. Bangor Hydro-Electric Company, a Maine-based 7%
stockholder, has cited its "deteriorating" financial condition, suspended its
common stock dividend, and sought expedited rate relief. Maine Public Service
Company, a 5% stockholder, cited problems in satisfying financial covenants in
loan documents and reduced its common stock dividend substantially in early
March 1997. Northeast Utilities (20% stockholder through three subsidiaries),
which is also adversely affected by the substantial additional costs
associated with the three shut-down Millstone nuclear units and the
permanently shut-down Connecticut Yankee unit, as well as an unfavorable
utility deregulation plan in New Hampshire (currently under appeal), announced
on March 25, 1997, an indefinite suspension of its quarterly common stock
dividends, commencing with the dividend that would have been payable for the
quarter ending June 30, 1997. A default by a Maine Yankee stockholder in
making payments under its Power Contract or Capital Funds Agreement could have
a material adverse effect on Maine Yankee, depending on the magnitude of the
default, and would constitute a default under Maine Yankee's bond indenture
and its two major credit agreements unless cured within applicable grace
periods by the defaulting stockholder or other stockholders. The Company
cannot predict, however, what effect, if any, the financial difficulties being
experienced by some Maine Yankee stockholders will have on Maine Yankee or the
Company.
INTERESTS IN OTHER NUCLEAR PLANTS
On December 4, 1996, the Board of Directors of Connecticut Yankee Atomic
Power Company voted to permanently shut down the Connecticut Yankee plant for
economic reasons, and to decommission the unit, which had not operated after
July 22, 1996. The Company has a 6% equity interest in Connecticut Yankee,
totaling approximately $6.8 million at June 30, 1997. The Company incurred
replacement power costs of approximately $2.5 million in the first half of
1997. The Company estimates its share of the cost of Connecticut Yankee's
continued compliance with regulatory requirements, recovery of its plant
investments, decommissioning and closing the plant to be approximately $40.9
million and has recorded a regulatory asset and a liability on its
consolidated balance sheet. The Company is currently recovering through rates
an amount to recover these expenses.
The Company has a 2.5% ownership interest in Millstone Unit No. 3, which is
operated by Northeast Utilities. This facility has been off-line since April
1996 due to Nuclear Regulatory Commission ("NRC") concern regarding license
requirements and the Company cannot predict when it will return to service.
Millstone Unit No. 3, along with two other units at the same site owned by
Northeast Utilities, is on the NRC's "watch list" in "Category 3", which
requires formal NRC action before a unit can be restarted. The Company
incurred replacement power costs related to Millstone Unit No. 3 of
approximately $2.4 million for the first half of 1997. On August 7, 1997, the
Company and other minority owners of Millstone Unit No. 3 filed suit and
initiated an arbitration claim against Northeast Utilities, its trustees, and
two of its subsidiaries, alleging mismanagement of the unit by the defendants.
The minority owners are seeking to recover their additional costs resulting
from such mismanagement, including their replacement power costs. The Company
cannot predict the outcome of the litigation and arbitration.
INDUSTRY RESTRUCTURING AND STRANDABLE COSTS
As discussed in the Management's Discussion and Analysis of Financial
Condition and Results of Operations included in the Company's 1996 Form 10-K,
the enactment by Congress of the Energy Policy Act of 1992 accelerated
planning by electric utilities, including the Company, for a transition to a
more competitive industry. Significant legislative steps have already been
taken toward competition in general and non-discriminatory transmission access
as discussed below. A departure from traditional regulation, however, could
have a substantial impact on the value of utility assets and on the ability of
electric utilities to recover their costs through rates. In the absence of
full recovery, utilities would find their above-market costs to be "stranded",
or unrecoverable, in the new competitive setting.
The Company has substantial exposure to cost stranding relative to its size.
In its January 1996 filing, the Company estimated its net-present-value
strandable costs to be approximately $2 billion as of January 1, 1996. These
costs represented the excess costs of purchased power obligations and the
Company's own generating
5
<PAGE>
costs over the market value of the power, and the costs of deferred charges
and other regulatory assets. Of the $2 billion, approximately $1.3 billion was
related to above-market costs of purchased power obligations, approximately
$200 million was related to estimated net above-market costs of the Company's
own generation, and the remaining $500 million was related to deferred
regulatory assets.
The MPUC also provided estimates of strandable costs for the Company, which
they found to be within a wide range of a negative $445 million to a positive
$965 million. These estimates were prepared using assumptions that differ from
those used by the Company, particularly a starting date for measurement of
January 1, 2000 versus the measurement starting date of January 1, 1996
utilized by the Company. The MPUC concluded that there is a high degree of
uncertainty that surrounds stranded costs estimates, resulting from having to
rely on projections and assumptions about future conditions. Given the
inherent uncertainty and volatility of these projections, the Company believes
that an annual estimation of stranded costs could serve to prevent significant
over- or under-collection beginning in the year 2000.
Estimated strandable costs are highly dependent on estimates of the future
market for power. Higher market rates lower stranded cost exposure, while
lower market rates increase it. In addition to market-related impacts, any
estimate of the ultimate level of strandable costs depends on state and
federal regulations; the extent, timing and form that competition for electric
service will take; the ongoing level of the Company's costs of operations;
regional and national economic conditions; growth of the Company's sales; the
timing of any changes that may occur from state and federal initiatives on
restructuring; and the extent to which regulatory policies ultimately address
recovery of strandable costs.
The estimated market rate for power is based on anticipated regional market
conditions and future costs of producing power. The present value of future
purchased-power obligations and the Company's generating costs reflects the
underlying costs of those sources of generation in place today, with
reductions for contract expirations and continuing depreciation. Deferred
regulatory asset totals include the current uncollected balances and existing
amortization schedules for purchased power contract restructuring and buyouts
negotiated by the Company to lessen the impact of these obligations, energy
management costs, financing costs, and other regulatory promises.
RESTRUCTURING LEGISLATION
On May 29, 1997, the Governor of Maine signed into law a bill enacted by the
Maine Legislature that will restructure the electric utility industry in Maine
by March 1, 2000. With respect to the ability of the Company to recover
stranded costs, the legislation requires that, when retail access begins, the
MPUC provide a "reasonable opportunity" to recover stranded costs through the
rates of the transmission and distribution company, comparable to the
utility's opportunity to recover stranded costs before the implementation of
retail access under the legislation. Stranded costs are defined as the
legitimate, verifiable and unmitigatable costs made unrecoverable as a result
of the restructuring required by the legislation and would be determined by
the MPUC as provided in the legislation. The MPUC must conduct separate
adjudicatory proceedings to determine the stranded costs for each utility and
the corresponding revenue requirements and stranded-cost charges to be charged
by each transmission and distribution utility. These proceedings must be
completed by July 1, 1999.
In addition, the legislation requires utilities to use all reasonable means
to reduce their potential stranded costs and to maximize the value from
generation assets and contracts. The MPUC must consider a utility's efforts to
mitigate its stranded costs in determining the amount of the utility's
stranded costs. Stranded costs will be prospectively adjusted as necessary to
correct substantial inaccuracies in the year 2003 and at least every three
years thereafter.
The principal restructuring provisions of the legislation provide for
customers to have direct retail access to generation services and for
deregulation of competitive electricity providers, commencing March 1, 2000.
By that date, subject to possible extensions of time granted by the MPUC to
improve the sale value of generation assets, investor owned utilities are
required to divest all generation assets and generation-related business
activities, with two major exceptions: (1) nonutility generator contracts with
qualifying facilities and contracts
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with demand-side management or conservation providers, brokers or hosts; and
(2) ownership interests in nuclear power plants. However, the MPUC can require
the Company to divest its interest in Maine Yankee on or after January 1,
2009. The Company must submit a plan to the MPUC by January 1, 1999, to divest
its generation assets, but is proceeding with its previously reported plan to
sell its generation assets, as discussed below. The bill also requires
investor-owned utilities, after February 28, 2000, to sell their rights to the
capacity and energy from all generation assets, including the purchased-power
contracts that had not previously been divested pursuant to the legislation,
with certain minor exceptions.
Upon the commencement of retail access on March 1, 2000, the Company, as a
transmission and distribution utility, will be prohibited from selling
electric energy to retail customers. Any competitive electricity provider that
is affiliated with the Company would be allowed to sell electricity outside
the Company's service territory without limitation as to amount, but within
the Company's service territory the affiliate would be limited to providing no
more than 33% of the total kilowatt hours sold within the Company's service
territory, as determined by the MPUC.
Other features of the legislation include the following:
(a) After the effective date of the legislation, if an entity purchases
10% or more of the stock of a distribution utility, including the Company,
the purchasing entity and any related entity would be prohibited from
selling generation service to any retail customer in Maine.
(b) The legislation encourages the generation of electricity from
renewable resources by requiring competitive providers, as a condition of
licensing, to demonstrate to the MPUC that no less than 30% of their
portfolios of supply sources for retail sales in Maine are accounted for by
renewable resources.
(c) The legislation requires the MPUC to ensure that standard-offer
service is available to all consumers, but any competitive provider
affiliated with the Company would be limited to providing such service for
only up to 20% of the electric load in the Company's service territory.
(d) Beginning March 1, 2002, or, by MPUC rule, as early as March 1, 2000,
the providing of billing and metering services will be subject to
competition.
(e) A customer who significantly reduces or eliminates consumption of
electricity due to self-generation, conversion to an alternative fuel, or
demand-side management may not be assessed an exit fee or re-entry fee in
any form for such reduction or elimination of consumption or for the re-
establishment of service with a transmission and distribution utility.
(f) Finally, the legislation provides for programs for low-income
assistance, energy conservation, research and development on renewable
resources, assistance for utility employees laid off as a result of the
legislation, and nuclear plant decommissioning costs, all funded through
transmission and distribution utility rates and charges.
The Company has stated that it supports the legislation ultimately enacted,
which reflects protracted negotiations and compromises among the interested
constituencies, and will continue to urge securitization of stranded cost
recovery as the most effective method of resolving an issue that is critical
to the Company's future. The Company believes, however, that some of the
limitations imposed on transmission and distribution utilities in the
legislation are unnecessary and inappropriate in the contemplated competitive
environment.
SALE OF GENERATION ASSETS
On April 28, 1997, the Company announced a plan to seek proposals to
purchase its generating assets, including interest in nuclear plants and
rights to power under NUG contracts. The Company believes that current market
conditions may offer advantages to seeking proposals before the date by which
divestiture is required by legislation. A number of utilities in Massachusetts
are also in the process of selling their generation assets, with a large
number of prospective purchasers expressing interest in acquiring the
facilities. On August 6, 1997, New England Electric System in Massachusetts
announced that it had agreed to sell its non-nuclear generating business to an
affiliate of PG&E Corp. (U.S. Generating Company).
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In early June 1997, the Company, working with its investment advisors,
developed and contacted a group of approximately 150 potential bidders that
are believed to be interested in the Company's generation assets and
financially qualified to bid. Non-binding bids are scheduled to be submitted
in early September. At that time the Company will begin a process of working
with a smaller group of qualified buyers. The potential consummation of a sale
will extend into late 1998 and is subject to regulatory approvals. The Company
cannot predict whether any sale or sales will occur, whether it will receive
satisfactory proposals, or whether necessary approvals for any such sale or
sales will be obtained.
PROPOSED FEDERAL INCOME TAX ADJUSTMENTS
On September 3, 1997, the Company received from the Internal Revenue Service
("IRS") a Revenue Agent's Report summarizing all adjustments proposed by the
IRS as a result of its audit of the Company's Federal income tax returns for
the years 1992 through 1994, and the Company expects to receive a notice of
deficiency relating to the proposed adjustments by September 15, 1997. Two
significant adjustments are among those proposed by the IRS. The first is a
disallowance of the Company's write-off of the undercollected balance of fuel
and purchased-power costs and the unrecovered balance of its unbilled Electric
Revenue Adjustment Mechanism ("ERAM") revenues, both as of December 31, 1994,
which were charged to income in 1994 in connection with the adoption of the
ARP effective January 1, 1995. The second major adjustment would disallow the
Company's 1994 deduction of the cost of the buyout of the Fairfield Energy
Venture purchased-power contract by the Company in 1994. The aggregate tax
impact of the unresolved issues amounts to approximately $33 million, over 90%
of which is associated with the two major proposed adjustments. The two major
adjustments relate largely to the timing of the deductions and would not
affect net income. If the IRS were to prevail the Company would be required to
make a tax payment of approximately $33 million, but the Company believes in
that event deductions would be amortized over periods of up to twenty post-
1994 tax years. The Company believes its tax treatment of the unresolved
issues was proper and intends to contest the proposed adjustments vigorously,
but cannot predict the results of its planned appeals.
THE COMPANY
The Company, a Maine corporation organized in 1905, is an investor-owned
electric utility engaged primarily 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 (see "Recent Developments"). 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 521,000 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 June 30, 1997 was 2.0, and such ratio for each of
the calendar years (the Company's fiscal year being a calendar year) in the
period 1992 through 1996, inclusive, was 2.5, 2.7, 0.3, 2.0 and 2.8
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, the repayment of short-term borrowings and other forms of indebtedness,
investments in related companies, and construction financing.
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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, the Third Supplemental
Indenture, dated as of December 15, 1994 and the Fourth Supplemental Indenture
to be entered into in connection with the Notes (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.
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 $400,000,000 and will
constitute the fourth series of Securities (as defined below) issued under the
Indenture and the fourth series of the Company's Medium-Term Notes. 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 $500,000,000 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, the Medium-Term Notes, Series B and the Medium-Term
Notes, Series C previously issued under the Indenture constitute unsecured
medium-term notes for the purpose of the foregoing consent. As of the date of
this Prospectus, $53 million in aggregate principal amount of unsecured
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, the Medium-Term Notes, Series B and the Medium-
Term Notes, Series C) exceeds $500,000,000, the excess of such amount would be
subject to the charter restriction described above. The Company has applied
for approval of the MPUC for the issuance of up to $500,000,000 in aggregate
principal amount of medium-term notes of any series at any one time
outstanding. Issuance of medium-term notes in excess of that amount would
require further approvals.
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 Specified 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).
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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.
"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 such terms are defined for 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.
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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 immediately succeeding Business Day (except that in the case of a LIBOR
Note, if such Business Day is in the immediately 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 immediately 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 Date will be made on the Interest Payment Date
following the immediately succeeding Regular Record Date to the registered
owner on such immediately 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, unless otherwise indicated in the applicable Pricing Supplement.
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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 immediately 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, unless otherwise indicated in the applicable Pricing
Supplement.
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 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
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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 immediately succeeding calendar month, such Interest
Reset Date shall be the immediately preceding 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
immediately 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 immediately 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 immediately 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 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 immediately
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
immediately
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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 immediately succeeding
Business Day with the same force and effect as if made on the due date, and no
additional interest shall be payable as a result of such delayed payment.
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 immediately 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 immediately 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 and including the Original Issue Date to but
excluding 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.
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
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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 immediately prior to 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 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 immediately
prior to 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:
Money Market Yield = D X 360
-------- 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
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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
immediately prior to 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.
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
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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 are not quoting as mentioned in this sentence, 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 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 under the heading "Bank Prime Loan"
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 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 USPRIME 1 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 USPRIME 1 Page on such
Interest Determination Date, or, if fewer than four such rates appear on the
Reuters Screen USPRIME 1 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. If
fewer than two quotations are provided 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 in effect immediately prior to such
Interest Determination Date. "Reuters Screen USPRIME 1 Page" means the display
designated as page "USPRIME 1" on the Reuters Monitor Money Rate Service (or
such other page as may replace page USPRIME 1 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.
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
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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 immediately prior to 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 (in each case, a "Reset
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 send to the Holder of such Note a
Notice (the "Reset Notice"), by facsimile transmission, hand delivery or
letter (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.
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
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establish a higher interest rate, in the case of a Fixed Rate Note, or a new
Spread and/or Spread Multiplier which results in a higher interest rate, in
the case of a Floating Rate Note, for the Subsequent Interest Period
commencing on such Optional Reset Date by causing the Paying Agent to send by
facsimile transmission, hand delivery or letter (first class, postage prepaid)
notice of such higher interest rate or new Spread and/or Spread Multiplier, as
the case may be, 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 new 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 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 Pricing Supplement relating to each Note as to which the Company has the
option to extend the Specified Maturity of such Note for one or more periods
of from one to five whole years (each an "Extension Period") up to but not
beyond the date of final maturity, which shall in no event be more than thirty
years from the Original Issue Date of such Note (the "Final Maturity Date"),
will set forth each applicable Extension Period and the Final Maturity Date.
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 calendar days
prior to the Specified Maturity of such Note in effect prior to the exercise
of such option (the "Original Specified Maturity Date"). If the Company so
notifies the Paying Agent of such exercise, the Paying Agent will send, not
later than 40 calendar days prior to the Original Specified Maturity Date, by
facsimile transmission, hand delivery or letter (first class, postage
prepaid), to the Holder of such Note a notice (the "Extension Notice")
relating to such Extension Period, indicating (i) that the Company has elected
to extend the Specified Maturity of such Note, (ii) the new Specified
Maturity, (iii) in the case of a Fixed Rate Note, the interest rate applicable
to the Extension Period or, in the case of a Floating Rate Note, the Spread
and/or Spread Multiplier applicable to the Extension Period, and (iv) the
provisions, if any, for redemption during the Extension 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 the Extension Period. Upon
the sending by the Paying Agent of an Extension Notice to the Holder of a
Note, the Specified Maturity of such Note shall be extended automatically,
and, except as modified by the Extension Notice and as described in the next
two paragraphs, such Note will have the same terms as prior to the sending of
such Extension Notice.
Notwithstanding the foregoing, not later than 20 calendar days prior to the
Original Specified Maturity Date of 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, provided for in
the Extension Notice and establish a higher interest rate, in the case of a
Fixed Rate Note, or a new Spread and/or Spread Multiplier which results in a
higher interest rate, in the case of a Floating Rate Note, for the Extension
Period by causing the Paying Agent to send by facsimile transmission, hand
delivery or letter (first class, postage prepaid) notice of such higher
interest rate or new Spread and/or Spread Multiplier, as the case may be, to
the Holder of such Note. Such notice shall be irrevocable. All Notes with
respect to which the Specified Maturity is extended will bear such higher
interest rate, in the case of a Fixed Rate Note, or new Spread and/or Spread
Multiplier, in the case
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of a Floating Rate Note, for the Extension Period, whether or not tendered for
repayment as provided in the next paragraph.
If the Company elects to extend the Specified Maturity of a Note, the Holder
of such Note will have the option to elect repayment of such Note by the
Company on the Original Specified Maturity Date at a price equal to the
principal amount thereof plus any accrued and unpaid interest to such date. In
order for a Note to be so repaid on the Original Specified Maturity Date, 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 calendar days prior to the Original Specified Maturity Date. A
Holder who has tendered a Note for repayment following receipt of an Extension
Notice may revoke such tender for repayment by written notice to the Paying
Agent received prior to 5:00 P.M., New York City time, on the tenth day prior
to the Original Specified Maturity Date.
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 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 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
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Notes, by delivering a written notice substantially similar to the above
mentioned form to the Paying Agent at least 30 days but not more than 60 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".
If applicable, the Company will comply with the requirements of Rule 14e-1
under the Securities Exchange Act of 1934, as amended, and any other
securities laws or regulations in connection with any such repayment.
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 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)
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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 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
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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
Unless otherwise specified in the applicable Pricing Supplement, the
following provisions will apply to all Book-Entry Notes:
The Depository will act as securities depositary 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 nominee). One fully-registered
Global Security will be issued for each issue of the Notes, in the aggregate
principal amount of such issue, and will be deposited with the Depository. If,
however, the aggregate principal amount of any issue exceeds the maximum
principal amount authorized by the Depository, one Global Security will be
issued with respect to such maximum principal amount and an additional Global
Security will be issued with respect to any remaining principal amount of such
issue. Unless and until it is exchanged in whole or in part for Notes in
definitive registered form, a Global Security may not be transferred except as
a whole by the Depository to another nominee of the Depository or to a
successor depositary or a nominee of such successor.
The Depository has advised the Company as follows: 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 (the "Beneficial Owner") is in turn to 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. Because the Depository
can act only on behalf of Participants and persons that may hold through
Participants, the ability of an owner of a beneficial interest in a Global
Security to pledge Notes to persons or entities that do not participate in the
book-entry and transfer system of the Depository, or otherwise
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take actions in respect of such Notes, may be limited. In addition, the laws
of some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair a purchaser's ability to transfer beneficial interests in a Global
Security.
To facilitate subsequent transfers, all Global Securities deposited by
Participants with the Depository are registered in the name of the
Depository's 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.
So long as the Depository or its nominee is the registered owner of a Global
Security, the Depository or such nominee, as the case may be, will be
considered the sole owner or Holder of the Notes represented by such Global
Security for all purposes under the Indenture. Except as set forth below,
owners of beneficial interests in a Global Security will not be entitled to
have Notes represented by such Global Security registered in their names, will
not receive or be entitled to receive physical delivery of Certificated Notes
and will not be considered the owners or Holders of such Notes under the
Indenture.
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., as the Holder of the Book-
Entry Notes. 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 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. Owners of beneficial interests in a Global Security that hold
through the Depository may experience some delay in the receipt of interest
payments since the Depository will forward payments to Participants, which in
turn will forward them to persons that hold through Participants or to such
owners.
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
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<PAGE>
purchase or a mandatory purchase will be deemed satisfied when the ownership
rights in the Book-Entry Notes are transferred by a Direct Participant on the
Depository's records.
If the Depository is at any time unwilling or unable to continue as
depositary or if the Depository ceases to be a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act, and, in either
case, a successor depositary is not appointed by the Company within 90 days,
the Company will issue individual Certificated Notes in exchange for Book-
Entry Notes represented by Global Securities. In addition, the Company may at
any time, and in its sole discretion, determine not to have all or a portion
of any Book-Entry Note represented by Global Securities and in such event will
issue individual Certificated Notes in exchange for the Book-Entry Note or
portion thereof no longer to be represented by Global Securities. If the Notes
are Book-Entry Notes represented by one or more Global Securities and if an
Event of Default with respect to the Notes shall have occurred and be
continuing, the Company will issue individual Certificated Notes in exchange
for such Book-Entry Notes.
The Company may decide to discontinue use of the system of book-entry
transfers through the Depository (or a successor securities depositary). 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
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day in any "accrual period" a ratable portion of the original issue discount
allocable to that accrual period. The "accrual period" for an Original Issue
Discount Note may be of any length and may vary in length over the term of the
Note, provided that each accrual period is no longer than one year and each
scheduled payment of principal or interest occurs either on the first day or
the last day of an 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. The
"adjusted issue price" of an Original Issue Discount Note at the beginning of
any accrual period is the sum of its issue price (as such term is defined for
Federal income tax purposes (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. 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 generally
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.
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.
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
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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 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 purchases of the Notes. The Company
will pay each Agent a commission of from .125% to 1.750% of the principal
amount of each Note sold through such Agent, depending upon such Note's
Specified Maturity and the credit rating assigned to the Notes. 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, 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.
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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.
In connection with the offering, the rules of the Commission permit the
Agents to engage in certain transactions that stabilize the price of the
Notes. Such transactions may consist of bids or purchases for the purpose of
pegging, fixing or maintaining the price of the Notes.
If the Agents create a short position in the Notes in connection with the
offering (i.e., if they sell a larger principal amount of the Notes than is
set forth in the cover page of this Prospectus), the Agents may reduce that
short position by purchasing Notes in the open market.
In general, purchases of a security for the purpose of stabilization or to
reduce a syndicate short position could cause the price of the security to be
higher than it might otherwise be in the absence of such purchases.
None of the Agents makes any representation or prediction as to the
direction or magnitude of any effect that the transactions described above may
have on the price of the Notes. In addition, none of the Agents makes any
representation that the Agents will engage in such transactions or that such
transactions, once commenced will not be discontinued without notice.
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. Choate, Hall & Stewart from time to time provides legal
services to Maine Yankee Atomic Power Company, an affiliate of the Company.
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, 1996, have been audited by Coopers &
Lybrand L.L.P., independent certified 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.
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TABLE OF CONTENTS
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Page
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Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Certain Investment Considerations.......................................... 3
The Company................................................................ 8
Ratio of Earnings to Fixed Charges......................................... 8
Use of Proceeds............................................................ 8
Description of Notes....................................................... 9
Certain Federal Income Tax Consequences.................................... 25
Plan of Distribution....................................................... 27
Legal Opinions............................................................. 28
Experts.................................................................... 28
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- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
$400,000,000
CENTRAL MAINE
POWER COMPANY
MEDIUM-TERM NOTES,
SERIES D
------------------
PROSPECTUS
, 1997
------------------
LEHMAN BROTHERS
BEAR, STEARNS & CO. INC.
SALOMON BROTHERS INC
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<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.................. $121,212
Auditors' Fees.................................................. 19,000*
Rating Agency Fees.............................................. 60,000*
Fees and Expenses of Trustee.................................... 6,000*
Legal Fees and Expenses......................................... 250,000*
State Securities Law Fees and Expenses.......................... 25,000*
Printing and Engraving.......................................... 15,000*
Miscellaneous................................................... 3,788*
---------
Total......................................................... $500,000*
</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 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.
II-1
<PAGE>
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. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective 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 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.
II-2
<PAGE>
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 September 8, 1997.
Central Maine Power Company
/s/ David E. Marsh
By _________________________________
DAVID E. MARSH
CHIEF FINANCIAL OFFICER
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of David E. Marsh, Curtis I. Call, Anne M.
Pare, 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:
SIGNATURES TITLE DATE
/s/ David T. Flanagan President and Chief September 8,
- ------------------------------------- Executive Officer; 1997
DAVID T. FLANAGAN Director
(PRINCIPAL EXECUTIVE OFFICER)
/s/ David E. Marsh Chief Financial September 8,
- ------------------------------------- Officer 1997
DAVID E. MARSH
(PRINCIPAL FINANCIAL OFFICER AND
DULY AUTHORIZED OFFICER)
/s/ Michael W. Caron Comptroller September 8,
- ------------------------------------- 1997
MICHAEL W. CARON
(PRINCIPAL ACCOUNTING OFFICER)
/s/ David M. Jagger Chairman of the Board September 8,
- ------------------------------------- of Directors 1997
DAVID M. JAGGER
/s/ Charles H. Abbott Director September 8,
- ------------------------------------- 1997
CHARLES H. ABBOTT
/s/ Charleen M. Chase Director September 8,
- ------------------------------------- 1997
CHARLEEN M. CHASE
II-4
<PAGE>
SIGNATURES TITLE DATE
/s/ E. James Dufour Director September 8,
- ------------------------------------- 1997
E. JAMES DUFOUR
/s/ Duane D. Fitzgerald Director September 8,
- ------------------------------------- 1997
DUANE D. FITZGERALD
/s/ Robert H. Gardiner Director September 8,
- ------------------------------------- 1997
ROBERT H. GARDINER
/s/ Peter J. Moynihan Director September 8,
- ------------------------------------- 1997
PETER J. MOYNIHAN
/s/ William J. Ryan Director September 8,
- ------------------------------------- 1997
WILLIAM J. RYAN
/s/ Kathryn M. Weare Director September 8,
- ------------------------------------- 1997
KATHRYN M. WEARE
/s/ Lyndel J. Wishcamper Director September 8,
- ------------------------------------- 1997
LYNDEL J. WISHCAMPER
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
<TABLE>
<CAPTION>
DESCRIPTION EXHIBIT SEC DOCKET
----------- ------- ----------
<C> <S> <C> <C>
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 dated 4.1 Current Report on Form 8-K,
as of August 7, 1989. dated August 7, 1989
4.3 Second Supplemental Indenture dated 4.1 33-44944
as of
January 10, 1992
4.4 Third Supplemental Indenture dated 4.1 33-56939
as of
December 15, 1994
Filed herewith:
4.4 Form of Fourth Supplemental
Indenture.
</TABLE>
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.
EXHIBIT 23. CONSENTS OF EXPERTS AND COUNSEL
Filed herewith:
23.1 The consent of Coopers & Lybrand L.L.P. 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, 1996, 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.
II-6
<PAGE>
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
<TABLE>
<CAPTION>
DESCRIPTION EXHIBIT SEC DOCKET
----------- ------- ----------
<C> <S> <C> <C>
99.1 Financial Data Schedule 99.1 Annual Report on Form 10-K,
dated for the year ended
December 31, 1996
</TABLE>
II-7
<PAGE>
EXHIBIT 1.1
CHOATE, HALL & STEWART
DRAFT DATED 7/21/97
$________________
CENTRAL MAINE POWER COMPANY
MEDIUM-TERM NOTES, SERIES D
DISTRIBUTION AGREEMENT
----------------------
[Date]
Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285-1200
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Salomon Brothers Inc
7 World Trade Center
New York, New York 10048
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") with respect to the issue and sale by the Company of up to an
aggregate principal amount of $______________ of its Medium-Term Notes, Series D
(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, the Third Supplemental Indenture dated as of December 15,
1994, and as further supplemented by the Fourth Supplemental Indenture dated as
of _____________ ___, 1997 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").
<PAGE>
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 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., Aroostook
2
<PAGE>
Valley Electric Company, NORVARCO, CMP International Consultants, Mainecom
Services and TeleSmart. 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 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
3
<PAGE>
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, 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,
4
<PAGE>
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 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
5
<PAGE>
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 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
6
<PAGE>
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 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 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.
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(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.
(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
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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 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
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<PAGE>
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.
(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
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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 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
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<PAGE>
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
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
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<PAGE>
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 $___________.
(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 $___________, have been duly
authorized and are in a form 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 $____________, 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).
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<PAGE>
(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 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).
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<PAGE>
(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 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 Corporate Counsel to the Company. At the Closing
Date, the Agents shall have received the opinion, addressed to the Agents
and dated the Closing Date, of corporate 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 $___________, 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
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<PAGE>
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).
(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
16
<PAGE>
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 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
17
<PAGE>
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.
(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,
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<PAGE>
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,
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.
19
<PAGE>
(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 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 corporate counsel for the Company and Day, Berry & Howard as to all
legal conclusions affected by the laws of Maine and Connecticut, respectively.
Corporate counsel for the Company 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
20
<PAGE>
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 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
corporate 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 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 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, if requested
by the Agents, (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
21
<PAGE>
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, 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, 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, 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 (such
request to be made not later than the date of pricing of such Notes), furnish
such Agent and its counsel with the
22
<PAGE>
written opinions of LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for the
Company, and of corporate counsel for the Company, each addressed to such Agent
and dated such settlement date, in form satisfactory to such Agent, of the same
tenor as the opinions referred to in Sections 5(d) and 5(e) hereof,
respectively, 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, each 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 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
23
<PAGE>
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 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,
24
<PAGE>
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 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
25
<PAGE>
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.
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) 526-
2040; Telecopy No.: (212) 528-1718; Salomon Brothers Inc, 7 World Trade Center,
New York, New York 10048, Attention: Medium-Term Note Department, Telephone
No.: (212) 783-5897; Telecopy No.: (212) 783-2274; and Bear Stearns & Co. Inc.,
245 Park Avenue, New York, New York 10167, Attention: Medium-Term Note
Department, Telephone No.: (212) 272-5371; Telecopy No.: (212) 272-6227;
notices to the Company shall be directed to it as follows: 83 Edison Drive,
Augusta, Maine 04336, Attention: Treasurer (with a copy to Anne M. Pare,
Corporate Secretary), Telephone No.: (207) 621-4795; Telecopy No.: (207) 621-
4714.
26
<PAGE>
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.
27
<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)
BEAR, STEARNS & CO. INC.
By:
-------------------------------------
(Title)
SALOMON BROTHERS INC
By:
-------------------------------------
(Title)
DS1:336275
28
<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 end of the Company's most recently ended
fiscal
<PAGE>
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 purpose of comparing certain financial information and certain
dollar amounts (or percentages
<PAGE>
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>
EXHIBIT A
Central Maine Power Company
Medium-Term Notes, Series D
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 unless, at the time of such sale, the medium-term notes of the Company are
rated Baa3 or above by Moody's Investors Service, Inc. or BBB- or above by
Standard & Poor's Corporation:
Term of Notes Commission Rate
------------- ---------------
9 months to less than 12 months .250%
12 months to less than 18 months .300%
18 months to less than 2 years .400%
2 years to less than 3 years .500%
3 years to less than 4 years .700%
4 years to less than 5 years .700%
5 years to less than 6 years 1.000%
6 years to less than 7 years 1.000%
7 years to less than 10 years 1.200%
10 years to less than 15 years 1.250%
15 years to less than 20 years 1.500%
20 years to and including 30 years 1.750%
A-1
<PAGE>
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 if, at
the time of such sale, the medium-term notes of the Company are rated Baa3 or
above by Moody's Investors Service, Inc. or BBB- or above by Standard & Poor's
Corporation:
Term of Notes Commission Rate
------------- ---------------
9 months to less than 12 months .125%
12 months to less than 18 months .150%
18 months to less than 2 years .200%
2 years to less than 3 years .250%
3 years to less than 4 years .350%
4 years to less than 5 years .450%
5 years to less than 6 years .500%
6 years to less than 7 years .550%
7 years to less than 10 years .600%
10 years to less than 15 years .625%
15 years to less than 20 years .650%
20 years to and including 30 years .750%
A-2
<PAGE>
EXHIBIT B
CENTRAL MAINE POWER COMPANY
MEDIUM-TERM NOTES, SERIES D
ADMINISTRATIVE PROCEDURES
Medium-Term Notes, Series D, 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., Bear, Stearns & Co. Inc
and Solomon Brothers Inc 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 ____________ __,
1997 (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.
B-1
<PAGE>
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).
B-2
<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.
B-3
<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,
B-4
<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 (ii) if to
Bear, Stearns, by telecopy and by hand to Bear, Stearns & Co. Inc., Medium-Term
Note Department, 245 Park Avenue, 4th Floor, New York, New York 10167, Telecopy:
B-5
<PAGE>
(212) 272-6227; and (iii) if to Solomon Brothers, by telecopy and by overnight
delivery to Solomon Brothers Inc, 8800 Hidden River Parkway, Tampa, Florida
33637, Telecopy (813) 558-4123, Attn: Enrique Castro. 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 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
B-6
<PAGE>
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 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.
B-7
<PAGE>
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.
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
B-10
<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:
SETTLEMENT
PROCEDURE TIME (NEW YORK)
- -----------------------------------------------
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
- -----------------------------------------------
B-11
<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.
B-12
<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, Lehman
Brothers will be the Currency Determination Agent (the "Currency Determination
Agent") with respect to the Multi-Currency Notes.
PAYMENT CURRENCY
B-13
<PAGE>
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 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
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)) 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
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 of principal and interest to be paid on each Global Security
maturing either at maturity or
B-19
<PAGE>
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:
SETTLEMENT
PROCEDURE TIME
- ----------------------------------------------------------
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
- ----------------------------------------------------------
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 Participant Terminal System, as soon as practicable a withdrawal
message instructing DTC to
B-24
<PAGE>
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.
DS1.336284
B-25
<PAGE>
EXHIBIT C
PURCHASE AGREEMENT
------------------
Central Maine Power Company _______________ __, ____
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 _______ __, 1997 (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 Distribution Agreement are not satisfied or (b) you are unable to
provide the certificate required pursuant to Section 5(g) of the Distribution
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
Distribution Agreement.
This Agreement shall be governed by and construed in accordance with
the laws of New York.
LEHMAN BROTHERS INC.*
By: _____________________________
(Title)
BEAR, STEARNS & CO., INC.
By: _____________________________
(Title)
SOLOMON BROTHERS INC
By:______________________________
(Title)
Accepted: __________________, 19_____
CENTRAL MAINE POWER COMPANY
By _____________________________
(Title)
- ------------------------
*Delete the name of the non-purchasing entity.
DS1.336285.3
C-2
<PAGE>
Schedule to Exhibit C
Additional Terms of the Purchased Notes
Title of Purchased Securities:
[ %] Medium-Term Notes, Series D
[Price to Public:]
Purchase Price by [Lehman Brothers Inc.] [Bear, Stearns & Co. Inc.] [Solomon
Brothers Inc]:
% 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:
C-3
<PAGE>
[(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 (f)
and Section 6(c).]
[(3) The accountants' letter referred to in
Section 5(h) and Section 6(d).]
((4) The officers' certificate referred to
in Section 5(g) and Section 6(a).]
Other Provisions (including Syndicate Provisions, if applicable):
DS1.336285.3
C-4
<PAGE>
EXHIBIT 4.4
================================================================================
CENTRAL MAINE POWER COMPANY
and
THE BANK OF NEW YORK,
As Trustee
_____________________________________
FOURTH SUPPLEMENTAL INDENTURE
Dated as of [_____], 1997
Supplementing the Indenture
Dated as of August 1, 1989
____________________________________
================================================================================
<PAGE>
THIS FOURTH SUPPLEMENTAL INDENTURE, dated as of [ ], 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, the Second Supplemental Indenture, dated as of January 10,
1992 and the Third Supplemental Indenture, dated as of December 15, 1994 (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 [DATE], $_____________ in aggregate
principal amount of Medium-Term Notes, Series A have been issued under the
Indenture, of which $________________ is outstanding, $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 and
$__________ in aggregate principal amount of Medium-Term Notes, Series C 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 D" 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 purposes set
forth in subsections (d) and (e) of said Section 10.1.
<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 FOURTH 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 D
--------------------------------------------
Section 1.01. The title of the series of the Securities established by
this supplemental indenture shall be "Medium-Term Notes, Series D" of the Issuer
(hereinafter called the "Series D Notes"). The Series D 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 D Notes shall be limited to $400,000,000 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 D 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 D Notes. The Depository for such Global Security or Global Securities
representing Series D Notes may surrender one or more Global Securities
representing Series D Notes in exchange in whole or in part for individual
Series D 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 D 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 D 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 D Notes
that do not bear interest.
Section 1.06. The terms of the Series D Notes shall be as set forth in
Exhibit A hereto, and shall include the payment and other terms reflected on the
respective Series D Notes as actually executed, authenticated and delivered
under the Indenture. Without limiting the generality of the foregoing, specific
terms of particular Series D 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
Certain Amendments of Original Indenture
----------------------------------------
Section 2.01. The definition of the term "vice president" in Section 1.1
of the Original Indenture is hereby amended to read as follows:
"The term 'vice president' means, with respect to the Issuer or the
--------------
Trustee, any vice president, whether or not designated by a number or a word or
words added before or after the title of 'vice president' and, with respect to
the Issuer, shall include the chief financial officer, whether or not
specifically designated by the title 'vice president'."
ARTICLE THREE
Miscellaneous
-------------
Section 3.01. 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 3.02. 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 3.03. 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 3.04. 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 Fourth 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 [__________], on this [____] day of [____________], before me, a Notary
Public in and for the County of Kennebec and State of Maine, personally appeared
and , the and ,
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 [____________], before me, a
Notary Public in and for the County and State of New York, personally appeared
and , a and
, 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. D- 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 D
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: Maximum Interest Rate:
Interest Reset Period: Minimum Interest Rate:
Interest Reset Dates:
Interest Determination Dates:
Interest Payment Period:
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
-2-
<PAGE>
corporate seal or a facsimile thereof to be hereon impressed, engraved or
imprinted and attested by such signature or facsimile signature of its Secretary
or an Assistant Secretary.
CENTRAL MAINE POWER COMPANY
(Seal)
By:___________________________
Attest: ____________________
Secretary By:___________________________
Trustee's Certificate of
Authentication
Dated:
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 D
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, the Third Supplemental Indenture, dated
as of December 15, 1994, and the Fourth Supplemental Indenture, dated as of
[_______________], 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 D (the "Notes"), limited to
$400,000,000 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 immediately
preceding such Interest Payment Date; provided, however, that the
-4-
<PAGE>
first payment of interest on any Note with an Original Issue Date between a
Regular Record Date and the succeeding Interest Payment Date will be made on the
Interest Payment Date following the immediately succeeding Regular Record Date
to the registered owner on such immediately 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 this 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
-5-
<PAGE>
30-day months (unless otherwise shown on the face hereof or as specified below).
---------------------------------------------------------------
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 immediately 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 immediately 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
-6-
<PAGE>
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 immediately 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
immediately succeeding Business Day with the same force and effect as if made on
the due date, and no additional interest shall be payable as a result of such
delayed payment.
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 immediately
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 immediately 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 and including the Original
Issue Date to but excluding 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
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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 immediately 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 LIBOR, the second London Banking Day immediately 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 any Note the Base Rate for which is the Treasury Rate
occurring in the immediately succeeding week. If an auction falls on a day that
is an Interest Reset Date for any Note the Base Rate for which is the Treasury
Rate, 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 immediately 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
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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 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 immediately prior to 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
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<PAGE>
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 offered rates as specified
herein, the Commercial Paper Rate with respect to such Interest Determination
Date will be the Commercial Paper Rate in effect immediately prior to 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:
Money Market Yield = D X 360 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
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<PAGE>
be the Federal Funds in effect immediately prior to 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:
(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
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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 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 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) under the heading "Bank Prime Loan". 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 Prime Rate for such Interest Determination Date
shall be calculated by the Calculation Agent and shall be the arithmetic mean of
the rates
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<PAGE>
of interest publicly announced by each bank named on the Reuters Screen USPRIME
1 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 USPRIME 1 Page on
such Interest Determination Date, or, if fewer than four such rates appear on
the Reuters Screen USPRIME 1 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. If fewer than
two quotations are provided 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. 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 in effect immediately prior to such Interest Determination
Date. "Reuters Screen USPRIME 1 Page" means the display designated as page
"USPRIME 1" on the Reuters Monitor Money Rate Service (or such other page as may
replace page USPRIME 1 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
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<PAGE>
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 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 with respect to such Interest
Determination Date shall be the Treasury Rate in effect immediately prior to
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 this Note. Not later than 40 days prior to such Optional Reset Date,
the Paying Agent will send to the Holder hereof a Notice (the "Reset Notice"),
by facsimile transmission, hand delivery or letter (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
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<PAGE>
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 Stated
Maturity of the principal amount of this 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 interest rate, in the case of a Fixed
Rate Note, or a new Spread and/or Spread Multiplier which results in a higher
interest rate, in the case of a Floating Rate Note, for the Subsequent Interest
Period commencing on such Optional Reset Date by causing the Paying Agent to
send by facsimile transmission, hand delivery or letter (first class, postage
prepaid) notice of such higher interest rate or new Spread and/or Spread
Multiplier, as the case may be, to the Holder. 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 new 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 Company has
----------------
the option to extend the Stated Maturity of this Note for one or more periods of
from one to five whole years (each an "Extension Period") up to but not beyond
the date of final maturity, which shall in no event be more than thirty years
from the Original Issue Date of this Note (the "Final Maturity Date"), and
Exhibit A hereto will set forth each applicable Extension
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<PAGE>
Period, the Final Maturity Date and any other terms and conditions applicable to
such option.
The Company may exercise such option by notifying the Paying Agent of
such exercise at least 45 but not more than 60 calendar days prior to the Stated
Maturity of this Note in effect prior to the exercise of such option (the
"Original Stated Maturity Date"). If the Company so notifies the Paying Agent
of such exercise, the Paying Agent will send, not later than 40 calendar days
prior to the Original Stated Maturity Date, by facsimile transmission, hand
delivery or letter (first class, postage prepaid), to the Holder hereof a notice
(the "Extension Notice") relating to such Extension Period, indicating (i) that
the Company has elected to extend the Stated Maturity of this Note, (ii) the new
Stated Maturity, (iii) in the case of a Fixed Rate Note, the interest rate
applicable to the Extension Period or, in the case of a Floating Rate Note, the
Spread and/or Spread Multiplier applicable to the Extension Period, and (iv) the
provisions, if any, for redemption during the Extension 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 the Extension Period. Upon the
sending by the Paying Agent of an Extension Notice to the Holder hereof, the
Stated Maturity of this Note shall be extended automatically, and, except as
modified by the Extension Notice and as described in the next two paragraphs,
this Note will have the same terms as prior to the sending of such Extension
Notice.
Notwithstanding the foregoing, not later than 20 calendar days prior
to the Original Stated Maturity Date of 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, provided for in the
Extension Notice and establish a higher interest rate, in the case of a Fixed
Rate Note, or a new Spread and/or Spread Multiplier which results in a higher
interest rate, in the case of a Floating Rate Note, for the Extension Period by
causing the Paying Agent to send by facsimile transmission, hand delivery or
letter (first class, postage prepaid) notice of such higher interest rate or new
Spread and/or Spread Multiplier, as the case may be, to the Holder of such Note.
Such notice shall be irrevocable. All Notes with respect to which the Stated
Maturity is extended will bear such higher interest rate, in the case of a Fixed
Rate Note, or new Spread and/or Spread Multiplier, in the case of a Floating
Rate Note, for the Extension Period, whether or not tendered for repayment as
provided in the next paragraph.
If the Company elects to extend the Stated Maturity of a Note, the
Holder of such Note will have the option to elect repayment of such Note by the
Company on the Original Stated Maturity Date at a price equal to the principal
amount thereof plus any accrued and unpaid interest to such date. In order for
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a Note to be so repaid on the Original Stated Maturity Date, 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 calendar days prior to the
Original Stated Maturity Date. A Holder who has tendered a Note for repayment
following receipt of an Extension Notice may revoke such tender for repayment by
written notice to the Paying Agent received prior to 5:00 P.M., New York City
time, on the tenth day prior to the Original Stated Maturity Date.
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.
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<PAGE>
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 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 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 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
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<PAGE>
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 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
-19-
<PAGE>
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.
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.
-20-
<PAGE>
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto
_______________________________ _________________________________
Please insert social security Please print or typewrite
or other identifying number name and 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.
-21-
<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.
-22-
<PAGE>
EXHIBIT 5.1
Central Maine Power Company
Edison Drive, Augusta, Maine 04336
(207) 623-3521
William M. Finn, Esq.
September 8, 1997
Central Maine Power Company
83 Edison Drive
Augusta, Maine 04336
Re: Central Maine Power Company - $400,000,000 of Medium-Term Notes,
Series D, 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 $400,000,000
in aggregate principal amount of Medium-Term Notes, Series D (the "Series D
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 D 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 D Notes;
(b) when (i) the Registration Statement that is being filed with the
Securities and Exchange Commission with respect to the Series D 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
September 8, 1997
Page 2
Series D Notes have been obtained, and (iii) the Prospectus relating to the
Series D Notes has been duly supplemented with respect to a particular
Series D 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 D
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, with respect to each Series D Note, such officer or officers
as may be authorized by the Board of Directors has or have approved the
terms of a particular Series D Note being issued, then such Series D 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 D Notes, the Series D 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 D Notes and the execution, authentication and
delivery of a particular Series D Note in accordance with the corporate and
governmental authorizations and instruments referred to above, including
the Indenture, such Series D 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.
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,
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
September 8, 1997
Central Maine Power Company
83 Edison Drive
Augusta, Maine 04336
Re: Central Maine Power Company - $400,000,000 of Medium-Term Notes,
Series D, 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
$400,000,000 in aggregate principal amount of Medium-Term Notes, Series D (the
"Series D 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 D 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 D 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>
Central Maine Power Company
September 8, 1997
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 D 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 D Notes have been obtained, and (iii) the
Prospectus relating to the Series D Notes has been duly supplemented with
respect to a particular Series D 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 D 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, with respect to each Series D Note, such officer or officers
as may be authorized by the Board of Directors of the Company has or have
approved the terms of a particular Series D Note being issued, then such
Series D 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 D Notes, the Series D 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 D Notes and the execution, authentication and
delivery of a particular Series D Note in accordance with the corporate and
governmental authorizations and instruments referred to above, including
the Indenture, such Series D 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.
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
<PAGE>
Central Maine Power Company
September 8, 1997
Page 3
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,
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
June 30, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1997 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Net income $ 36,767 $ 60,230 $ 37,978 $ (23,263) $ 61,303 $ 63,583
Federal and state income taxes 13,328 32,021 16,032 (14,144) 22,589 18,435
Fixed Charges 50,224 51,628 52,559 51,057 48,944 55,998
---------- --------- --------- ---------- -------- ----------
Registrant's Subtotal 100,319 143,879 106,569 13,650 132,836 138,016
Majority-owned companies:
Minority interest in income 46 48 23 23 23 23
Federal and state income taxes 1,181 1,435 974 2,135 874 1,290
Fixed charges 77 20 1 1 1 1
Less - Undistributed income of less than
50% - owned subsidiaries 2,008 315 1,335 (76) 206 (59)
---------- --------- --------- ---------- -------- ----------
Total $ 99,615 $ 145,067 $ 106,232 $ 15,885 $ 133,528 $ 139,389
========== ========= ========= ========= ========= ==========
Fixed Charges:
Interest on long-term debt $ 42,096 $ 43,611 $ 45,823 $ 41,968 $ 39,321 $ 44,275
Amortization of debt discount and
expense, less premium 1,153 1,348 1,328 994 607 522
Interest on short-term debt and other
interest 4,693 4,341 3,244 5,887 6,784 8,844
Interest component of rental
charges (Note A) 2,282 2,328 2,164 2,208 2,232 2,357
---------- --------- --------- ---------- -------- ----------
Registrant's Subtotal 50,224 51,628 52,559 51,057 48,944 55,998
Fixed charges of majority - owned
companies 77 20 1 1 1 1
---------- --------- --------- ---------- -------- ----------
$ 50,301 $ 51,648 $ 52,560 $ 51,058 $ 48,945 $ 55,999
========= ========= ========== ========== ========= ==========
Ratio of Earnings to Fixed Charges 2.0 2.8 2.0 0.3 2.7 2.5
</TABLE>
Note A: The interest component of rental charges includes the estimated
interest component of certain lease rental and one-third of all other
rentals.
<PAGE>
EXHIBIT 23.1
COOPERS & LYBRAND L.L.P.
COOPERS
&LYBRAND a professional services firm
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference into this registration statement on
Form S-3 of our report dated January 23, 1997, on our audits of the consolidated
financial statements and financial statement schedule of Central Maine Power
Company and subsidiary as of December 31, 1996 and 1995, and for each of the
three years in the period ended December 31, 1996. We also consent to the
reference of our firm under the caption "Experts."
Portland, Maine /s/ Coopers & Lybrand L.L.P.
September 8, 1997
<PAGE>
EXHIBIT 23.4
DAY, BERRY & HOWARD CityPlace
Hartford
Connecticut 06103-3499
Telephone (860) 275-0100
Counsellors at Law Facsimile (860) 275-0343
Hartford, Stamford and Boston
August 21, 1997
Central Maine Power Company
Edison Drive
Augusta, Maine 04336
Re: $400,000,000 in Aggregate Principal Amount of Medium-Term Notes,
Series D (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:btr
<PAGE>
EXHIBIT 25.1
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
================================================================================
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)
______________________
Medium-Term Notes, Series D
(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, N.Y. 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 10005
(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.
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 17 C.F.R.
229.10(d).
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.
-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 22nd day of August, 1997.
THE BANK OF NEW YORK
By: /S/VIVIAN GEORGES
-----------------------
Name: VIVIAN GEORGES
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE>
Exhibit 7
- --------------------------------------------------------------------------------
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 March 31, 1997,
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.................... $ 8,249,820
Interest-bearing balances............. 1,031,026
Securities:
Held-to-maturity securities........... 1,118,463
Available-for-sale securities......... 3,005,838
Federal funds sold and Securities pur-
chased under agreements to resell...... 3,100,281
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................32,895,077
LESS: Allowance for loan and
lease losses ..............633,877
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 32,260,771
Assets held in trading accounts......... 1,715,214
Premises and fixed assets (including
capitalized leases)................... 684,704
Other real estate owned................. 21,738
Investments in unconsolidated
subsidiaries and associated
companies............................. 195,761
Customers' liability to this bank on
acceptances outstanding............... 1,152,899
Intangible assets....................... 683,503
Other assets............................ 1,526,113
-----------
Total assets............................ $54,746,131
===========
LIABILITIES
Deposits:
In domestic offices................... $25,614,961
Noninterest-bearing ......10,564,652
Interest-bearing .........15,050,309
In foreign offices, Edge and
Agreement subsidiaries, and IBFs...... 15,103,615
Noninterest-bearing .........560,944
Interest-bearing .........14,542,671
Federal funds purchased and Securities
sold under agreements to repurchase. 2,093,286
Demand notes issued to the U.S.
Treasury.............................. 239,354
Trading liabilities..................... 1,399,064
Other borrowed money:
With remaining maturity of one year
or less............................. 2,075,092
With remaining maturity of more than
one year............................ 20,679
Bank's liability on acceptances exe-
cuted and outstanding................. 1,160,012
Subordinated notes and debentures....... 1,014,400
Other liabilities....................... 1,840,245
-----------
Total liabilities....................... 50,560,708
-----------
EQUITY CAPITAL
Common stock............................ 942,284
Surplus................................. 731,319
Undivided profits and capital
reserves.............................. 2,544,303
Net unrealized holding gains
(losses) on available-for-sale
securities............................ ( 19,449)
Cumulative foreign currency transla-
tion adjustments...................... ( 13,034)
-----------
Total equity capital.................... 4,185,423
-----------
Total liabilities and equity
capital ........................... $54,746,131
===========
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.
Alan R. Griffith
J. Carter Bacot
Thomas A. Renyi Directors
- --------------------------------------------------------------------------------
