-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TEDIhLTG+/jykBb0ysy3WagfYyYO9BPAg/DRURjxHbEJCqurlyPLTpJVFQspeMnV GtftiZLhP/ueRk+an/aMyw== 0000950123-98-000461.txt : 19980123 0000950123-98-000461.hdr.sgml : 19980123 ACCESSION NUMBER: 0000950123-98-000461 CONFORMED SUBMISSION TYPE: S-4/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19980122 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORANGE & ROCKLAND UTILITIES INC CENTRAL INDEX KEY: 0000074778 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 131727729 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-43953 FILM NUMBER: 98510687 BUSINESS ADDRESS: STREET 1: ONE BLUE HILL PLZ CITY: PEARL RIVER STATE: NY ZIP: 10965 BUSINESS PHONE: 9143526000 MAIL ADDRESS: STREET 1: ONE BLUE HILL PLAZA CITY: PEARL RIVER STATE: NY ZIP: 10965 FORMER COMPANY: FORMER CONFORMED NAME: ROCKLAND LIGHT & POWER CO DATE OF NAME CHANGE: 19681202 S-4/A 1 AMENDMENT #1 TO FORM S-4 1 REGISTRATION NO. 333-43953 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 -------------------------------- AMENDMENT NO. 1 TO FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------------------- ISSUER OF EXCHANGE DEBENTURES REGISTERED HEREBY ORANGE AND ROCKLAND UTILITIES, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW YORK 4931 13-1727729 (STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER) ONE BLUE HILL PLAZA PEARL RIVER, NEW YORK 10965 (914) 352-6000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES) -------------------------------- G. D. CALIENDO SENIOR VICE PRESIDENT, GENERAL COUNSEL, AND SECRETARY ORANGE AND ROCKLAND UTILITIES, INC. ONE BLUE HILL PLAZA PEARL RIVER, NEW YORK 10965 (914) 352-6000 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) -------------------------------- COPY TO: MICHAEL F. CUSICK, ESQ. WINTHROP, STIMSON, PUTNAM & ROBERTS ONE BATTERY PARK PLAZA NEW YORK, NEW YORK 10004-1490 (212) 858-1000 -------------------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. -------------------------------- If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. |_| If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, 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 filed pursuant to Rule 462(d) 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. |_| ________________ THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS 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. 2 PROSPECTUS CONFIDENTIAL ORANGE AND ROCKLAND UTILITIES, INC. OFFER TO EXCHANGE ITS 6-1/2% DEBENTURES DUE 2027 (SERIES F) FOR ANY AND ALL OF ITS OUTSTANDING 6-1/2% DEBENTURES DUE 2027 (SERIES E) The Exchange Offer will expire at 5:00 P.M., New York City time, on February 25, 1998, unless extended. Orange and Rockland Utilities, Inc., a New York corporation (the "Company"), hereby offers (the "Exchange Offer"), upon the terms and subject to the conditions set forth in this Prospectus (the "Prospectus") and the accompanying Letter of Transmittal (the "Letter of Transmittal"), to exchange $1,000 principal amount of its 6-1/2% Debentures Due 2027 (Series F) (the "Exchange Debentures"), which will have been registered under the Securities Act of 1933 (the "1933 Act"), pursuant to a Registration Statement of which this Prospectus is a part, for each $1,000 principal amount of its outstanding 6-1/2% Debentures Due 2027 (Series E) (the "Old Debentures," and with the Exchange Debentures, the "Debentures"), of which $80,000,000 aggregate principal amount is outstanding. The form and terms of the Exchange Debentures are substantially identical to the form and terms of the Old Debentures except that the Exchange Debentures will bear a Series F designation and will have been registered under the 1933 Act and, therefore, will not bear legends restricting their transfer and will not entitle the holders thereof (the "Holders") to certain provisions relating to liquidated damages which were applicable to the Old Debentures in certain circumstances relating to the timing of the Exchange Offer. The Old Debentures and the Exchange Debentures will be issued only in denominations of $100,000 or in any amount in excess thereof which is an integral multiple of $1,000. The Exchange Debentures will evidence the same debt as the Old Debentures (which they replace) and will be issued under and be entitled to the benefits of the Indenture dated as of March 1, 1990, as supplemented and amended by three supplemental indentures, and further supplemented and amended by a Fourth Supplemental Indenture relating to the Old Debentures and the Exchange Debentures, dated as of December 1, 1997 (the "Fourth Supplemental Indenture") between The Bank of New York, as trustee (the "Trustee") and the Company (the "Indenture"), which also governs the Old Debentures. See "The Exchange Offer" and "Description of Exchange Debentures." The Company will accept for exchange any and all Old Debentures validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on February 25, 1998, unless the Exchange Offer is extended by the Company in its sole discretion (the "Expiration Date"). Tenders of Old Debentures may be withdrawn at any time prior to 5:00 p.m. on the Expiration Date. The Old Debentures may be tendered only in integral multiples of $1,000 principal amount. The Exchange Offer is subject to certain customary conditions. See "The Exchange Offer." The Old Debentures were sold on December 18, 1997 (the "Issue Date") to the Initial Purchasers (as defined herein) in a transaction not registered under the 1933 Act in reliance upon an exemption under the 1933 Act. The Initial Purchasers subsequently resold the Old Debentures to qualified institutional buyers ("Qualified Institutional Buyers"), in reliance upon Rule 144A ("Rule 144A") under the 1933 Act, that agreed to comply with certain transfer restrictions and other conditions. Accordingly, the Old Debentures may not be reoffered, resold or otherwise transferred in the United States unless registered under the 1933 Act or unless an applicable exemption from the registration requirements of the 1933 Act is available. The Exchange Debentures are being offered hereunder in order to satisfy certain obligations of the Company under the Registration Rights Agreement (as defined herein) entered into in connection with the offering of the Old Debentures. See "The Exchange Offer." Based on no-action letters issued by the staff of the Securities and Exchange Commission (the "Commission") to third parties, the Company believes the Exchange Debentures issued pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by any Holder thereof (other than any such Holder that is an "affiliate" of the Company within the meaning of Rule 405 under the 1933 Act) without compliance with the registration and prospectus delivery requirements of the 1933 Act, provided that such Exchange Debentures are acquired in the ordinary course of such Holder's business and such Holder has no arrangement or understanding with any person to participate in the distribution of such Exchange Debentures. See "The Exchange Offer -- Purpose and Effect of the Exchange Offer" and "The Exchange Offer -- Resale of the Exchange Debentures." Each broker-dealer (a "Participating Broker-Dealer") that receives Exchange Debentures for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Debentures. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a Participating Broker-Dealer will not be deemed to admit that it is an "underwriter" within the meaning of the 1933 Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer in connection with resales of Exchange Debentures received in exchange for Old Debentures where such Old Debentures were acquired by such Participating Broker-Dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date, it will make this Prospectus available to any Participating Broker-Dealer for use in connection with any such resale. See "Plan of Distribution." Holders of Old Debentures not tendered and accepted in the Exchange Offer will continue to hold such Old Debentures and will be entitled to all the rights and benefits and will be subject to the limitations applicable thereto under the Fourth Supplemental Indenture and with respect to transfer under the 1933 Act. The Company will pay all the expenses incurred by it incident to the Exchange Offer. See "The Exchange Offer." 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. The date of this Prospectus is January 22, 1998. 3 NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE EXCHANGE OFFER COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. 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 FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. -------------------------- TABLE OF CONTENTS
Page Available Information............................. 3 Incorporation of Certain Documents by Reference.................................... 3 Prospectus Summary................................ 4 The Company....................................... 9 Regulatory Proceedings............................ 9 Use of Proceeds.................................. 10 Selected Financial Information................... 11 The Exchange Offer .............................. 12 Description of Exchange Debentures............... 18 Certain United States Federal Income Tax Considerations............................. 22 Plan of Distribution............................. 25 Rating........................................... 25 Experts.......................................... 25
There has not previously been any public market for the Old Debentures or the Exchange Debentures. The Company does not intend to list the Exchange Debentures on any securities exchange or to seek approval for quotation through any automated quotation system. There can be no assurance that an active market for the Exchange Debentures will develop. Moreover, to the extent that Old Debentures are tendered and accepted in the Exchange Offer, the trading market for untendered and tendered but unaccepted Old Debentures could be adversely affected. The Exchange Debentures will be available only in book-entry form. The Company expects that the Exchange Debentures issued pursuant to this Exchange Offer will be issued in the form of a Global Debenture (as defined herein), which will be deposited with, or on behalf of, The Depository Trust Company (the "Depositary") and registered in its name or in the name of Cede & Co., its nominee. Beneficial interests in the Global Debenture representing the Exchange Debentures will be shown on, and transfers thereof will be effected through, records maintained by the Depositary and its Participants (as hereinafter defined). See "Description of Exchange Debentures -- Book-Entry; Delivery and Form." 2 4 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934 (the "1934 Act"), and in accordance therewith files reports and other information with the Commission. Such reports, proxy statements and other information filed by the Company with the Commission can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at its Regional Offices located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and Seven World Trade Center, Suite 1300, New York, New York 10048. Copies of such material can be obtained from the Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates, or by writing to Orange and Rockland Utilities, Inc., One Blue Hill Plaza, Pearl River, New York, 10965, Attention: Office of the Treasurer. The Commission maintains a web site on the Internet that contains reports, proxy and information statements and other information regarding registrants, including the Company; the address of such site is http://www.sec.gov. Such material can also be inspected at the offices of The New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005, where the Company's common stock is listed and traded under the ticker symbol "ORU." INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed with the Commission pursuant to the 1934 Act are incorporated by reference in this Prospectus and made a part hereof: (a) The Company's Annual Report on Form 10-K for the year ended December 31, 1996 (the "10-K"). (b) The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 1997. (c) The Company's Current Reports on Form 8-K dated April 17, June 17, July 1, December 11 and December 17, 1997. In addition, all documents subsequently filed with the Commission by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this Prospectus shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the respective dates of filing of such documents. The documents incorporated or deemed to be incorporated herein by reference are sometimes hereinafter called the "Incorporated Documents." Any statement contained in this Prospectus, or in a document incorporated or deemed to be incorporated by reference herein as described above, 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 is or is deemed to be incorporated by reference herein as described above 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, INCLUDING ANY BENEFICIAL OWNER, UPON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE INCORPORATED DOCUMENTS, OTHER THAN CERTAIN EXHIBITS TO SUCH INCORPORATED DOCUMENTS. REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO: OFFICE OF THE TREASURER, ORANGE AND ROCKLAND UTILITIES, INC., ONE BLUE HILL PLAZA, PEARL RIVER, NEW YORK 10965 (TELEPHONE NUMBER 914-352-6000). IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY FIVE BUSINESS DAYS PRIOR TO THE EXPIRATION DATE. 3 5 PROSPECTUS SUMMARY The following summary is qualified in its entirety by reference to the more detailed information contained elsewhere in this Prospectus (which term includes any applicable amendments or supplements hereto), including the Selected Financial Information included herein and the Company's financial statements and other information contained in the Incorporated Documents. THE COMPANY The Company and its two wholly-owned utility subsidiaries, Rockland Electric Company and Pike County Light & Power Company, supply electricity and gas to a territory covering approximately 1,350 square miles. As of December 31, 1996, the Company and its utility subsidiaries furnished electric service to approximately 266,000 customers in 96 communities with an estimated population of 676,000 and gas service to approximately 113,000 customers in 57 communities with an estimated population of 478,000.
THE EXCHANGE OFFER Old Debentures...................................... The Old Debentures were sold on December 18, 1997 to Donaldson, Lufkin & Jenrette Securities Corporation and Salomon Smith Barney (the "Initial Purchasers") pursuant to a Purchase Agreement dated December 15, 1997 by and among the Company and the Initial Purchasers (the "Purchase Agreement"). The Initial Purchasers subsequently resold the Old Debentures to Qualified Institutional Buyers, pursuant to Rule 144A under the 1933 Act, who agreed to be bound by certain transfer restrictions and comply with other conditions. Registration Rights Agreement............................................Pursuant to a Registration Rights Agreement (the "Registration Rights Agreement") between the Company and the Initial Purchasers, the Company agreed to file a registration statement (the "Exchange Offer Registration Statement") with respect to an offer to exchange the Old Debentures for the Exchange Debentures registered under the 1933 Act, with terms substantially identical to those of the Old Debentures. The Exchange Offer is intended to satisfy certain of such exchange rights which will terminate upon the consummation of the Exchange Offer. The Exchange Offer.................................. The Company is offering to exchange $1,000 principal amount of Exchange Debentures for each $1,000 principal amount of Old Debentures. As of the date hereof, $80,000,000 aggregate principal amount of Old Debentures are outstanding. The Old Debentures and the Exchange Debentures will be issued only in denominations of $100,000 or in any amount in excess thereof which is an integral multiple of $1,000. Based on an interpretation by the staff of the Commission set forth in no-action letters issued to third parties, the Company believes that Exchange Debentures issued pursuant to the Exchange Offer in exchange for Old Debentures may be offered for resale, resold and otherwise transferred by any Holder thereof (other than any such Holder which is an "affiliate" of the Company within the meaning of Rule 405 under the 1933 Act) without compliance with the registration and prospectus delivery requirements of the 1933 Act, provided that such Exchange Debentures are acquired in the ordinary course of such Holder's business and that such Holder does not intend to participate and has no arrangement or understanding with any person to participate in the distribution of such Exchange Debentures. Each Participating Broker-Dealer that receives Exchange Debentures for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any
4 6 resale of such Exchange Debentures. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a Participating Broker-Dealer will not be deemed to admit that it is an "underwriter" within the meaning of the 1933 Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer in connection with resales of Exchange Debentures received in exchange for Old Debentures where such Old Debentures were acquired by such Participating Broker-Dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date, it will make this Prospectus available to any Participating Broker-Dealer for use in connection with any such resale. See "Plan of Distribution." Any Holder of Old Debentures who tenders in the Exchange Offer with the intention to participate, or for the purpose of participating, in a distribution of the Exchange Debentures could not rely on the position of the staff of the Commission enunciated in no-action letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the 1933 Act in connection with any resale transaction. Failure to comply with such requirements in such instance may result in such Holder incurring liability under the 1933 Act for which the Holder is not indemnified by the Company. Expiration Date..................................... 5:00 p.m., New York City time, on February 25, 1998 unless the Exchange Offer is extended by the Company in its sole discretion, in which case the term "Expiration Date" means the latest date and time to which the Exchange Offer is extended. Interest............................................ Interest on Exchange Debentures shall accrue from the last interest payment date on which interest was paid on the Old Debentures so surrendered, or, if no interest has been paid on such Old Debentures, from December 18, 1997. No interest will be paid on the Old Debentures accepted for exchange. Conditions to the Exchange Offer................................... The Exchange Offer is subject to certain customary conditions, which may be waived by the Company. See "The Exchange Offer -- Conditions." Procedures for Tendering Old Debentures................................... Each Holder of Old Debentures wishing to accept the Exchange Offer must complete, sign and date the accompanying Letter of Transmittal, or a facsimile thereof, in accordance with the instructions contained herein and therein, and mail or otherwise deliver such Letter of Transmittal, or such facsimile, together with the Old Debentures and any other required documentation to the Exchange Agent (as defined herein) at the address set forth herein. By executing the Letter of Transmittal, each Holder will be deemed to represent to the Company, among other things, that (i) the Exchange Debentures acquired pursuant to the Exchange Offer are being obtained in the ordinary course of business of the person receiving such Exchange Debentures, whether or not such person is the Holder, (ii) neither the Holder nor any such other person has any arrangement or understanding with any person to participate in the distribution of such Exchange Debentures in violation of the 1933 Act, (iii) neither the Holder nor any such other person is an "affiliate," as defined under Rule 405 of the 1933 Act, of the Company and (iv) such Holder has full power and authority to exchange the Old Debentures for the Exchange Debentures. See "The Exchange Offer -- Purpose and Effect of the Exchange Offer" and " -- Procedures for Tendering."
5 7 Untendered Debentures............................... Following the consummation of the Exchange Offer, Holders of Old Debentures eligible to participate but who do not tender their Old Debentures will not have any further registration rights and such Old Debentures will continue to be subject to certain restrictions on transfer. Accordingly, the liquidity of the market for such Old Debentures could be adversely affected. Consequences of Failure to Exchange.............................. Old Debentures that are not exchanged pursuant to the Exchange Offer will remain restricted securities. Accordingly, such Old Debentures may be resold only (i) to the Company, (ii) pursuant to Rule 144A or Rule 144 under the 1933 Act or pursuant to some other exemption under the 1933 Act, (iii) outside the United States to a foreign person pursuant to the requirements of Rule 904 under the 1933 Act, or (iv) pursuant to an effective registration statement under the 1933 Act. See "The Exchange Offer -- Consequences of Failure to Exchange." Shelf Registration Statement........................ If any Holder of the Old Debentures notifies the Company within 20 Business Days following the Consummation of the Exchange Offer that such Holder was prohibited by law or Commission policy from participating in the Exchange Offer, and such Holder has provided information regarding such Holder and the distribution of such Holder's Old Debentures to the Company, the Company has agreed to register the Old Debentures on a shelf registration statement (the "Shelf Registration Statement") and to use its commercially reasonable best efforts to cause such Shelf Registration Statement to become effective on or prior to the 90 days after the date on which the Company becomes obligated to file such Shelf Registration Statement. Special Procedures for Beneficial Owners................................ Any beneficial owner whose Old Debentures are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact such registered Holder promptly and instruct such registered Holder to tender on such beneficial owner's behalf. If such beneficial owner wishes to tender on such owner's own behalf, such owner must, prior to completing and executing the Letter of Transmittal and delivering its Old Debentures, either make appropriate arrangements to register ownership of the Old Debentures in such owner's name or obtain a properly completed bond power from the registered Holder. The transfer of registered ownership may take considerable time. Guaranteed Delivery Procedures....................................... Holders of Old Debentures who wish to tender their Old Debentures and whose Old Debentures are not immediately available or who cannot deliver their Old Debentures, the Letter of Transmittal or any other documents required by the Letter of Transmittal to the Exchange Agent (or comply with the procedures for book-entry transfer) prior to the Expiration Date, must tender their Old Debentures according to the guaranteed delivery procedures set forth in "The Exchange Offer -- Guaranteed Delivery Procedures." Withdrawal Rights................................... Tenders may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. Acceptance of Old Debentures and Delivery of Exchange Debentures.............................. The Company will accept for exchange any and all Old Debentures which are properly tendered in the Exchange Offer prior to 5:00 p.m., New York City time, on the Expiration Date. The Exchange Debentures issued pursuant to the Exchange Offer will be delivered on the earliest practicable date following the Expiration Date. See "The Exchange Offer -- Terms of the Exchange Offer."
6 8 Use of Proceeds..................................... The Company will not receive any cash proceeds from the issuance of the Exchange Debentures in the Exchange Offer. See "Use of Proceeds." Exchange Agent...................................... The Bank of New York, as Trustee, is serving as Exchange Agent in connection with the Exchange Offer. THE EXCHANGE DEBENTURES General............................................. The form and terms of the Exchange Debentures are substantially identical to the form and terms of the Old Debentures except that (i) the Exchange Debentures bear a Series F designation, (ii) the Exchange Debentures have been registered under the 1933 Act and, therefore, will not bear legends restricting the transfer thereof, and (iii) the Holders of Exchange Debentures will not be entitled to certain rights under the Registration Rights Agreement, including the provisions providing for liquidated damages in certain circumstances relating to the timing of the Exchange Offer, which rights will terminate when the Exchange Offer is consummated. See "The Exchange Offer -- Purpose and Effect of the Exchange Offer." The Exchange Debentures will evidence the same debt as the Old Debentures (which they replace) and will be entitled to the benefits of the Indenture. See "Description of Exchange Debentures." The Old Debentures and/or the Exchange Debentures, whichever was, is or will be outstanding in the particular context, are referred to herein collectively as the "Debentures." Securities Offered:................................. $80,000,000 6-1/2% Debentures Due 2027 (Series F) (the "Exchange Debentures"). Maturity Date:...................................... December 1, 2027 Interest Rate:...................................... 6-1/2% per annum calculated on the basis of a 360-day year consisting of twelve 30-day months. Interest Payments:.................................. Semi-annually on each June 1 and December 1, commencing June 1, 1998, accruing from the last interest payment date on which interest was paid on the Old Debentures so surrendered, or, if no interest has been paid on such Old Debentures, from December 18, 1997. Redemption:......................................... The Exchange Debentures are not redeemable in whole or in part prior to maturity and there is no sinking fund for the Exchange Debentures. Repayment at Option of Holder:...................... The registered Holder of each Exchange Debenture may elect to have such Exchange Debenture (or any portion thereof in the amount of $100,000 or in integral multiples of $1,000 in excess thereof) repaid on December 1, 2004 (or, if such day is not a business day, the next succeeding business day), at a repayment price equal to the principal amount of such Exchange Debenture (or such portion thereof) together with accrued and unpaid interest thereon to the date of repayment. Such election, which is irrevocable, must be made within the period commencing October 1, 2004 and ending at 5:00 p.m. (New York City time) on November 1, 2004 (or, if such day is not a business day, the next succeeding business day). Ranking of Debentures:......................................... The Exchange Debentures will constitute a new series of debentures issued under the Indenture. The Exchange Debentures will be unsecured and rank equally and ratably with all the debentures outstanding under the Indenture and with other unsecured obligations of the Company. The Company has retired its last outstanding series of First Mortgage Bonds and has cancelled its First Mortgage and discharged the lien thereof.
7 9 Restriction on Secured Indebtedness:................ The Indenture contains a covenant restricting the issuance by the Company of secured indebtedness for borrowed money. See "Description of Debentures--Restriction on Secured Indebtedness for Borrowed Money." Denomination and Registration of Debentures:...................................... The Exchange Debentures will be issued in the form of book-entry securities, represented by one global certificate (the "Global Debenture") deposited with a custodian for, and registered in the name of, the Depositary or its nominee. See "Description of Debentures--Book-Entry, Delivery and Form." The Exchange Debentures will be issued only in denominations of $100,000 or any amount in excess thereof which is an integral multiple of $1,000. Rating:............................................. The Exchange Debentures have received a preliminary rating of A- from Standard & Poor's Rating Services ("S&P") and a rating of A3 from Moody's Investors Services, Inc. ("Moody's"), subject to receipt and review of final documents.
8 10 THE COMPANY Orange and Rockland Utilities, Inc. (the "Company) is a New York corporation, with its principal office at One Blue Hill Plaza, Pearl River, New York 10965 (telephone number 914-352-6000), which was formed originally under the name Rockland Light and Power Company on May 21, 1926 through the consolidation of a company having the latter name (organized in 1899), Catskill Power Corporation and Orange County Public Service Company, Inc. Its present name was adopted on February 28, 1958, when The Orange and Rockland Electric Company was consolidated with Rockland Light and Power Company. The Company has two wholly-owned utility subsidiaries, Rockland Electric Company ("RECO"), a New Jersey corporation, and Pike County Light & Power Company, a Pennsylvania corporation. The Company and its utility subsidiaries supply electricity and gas to a territory covering approximately 1,350 square miles. As of December 31, 1996, the Company and its utility subsidiaries furnished electric service to approximately 266,000 customers in 96 communities with an estimated population of 676,000 and gas service to approximately 113,000 customers in 57 communities with an estimated population of 478,000. The Company also has two wholly-owned non-utility subsidiaries, Clove Development Corporation ("Clove"), a real estate operation, and O&R Development, Inc. ("ORD"), a land development company. RECO has two wholly-owned non-utility subsidiaries, Enserve Holding, Inc. ("EHI") and Saddle River Holdings Corp. ("SRH"), both Delaware corporations. EHI has two wholly-owned non-utility subsidiaries which were established to provide non-regulated energy services and to invest in energy technology ventures. SRH has a wholly-owned non-utility subsidiary, NORSTAR Holding, Inc. ("NHI") (formerly O&R Energy, Inc.), a Delaware corporation which was engaged in natural gas marketing through its wholly-owned non-utility subsidiary, NORSTAR Management, Inc. ("NMI"), a Delaware corporation. NMI is the sole general partner of a Delaware limited partnership, NORSTAR Energy Limited Partnership ("NORSTAR Partnership"). NORSTAR Partnership is the majority owner of NORSTAR Energy Pipeline Company, L.L.C. ("NORSTAR LLC"), a Delaware limited liability company. Pursuant to an agreement dated as of August 20, 1997, the NORSTAR Partnership sold to mc2 Inc., effective August 1, 1997, its accounts receivable, with certain exceptions, and its contracts with customers and related agreements. NMI is in the process of winding up the remaining portion of the NORSTAR Partnership business. REGULATORY PROCEEDINGS Regulatory agencies at the Federal level as well as the three states in which the Company and its utility subsidiaries have retail electric franchises are currently evaluating changes in regulatory and rate-making practices designed to promote increased competition consistent with safety, reliability and affordability standards. With respect to the Company, in May 1996, the New York State Public Service Commission ("NYPSC") issued an Order in its Competitive Opportunities Proceeding (Case 96-E-0900) setting forth its visions for the fundamental restructuring of the electric industry in New York State based on competition in the generation and energy services sectors of the industry. On November 26, and December 31, 1997, the NYPSC issued orders approving an Electric Rate and Restructuring Plan (the "Restructuring Plan"), which had been filed on November 6, 1997 by the Company, the New York State Department of Public Service (the "Staff") and other parties in Case 96-E-0900. The Restructuring Plan provides for the sale of all of the Company's generating assets (i.e., all units at the Lovett Generating Station, the Company's one-third interest in the Bowline Generating Station, as well as its hydro-electric facilities and gas turbines) and for lower electric rates. The Restructuring Plan superseded the settlement agreement the Company entered into on March 25, 1997 with the Staff and other parties in this case. The NYPSC had found the March 25, 1997 settlement agreement unacceptable and had directed the Company, the Staff and other parties to resume negotiations to modify it. Under the terms of the Restructuring Plan, which covers a four-year period commencing with NYPSC approval, the Company has agreed to commence immediately the process of auctioning all of its generating assets. The Restructuring Plan provides that if the Company selects a winning bidder prior to May 1, 1999, the New York share of any net book gains associated with the sale are to be allocated between shareholders and customers on a 25/75 basis, respectively, and any net book losses are to be allocated between shareholders and customers on a 5/95 basis, respectively. If the Company selects a winning bidder on or after May 1, 1999, the New York share of the net book gains or losses associated with the sale are to be allocated between shareholders and customers on a 20/80 basis. The Restructuring Plan further provides for a $20 million cap on the New York share of net book gains allocable to shareholders from the sale of generating assets. The NYPSC, in approving the Restructuring Plan, offered the Company the opportunity to participate as a bidder in the auction of the Company's generating assets, subject to the conditions that the auction be conducted by an independent third party and that the Company renounce the shareholders' share of any net book gain from the sale provided for in the Restructuring Plan. In its November 26, 1997 order, the NYPSC also stated that if the Company 9 11 elected to participate in the auction, the shareholders would not be required to absorb their share of any net book loss provided for in the Restructuring Plan. By letter dated December 10, 1997, the Company notified the NYPSC that it has elected not to be a bidder in the auction. Accordingly, the Company will be subject to the terms of the Restructuring Plan as filed on November 6, 1997. On December 11, 1997, in accordance with the Restructuring Plan, the Company submitted its Preliminary Divestiture Plan to the NYPSC Staff and other parties. The terms of the Restructuring Plan permit the Company to defer and recover up to $7.5 million (New York electric share) of prudent and verifiable non-officer employee costs, such as retraining, outplacement, severance, early retirement and employee retention programs associated with the divestiture. Under the terms of the Restructuring Plan, the Company will be authorized to petition the NYPSC for recovery of employee costs in excess of $7.5 million. In addition, the terms of the Restructuring Plan permit the Company to retain all earnings up to an 11.4% return on equity and provide that earnings in excess of 11.4% are to be shared, with 75% to be used to offset NYPSC approved deferrals or otherwise inure to the Company's customers, and 25% to be retained by the Company's shareholders. The Restructuring Plan further provides that full retail access to a competitive energy and capacity market will be available for all customers by May 1, 1999. The Company's existing PowerPick(TM) Program, whereby customers can purchase energy (but not capacity) from suppliers other than the Company, will be expanded to all customers on May 1, 1998. The Restructuring Plan also provides for electric price reductions of approximately $32.4 million over its four-year term and for recovery of above market generation costs should the transfer of title to the Company's generating assets not occur before May 1, 1999, through a Competitive Transition Charge (the "CTC"). Should a CTC be required, the Company would be authorized to recover the difference between its non-variable costs of generation, including 75% of fixed production labor expenses and property taxes, and the revenues, net of fuel and variable operating and maintenance ("O&M") expenses, derived from the operation of the Company's generating assets in a deregulated competitive market. If title to the generating assets has not transferred as of May 1, 2000, the CTC would be modified so as to allow a maximum recovery of 65% of fixed production labor expenses and property taxes. The modified CTC would remain effective until the earlier of the date title to the generating assets is transferred or October 31, 2000. In the event title to the generating assets is not to be transferred by October 31, 2000, the Company would be authorized to petition the NYPSC for permission to continue a CTC until the date title to the generating assets is transferred. The CTC does not allow for the recovery of inflationary increases in non-fuel O&M production costs, property tax increases, wage rate increases, or increased costs associated with capital additions or changes in the costs of capital applicable to production costs. The Restructuring Plan also provides that the Company and its utility subsidiaries are to apply to the appropriate regulatory authorities for permission to form a new holding company, which would be a registered holding company under the Public Utility Holding Company Act of 1935 (the "1935 Act"). The Company currently is an exempt holding company under the 1935 Act. The new holding company structure would provide for separate regulated electric distribution companies in the New York, New Jersey and Pennsylvania service territories, as well as an unregulated energy services company. The Company would continue as the New York regulated electric distribution company, and the Exchange Debentures would remain obligations of the Company. The unregulated energy services company would be able to market electricity and unbundled energy services (e.g., metering) to wholesale and retail customers on a competitive basis using the Company's name without a royalty payment. The formation of the holding company is conditioned upon shareholder and regulatory approval, including approval of the Commission, the Federal Energy Regulatory Commission, the NYPSC, the New Jersey Board of Public Utilities and the Pennsylvania Public Utility Commission. Additional information concerning regulatory proceedings relating to the Company and its utility subsidiaries is contained in the Incorporated Documents. USE OF PROCEEDS The Exchange Offer is intended to satisfy certain of the Company's obligations under the Registration Rights Agreement. The Company will not receive any cash proceeds from the issuance of the Exchange Debentures in the Exchange Offer. The Company used the net proceeds from the sale of the Old Debentures to refund short-term debt incurred to repay at maturity in October 1997 both its last outstanding series of First Mortgage Bonds which bore interest at the rate of 6-1/2% and the 6.50% Series B Debentures in the aggregate principal amount of $78,000,000. The effective interest rate on such short-term debt was approximately 6.0%. The remaining net proceeds were applied to finance permanently outstanding short-term debt or to other corporate purposes. 10 12 SELECTED FINANCIAL INFORMATION The selected financial information set forth below has been derived from the Company's previously published financial statements included in the Incorporated Documents and reflects the reclassification of NORSTAR Partnership as discontinued operations for the years ended December 31, 1996 and 1995 subsequent to the original issuance of such statements. See "The Company." The Company's financial statements for the years ended December 31, 1996 and 1995 have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports included in the Incorporated Documents. The unaudited financial information for the twelve months ended September 30, 1997, includes all adjustments, consisting of normal recurring accruals, that the Company considers necessary for a fair presentation of the financial position and results of operation for such period. The selected financial data set forth below do not purport to be complete and should be read in conjunction with the Company's annual and quarterly reports included in the Incorporated Documents.
Year Ended December 31, Twelve Months 1995(1) 1996(1) Ended September 30, ------- ------- ------------------- 1997(1) (unaudited) (Dollars in thousands) Selected Income Statement Data: Operating Revenues $ 602,310 $ 654,890 $ 637,044 Operating Income $ 75,569 $ 82,644 $ 74,538 Net Income: Continuing Operations $ 37,766 $ 48,147 $ 41,566 Discontinued Operations $ 807 $ (1,844) $ (16,326) Total $ 38,573 $ 46,303 $ 25,240 Earnings Applicable to Common Stock $ 35,438 $ 43,279 $ 22,385 Selected Balance Sheet Data: Total Assets $ 1,241,227 $ 1,257,900 $ 1,271,019 Total Long-Term Debt $ 359,928 $ 359,825 $ 354,680 Common Stock Equity $ 379,776 $ 387,850 $ 377,819 Other Data: Electric Customers 263,156 266,022 269,059 Gas Customers 112,188 113,126 113,886 Ratio of Earnings to Fixed Charges (2) 2.75 3.20 2.83
(1) Effective August 1, 1997, the accounts receivable, with certain exceptions, and contracts with customers and related agreements of NORSTAR Partnership were sold. In accordance with Accounting Principles Board Opinion No. 30, the consolidated financial statements of the Company at September 30, 1997 reported the results of NORSTAR Partnership as "Discontinued Operations," and the results of all prior periods presented herein have been restated to conform with the current period classifications. Additional information regarding NORSTAR Partnership is included in the Company's Quarterly Report to the Commission on Form 10-Q for the quarter ended September 30, 1997, which information is incorporated by reference in this document. (2) For purposes of computing the ratio of earnings to fixed charges, earnings are defined as the sum of pre-tax income from continuing operations plus fixed charges. Fixed charges consist of all interest expense (before allowance for borrowed funds used during construction), one-third of rent expense (which approximates the interest component of such expense) and amortization of debt expense. 11 13 THE EXCHANGE OFFER PURPOSE AND EFFECT OF THE EXCHANGE OFFER The Old Debentures were originally sold on December 18, 1997 to the Initial Purchasers pursuant to the Purchase Agreement. The Initial Purchasers subsequently resold the Old Debentures to Qualified Institutional Buyers, in reliance on Rule 144A under the 1933 Act, who agreed to comply with certain transfer restrictions and other conditions. As a condition to the Purchase Agreement, the Company entered into the Registration Rights Agreement with the Initial Purchasers pursuant to which the Company has agreed, unless the Exchange Offer shall not be permitted by applicable federal law, to (i) cause to be filed with the Commission as soon as practicable after December 18, 1997, but in no event later than 150 days after December 18, 1997, the Exchange Offer Registration Statement, (ii) use its commercially reasonable best efforts to cause such Exchange Offer Registration Statement to become effective at the earliest possible time, but in no event later than 180 days after December 18, 1997, (iii) in connection with the foregoing, (A) file all pre-effective amendments to such Exchange Offer Registration Statement as may be necessary in order to cause such Exchange Offer Registration Statement to become effective, (B) file, if applicable, a post-effective amendment to such Exchange Offer Registration Statement pursuant to Rule 430A under the 1933 Act and (C) cause all necessary filings, if any, in connection with the registration and qualification of the Exchange Debentures to be made under the Blue Sky laws of such jurisdictions as are necessary to permit Consummation of the Exchange Offer and (iv) upon the effectiveness of such Exchange Offer Registration Statement, Consummate the Exchange Offer. For each Old Debenture surrendered to the Company pursuant to the Exchange Offer, the Holder of such Old Debenture will receive an Exchange Debenture having a principal amount equal to that of the surrendered Old Debenture. Interest on Exchange Debentures will accrue from the last interest payment date on which interest was paid on the Old Debentures so surrendered, or, if no interest has been paid on such Old Debentures, from December 18, 1997. No interest will be paid on the Old Debentures accepted for exchange. The Exchange Offer shall be deemed "Consummated" for purposes of the Registration Rights Agreement upon the occurrence of (a) the filing and effectiveness under the Act of the Exchange Offer Registration Statement relating to the Series F Debentures to be issued in the Exchange Offer, (b) the maintenance of such Registration Statement continuously effective and the keeping of the Exchange Offer open for a period not less than the minimum period required under applicable federal and state securities laws to Consummate the Exchange Offer; provided however, that in no event shall such period be less than 20 Business Days and (c) the delivery by the Company to the Registrar under the Indenture of Exchange Debentures in the same aggregate principal amount as the aggregate principal amount of Old Debentures tendered by Holders thereof pursuant to the Exchange Offer. Under existing interpretations of the staff of the Commission contained in several no-action letters to third parties, the Exchange Debentures would in general be freely tradable after the Exchange Offer without further registration under the 1933 Act. However, any purchaser of Old Debentures who is an "affiliate" of the Company or who intends to participate in the Exchange Offer for the purpose of distributing the Exchange Debentures (i) will not be able to rely on the interpretation of the staff of the Commission, (ii) will not be able to tender its Old Debentures in the Exchange Offer and (iii) must comply with the registration and prospectus delivery requirements of the 1933 Act in connection with any sale or transfer of the Old Debentures, unless such sale or transfer is made pursuant to an exemption from such requirements. As a condition to its participation in the Exchange Offer, each Holder of Old Debentures shall furnish, upon the request of the Company, prior to the Consummation of the Exchange Offer, a written representation to the Company (which may be contained in the Letter of Transmittal) to the effect that (A) it is not an affiliate of the Company, (B) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of the Exchange Debentures and (C) it is acquiring the Exchange Debentures in its ordinary course of business. In addition, in connection with any resales of Exchange Debentures, any Participating Broker-Dealer who acquired the Old Debentures for its own account as a result of market-making or other trading activities must deliver a prospectus meeting the requirements of the 1933 Act. The staff of the Commission has taken the position to the effect that Participating Broker-Dealers may fulfill their prospectus delivery requirements with respect to the Exchange Debentures (other than a resale of an unsold allotment from the original sale of the Old Debentures) with the prospectus contained in the Exchange Registration Statement. Under the Registration Rights Agreement, the Company is required to allow Participating Broker-Dealers and other persons, if any, subject to similar prospectus delivery requirements to use the prospectus contained in the Exchange Registration Statement in connection with the resale of such Exchange Debentures. If (i) the Company is not required to file an Exchange Offer Registration Statement with respect to the Exchange Debentures because the Exchange Offer is not permitted by applicable law (after compliance with the registration procedures set forth in the Registration Rights Agreement) or (ii) any Holder of Transfer Restricted Securities (as herein defined) shall notify the Company within 20 Business Days following the Consummation of the Exchange Offer that (A) such Holder was prohibited by law or Commission policy from participating in the Exchange Offer or (B) such Holder may not resell the Exchange Debentures acquired by it in the Exchange Offer to the public without delivering a prospectus and the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder or (C) such Holder is a Broker-Dealer and holds Old Debentures acquired directly from the Company or one of its affiliates, then the Company shall (x) cause to be filed on or prior to 30 days after the date on which the Company determines that it is not required to file the Exchange Offer Registration Statement pursuant to clause (i) above or 30 days after the date on which the Company receives the notice specified 12 14 in clause (ii) above a shelf registration statement pursuant to Rule 415 under the 1933 Act (which may be an amendment to the Exchange Offer Registration Statement (in either event, the "Shelf Registration Statement")), relating to all Transfer Restricted Securities the Holders of which shall have provided in writing to the Company, within 20 days after receipt of a request therefor, the information specified in Item 507 of Regulation S-K under the 1933 Act, and shall (y) use its commercially reasonable best efforts to cause such Shelf Registration Statement to become effective on or prior to 90 days after the date on which the Company becomes obligated to file such Shelf Registration Statement. If, after the Company has filed an Exchange Offer Registration Statement which satisfies the requirements of the Registration Rights Agreement, the Company is required to file and make effective a Shelf Registration Statement solely because the Exchange Offer shall not be permitted under applicable federal law, then the filing of the Exchange Offer Registration Statement shall be deemed to satisfy the requirements of clause (x) above. Such an event shall have no effect on the requirements of clause (y) above. The Company shall use its commercially reasonable best efforts to keep the Shelf Registration Statement continuously effective, supplemented and amended as required, to the extent necessary to ensure that it is available for sales of the Transfer Restricted Securities by the Holders thereof entitled to the benefits described in this section, and to ensure that it conforms with the requirements of the Registration Rights Agreement, the 1933 Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of at least two years following the date on which such Shelf Registration Statement first becomes effective under the 1933 Act. For purposes of the foregoing, "Transfer Restricted Securities" means each Debenture until (i) the date on which an Old Debenture has been exchanged by a person other than a broker-dealer for an Exchange Debenture in the Exchange Offer, (ii) following the exchange by a broker-dealer in the Exchange Offer of an Old Debenture for an Exchange Debenture, the date on which such Exchange Debenture is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of the prospectus contained in the Exchange Offer Registration Statement, (iii) the date on which such Debenture has been effectively registered under the 1933 Act and disposed of in accordance with the Shelf Registration Statement or (iv) the date on which such Debenture is distributed to the public pursuant to Rule 144 under the 1933 Act. The statements made in this Prospectus relating to the Registration Rights Agreement are intended to be summaries of all material elements of such agreement in connection with the Exchange Offer and, as such, do not purport to be complete. Reference is made to the Registration Rights Agreement, a copy of which is filed as an exhibit to the Exchange Registration Statement of which this Prospectus is a part, for a more complete description of the agreement or matter involved. Following the consummation of the Exchange Offer, Holders of the Old Debentures who were eligible to participate in the Exchange Offer but who did not tender their Old Debentures will not have any further registration rights and such Old Debentures will continue to be subject to certain restrictions on transfer. Accordingly, the liquidity of the market if any, for such Old Debentures could be adversely affected. TERMS OF THE EXCHANGE OFFER Upon the terms and subject to the conditions set forth in this Prospectus and in the Letter of Transmittal, the Company will accept any and all Old Debentures validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the Expiration Date. The Company will issue $1,000 principal amount of Exchange Debentures in exchange for each $1,000 principal amount of outstanding Old Debentures accepted in the Exchange Offer. Holders may tender some or all of their Old Debentures pursuant to the Exchange Offer. However, Old Debentures may be tendered only in denominations of $100,000 or any amount in excess thereof which is an integral multiples of $1,000. The form and terms of the Exchange Debentures are substantially identical to the form and terms of the Old Debentures except that (i) the Exchange Debentures bear a Series F designation and a different CUSIP Number from the Old Debentures, (ii) the Exchange Debentures have been registered under the 1933 Act and hence will not bear legends restricting the transfer thereof and (iii) the Holders of the Exchange Debentures will not be entitled to certain rights under the Registration Rights Agreement, including the provisions providing for liquidated damages in certain circumstances relating to the timing of the Exchange Offer, all of which rights will terminate when the Exchange Offer is terminated. The Exchange Debentures will evidence the same debt as the Old Debentures (which they replace) and will be entitled to the benefits of the Indenture. As of the date of this Prospectus, the entire $80,000,000 aggregate principal amount of Old Debentures is registered in the name of Cede & Co., as nominee for the Depositary. The Company has fixed the close of business on January 27, 1998 as the record date for the Exchange Offer for purposes of determining the persons to whom this Prospectus and the Letter of Transmittal will be mailed initially. Only a Holder of Old Debentures may tender such Old Debentures in the Exchange Offer. The term "Holder" with respect to the Exchange Offer means any person in whose name Old Debentures are registered in the Securities Register or any other person who has obtained a properly completed Agent's Message (as hereinafter defined) from the registered Holder, or any person whose Old Debentures are held of record by the Depositary who desires to deliver such Old Debentures by book-entry transfer at the Depositary. Holders of Old Debentures do not have any appraisal or dissenters' rights under the New York Business Corporation Law or the Indenture in connection with the Exchange Offer. The Company intends to conduct the Exchange Offer in accordance with the applicable requirements of the 1934 Act and the rules and regulations of the Commission thereunder. 13 15 The Company shall be deemed to have accepted validly tendered Old Debentures when, as and if the Company has given oral or written notice thereof to the Exchange Agent. The Exchange Agent will act as agent for the tendering Holders of Old Debentures and for the purpose of receiving the Exchange Debentures from the Company. If any tendered Old Debentures are not accepted for exchange because of an invalid tender, the occurrence of certain other events set forth herein or otherwise, the certificates for any such unaccepted Old Debentures will be returned (or in the case of Old Debentures tendered by book-entry transfer through the Depositary, will be credited to an account maintained with the Depositary), without expense, to the tendering Holder thereof as promptly as practicable after the Expiration Date. Holders who tender Old Debentures in the Exchange Offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the Letter of Transmittal, transfer taxes with respect to the exchange of Old Debentures pursuant to the Exchange Offer. The Company will pay all charges and expenses, other than transfer taxes in certain circumstances, in connection with the Exchange Offer. See " -- Fees and Expenses." EXPIRATION DATE; EXTENSIONS; AMENDMENTS The term "Expiration Date" shall mean 5:00 p.m., New York City time, on February 25, 1998, unless the Company, in its sole discretion, extends the Exchange Offer, in which case the term "Expiration Date" shall mean the latest date and time to which the Exchange Offer is extended. In order to extend the Exchange Offer, the Company will notify the Exchange Agent of any extension by oral or written notice and will mail to the registered Holders an announcement thereof, each prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. The Company reserves the right, in its reasonable discretion, (i) to delay accepting any Old Debentures, to extend the Exchange Offer or to terminate the Exchange Offer if any of the conditions set forth below under " -- Conditions" shall not have been satisfied, by giving oral or written notice of such delay, extension or termination to the Exchange Agent or (ii) to amend the terms of the Exchange Offer in any manner. Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice thereof to the registered Holders. INTEREST ON THE EXCHANGE DEBENTURES Interest on Exchange Debentures shall accrue from the last interest payment date on which interest was paid on the Old Debentures so surrendered, or, if no interest has been paid on such Old Debentures, from December 18, 1997. No interest will be paid on the Old Debentures accepted for exchange. PROCEDURES FOR TENDERING For a Holder of Old Debentures to tender Old Debentures validly pursuant to the Exchange Offer, a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature, guarantee, or (in the case of book-entry transfer) an Agent's Message in lieu of the Letter of Transmittal, and any other required documents, must be received by the Exchange Agent at the address set forth below under " --Exchange Agent" prior to 5:00 p.m., New York City time, on the Expiration Date. In addition, prior to 5:00 p.m., New York City time, on the Expiration Date, such Old Debentures must be transferred pursuant to the procedures for book-entry transfer described below (and a confirmation of such tender received by the Exchange Agent, including an Agent's Message if the tendering Holder has not delivered a Letter of Transmittal). The term "Agent's Message" means a message transmitted by the Depositary, received by the Exchange Agent and forming part of the confirmation of a book-entry transfer, which states that the Depositary has received an express acknowledgment from the Participant in the Depositary tendering Old Debentures which are the subject of such book-entry confirmation, that such Participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Company may enforce such agreement against such Participant. By tendering Old Debentures pursuant to the procedures set forth above, each Holder will be deemed to make to the Company the representations set forth above in the third paragraph under the heading " -- Purpose and Effect of the Exchange Offer." The tender by a Holder of Old Debentures and the acceptance thereof by the Company will constitute agreement between such Holder and the Company in accordance with the terms and subject to the conditions set forth herein and in the Letter of Transmittal. 14 16 THE METHOD OF DELIVERY OF THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND SOLE RISK OF THE HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL, HOLDERS MAY WISH TO CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL SHOULD BE SENT TO THE COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS. All beneficial owners who wish to tender should contact the registered Holder promptly and instruct such registered Holder to tender on such beneficial owner's behalf. See "Instruction to Book-Entry Transfer Facility Participant from Owner" included with the Letter of Transmittal. Signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an Eligible Institution (as defined below) unless the Old Debentures tendered pursuant thereto are tendered (i) by a registered Holder who has not completed the box entitled "Special Registration Instructions" or "Special Issuance Instructions" on the Letter of Transmittal or (ii) for the account of an Eligible Institution. In the event that signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantee must be by a member firm of the Medallion System (an "Eligible Institution"). The Company understands that the Exchange Agent will make a request promptly after the date of this Prospectus to establish accounts with respect to the Old Debentures at the Depositary for the purpose of facilitating the Exchange Offer, and subject to the establishment thereof, any financial institution that is a Participant in the system may make book-entry delivery of Old Debentures by causing the Depositary to transfer such Old Debentures into the Exchange Agent's account with respect to the Old Debentures in accordance with the Depositary's procedures for such transfer. Although delivery of the Old Debentures may be effected through book-entry transfer into the Exchange Agent's account at the Depositary, an Agent's Message in lieu of the Letter of Transmittal and all other required documents must in each case be transmitted to and received or confirmed by the Exchange Agent at its address set forth below on or prior to the Expiration. Delivery of documents to the Depositary does not constitute delivery to the Exchange Agent. The Exchange Agent and the Depositary have confirmed that the Exchange Offer is eligible for the Depositary's Automated Tender Offer Program ("ATOP"). Accordingly, the Depositary's Participants may electronically transmit their acceptance of the Exchange Offer by causing the Depositary to transfer Old Debentures to the Exchange Agent in accordance with the Depositary's ATOP procedures for transfer. The Depositary will then send an Agent's Message to the Exchange Agent. All questions as to the validity, form, eligibility (including time of receipt), acceptance of tendered Old Debentures and withdrawal of tendered Old Debentures will be determined by the Company in its reasonable discretion, which determination will be final and binding. The Company reserves the absolute right to reject any and all Old Debentures not properly tendered or any Old Debentures the Company's acceptance of which would, in the opinion of counsel for the Company, be unlawful. The Company also reserves the right in its reasonable discretion to waive any defects, irregularities or conditions of tender as to particular Old Debentures. The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions in the Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Debentures must be cured within such time as the Company shall determine. Although the Company intends to notify Holders of defects or irregularities with respect to tenders of Old Debentures, neither the Company, the Exchange Agent nor any other person shall incur any liability for failure to give such notification. Tenders of Old Debentures will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Old Debentures received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering Holders, unless otherwise provided in the Letter of Transmittal, as soon as practicable following the Expiration Date. GUARANTEED DELIVERY PROCEDURES Holders who wish to tender their Old Debentures and (i) whose Old Debentures are not immediately available, (ii) who cannot deliver their Old Debentures, the Letter of Transmittal or any other required documents to the Exchange Agent or (iii) who cannot complete the procedures for book-entry transfer, prior to the Expiration Date, may effect a tender if: (a) the tender is made through an Eligible Institution; (b) prior to the Expiration Date, the Exchange Agent receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the Holder, the certificate number(s) of such Old Debentures and the principal amount of Old Debentures tendered, stating that the tender is being made thereby and guaranteeing that, within three New York Stock Exchange trading days after the Expiration Date, the Letter of Transmittal (or facsimile thereof) together with the 15 17 certificate(s) representing the Old Debentures (or a confirmation of book-entry transfer of such Old Debentures into the Exchange Agent's account at the Depositary), and any other documents required by the Letter of Transmittal will be deposited by the Eligible Institution with the Exchange Agent; and (c) such properly completed and executed Letter of Transmittal (of facsimile thereof), as well as the certificate(s) representing all tendered Old Debentures in proper form for transfer (or a confirmation of book-entry transfer of such Old Debentures into the Exchange Agent's account at the Depositary), and all other documents required by the Letter of Transmittal are received by the Exchange Agent upon three New York Stock Exchange trading days after the Expiration Date. Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be sent to Holders who wish to tender their Old Debentures according to the guaranteed delivery procedures set forth above. WITHDRAWAL OF TENDERS Except as otherwise provided herein, tenders of Old Debentures may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. To withdraw a tender of Old Debentures in the Exchange Offer, a telegram, telex, letter or facsimile transmission notice of withdrawal must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date. Any such notice of withdrawal must (i) specify the name of the person having deposited the Old Debentures to be withdrawn (the "Depositor"), (ii) identify the principal amount of Old Debentures to be withdrawn (including the name and number of the account at the Depositary to be credited), (iii) be signed by the Holder in the same manner as the original signature on the Letter of Transmittal by which such Old Debentures were tendered (including any required signature guarantees) or be accompanied by documents of transfer sufficient to have the Trustee with respect to the Old Debentures register the transfer of such Old Debentures into the name of the person withdrawing the tender and (iv) specify the name in which any such Old Debentures are to be registered, if different from that of the Depositor. All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by the Company, whose determination shall be final and binding on all parties. Any Old Debentures so withdrawn will be deemed not to have been validly tendered for purposes of the Exchange Offer and no Exchange Debentures will be issued with respect thereto unless the Old Debentures so withdrawn are validly retendered. Any Old Debentures which have been tendered but which are not accepted for exchange will be returned to the Holder thereof without cost to such Holder as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Old Debentures may be retendered by following one of the procedures described above under " -- Procedures for Tendering" at any time prior to the Expiration Date. CONDITIONS Notwithstanding any other term of the Exchange Offer, the Company shall not be required to accept for exchange, or exchange Exchange Debentures for, any Old Debentures, and may terminate or amend the Exchange Offer as provided herein before the acceptance of such Old Debentures, if: (a) any action or proceeding is instituted or threatened in any court or by or before any governmental agency with respect to the Exchange Offer (or other similar exchange offers) which, in the sole judgment of the Company, might materially impair the ability of the Company to proceed with the Exchange Offer or any material adverse development has occurred in any existing action or proceeding with respect to the Company or any of its subsidiaries; (b) any law, statute, rule, regulation or interpretation by the staff of the Commission is proposed, adopted or enacted, which, in the reasonable judgment of the Company, might materially impair the ability of the Company to proceed with the Exchange Offer or materially impair the contemplated benefits of the Exchange Offer to the Company; or (c) any governmental approval has not been obtained, which approval the Company shall, in its reasonable discretion, deem necessary for the consummation of the Exchange Offer as contemplated hereby. If the Company determines in its reasonable discretion that any of the conditions are not satisfied, the Company may (i) refuse to accept any Old Debentures and return all tendered Old Debentures to the tendering Holders, (ii) extend the Exchange Offer and retain all Old Debentures tendered prior to the expiration of the Exchange Offer, subject, however, to the rights of Holders to withdraw such Old Debentures (see " -- Withdrawal of Tenders") or (iii) waive such unsatisfied conditions with respect to the Exchange Offer and accept all properly tendered Old Debentures which have not been withdrawn. 16 18 EXCHANGE AGENT The Bank of New York has been appointed as Exchange Agent for the Exchange Offer. Questions and requests for assistance, requests for additional copies of this Prospectus or of the Letter of Transmittal should be directed to the Exchange Agent addressed as follows:
By Registered or Certified Mail, Overnight Courier or Hand: By Facsimile: The Bank of New York Attention: Corporate Trust Office 101 Barclay Street (212) 815-5915 - New York, NY 10286 Attention: Corporate Trust Office Tel: (212) 815-5092
Originals of all documents submitted by facsimile should be sent promptly by registered or certified mail, overnight courier or hand. Delivery to an address other than as set forth above will not constitute a valid delivery. FEES AND EXPENSES The expenses of soliciting tenders will be borne by the Company. The principal solicitation is being made by mail; however, additional solicitation may be made by telegraph, facsimile, telephone or in person by officers and regular employees of the Company and its affiliates. The Company has not retained any dealer-manager in connection with the Exchange Offer and will not make any payments to brokers, dealers, or others soliciting acceptances of the Exchange Offer. The Company, however, will pay the Exchange Agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses in connection therewith. The cash expenses to be incurred in connection with the Exchange Offer will be paid by the Company. Such expenses include fees and expenses of the Exchange Agent and Trustee, accounting and legal fees and printing costs, among others. ACCOUNTING TREATMENT The Exchange Debentures will be recorded at the same carrying value as the Old Debentures, which is face value, as reflected in the Company's accounting records on the date of exchange. Accordingly, no gain or loss for accounting purposes will be recognized by the Company. The expenses of the Exchange Offer will be expensed over the term of the Exchange Debentures. CONSEQUENCES OF FAILURE TO EXCHANGE The Old Debentures were offered for resale in a transaction not involving any public offering in the United States within the meaning of the 1933 Act. The Old Debentures were not registered under the 1933 Act or any United States securities laws. The Old Debentures may not be reoffered, resold, pledged or otherwise transferred except (i) to the Company or any of its subsidiaries, (ii) to a person whom the purchaser reasonably believes is a Qualified Institutional Buyer in a transaction meeting the requirements of Rule 144A under the 1933 Act, (iii) in an offshore transaction complying with Rule 904 of Regulation S, (iv) pursuant to an exemption from registration under the 1933 Act provided by Rule 144 thereunder (if available), (v) to an institutional "accredited investor" (as defined in Rule 501 (a) (1), (2), (3) or (7) of Regulation D under the 1933 Act) that, prior to such transfer, furnishes the Trustee a signed letter containing certain representations and agreements relating to the transfer of the Debentures and, if such transfer is in respect of an aggregate principal amount of Debentures less than $250,000, an opinion of counsel, (vi) in accordance with another exemption from the registration requirements of the 1933 Act or (vii) pursuant to an effective registration statement under the 1933 Act, and, in each case, in accordance with all applicable state securities laws of any state of the United States or any other applicable jurisdiction. RESALE OF THE EXCHANGE DEBENTURES With respect to resales of Exchange Debentures, based on interpretations by the staff of the Commission set forth in no-action letters issued to third parties, the Company believes that a Holder or other person who receives Exchange Debentures, whether or not such person is the Holder (other than a person that is an "affiliate" of the Company within the meaning of Rule 17 19 405 under the 1933 Act) who receives Exchange Debentures in exchange for Old Debentures, in the ordinary course of business and who is not participating, does not intend to participate, and has no arrangement or understanding with any person to participate, in the distribution of the Exchange Debentures, will be allowed to resell the Exchange Debentures to the public without further registration under the 1933 Act and without delivering to the purchasers of the Exchange Debentures a prospectus that satisfies the requirements of Section 10 of the 1933 Act. However, if any Holder acquires Exchange Debentures in the Exchange Offer for the purpose of distributing or participating in a distribution of the Exchange Debentures, such Holder cannot rely on the position of the staff of the Commission enunciated in such no-action letters or any similar interpretive letters, and must comply with the registration and prospectus delivery requirements of the 1933 Act in connection with any resale transaction, unless an exemption from registration is otherwise available. Further, each Participating Broker-Dealer that receives Exchange Debentures for its own account in exchange for Old Debentures where such Old Debentures were acquired by such Participating Broker-Dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Debentures. As contemplated by these no-action letters and the Registration Rights Agreement, each Holder accepting the Exchange Offer is required to represent to the Company in the Letter of Transmittal that (i) the Exchange Debentures are to be acquired by the Holder or the person receiving such Exchange Debentures, whether or not such person is the Holder, in the ordinary course of business, (ii) the Holder or any such other person (other than a broker-dealer referred to in the next sentence) is not engaging, and does not intend to engage, in the distribution of the Exchange Debentures, (iii) the Holder or any such other person has no arrangement or understanding with any person to participate in the distribution of the Exchange Debentures, (iv) neither the Holder nor any such other person is an "affiliate" of the Company within the meaning of Rule 405 under the 1933 Act and (v) the Holder or any such other person acknowledges that if such Holder or other person participates in the Exchange Offer for the purpose of distributing the Exchange Debentures it must comply with the registration and prospectus delivery requirements of the 1933 Act in connection with any resale of the Exchange Debentures and cannot rely on those no-action letters. As indicated above, each Participating Broker-Dealer that receives an Exchange Debenture for its own account in exchange for Old Debentures must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Debentures. For a description of the procedures for such resales by Participating Broker-Dealers, see "Plan of Distribution." DESCRIPTION OF EXCHANGE DEBENTURES The Exchange Debentures are to be issued under an Indenture dated as of March 1,1990 between the Company and The Bank of New York, as Trustee (the "Trustee"), as supplemented by a First Supplemental Indenture, dated as of March 7, 1990, relating to $80,000,000 in aggregate principal amount of 9 3/8% Debentures Due 2000 (Series A) of the Company, a Second Supplemental Indenture, dated as of October 15, 1992, relating to $55,000,000 in aggregate principal amount of the Company's Series B Debentures, a Third Supplemental Indenture, dated as of March 1, 1993, relating to $20,000,000 in aggregate principal amount of 6.14% Debentures Due 2000 (Series C) of the Company and $35,000,000 in aggregate principal amount of 6.56% Debentures Due 2003 (Series D) of the Company, and a Fourth Supplemental Indenture, dated as of December 1, 1997, relating to the Old Debentures and the Exchange Debentures (collectively, the "Indenture," which term includes all amendments and supplements from time to time). The statements herein concerning the Old Debentures, the Exchange Debentures, and the Indenture do not purport to be complete. They are qualified in their entirety by reference to the Indenture and to the definitions therein of terms used herein. All article and section references appearing in this section are to articles and sections of the Indenture, and all capitalized terms not defined herein have the meanings specified in the Indenture. GENERAL The Exchange Debentures will be issued in a single series, as specified on the cover of this Prospectus, and will be limited to $80,000,000 in aggregate principal amount. The Exchange Debentures will be issued only in exchange for an equal principal amount of Old Debentures; for that reason, the aggregate principal amount of Old Debentures and Exchange Debentures outstanding will always be $80,000,000. The Exchange Debentures will mature on December 1, 2027, and will bear interest from the last interest payment date on which interest was paid on the Old Debentures so surrendered, or, if no interest has been paid on such Old Debentures, from December 18, 1997, at the rate of 6-1/2% per annum payable on June 1 and December 1 of each year, commencing June 1, 1998, until maturity. The Exchange Debentures are not redeemable in whole or in part prior to maturity, and there is no sinking fund for the Exchange Debentures. The Exchange Debentures will be unsecured and will rank equally with other unsecured obligations of the Company. The Indenture does not limit the amount of debentures which may be issued thereunder, and additional debentures may be issued thereunder up to the aggregate principal amount which may be authorized from time to time by the Company. 18 20 REPAYMENT AT OPTION OF HOLDER The registered Holder of each Exchange Debenture may elect to have such Exchange Debenture (or any portion thereof in the amount of $100,000 or in integral multiples of $1,000 in excess thereof) repaid on December 1, 2004 (or, if such day is not a Business Day, the next succeeding Business Day), at a repayment price equal to the principal amount of such Exchange Debenture (or such portion thereof) together with accrued and unpaid interest thereon to the date of repayment. In order for the Holder to exercise this option, the Company must receive at its office or agency in New York, New York, during the period beginning on October 1, 2004 and ending at 5:00 p.m. (New York City time) on November 1, 2004 (or, if such day is not a Business Day, the next succeeding Business Day) such Exchange Debenture with the form entitled "Option to Elect Repayment on December 1, 2004" on the reverse of such Exchange Debenture duly completed. Any such notice received by the Company during the period beginning on October 1, 2004 and ending at 5:00 p.m. (New York City time) on November 1, 2004 shall be irrevocable. So long as the Exchange Debentures are represented by the Global Debenture, a beneficial owner shall give notice to elect to have its Exchange Debentures repaid, through its Participant, to the Trustee, and shall effect delivery of such Exchange Debentures by causing the Direct Participant (as hereinafter defined) to transfer the Participant's interest in the Exchange Debentures on the Depositary's records, to the Trustee. The requirement for physical delivery of Exchange Debentures in connection with a repayment will be deemed satisfied when the ownership rights in the Exchange Debentures are transferred by Direct Participants on the Depositary's records and followed by a book-entry credit of tendered Exchange Debentures to the Trustee's account. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of any Debenture for repayment will be determined by the Company, whose determination shall be final and binding. Failure by the Company to repay the Exchange Debentures when required as described above will result in an Event of Default under the Indenture. As long as the Exchange Debentures are represented by the Global Debenture, the Depositary or its nominee will be the registered Holder of the Exchange Debentures and therefore will be the only person or entity that can exercise a right to such repayment. See " -- Book-Entry, Delivery and Form." RESTRICTION ON SECURED INDEBTEDNESS FOR BORROWED MONEY The Indenture contains a covenant restricting the issuance by the Company of secured indebtedness for borrowed money while any debentures are outstanding under the Indenture. The Company is precluded from creating, issuing, incurring or assuming any other indebtedness for borrowed money secured by a mortgage or other lien on, or security interest in, any properties of the Company (other than (i) certain types of properties such as materials, fuels, supplies, cash, gas, minerals, notes, accounts receivables and securities and (ii) any property that is acquired by the Company after the date of the Second Supplemental Indenture subject to a mortgage, lien or security interest, and certain additions, improvements and betterments thereto). The term "indebtedness for borrowed money" means indebtedness evidenced by a bond, note or other comparable written obligation representing borrowed money, and does not, in any event, include any lease or installment sale agreement (or any obligation in the nature of or having the characteristics of a lease or installment sale agreement), whether or not capitalized for financial reporting or any other purpose. MERGER, SALE OF ASSETS, ETC. Under the Indenture, the Company covenants that it will not consolidate with or merge into any other corporation, or sell, transfer or lease its properties as an entirety or substantially as an entirety, unless the due and punctual payment of the principal of and interest on the Exchange Debentures, and the due and punctual performance and observance of all the terms, covenants and conditions of the Indenture to be performed or observed by the Company, shall be expressly assumed by the successor corporation, if other than the Company, formed by or surviving any such consolidation or merger or to which such sale, transfer or lease shall have been made, and immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time, or both, would become an Event of Default, shall have occurred and be continuing. (Section 11.2) In the case of any such sale or transfer, the Company will thereupon be released from its liability as obligor on the Exchange Debentures. DELIVERY AND FORM The Exchange Debentures will be issued in fully registered form without coupons. See "--Book-Entry, Delivery and Form." The Exchange Debentures will be issued only in denominations of $100,000 or in any amount in excess thereof which is an integral multiple of $1,000. 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 debentures issued under the Indenture with the consent of the Holders of a majority of the aggregate principal amount of outstanding debentures of all series affected by the modification (voting as one class). Without the consent of the Holder of each debenture affected, however, no modification shall change the Stated Maturity of any debenture, reduce the principal amount or the amount of any premium payable thereon, reduce the rate, extend the time of 19 21 payment or change the method of calculation of interest thereon, reduce any amount payable on redemption thereof or reduce the percentage required for modification. No modification of the Indenture subordinating the indebtedness evidenced by any series of debentures issued thereunder to any indebtedness of the Company is effective against any Holder of debentures without the consent of such Holder. Under certain limited circumstances, including, without limitation, modification of the Indenture to conform to any amendments of the Trust Indenture Act of 1939, the Indenture may be modified without the consent of the Holders. (Sections 10.1 and 10.2) EVENTS OF DEFAULT The Indenture provides that the following are Events of Default thereunder with respect to any series of debentures issued thereunder: (i) default in the payment of the principal of (or premium, if any, on) any debenture of such series 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 the debentures of such series; (iii) default for 30 days in the payment of any installment of interest on any debenture of such series; (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 debentures of all series affected) in the performance of any other covenant or agreement in respect of the debentures of such series contained in the Indenture; (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; or (vi) any other Event of Default provided in the applicable Board Resolution or supplemental indenture under which such series of debentures is issued. (Section 6.1) The Fourth Supplemental Indenture provides that the following is an additional Event of Default with respect to the Exchange Debentures: a failure by the Company to repay the outstanding principal amount of any Exchange or Old Debenture, together with accrued but unpaid interest thereon, on December 1, 2004 in accordance with a proper election by the Holder of such debenture to receive such repayment. An Event of Default with respect to a particular series of debentures issued under the Indenture does not necessarily constitute an Event of Default with respect to any other series of debentures issued under the Indenture. The Trustee may withhold notice to the Holders of any series of debentures of any default with respect to such series (except a default in the payment of principal, premium or interest) if it considers such withholding in the interest of such Holders. (Section 6.11) If any Event of Default with respect to any series of debentures shall have occurred and be continuing, the Trustee or the Holders of not less than 25% in aggregate principal amount of the outstanding debentures of such series may declare the principal of all the debentures of such series 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 a majority in aggregate principal amount of the outstanding debentures of such series. (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 certain covenants, 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 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 principal amount of the outstanding debentures of any series may direct the time, method and place of conducting any proceeding or any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, with respect to the debentures of such series. (Section 6.9) PAYMENT AND TRANSFER In the event that Exchange Debenture certificates are required to be printed and delivered as described under "--Book-Entry, Delivery and Form," principal and interest on Exchange Debentures will be payable at such place or places as may be designated by the Company for such purpose, except that payment of interest may be made at the option of the Company by check mailed to the persons in whose names such Exchange Debentures are registered at the close of business on the May 15th or the November 15th next preceding the relevant interest payment date. (Sections 3.8 and 4.1) Exchange Debentures 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) All applicable payments of principal and interest on the Exchange Debentures issued as a Global Debenture will be made by the Company in immediately available funds. The Global Debenture will be in the Same-Day Funds Settlement System at the Depositary and, to the extent that secondary market trading in beneficial interests in the Global Debenture is effected through the facilities of the Depositary, such trades will be settled in immediately available funds. 20 22 LEGAL DEFEASANCE AND COVENANT DEFEASANCE The Company may, at its option and at any time after December 1, 2004, elect to have all obligations discharged with respect to the outstanding Exchange Debentures ("Legal Defeasance"). Such Legal Defeasance means that the Company will be deemed to have paid and discharged the entire indebtedness represented by the outstanding Exchange Debentures, except for: (a) the rights of Holders of outstanding Exchange Debentures to receive payments in respect of the principal of and interest on the Exchange Debentures when such payments are due; (b) the Company's obligations with respect to the Exchange Debentures concerning issuing temporary debentures, registration of Exchange Debentures, mutilated, destroyed, lost or stolen Exchange Debentures and the maintenance of an office or agency for payment and money for security payments held in trust; (c) the rights, powers, trust, duties and immunities of the Trustee, and the Company' obligations in connection therewith; and (d) the Legal Defeasance provisions of the Fourth Supplemental Indenture. In addition, the Company may, at its option and at any time after December 1, 2004, elect to have all obligations released with respect to a certain covenant contained in the Indenture restricting the issuance by the Company of secured indebtedness for borrowed money ("Covenant Defeasance") and thereafter any omission to comply with such obligations shall not constitute a Default or Event of Default with respect to the Exchange Debentures. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under "--Events of Default" will no longer constitute an Event of Default with respect to the Exchange Debentures. In order to exercise either Legal Defeasance or Covenant Defeasance: (i) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Exchange Debentures, cash in United States dollars, non-callable Government Obligations, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants selected by the Trustee, to pay the principal of and interest on the outstanding Exchange Debentures on the stated maturity; (ii) in the case of Legal Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel confirming that (A) the Company has received from, or there has been published by the Internal Revenue Service, a ruling or (B) since the date of the Fourth Supplemental Indenture, there has been a change in the applicable Federal income tax law, in each case to the effect that, and based thereon such opinion of counsel shall confirm that, the Holders of such Exchange Debentures will not recognize income, gain or loss for Federal income tax purposes as a result of such Legal Defeasance, and will be subject to Federal income tax in the same amount, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; (iii) in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel confirming that the Holders of such Exchange Debentures will not recognize income, gain or loss for Federal income tax purposes as a result of such Covenant Defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; (iv) no Event of Default shall have occurred and be continuing on the date of such deposit or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit; (v) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under the Indenture or any other material agreement or instrument to which the Company is a party; (vi) the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of such Exchange Debentures over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company or others; and (vii) the Company shall have delivered to the Trustee an Officers' Certificate stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with. CONCERNING THE TRUSTEE The Bank of New York is the Trustee under the Indenture. The Bank of New York is also the Trustee under an indenture relating to Pollution Control Refunding Revenue Bonds issued by the New York State Energy Research and Development Authority and supported by the obligation of the Company. The Bank of New York also serves as the Company's Stock Transfer Agent. In addition, 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, DELIVERY AND FORM The Depositary will act as securities depository for the Exchange Debentures. The Exchange Debentures will be issued as fully-registered securities registered in the name of Cede & Co. (the Depositary's partnership nominee). One fully-registered Global Debenture will be issued for the Exchange Debentures in the aggregate principal amount of such issue and will be deposited with the Depositary. The Depositary 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 1934 Act. The Depositary holds securities that its participants (the "Participants") deposit with the Depositary. The Depositary also facilitates the settlement among Participants of securities transactions, such as transfers and 21 23 pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. The "Direct Participants" include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. The Depositary 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 Depositary'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 (the "Indirect Participants"). The Rules applicable to the Depositary and its Participants are on file with the Commission. To facilitate subsequent transfers, all Exchange Debentures deposited by Participants with the Depositary are registered in the name of the Depositary's partnership nominee, Cede & Co. The deposit of Exchange Debentures with the Depositary and their registration in the name of Cede & Co. effect no change in beneficial ownership. The Depositary has no knowledge of the actual beneficial owners of the Exchange Debentures; the Depositary's records reflect only the identity of the Direct Participants to whose accounts such Exchange Debentures are credited, which may or may not be the beneficial owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by the Depositary 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. Neither the Depositary nor Cede & Co. will consent or vote with respect to Exchange Debentures. Under its usual procedures, the Depositary mails 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 Exchange Debentures are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Exchange Debentures will be made to the Depositary. The Depositary's practice is to credit Direct Participants' accounts on the payable date in accordance with their respective holdings shown on the Depositary's records unless the Depositary has reason to believe 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 is the case with securities held for the accounts of customers in bearer form or registered in a "street name," and will be the responsibility of such Participant and not of the Depositary, the Trustee, 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 Depositary is the responsibility of the Company or the Trustee, disbursement of such payments to Direct Participants shall be the responsibility of the Depositary, and disbursement of such payments to the beneficial owners shall be the responsibility of Direct and Indirect Participants. The Depositary may discontinue providing its services as securities depositary with respect to the Exchange Debentures at any time by giving reasonable notice to the Company or the Trustee. Under such circumstances, in the event that a successor securities depositary is not obtained, Debenture certificates are required to be printed and delivered. The Company may decide to discontinue use of the system of book-entry transfers through the Depositary (or a successor securities depositary). In that event, Debenture certificates will be printed and delivered. The information in this section concerning the Depositary and the Depositary'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. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS There follows a discussion of selected United States federal income tax consequences of the Exchange Offer to Holders of Old Debentures. Except as otherwise expressly indicated, this discussion addresses only United States federal income tax consequences to U.S. Holders holding Old Debentures as capital assets. For these purposes, the term "U.S. Holders" denotes (i) citizens or residents of the United States, (ii) corporations, partnerships or other entities created or organized in or under the laws of the United States or any political subdivision thereof or therein, (iii) estates the income of which is subject to United States federal income tax regardless of its source, (iv) trusts the administration of which is subject to the primary supervision of a court within the United States and for which one or more United States fiduciaries have the authority to control all substantial decisions, or (v) any other person defined as a United States person under the Internal Revenue Code of 1986, as amended (the "Code"). This discussion is based upon the Code, the Treasury Department regulations promulgated thereunder, and administrative and judicial interpretations thereof, all as of the date hereof and all of which are subject to change, possibly on a retroactive basis. Holders of Old Debentures should also understand that the following discussion is limited in certain other ways. For example, it does not purport to address tax consequences that may be relevant to particular persons by reason of their special 22 24 status, including, financial institutions, broker-dealers, persons that mark-to-market their securities, insurance companies, tax-exempt organizations, individual retirement and other tax-deferred accounts, and other persons in special situations, such as those that hold Old Debentures or Exchange Debentures as part of a straddle, hedge, conversion transaction, or other integrated investment. Moreover, it does not purport to describe the additional consequences for persons that have a "functional currency" other than the U.S. dollar or that have acquired Old Debentures at a premium or a market discount; nor does it address the United States federal alternative minimum tax consequences or, as already indicated, any aspect of state, local or foreign taxation. This discussion constitutes the opinion of Winthrop, Stimson, Putnam & Roberts, counsel to the Company, and is not binding upon the Internal Revenue Service or the courts. HOLDERS OF OLD DEBENTURES ARE URGED TO CONSULT THEIR TAX ADVISORS CONCERNING THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO THEM OF ACQUIRING, OWNING AND DISPOSING OF THE EXCHANGE DEBENTURES, AS WELL AS THE APPLICATION OF STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX LAWS. THE EXCHANGE The exchange of an Old Debenture for an Exchange Debenture pursuant to the Exchange Offer should not be treated as an exchange or otherwise as a taxable event for U.S. federal income tax purposes. Accordingly, the Exchange Debentures should have the same issue price as the Old Debentures, and each Holder should have the same adjusted basis and holding period in the Exchange Debentures as it had in the Old Debentures immediately before the Exchange Offer. It is assumed, for purposes of the following discussion, that the consummation of the Exchange Offer will not be treated as a taxable event and that the Exchange Debentures and the Old Debentures will be treated as the same instruments for U.S. federal income tax purposes. DISPOSITION OF EXCHANGE DEBENTURES If a U.S. Holder sells an Exchange Debenture between interest payment dates, the U.S. Holder will recognize gain or loss equal to the difference between the amount realized on the sale less the amount attributable to accrued but previously unrecognized interest, which is taxable as ordinary interest income, and the U.S. Holder's adjusted tax basis in the Exchange Debenture. Subject to U.S. federal income tax rules relating to "market discount," such gain or loss will generally be long-term if the Exchange Debentures have been held for more than 18 months, mid-term if held for more than one year but not more than 18 months and short-term if held for one year or less. Generally, for non-corporate U.S. Holders, mid-term gain will be subject to income tax at a maximum rate of 28% and long-term gain will be subject to income tax at a maximum rate of 20%. Subject to certain limited exceptions, capital losses cannot be used to offset ordinary income. FOREIGN HOLDERS For purposes of this discussion, a "Foreign Holder" is any Holder other than a U.S. Holder. A Foreign Holder generally will not be subject to United States federal withholding tax on interest paid on the Exchange Debentures so long as the Foreign Holder (i) is not actually or constructively a "10 percent shareholder" of the Company or a "controlled foreign corporation" with respect to which the Company is a "related person" within the meaning of section 864(d) of the Code, and (ii) provides an appropriate statement, signed under penalties of perjury, certifying that the beneficial owner of the Exchange Debenture is a foreign person and providing that foreign person's name and address. If the information provided in this statement changes, the foreign person must so inform the Company within 30 days of such change. The statement generally must be provided in the year a payment occurs or in either of the two preceding years. If the foregoing conditions are not satisfied, then interest paid on the Exchange Debentures will be subject to United States withholding tax at a rate of 30%, unless such rate is reduced or eliminated pursuant to an applicable tax treaty. Any capital gain a Foreign Holder realizes on the sale, redemption, retirement or other taxable disposition of an Exchange Debenture will be exempt from United States federal income and withholding tax, provided that (i) the gain is not effectively connected with the Foreign Holder's conduct of a trade or business in the United States, (ii) in the case of a Foreign Holder who is an individual, he or she is not present in the United States for 183 days or more in the taxable year of the disposition and (iii) the Foreign Holder is not subject to tax pursuant to the provisions of U.S. tax law applicable to certain U.S. expatriates. If the interest, gain or other income a Foreign Holder recognizes on an Exchange Debenture is effectively connected with the Foreign Holder's conduct of a trade or business in the United States, the Foreign Holder (although exempt from the withholding tax previously discussed if an appropriate statement is furnished) generally will be subject to United States federal income tax on the interest, gain or other income at regular federal income tax rates. In addition, if the Foreign Holder is a foreign corporation, it may be subject to a branch profits tax equal to 30% of its "effectively connected earnings and profits," as adjusted for certain items, unless it qualifies for a lower rate under an applicable tax treaty. INFORMATION REPORTING AND BACKUP WITHHOLDING 23 25 On October 6, 1997, the Treasury Department issued final regulations relating to information reporting and backup withholding that unify certain certification procedures and forms and clarify certain standards governing the information upon which a withholding agent may rely (the "Final Regulations"). The Final Regulations will be effective with respect to payments made after December 31, 1998. This section (including the related discussion under the heading "--Foreign Holders" above) describes rules applicable to payments made on or before December 31, 1998. Holders of the Exchange Debentures are urged to consult their own tax advisors as to the effect, if any, of the Final Regulations upon their own particular situations. The Company will be required to report annually to the IRS, and to each U.S. Holder of record, the amount of interest paid on the Exchange Debentures (and the amount, if any, withheld) for each calendar year, except as to exempt Holders (generally, corporations, tax-exempt organizations, qualified pension and profit-sharing trusts, individual retirement accounts, or non-resident aliens that provide certification as to their status). Each U.S. Holder (other than Holders, including, among others, corporations, that are not subject to the reporting requirements) will be required to provide to the Company, under penalties of perjury, a certificate containing the U.S. Holder's name, address, correct federal taxpayer identification number and a statement that the U.S. Holder is not subject to backup withholding. Should a nonexempt U.S. Holder fail to provide the required certificate, the Company will be required to withhold 31% of the interest otherwise payable to the U.S. Holder and to remit the withheld amount to the IRS as a credit against the U.S. Holder's federal income tax liability. 24 26 PLAN OF DISTRIBUTION Prior to the Exchange Offer, there has been no market for any of the Exchange Debentures. There can be no assurance that an active trading market will develop for, or as to the liquidity of, any of the Exchange Debentures. Each Participating Broker-Dealer that receives Exchange Debentures for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Debentures. This Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer in connection with resales of Exchange Debentures received in exchange for Old Debentures where such Old Debentures were acquired as a result of market-making activities or other trading activities. The Company has agreed that for a period of 180 days after the Expiration Date, the Company will make this Prospectus, as amended or supplemented, available to any Participating Broker-Dealer for use in connection with any such resale. The Company will not receive any proceeds from any sales of the Exchange Debentures by Participating Broker-Dealers. Exchange Debentures received by Participating Broker-Dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Debentures or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchaser or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such Participating Broker-Dealer and/or the purchasers of any such Exchange Debentures. Any Participating Broker-Dealer that resells the Exchange Debentures that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Debentures may be deemed to be an "underwriter" within the meaning of the 1933 Act and any profit on any such resale of Exchange Debentures and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the 1933 Act. The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a Participating Broker-Dealer will not be deemed to admit that it is an "underwriter" within the meaning of the 1933 Act. For a period of 180 days after the Expiration Date the Company will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any Participating Broker-Dealer that requests such documents in the Letter of Transmittal. RATING The Exchange Debentures have received a preliminary rating of A- from S&P and a rating of A3 from Moody's, subject to receipt and review of final documents. EXPERTS The consolidated financial statements and related financial statement schedules of the Company incorporated by reference in this Prospectus have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports and are incorporated herein by reference in reliance upon the authority of said firm as experts in giving said reports. 25 27 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS Sections 721 through 726 of Article 7 of the New York Business Corporation Law ("NYBCL") provides for the indemnification of registrant's directors and officers. Article Five of the registrant's By-Laws provides, in summary, for indemnification by registrant, to the fullest extent permitted by law, of each person involved in, or made or threatened to be made a party to any action, suit, claim, or proceeding by reason of the fact that such person was a director or officer of registrant or while serving the registrant, such person is or was serving, at the request of the registrant, as a director or officer, or in any other capacity, any other enterprise, against judgments, fines, penalties, amounts paid in settlement and expenses, including attorney's fees, actually and reasonably incurred by such person. Article Five of the registrant's By-Laws also provides for advancement of expenses with respect to such suits. In addition, Article Five authorizes registrant to purchase indemnity insurance for directors and officers to the extent permitted under Section 726 of the NYBCL. Section 402(b) of the NYBCL permits a corporation, with the approval of its shareholders, to include in its certificate of incorporation a provision eliminating or limiting the personal liability of a director to the corporation or its shareholders for damages for any breach of duty in such capacity, subject to certain exceptions. Section 402(b) does not permit the limitation or elimination of personal liability of a director to the corporation or its shareholders for damages for acts or omissions (i) in bad faith; (ii) involving intentional misconduct; (iii) involving a knowing violation of law; (iv) resulting in the director personally gaining a financial profit or other advantage to which he or she was not legally entitled ; or (v) violating the provisions of Section 719 of the NYBCL, which prohibits certain corporate actions relating to (a) declarations of dividends, (b) purchases or redemptions by the corporation of its shares, (c) distribution of assets to shareholders after dissolution of the corporation or (d) making of loans to directors. In addition, Section 402(b) of the NYBCL does not affect the availability of equitable remedies. Article Nine of registrant's Certificate of Incorporation limits the liability of registrant's directors for damages to the maximum extent permissible under Section 402(b) of the NYBCL. Registrant maintains insurance providing for reimbursement, with certain exclusions and deductions, to registrant for registrant's indemnification of its directors and officers for expenses incurred by them as the result of actions or proceedings brought against them in those capacities, and to directors and officers for any such expenses for which they are not indemnified by registrant. In addition, such insurance covers directors and officers and certain other persons against specified liabilities in connection with the administration of registrant's retirement and benefit plans. II-1 28 ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) EXHIBITS
EXHIBIT NUMBER DESCRIPTION - -------------- ----------- **3.1 Restated Certificate of Incorporation dated May 7, 1996 (incorporated by reference to Exhibit 3.4 to the Company's Quarterly Report on Form 10-Q for the period ended March 31, 1996, File No. 1-4315) **3.2 By-Laws, as amended through June 30, 1995 (incorporated by reference to Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 1995, File No. 1-4315) **4.1 Indenture dated as of March 1, 1990 between the Company and the Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-3 filed on October 14, 1992, File No. 33-53256) **4.2 First Supplemental Indenture dated as of March 7, 1990 (incorporated by reference to Exhibit 4.2 to the Company's Registration Statement on Form S-3 filed on October 14, 1992, File No. 33-53256) **4.3 Second Supplemental Indenture dated as of October 15, 1992 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on October 29, 1992, File No. 1-4315) **4.4 Third Supplemental Indenture dated as of March 1, 1993 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on March 8, 1993, File No.1-4315) **4.5 Fourth Supplemental Indenture dated as of December 1, 1997 **4.6 Registration Rights Agreement dated as of December 18, 1997, among the Company, Donaldson, Lufkin & Jenrette Securities Corporation and Salomon Brothers Inc *5 Opinion of Winthrop, Stimson, Putnam & Roberts, counsel for the Company *8 Opinion of Winthrop, Stimson, Putnam & Roberts regarding certain United States federal income tax considerations **12 Statements regarding computation of ratios **21 List of the subsidiaries of the Company *23.1 Consent of Arthur Andersen LLP *23.2 Consent of Winthrop, Stimson, Putnam & Roberts, counsel for the Company (included in Exhibit 5) **24 Powers of Attorney **25 Form T-1 Statement of Eligibility of Trustee *99.1 Form of Letter of Transmittal *99.2 Form of Notice of Guaranteed Delivery *99.3 Form of Exchange Agent Agreement
(b) FINANCIAL STATEMENT SCHEDULES Not applicable. - ----------------------------------- * Filed herewith. ** Previously Filed. II-2 29 ITEM 22. UNDERTAKINGS (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information set forth 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) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officer and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than payment by the registrant of expenses incurred or paid by a director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-3 30 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-4 and has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Hamlet of Pearl River, State of New York, on the 20th day of January, 1998. ORANGE AND ROCKLAND UTILITIES, INC. (Registrant) By /s/ D. Louis Peoples ------------------------------------------- (D. Louis Peoples, Vice Chairman of the Board of Directors and Chief Executive Officer) Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
Capacity in Signature Which Signing Date --------- ------------- ---- Chief Executive Officer; /s/ D. Louis Peoples Director - ---------------------------------------------------- (D. Louis Peoples, Vice Chairman of the Board of Directors and Chief Executive Officer) *R. Lee Haney Chief Financial Officer - ---------------------------------------------------- (R. Lee Haney, Senior Vice President and Chief Financial Officer) *Edward M. McKenna Controller - ---------------------------------------------------- (Edward M. McKenna, Controller) *H. Kent Vanderhoef Director - ---------------------------------------------------- (H. Kent Vanderhoef, Chairman of the Board of Directors) *Ralph M. Baruch Director - ---------------------------------------------------- (Ralph M. Baruch) *J. Fletcher Creamer Director - ---------------------------------------------------- (J. Fletcher Creamer) *Michael J. Del Giudice Director - ---------------------------------------------------- (Michael J. Del Giudice) * Jon F. Hanson Director - ---------------------------------------------------- (Jon F. Hanson) *Kenneth D. McPherson Director - ---------------------------------------------------- (Kenneth D. McPherson) *Robert E. Mulcahy III Director - ---------------------------------------------------- (Robert E. Mulcahy III) *James F. O'Grady, Jr. Director - ---------------------------------------------------- (James F. O'Grady, Jr.)
II-4 31
Capacity in Signature Which Signing Date --------- ------------- ---- *Frederic V. Salerno Director - ---------------------------------------------------- (Frederic V. Salerno) *Linda C. Taliaferro Director - ---------------------------------------------------- (Linda C. Taliaferro) *By /s/ G. D. Caliendo January 20, 1998 ------------------------------------------- G. D. Caliendo Attorney-in-fact
II-5 32 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - -------------- ----------- **3.1 Restated Certificate of Incorporation dated May 7, 1996 (incorporated by reference to Exhibit 3.4 to the Company's Quarterly Report on Form 10-Q for the period ended March 31, 1996, File No. 1-4315) **3.2 By-Laws, as amended through June 30, 1995 (incorporated by reference to Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 1995, File No. 1-4315) **4.1 Indenture dated as of March 1, 1990 between the Company and the Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-3 filed on October 14, 1992, File No. 33-53256) **4.2 First Supplemental Indenture dated as of March 7, 1990 (incorporated by reference to Exhibit 4.2 to the Company's Registration Statement on Form S-3 filed on October 14, 1992, File No. 33-53256) **4.3 Second Supplemental Indenture dated as of October 15, 1992 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on October 29, 1992, File No. 1-4315) **4.4 Third Supplemental Indenture dated as of March 1, 1993 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on March 8, 1993, File No.1-4315) **4.5 Fourth Supplemental Indenture dated as of December 1, 1997 **4.6 Registration Rights Agreement dated as of December 18, 1997, among the Company, Donaldson, Lufkin & Jenrette Securities Corporation and Salomon Brothers Inc *5 Opinion of Winthrop, Stimson, Putnam & Roberts, counsel for the Company *8 Opinion of Winthrop, Stimson, Putnam & Roberts regarding certain United States federal income tax considerations **12 Statements regarding computation of ratios **21 List of the subsidiaries of the Company *23.1 Consent of Arthur Andersen LLP *23.2 Consent of Winthrop, Stimson, Putnam & Roberts, counsel for the Company (included in Exhibit 5) **24 Powers of Attorney **25 Form T-1 Statement of Eligibility of Trustee *99.1 Form of Letter of Transmittal *99.2 Form of Notice of Guaranteed Delivery *99.3 Form of Exchange Agent Agreement
* Filed herewith. ** Previously Filed. EX-5 2 OPINION RE LEGALITY 1 Exhibit 5 [LETTERHEAD OF WINTHROP, STIMSON, PUTNAM & ROBERTS] January 21, 1998 Orange and Rockland Utilities, Inc. One Blue Hill Plaza Pearl River, New York 10965 Ladies and Gentlemen: We have acted as counsel to Orange and Rockland Utilities, Inc. (the "Company"), a New York corporation, in connection with the proposed registration by the Company of $80,000,000 in aggregate principal amount of the Company's 6-1/2% Debentures Due 2027 (Series F) (the "Exchange Debentures") pursuant to a Registration Statement on Form S-4 (Reg. No. 333-43953) filed with the Securities and Exchange Commission (the "Commission") on January 9, 1998, under the Securities Act of 1933 (the "Securities Act") (such Registration Statement, as amended or supplemented, is hereinafter referred to as the "Registration Statement"), for the purpose of effecting an exchange offer (the "Exchange Offer") for the Company's 6-1/2% Debentures Due 2027 (Series E) (the "Old Debentures"). The Exchange Debentures are to be issued pursuant to the Indenture dated as of March 1, 1990, as supplemented and amended by three supplemental indentures, and further supplemented and amended by a Fourth Supplemental Indenture dated as of December 1, 1997 (the "Fourth Supplemental Indenture") between The Bank of New York, as trustee (the "Trustee") and the Company (collectively, the "Indenture"), in exchange for and in replacement of the Company's outstanding Old Debentures, of which $80,000,000 in aggregate principal amount is outstanding. For purposes of this opinion, we have (i) examined copies of the Registration Statement and exhibits thereto, the Indenture and such board resolutions, corporate documents, records and other instruments as we have deemed necessary for the purposes of this opinion and (ii) assumed the authenticity of all documents submitted to us as originals, the conformity to the originals of all documents submitted to us as copies and the authenticity of the originals of all documents submitted to us as copies. For such purposes, we have also assumed the genuineness of all signatures, the legal capacity of natural persons, the authority of such persons signing on behalf of the parties thereto and the due authorization, execution and delivery of all documents by the parties thereto (including the Company). In rendering this opinion, we have assumed the validity of, and relied upon, the representations of the Company as to certain factual matters relevant hereto. 2 Based upon and subject to the foregoing qualifications, assumptions and limitations and the further limitations set forth below, we are of the opinion that: When, as and if (i) the Registration Statement shall have become effective, (ii) the Indenture shall have been qualified pursuant to the provisions of the Trust Indenture Act of 1939 (iii) the Exchange Debentures are duly executed and delivered on behalf of the Company in accordance with the Indenture in exchange for Old Debentures pursuant to the terms of the Exchange Offer and (iv) the Exchange Debentures are duly authenticated by the Trustee pursuant to the terms of the Indenture, then the Exchange Debentures will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, reorganization, fraudulent transfer or conveyance, moratorium and other laws relating to or affecting generally the enforcement of creditors' rights and subject to general principles of equity (whether considered in a proceeding at law or in equity) and by an implied covenant of good faith and fair dealing. We are members of the bar of the State of New York and do not express any opinion herein as to any laws other than the laws of the State of New York. We hereby consent to the filing of this opinion as Exhibit 5 to the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act. We do not pass upon the application of the federal laws of the United States nor the securities or "Blue Sky" laws of the various states to the issuance of the Exchange Debentures. Very truly yours, /s/ WINTHROP, STIMSON, PUTNAM & ROBERTS 2 EX-8 3 OPINION RE TAX MATTERS 1 Exhibit 8 [LETTERHEAD OF WINTHROP, STIMSON, PUTNAM & ROBERTS] January 21, 1998 Orange and Rockland Utilities, Inc. One Blue Hill Plaza Pearl River, New York 10965 Re: Registration Statement on Form S-4 Ladies and Gentlemen: You have requested our opinion relating to the discussion of selected United States federal income tax consequences expected to result to certain holders from the exchange of Old Debentures for Exchange Debentures of Orange and Rockland Utilities, Inc., a New York corporation, pursuant to the Exchange Offer, as set forth in the Prospectus (the "Prospectus") included in the above-reference Registration Statement on Form S-4 and exhibits thereto filed with the Securities Exchange Commission (the "Registration Statement"). Capitalized terms not defined herein have the respective meanings ascribed to them in the Prospectus. Based on the facts set forth in the Prospectus, it is our opinion that the description of material United States federal income tax consequences in the Prospectus that is set forth under the caption "Certain United States Federal Income Tax Considerations" is accurate under currently applicable law. 2 January __, 1998 As stated in the Prospectus, this opinion expresses our views as to United States federal income tax laws in effect as of the date hereof, including the Internal Revenue Code of 1986, as amended, applicable Treasury Regulations promulgated thereunder, judicial authority and current administrative rulings and practice of the IRS, all of which are subject to change either prospectively or retroactively. Also as stated therein, it addresses such income tax consequences only with respect to U.S. Holders that hold Old Debentures as capital assets; it does not address such consequences, if any, to any person with a special tax status or the consequences under the federal alternative minimum tax. Also, any variation or difference in the facts as incorporated herein might affect the conclusion stated herein. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name under "Certain United States Federal Income Tax Considerations" in the Prospectus included in the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933. Very truly yours, /s/ WINTHROP, STIMSON, PUTNAM & ROBERTS 2 EX-23.1 4 CONSENT OF ARTHUR ANDERSEN LLP 1 Exhibit 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our reports dated February 6, 1997 included and incorporated by reference in Orange and Rockland Utilities, Inc.'s Form 10-K for the year ended December 31, 1996 and to all references to our Firm included in this registration statement. /s/ ARTHUR ANDERSEN LLP New York, New York January 21, 1998 EX-99.1 5 FORM OF LETTER OF TRANSMITTAL 1 Exhibit 99.1 LETTER OF TRANSMITTAL ORANGE AND ROCKLAND UTILITIES, INC. OFFER TO EXCHANGE ITS 6-1/2% DEBENTURES DUE 2027 (SERIES F) FOR ANY AND ALL OUTSTANDING 6-1/2% DEBENTURES DUE 2027 (SERIES E) PURSUANT TO THE PROSPECTUS DATED JANUARY 22, 1998 - -------------------------------------------------------------------------------- ORANGE AND ROCKLAND UTILITIES, INC. WILL ACCEPT ALL OLD DEBENTURES (AS HEREINAFTER DEFINED) TENDERED AND NOT WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON FEBRUARY 25, 1998, UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. - -------------------------------------------------------------------------------- The Exchange Agent is: THE BANK OF NEW YORK By Facsimile: By Registered or Certified mail, Confirm by Telephone: (212) 815-5915 Overnight Courier or Hand: (212) 815-5092 Attention: The Bank of New York Corporate Trust 101 Barclay Street Office New York, NY 10286 Attention: Corporate Trust Office DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. FOR ANY QUESTIONS REGARDING THIS LETTER OF TRANSMITTAL OR FOR ANY ADDITIONAL INFORMATION, YOU MAY CONTACT THE EXCHANGE AGENT. The undersigned acknowledges receipt of the Prospectus dated January 22, 1998 (the "Prospectus"), of ORANGE AND ROCKLAND UTILITIES, INC., a New York corporation (the "Company"), and this Letter of Transmittal (the "Letter of Transmittal"), which together with the Prospectus constitute the Company's offer (the "Exchange Offer") to exchange $1,000 principal amount of its 6-1/2% Debentures Due 2027 (Series F) (the "Exchange Debentures") for each $1,000 principal amount of its outstanding 6-1/2% Debentures Due 2027 (Series E) (the "Old Debentures"). The Old Debentures and the Exchange Debentures will be issued only in denominations of $100,000 or in any amount in excess thereof which is an integral multiple of $1,000. Recipients of the Prospectus should read the requirements described in such Prospectus with respect to eligibility to participate in the Exchange Offer. Capitalized terms used but not defined herein have the meanings given to them in the Prospectus. Either this Letter of Transmittal or an Agent's Message is to be completed by a holder of Old Debentures (which term, for purposes of the Exchange Offer, includes any participant in the Book-Entry Transfer Facility system whose name appears on a security position listing as the holder of such Old Debentures) in order to tender Old Debentures. Certificates for Old Debentures should be forwarded with this Letter of Transmittal or, if tender of Old Debentures is to be made by book-entry transfer pursuant to the procedures set forth in the Prospectus under "The Exchange Offer -- 2 Procedures for Tendering," tender of Old Debentures should be made by book-entry transfer to the account maintained by the Exchange Agent at The Depository Trust Company (the "Book-Entry Transfer Facility"). Any beneficial owner whose Old Debentures are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact such registered holder of Old Debentures promptly and instruct such registered holder of Old Debentures to tender on behalf of the beneficial owner. If such beneficial owner wishes to tender on his own behalf, such beneficial owner must, prior to completing and executing this Letter of Transmittal and delivering his Old Debentures, either make appropriate arrangements to register ownership of the Old Debentures in such beneficial owner's name or obtain a properly completed bond power from the registered holder of Old Debentures. The transfer of registered ownership may take considerable time. In order properly to complete this Letter of Transmittal, a holder of Old Debentures must (i) complete the box entitled "Description of Old Debentures," (ii) if appropriate, check and complete the boxes relating to book-entry transfer, guaranteed delivery, Special Issuance Instructions and Special Delivery Instructions, (iii) sign the Letter of Transmittal by completing the box entitled "Sign Here" and (iv) complete the Substitute Form W-9. Each holder of Old Debentures should read carefully the detailed instructions below prior to completing the Letter of Transmittal. Holders of Old Debentures who desire to tender the Old Debentures for exchange and (i) whose Old Debentures are not immediately available, (ii) who cannot deliver their Old Debentures and all other documents required hereby to the Exchange Agent on or prior to the Expiration Date or (iii) who are unable to complete the procedure for book-entry transfer on a timely basis, must tender the Old Debentures pursuant to the guaranteed delivery procedures set forth below. See Instruction 2. Each broker-dealer that receives Exchange Debentures for its own account in exchange for Old Debentures, where such Old Debentures were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Debentures. Holders of Old Debentures who wish to tender their Old Debentures for exchange must, at a minimum, complete columns (1) through (3) in the box below entitled "Description of Old Debentures" and sign the box below entitled "Sign Here." If only these columns are completed, such holder of Old Debentures will have tendered for exchange all Old Debentures listed in column (3) below. If the holder of Old Debentures wishes to tender for exchange less than all of such Old Debentures, column (4) must be completed in full. In such case, such holder of Old Debentures should refer to Instruction 5. 2 3
____________________________________________________________________________________________________________________________________ DESCRIPTION OF OLD DEBENTURES ____________________________________________________________________________________________________________________________________ (1) (2) (3) (4) Principal Amount Tendered For Exchange (only if different amount from Debenture Number(s)(1) column (3)) (must be Name(s) and Address(es) of registered holder of Old Debenture(s) (Attach signed list if Aggregate Principal in integral multiples (Please fill in, if blank) necessary) Amount* of $1,000)(2)* ____________________________________________________________________________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ ____________________________________________________________________________________________________________________________________
[ ] CHECK HERE IF TENDERED OLD DEBENTURES ARE ENCLOSED HEREWITH. [ ] CHECK HERE IF TENDERED OLD DEBENTURES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE DEPOSITORY TRUST COMPANY AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS (AS HEREINAFTER DEFINED) ONLY): Name of Tendering Institution___________________________________________________ Account Number__________________________________________________________________ Transaction Code Number_________________________________________________________ By crediting the Old Debentures to the Exchange Agent's account at the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer Facility's Automated Tender Offer Program ("ATOP") and by complying - ---------- (1) Column (2) need not be completed by holders of Old Debentures tendering Old Debentures for exchange by book-entry transfer. Please check the appropriate box and provide the requested information. * Old Debentures may be tendered in whole or in part in denominations of $100,000 and integral multiples of $1,000 in excess thereof, provided that if any Old Debentures are tendered for exchange in part, the non-tendered principal amount thereof must be $100,000 or any integral multiple of $1,000 in excess thereof. All Old Debentures held shall be deemed tendered unless a lesser number is specified in this column. (2) Column (4) need not be completed by holders of Old Debentures who wish to tender for exchange the principal amount of Old Debentures listed in Column (3). Completion of Column (4) will indicate that the holder of Old Debentures wishes to tender for exchange only the principal amount of Old Debentures indicated in column (4). 3 4 with applicable ATOP procedures with respect to the Exchange Offer, including transmitting a computer-generated message (an "Agent's Message") to the Exchange Agent in which the holder of the Old Debentures acknowledges and agrees to be bound by the terms of this Letter of Transmittal, the participant in the Book-Entry Transfer Facility confirms on behalf of itself and the beneficial owners of such Old Debentures all provisions of this Letter of Transmittal applicable to it and such beneficial owners as fully as if it had completed the information required herein and executed and transmitted this Letter of Transmittal to the Exchange Agent. [ ] CHECK HERE IF TENDERED OLD DEBENTURES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY ENCLOSED HEREWITH AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS ONLY): Name of Registered Holder of Old Debenture(s)___________________________________ Date of Execution of Notice of Guaranteed Delivery)_____________________________ Window Ticket Number (if available)_____________________________________________ Name of Institution which Guaranteed Delivery___________________________________ Account Number (if delivered by book-entry transfer)____________________________ [ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name____________________________________________________________________________ Address_________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ 4 5 SPECIAL ISSUANCE INSTRUCTIONS (SEE INSTRUCTIONS 1, 6, 7 AND 8) To be completed ONLY if Exchange Debentures or non-tendered or non-exchanged Old Debentures are to be issued in the name of someone other than the registered holder(s) of the Old Debentures whose name(s) appear(s) above. Issue: / / Non-tendered or non-exchanged Old Debentures to: / / Exchange Debentures to: Name(s): __________________________________________________________________________ (PLEASE PRINT) Address: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ (INCLUDE ZIP CODE) Telephone Number: ___________________________________________________________________________ (INCLUDE AREA CODE) Tax Identification or Social Security Number: ___________________________________________________________________________ Credit non-exchanged Old Debentures, delivered by book-entry transfer, to the Book-Entry Transfer Facility account set forth below: ________________________________________________________________________________ (BOOK-ENTRY TRANSFER FACILITY ACCOUNT NUMBER) SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 6, 7 AND 8) To be completed ONLY if Certificates for non-exchanged Old Debentures are to be sent to someone other than the registered holder(s) of the Old Debentures whose name(s) appear(s) above, or such registered holder(s) at an address other than that shown above. Mail Certificates for non-exchanged Old Debentures to: Name(s): ____________________________________________________________________________ (PLEASE PRINT) Address: _________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (INCLUDE ZIP CODE) Telephone Number: ________________________________________________________________________________ (INCLUDE AREA CODE) Tax Identification or Social Security Number: ________________________________________________________________________________ 5 6 SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY LADIES AND GENTLEMEN: Pursuant to the order by ORANGE AND ROCKLAND UTILITIES, INC. (the "Company"), upon the terms and subject to the conditions set forth in the Company's Prospectus dated January __, 1998 (the "Prospectus") and this Letter of Transmittal (the "Letter of Transmittal"), which together with the Prospectus constitute the Company's offer (the "Exchange Offer") to exchange $1,000 principal amount of its 6-1/2% Debentures Due 2027 (Series F) (the "Exchange Debentures") for each $1,000 principal amount of its outstanding 6-1/2% Debentures Due 2027 (Series E) (the "Old Debentures"), the Old Debentures may be tendered for exchange in whole or in part in denominations of $100,000 and integral multiples of $1,000 in excess thereof, provided that if any Old Debentures are tendered for exchange in part, the non-tendered principal amount thereof must be $100,000 or any integral multiple of $1,000 in excess thereof. The undersigned hereby tenders to the Company for exchange the Old Debentures indicated above. By executing this Letter of Transmittal and subject to and effective upon acceptance for exchange of the Old Debentures tendered for exchange herewith, the undersigned will have irrevocably sold, assigned, transferred and exchanged, to the Company, all right, title and interest in, to and under all of the Old Debentures tendered for exchange hereby, and hereby appoints the Exchange Agent as the true and lawful agent and attorney-in-fact (with full knowledge that the Exchange Agent also acts as agent of the Company) of such holder of Old Debentures with respect to such Old Debentures, with full power of substitution to (i) deliver certificates representing such Old Debentures, or transfer ownership of such Old Debentures on the account books maintained by the Book-Entry Transfer Facility (together, in any such case, with all accompanying evidences of transfer and authenticity), to the Company, (ii) present and deliver such Old Debentures for transfer on the books of the Company and (iii) receive all benefits and otherwise exercise all rights and incidents of beneficial ownership with respect to such Old Debentures, all in accordance with the terms of the Exchange Offer. The power of attorney granted in this paragraph shall be deemed to be irrevocable and coupled with an interest. The undersigned hereby represents and warrants that the undersigned is the owner and has full power and authority to transfer the Old Debentures in exchange for the Exchange Debentures, and that when such Old Debentures are accepted for exchange by the Company, the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims. The undersigned will, upon receipt, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the exchange, assignment and transfer of the Old Debentures tendered for exchange hereby. The undersigned hereby further represents to the Company that (i) the Exchange Debentures acquired pursuant to the Exchange Offer are being obtained in the ordinary course of business of the person receiving such Exchange Debentures, whether or not such person is the holder, (ii) neither the holder nor any such other person has an arrangement or understanding with any person, nor an intention, to participate in the distribution of such Exchange Debentures, (iii) neither the holder nor any such other person is an "affiliate," as defined under Rule 405 of the Securities Act of 1933 (the "Securities Act"), of the Company and (iv) the holder and such other person acknowledge that (a) any person participating in the Exchange Offer for the purpose of distributing the Exchange Debentures (1) could not rely on the staff position enunciated in "Exxon Capital Holdings Corporation" (available May 13, 1988) or similar letters and (2) must comply with registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction and (b) failure to comply with such requirements in such instance could result in such holder incurring liability under the Securities Act for which such holder is not indemnified by the Company. If the undersigned is a broker-dealer that will receive Exchange Debentures for its own account in exchange for Old Debentures that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Debentures; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For purposes of the Exchange Offer, the Company will be deemed to have accepted for exchange, and to have exchanged, validly tendered Old Debentures, if, as and when the Company gives oral or written notice thereof to the Exchange Agent. Except as otherwise provided in the Prospectus, tenders of Old Debentures may be withdrawn at any time 6 7 prior to 5:00 p.m., New York City time, on the Expiration Date. See "The Exchange Offer -- Withdrawal of Tenders" in the Prospectus. Any Old Debentures tendered by the undersigned and not accepted for exchange will be returned to the undersigned at the address set forth above unless otherwise indicated in the box above entitled "Special Delivery Instructions." The undersigned acknowledges that the Company's acceptance of Old Debentures validly tendered for exchange pursuant to any one of the procedures described in the section of the Prospectus entitled "The Exchange Offer" and in the instructions hereto will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Exchange Offer. Unless otherwise indicated in the box entitled "Special Issuance Instructions," please return any Old Debentures not tendered for exchange in the name(s) of the undersigned. Similarly, unless otherwise indicated in the box entitled "Special Delivery Instructions," please mail any certificates for Old Debentures not tendered or exchanged (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned's signature(s). In the event that both "Special Issuance Instructions" and "Special Delivery Instructions" are completed, please issue the certificate representing the Exchange Debentures issued in exchange for the Old Debentures accepted for exchange in the name(s) of, and return any Old Debentures not tendered for exchange or not exchanged to, the person(s) so indicated. The undersigned recognizes that the Company has no obligation pursuant to the "Special Issuance Instructions" and "Special Delivery Instructions" to transfer any Old Debentures from the name of the holder of Old Debentures thereof if the Company does not accept for exchange any of the Old Debentures so tendered for exchange. A tender for exchange of Old Debentures pursuant to any one of the procedures set forth in the section of the Prospectus entitled "The Exchange Offer" will constitute the tendering holder of Old Debentures acceptance of the terms and conditions of the Exchange Offer. IN ORDER VALIDLY TO TENDER OLD DEBENTURES FOR EXCHANGE, HOLDERS OF OLD DEBENTURES MUST COMPLETE, EXECUTE AND DELIVER THIS LETTER OF TRANSMITTAL. Except as stated in the Prospectus, all authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as otherwise stated in the Prospectus, this tender for exchange of Old Debentures is irrevocable. 7 8 SIGN HERE ________________________________________________________________________________ ________________________________________________________________________________ Date:_____________________, 1998 Must be signed by the registered holder of Old Debentures(s) exactly as name(s) appear(s) on certificate(s) representing the Old Debentures or on a security position listing or by person(s) authorized to become registered Old Debenture holder(s) by certificates and documents transmitted herewith. If signature(s) is/are by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please provide the following information. (See Instruction 6) Name(s)_________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (PLEASE PRINT) Capacity (full title)___________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (INCLUDE ZIP CODE) Area Code and Telephone No. (______)____________________________________________ Tax Identification or Social Security Nos.______________________________________ PLEASE COMPLETE SUBSTITUTE FORM W-9 GUARANTEE OF SIGNATURE(S) (SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 1) Authorized Signature____________________________________________________________ Dated___________________________________________________________________________ Name and Title__________________________________________________________________ (PLEASE PRINT) Name of Firm____________________________________________________________________ 8 9 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. GUARANTEE OF SIGNATURE. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by an eligible institution that is a member of one of the following recognized signature Guarantee Programs: (a) The Securities Transfer Agents Medallion Program (b) The New York Stock Exchange Medallion Signature Program (c) The Stock Exchange Medallion Program Signatures on this Letter of Transmittal need not be guaranteed (i) if this Letter of Transmittal is signed by the registered holder(s) of the Old Debentures tendered herewith and such registered holder(s) have not completed the box entitled "Special Issuance Instructions" or the box entitled "Special Delivery Instructions" on this Letter of Transmittal or (ii) if such Old Debentures are tendered for the account of an Eligible Guarantor Institution. IN ALL OTHER CASES, ALL SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION. 2. DELIVERY OF THIS LETTER OF TRANSMITTAL AND DEBENTURES; GUARANTEED DELIVERY PROCEDURE. This Letter of Transmittal is to be completed by holders of Old Debentures (i) if certificates are to be forwarded herewith or (ii) if tenders are to be made pursuant to the procedures for tender by book-entry transfer or guaranteed delivery set forth in the section of the Prospectus entitled "The Exchange Offer." Certificates for all physically tendered Old Debentures or any confirmation of a book-entry tender (a "Book-Entry Confirmation"), as well a properly completed and duly executed copy of this Letter of Transmittal or facsimile hereof, and any other documents required by this Letter of Transmittal must be received by the Exchange Agent at its address set forth on the cover of this Letter of Transmittal prior to 5:00 p.m., New York City time, on the Expiration Date. Holders of Old Debentures who elect to tender Old Debentures and (i) whose Old Debentures are not immediately available, (ii) who cannot deliver the Old Debentures or other required documents to the Exchange Agent prior to 5:00 p.m., New York City time on the Expiration Date or (iii) who are unable to complete the procedure for book-entry transfer on a timely basis, may have such tender effected if: (a) such tender is made by or through an Eligible Guarantor Institution; (b) prior to 5:00 p.m., New York City time, on the Expiration Date, the Exchange Agent has received from such holder or Eligible Guarantor Institution a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) and Notice of Guaranteed Delivery (by telegram, telex, facsimile transmission, mail or hand delivery) setting forth the name and address of the holder of such Old Debentures, the certificate number(s) of such Old Debentures and the principal amount of Old Debentures tendered for exchange, stating that tender is being made thereby and guaranteeing that, within three New York Stock Exchange trading days after the date of delivery of the Notice of Guaranteed Delivery, the certificates representing such Old Debentures (or a Book-Entry Confirmation), in proper form for transfer, and any other documents required by this Letter of Transmittal, will be deposited by such Eligible Guarantor Institution with the Exchange Agent and (c) certificates for all tendered Old Debentures, or a Book-Entry Confirmation, together with a copy of the previously executed Letter of Transmittal (or facsimile thereof) and any other documents required by this Letter of Transmittal are received by the Exchange Agent within three New York Stock Exchange trading days after the Expiration Date. THE METHOD OF DELIVERY OF OLD DEBENTURES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING HOLDER OF OLD DEBENTURES. EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. NEITHER THE LETTER OF TRANSMITTAL NOR ANY OLD DEBENTURES SHOULD BE SENT TO THE COMPANY. 9 10 No alternative, conditional or contingent tenders will be accepted. All tendering holders of Old Debentures, by execution of this Letter of Transmittal (or facsimile hereof, if applicable), waive any right to receive notice of the acceptance of their Old Debentures for exchange. 3. INADEQUATE SPACE. If the space provided in the box entitled "Description of Old Debentures" above is inadequate, the certificate numbers and principal amounts of the Old Debentures being tendered should be listed on a separate signed schedule affixed hereto. 4. WITHDRAWALS. A tender of Old Debentures may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date by delivery of written notice of withdrawal to the Exchange Agent at the address set forth on the cover of this Letter of Transmittal. To be effective, a notice of withdrawal of Old Debentures must (i) specify the name of the person who tendered the Old Debentures to be withdrawn (the "Depositor"), (ii) identify the Old Debentures to be withdrawn (including the certificate number or numbers and aggregate principal amount of such Old Debentures), (iii) be signed by the holder of Old Debentures in the same manner as the original signature on the Letter of Transmittal by which such Old Debentures were tendered (including any required signature guarantees) or be accompanied by documents of transfer sufficient to have the applicable transfer agent register the transfer of such Old Debentures into the name of the person withdrawing the tender and (iv) specify the name in which any such Old Debentures are to be registered, if different from that of the Depositor. Withdrawals of tenders of Old Debentures may not be rescinded, and any Old Debentures withdrawn will thereafter be deemed not validly tendered for purposes of the Exchange Offer, and no Exchange Debentures will be issued with respect thereto unless the Old Debentures so withdrawn are validly retendered. Properly withdrawn Old Debentures may be retendered by following one of the procedures described in the section of the Prospectus entitled "The Exchange Offer -- Procedures for Tendering" at any time prior to 5:00 p.m., New York City time, on the Expiration Date. 5. PARTIAL TENDERS. Tenders of Old Debentures will be accepted only in denominations of $100,000 and any integral multiple of $1,000 in excess thereof, provided that if any Old Debentures are tendered for exchange in part, the non-tendered principal amount thereof must be $100,000 or any integral multiple of $1,000 in excess thereof. If a tender for exchange is to be made with respect to less than the entire principal amount of any Old Debentures, fill in the principal amount of Old Debentures that are tendered for exchange in column (4) of the box entitled "Description of Old Debentures," as more fully described in the footnotes thereto. In case of a partial tender for exchange, a new certificate, in fully registered form, for the remainder of the principal amount of the Old Debentures, will be sent to the holders of Old Debentures unless otherwise indicated in the appropriate box on this Letter of Transmittal as promptly as practicable after the expiration or termination of the Exchange Offer. 6. SIGNATURES ON THIS LETTER OF TRANSMITTAL, POWERS OF ATTORNEY AND ENDORSEMENTS. (a) The signature(s) of the holder of Debentures on this Letter of Transmittal must correspond with the name(s) as written on the face of the Old Debentures without alteration, enlargement or any change whatsoever. (b) If tendered Old Debentures are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. (c) If any tendered Old Debentures are registered in different names, on several certificates, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal and any necessary or required documents as there are different registrations or certificates. (d) When this Letter of Transmittal is signed by the holder of the Old Debentures listed and transmitted hereby, no endorsements of Old Debentures or separate powers of attorney are required. If, however, Old Debentures not tendered or not accepted are to be issued or returned in the name of a person other than the holder of such Old Debentures, then the Old Debentures transmitted hereby must be endorsed or accompanied by appropriate powers of attorney in a form satisfactory to the Company, in either case signed exactly as the name(s) of the holder of Old Debentures appear(s) on the Old Debentures. Signatures on such Old Debentures 10 11 or powers of attorney must be guaranteed by an Eligible Guarantor Institution (unless signed by an Eligible Guarantor Institution). (e) If this Letter of Transmittal or Old Debentures or powers of attorney are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to the Company of their authority so to act must be submitted. (f) If this Letter of Transmittal is signed by a person other than the registered holder of Old Debentures listed, the Old Debentures must be endorsed or accompanied by appropriate powers of attorney, in either case signed exactly as the name(s) of the registered holder of Old Debenture(s) appear(s) on the certificates. Signatures on such Old Debentures or powers of attorney must be guaranteed by an Eligible Institution (unless signed by an Eligible Institution). 7. TRANSFER TAXES. Except as set forth in this Instruction 7, the Company will pay all transfer taxes, if any, applicable to the transfer and exchange of Old Debentures pursuant to the Exchange Offer. If, however, issuance of Exchange Debentures is to be made to, or Old Debentures not tendered for exchange are to be issued or returned in the name of, any person other than the holder of Old Debentures, the amount of any transfer taxes payable on account of the transfer to such person will be imposed on and payable by the holder of Old Debenture(s) tendering Old Debentures for exchange prior to the issuance of the Exchange Debentures. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering holder. 8. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If the Exchange Debentures or any Old Debentures not tendered or not exchanged are to be issued to someone other than the registered holder of Old Debentures or if any Old Debentures not exchanged are to be sent to an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. Holders of Old Debentures tendering Old Debentures by book-entry transfer may request that Old Debentures not exchanged be credited to such account maintained at the Book-Entry Transfer Facility as such holder of Old Debentures may designate. 9. IRREGULARITIES. All questions as to the form of documents and the validity, eligibility (including time or receipt), acceptance and withdrawal of Old Debentures will be determined by the Company, in its sole discretion, whose determination shall be final and binding. The Company reserves the absolute right to reject any or all tenders for exchange of any particular Old Debentures that are not in proper form, or the acceptance of which would, in the opinion of the Company or its counsel, be unlawful. The Company reserves the absolute right to waive any defect, irregularity or condition of tender for exchange with regard to any particular Old Debenture. The Company's interpretation of the terms of, and conditions to, the Exchange Offer (including the instructions herein) will be final and binding. Unless waived, any defect or irregularities in connection with the Exchange Offer must be cured within such time as the Company shall determine. Neither the Company, the Exchange Agent nor any other person shall be under any duty to give notice of any defects or irregularities in Old Debentures tendered for exchange, nor shall any of them incur any liability for failure to give such notice. A tender of Old Debentures will not be deemed to have been made until all defects and irregularities with respect to such tender have been cured or waived. Any Old Debentures received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering holders, unless otherwise provided in this Letter of Transmittal as soon as practicable following the Expiration Date. 10. WAIVER OF CONDITIONS. The Company reserves the absolute right to waive certain of the specified conditions as described under "The Exchange Offer -- Conditions" in the Prospectus in the case of any Debentures tendered (except as otherwise provided in the Prospectus). 11. MUTILATED, LOST, STOLEN OR DESTROYED DEBENTURES. If a holder of Old Debentures desires to tender an Old Debenture pursuant to the Exchange Offer, but the Old Debenture has been mutilated, lost, stolen or destroyed, such holder of Old Debentures should write to or telephone the Trustee, at the address listed below, 11 12 concerning the procedures for obtaining replacement certificates for such Old Debentures, arranging for indemnification or any other matter that requires handling by the Trustee: The Bank of New York 101 Barclay Street New York, New York 10286 Telephone: (212) 815-5092 Facsimile: (212) 815-5915 12. REQUESTS FOR INFORMATION OR ADDITIONAL COPIES. Requests for information or for additional copies of the Prospectus and this Letter of Transmittal may be directed to the Exchange Agent at the address or telephone number set forth on the cover of this Letter of Transmittal. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF, IF APPLICABLE) TOGETHER WITH OLD DEBENTURE CERTIFICATES, OR CONFIRMATION OF BOOK-ENTRY OR THE NOTICE OF GUARANTEED DELIVERY, AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. 12 13 IMPORTANT TAX INFORMATION Under current federal income tax law, a holder of Old Debentures whose tendered Old Debentures we accepted for exchange is required to provide the Company (as payor), through the Exchange Agent, with such holder's correct taxpayer identification number ("TIN") on Substitute Form W-9 or otherwise establish a basis for exemption from backup withholding. If such holder of Old Debentures is an individual, the TIN is such holder's social security number. If the Exchange Agent is not provided with the correct taxpayer identification number, the holder of Old Debentures may be subject to a penalty imposed by the Internal Revenue Service. In addition, delivery of such holder's Exchange Debentures may be subject to backup withholding. Certain holders of Old Debentures (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. Exempt holders of Old Debentures should indicate their exempt status on Substitute Form W-9. A foreign individual may qualify as an exempt recipient by submitting to the Exchange Agent a properly completed Internal Revenue Service Form W-8 (which the Exchange Agent will provide upon request) signed under penalty of perjury, attesting to the holder's exempt status. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. If backup withholding applies, the Company is required to withhold 31% of any payment made to the holder of Old Debentures or other payee. Backup withholding is not an additional federal income tax. Rather, the federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. SUBSTITUTE FORM W-9; TAXPAYER IDENTIFICATION NUMBER To prevent backup withholding on payments that are made with respect to Old Debentures exchanged in the Exchange Offer, each holder of Old Debentures is required to provide the Exchange Agent with either (i) the holder's correct TIN by completing the form below, certifying that the TIN provided on Substitute Form W-9 is correct (or that such holder of Old Debentures is awaiting a TIN) and that (A) the holder of Old Debentures has not been notified by the Internal Revenue Service that he or she is subject to backup withholding as a result of a failure to report all interest or dividends or (B) the Internal Revenue Service has notified the holder of Old Debentures that he or she is no longer subject to backup withholding; or (ii) an adequate basis for exemption. The holder of Old Debentures is required to give the Exchange Agent the TIN (e.g., social security number or employer identification number) of the record owner of the Old Debentures. If the Old Debentures are held in more than one name or are not held in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance regarding which number to report. 13 14 PAYER'S NAME: ___________________________ PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW Social Security Number OR______________________________ Employer Identification Number -------------------------------------------------------- SUBSTITUTE FORM W-9 PART 2 -- Certification -- Under Penalties of Perjury, I PART 3 -- Awaiting TIN [ ] certify that: DEPARTMENT OF THE TREASURY (1) The number shown on this form is my correct INTERNAL REVENUE SERVICE taxpayer identification number (or I am waiting for a number to be issued to me) and PAYER'S REQUEST FOR (2) I am not subject to backup withholding either TAXPAYER IDENTIFICATION because I have not been notified by the Internal NUMBER (TIN) Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or the IRS has notified me that I am no longer subject to backup withholding. Certificate instructions -- You must cross out item (2) in Part 2 above if you have been notified by the IRS that you are subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you receive another notification from the IRS stating that you are no longer subject to backup withholding, do not cross out item (2) SIGNATURE___________________________________________ DATE________________________________________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENT MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9 CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver such an application in the near future. I understand that if I do not provide a taxpayer identification number within sixty (60) days, 31% of all reportable payments made to me thereafter will be withheld until I provide such a number. _______________________________________ _______________________ Signature Date 14 EX-99.2 6 FORM OF NOTICE OF GUARANTEED DELIVERY 1 Exhibit 99.2 NOTICE OF GUARANTEED DELIVERY TO BE USED IN CONNECTION WITH ORANGE AND ROCKLAND UTILITIES, INC. OFFER TO EXCHANGE ITS 6-1/2% DEBENTURES DUE 2027 (SERIES F) FOR ANY AND ALL OUTSTANDING 6-1/2% DEBENTURES DUE 2027 (SERIES E) As set forth in the Prospectus dated January 22, 1998 (the "Prospectus") of ORANGE AND ROCKLAND UTILITIES, INC. (the "Company"), in the section entitled "The Exchange Offer" and in the accompanying Letter of Transmittal, which together with the Prospectus constitute the Company's offer (the "Exchange Offer"), this form, or one substantially equivalent hereto, must be used by any holder of the Company's 6-1/2% Debentures Due 2027 (Series E) (the "Old Debentures") who wishes to tender Old Debentures pursuant to the Exchange Offer and (i) whose Old Debentures are not immediately available, (ii) who cannot deliver the Old Debentures or other required documents to the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date or (iii) who is unable to complete the book-entry transfer on a timely basis. Such form may be delivered by facsimile transmission, if applicable, mail or hand delivery to the Exchange Agent. - -------------------------------------------------------------------------------- THE COMPANY WILL ACCEPT ALL OLD DEBENTURES TENDERED PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON FEBRUARY 25, 1998 UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. - -------------------------------------------------------------------------------- The Exchange Agent is: THE BANK OF NEW YORK By Facsimile: By Registered or Certified mail, Confirm by Overnight Courier or Hand Telephone: (212) 815-5915 Attention: The Bank of New York (212) 815-5092 Corporate Trust Office 101 Barclay Street New York, NY 10286 Attention: Corporate Trust Office DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN TO THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. 2 PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: The undersigned hereby tenders to Orange and Rockland Utilities, Inc. upon the terms and subject to the conditions set forth in the Prospectus dated January 22, 1998 (the "Prospectus") and the related Letter of Transmittal (which together with the Prospectus constitute the "Exchange Offer"), receipt of which is hereby acknowledged, the aggregate principal amount of Old Debentures set forth below pursuant to the guaranteed delivery procedures set forth under the section of the Prospectus entitled "The Exchange Offer." ________________________________________________________________________________ OLD DEBENTURE CERTIFICATE NUMBERS PRINCIPAL AMOUNT TENDERED (IF AVAILABLE) ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ If Old Debentures will be tendered by book-entry transfer to The Depository Trust Company: SIGN HERE ____________________________________________ Signatures(s) Name of Tendering Institution: _______________________________ ____________________________________________ ____________________________________________ Name(s) (Please Print) Account No.____________________ ____________________________________________ ____________________________________________ Address ____________________________________________ ____________________________________________ City State Zip Code ____________________________________________ Area Code and Telephone No. Date:_______________________________________ 2 3 GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTY) The undersigned, an institution that is a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc. or is a commercial bank or trust company having an office or correspondent in the United States (an "Eligible Guarantor Institution"), guarantees (a) that the above named person(s) "own(s)" the Old Debentures tendered hereby within the meaning of Rule 14e-4 under the Securities Exchange Act of 1934, (b) that such tender of Old Debentures complies with Rule 14e-4 and (c) delivery to the Exchange Agent of either the Old Debentures tendered hereby in proper form for transfer, or confirmation of the book-entry transfer of such Old Debentures into the Exchange Agent's account at The Depository Trust Company, pursuant to the procedure for book-entry transfer set forth in the Prospectus, and any other documents required by the Letter of Transmittal, all by 5:00 p.m., New York City time, on the third New York Stock Exchange trading day following the Expiration Date. SIGN HERE ________________________________________________________________________________ Eligible Guarantor Institution (Please Print) ________________________________________________________________________________ ________________________________________________________________________________ Signature(s) ________________________________________________________________________________ ________________________________________________________________________________ Name(s) (Please Print) ________________________________________________________________________________ ________________________________________________________________________________ Address ________________________________________________________________________________ City State Zip Code ________________________________________________________________________________ Area Code and Telephone No. Date: ____________________________ DO NOT SEND OLD DEBENTURES WITH THIS FORM. ACTUAL TENDER OF OLD DEBENTURES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A COPY OF THE PREVIOUSLY EXECUTED LETTER OF TRANSMITTAL. 3 4 INSTRUCTIONS 1. DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY. A properly completed and duly executed copy of this Notice of Guaranteed Delivery and any other documents required by this Notice of Guaranteed Delivery must be received by the Exchange Agent at its address set forth on the cover hereof prior to 5:00 p.m., New York City time, on the Expiration Date. The method of delivery of this Notice of Guaranteed Delivery and all other required documents to the Exchange Agent is at the election and risk of the holder but, except as otherwise provided below, the delivery will be deemed made only when actually received by the Exchange Agent. If such delivery is by mail, it is recommended that the holder use properly insured, registered mail with return receipt requested. For a full description of the guaranteed delivery procedures, see the section of the Prospectus entitled "The Exchange Offer". In all cases, sufficient time should be allowed to assure timely delivery. No Notice of Guaranteed Delivery should be sent to the Company. 2. SIGNATURE ON THIS NOTICE OF GUARANTEED DELIVERY; GUARANTEE OF SIGNATURES. If this Notice of Guaranteed Delivery is signed by the registered holder(s) of the Old Debentures referred to herein, the signature must correspond with the name(s) as written on the face of the Old Debentures without alteration, enlargement or any change whatsoever. If this Notice of Guaranteed Delivery is signed by a person other than the registered holder(s) of any Old Debentures listed, this Notice of Guaranteed Delivery must be accompanied by appropriate bond powers signed as the name(s) of the registered holder(s) appear(s) on the face of the Old Debentures without alteration, enlargement or any change whatsoever. If this Notice of Guaranteed Delivery is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and, unless waived by the Company, evidence satisfactory to the Company of the authority so to act must be submitted with this Notice of Guaranteed Delivery. 3. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for assistance or for additional copies of the Prospectus and the Letter of Transmittal may be directed to the Exchange Agent at its address or telephone number set forth on the cover hereof. 4 EX-99.3 7 FORM OF EXCHANGE AGREEMENT 1 Exhibit 99.3 _________________ __, ____ EXCHANGE AGENT AGREEMENT The Bank of New York Corporate Trust Trustee Administration 101 Barclay Street - 21st Floor New York, New York 10286 Ladies and Gentlemen: Orange and Rockland Utilities, Inc., a New York corporation (the "Company"), proposes to make an offer (the "Exchange Offer") to exchange its 6-1/2% Debentures due 2027 (Series E) (the "Old Debentures") for its 6-1/2% Debentures due 2027 (Series F) (the "Exchange Debentures"). The terms and conditions of the Exchange Offer as currently contemplated are set forth in a Prospectus, dated January ___, 1998 (the "Prospectus"), proposed to be distributed to all of the record holders of the Old Debentures. The Old Debentures and the Exchange Debentures are collectively referred to herein as the "Debentures." The Company hereby appoints The Bank of New York to act as exchange agent (the "Exchange Agent") in connection with the Exchange Offer. References hereinafter to "you" shall refer to The Bank of New York. The Exchange Offer is expected to be commenced by the Company on or about ________ __, 1998. The Letter of Transmittal accompanying the Prospectus is to be used by holders of the Old Debentures to accept the Exchange Offer, and contains instructions with respect to the delivery of certificates for Old Debentures tendered. The Exchange Offer shall expire at 5:00 P.M., New York City time, on __________ __, 1998 or on such later date or time to which the Company may extend the Exchange Offer (the "Expiration Date"). Subject to the terms and conditions set forth in the Prospectus, the Company expressly reserves the right to extend the Exchange Offer from time to time and may extend the Exchange Offer by giving oral (confirmed in writing) or written notice to you before 9:00 A.M., New York City time, on the business day following the previously scheduled Expiration Date. The Company expressly reserves the right to amend or terminate the Exchange Offer, and not to accept for exchange any Old Debentures not theretofore accepted for exchange, as specified in the Prospectus under the caption "The Exchange Offer -- Expiration Date; Amendments." The Company will give oral (confirmed in writing) or written notice of any amendment, termination or nonacceptance to you as promptly as practicable. 2 In carrying out your duties as Exchange Agent, you are to act in accordance with the following instructions: 1. You will perform such duties and only such duties as are specifically set forth in the section of the Prospectus captioned "The Exchange Offer" or as specifically set forth herein; provided, however, that in no way will your general duty to act in good faith be discharged by the foregoing. 2. You will establish an account with respect to the Old Debentures at The Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of the Exchange Offer within two business days after the date of the Prospectus, and any financial institution that is a participant in the Book-Entry Transfer Facility's systems may make book-entry delivery of the Old Debentures by causing the Book-Entry Transfer Facility to transfer such Old Debentures into your account in accordance with the Book-Entry Transfer Facility's procedure for such transfer. 3. You are to examine each of the Letters of Transmittal and the Old Debentures (or confirmation of book-entry transfer into your account at the Book-Entry Transfer Facility) and any other documents delivered or mailed to you by or for holders of the Old Debentures to ascertain whether (i) the Letters of Transmittal are properly completed and duly executed in accordance with the instructions set forth therein, (ii) the Old Notes have otherwise been properly tendered and (iii), if applicable, the other documents are properly completed and duly executed. You need not pass on the legal sufficiency of any signature or verify any signature guarantee. 4. With the approval of the Chief Executive Officer, any Senior Vice President, the Treasurer or the Assistant Treasurer of the Company (such approval, if given orally, to be confirmed in writing) or any other party designated by such an officer in writing, you are authorized to waive any irregularities in connection with any tender of Old Debentures pursuant to the Exchange Offer. 5. Tenders of Old Debentures may be made only as set forth in the Letter of Transmittal and in the section of the Prospectus captioned "The Exchange Offer -- Procedures for Tendering" and Old Debentures shall be considered properly tendered to you only when tendered in accordance with the procedures set forth therein. Notwithstanding the provisions of this paragraph 5, Old Debentures which Chief Executive Officer, any Senior Vice President, the Treasurer or the Assistant Treasurer of the Company shall approve as having been properly tendered shall be considered to be properly tendered (such approval, if given orally, shall be confirmed in writing). 6. You shall advise the Company with respect to any Old Debentures received subsequent to the Expiration Date and accept its instructions with respect to disposition of such Old Debentures. 7. You shall accept tenders: 2 3 (a) in cases where the Old Debentures are registered in two or more names only if signed by all named holders; (b) in cases where the signing person (as indicated on the Letter of Transmittal) is acting in a fiduciary or a representative capacity only when proper evidence of his or her authority so to act is submitted; and (c) from persons other than the registered holder of Old Debentures provided that customary transfer requirements, including any applicable transfer taxes, are fulfilled. You shall accept partial tenders of Old Debentures where so indicated and as permitted in the Letter of Transmittal and deliver certificates for Old Debentures to the transfer agent for split-up and return any untendered Old Debentures to the holder (or such other person as may be designated in the Letter of Transmittal) as promptly as practicable after expiration or termination of the Exchange Offer. 8. Upon satisfaction or waiver of all of the conditions to the Exchange Offer, the Company will notify you (such notice if given orally, to be confirmed in writing) of its acceptance, promptly after the Expiration Date, of all Old Debentures properly tendered and you, on behalf of the Company, will exchange such Old Debentures for Exchange Debentures and cause such Old Debentures to be cancelled. Delivery of Exchange Debentures will be made on behalf of the Company by you at the rate of $1,000 principal amount of Exchange Debentures for each $1,000 principal amount of the corresponding series of Old Debentures tendered promptly after notice (such notice if given orally, to be confirmed in writing) of acceptance of said Old Debentures by the Company; provided, however, that in all cases, Old Debentures tendered pursuant to the Exchange Offer will be exchanged only after timely receipt by you of certificates for such Old Debentures (or confirmation of book-entry transfer into your account at the Book-Entry Transfer Facility), a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) with any required signature guarantees and any other required documents. You shall issue Exchange Debentures only in denominations of $1,000 or any integral multiple thereof. 9. Tenders pursuant to the Exchange Offer are irrevocable, except that, subject to the terms and upon the conditions set forth in the Prospectus and the Letter of Transmittal, Old Debentures tendered pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date. 10. The Company shall not be required to exchange any Old Debentures tendered if any of the conditions set forth in the Exchange Offer are not met. Notice of any decision by the Company not to exchange any Old Debentures tendered shall be given (and confirmed in writing) by the Company to you. 11. If, pursuant to the Exchange Offer, the Company does not accept for exchange all or part of the Old Debentures tendered because of an invalid tender, the occurrence of certain other events set forth in the Prospectus under the caption "The Exchange Offer -- Conditions" or otherwise, you shall as soon as practicable after the expiration or termination of the Exchange 3 4 Offer return those certificates for unaccepted Old Debentures (or effect appropriate book-entry transfer), together with any related required documents and the Letters of Transmittal relating thereto that are in your possession, to the persons who deposited them. 12. All certificates for reissued Old Debentures, unaccepted Old Debentures or for Exchange Debentures shall be forwarded by (a) first-class certified mail, return receipt requested under a blanket surety bond protecting you and the Company from loss or liability arising out of the non-receipt or non-delivery of such certificates or (b) by registered mail insured separately for the replacement value of each of such certificates. 13. You are not authorized to pay or offer to pay any concessions, commissions or solicitation fees to any broker, dealer, bank or other persons or to engage or utilize any person to solicit tenders. 14. As Exchange Agent hereunder you: (a) shall have no duties or obligations other than those specifically set forth herein or in the section of the Prospectus captioned "The Exchange Offer" or as may be subsequently agreed to in writing by you and the Company; (b) will be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value or genuineness of any of the certificates or the Old Debentures represented thereby deposited with you pursuant to the Exchange Offer, and will not be required to and will make no representation as to the validity, value or genuineness of the Exchange Offer; provided, however, that in no way will your general duty to act in good faith be discharged by the foregoing; (c) shall not be obligated to take any legal action hereunder which might in your reasonable judgment involve any expense or liability, unless you shall have been furnished with reasonable indemnity; (d) may reasonably rely on and shall be protected in acting in reliance upon any certificate, instrument, opinion, notice, letter, telegram or other document or security delivered to you and reasonably believed by you to be genuine and to have been signed by the proper party or parties; (e) may reasonably act upon any tender, statement, request, comment, agreement or other instrument whatsoever not only as to its due execution and validity and effectiveness of its provisions, but also as to the truth and accuracy of any information contained therein, which you shall in good faith believe to be genuine or to have been signed or represented by a proper person or persons; (f) may rely on and shall be protected in acting upon written or oral instructions from any officer of the Company; (g) may consult with your counsel with respect to any questions relating to your duties and responsibilities and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or 4 5 omitted to be taken by you hereunder in good faith and in accordance with the advice or opinion of such counsel; and (h) shall not advise any person tendering Old Debentures pursuant to the Exchange Offer as to the wisdom of making such tender or as to the market value or decline or appreciation in market value of any Old Debentures or Exchange Debentures. 15. You shall take such action as may from time to time be requested by the Company or its counsel (and such other action as you may reasonably deem appropriate) to furnish copies of the Prospectus, Letter of Transmittal and the Notice of Guaranteed Delivery (as defined in the Prospectus) or such other forms as may be approved from time to time by the Company, to all persons requesting such documents and to accept and comply with telephone requests for information relating to the Exchange Offer, provided that such information shall relate only to the procedures for accepting (or withdrawing from) the Exchange Offer. The Company will furnish you with copies of such documents at your request. All other requests for information relating to the Exchange Offer shall be directed to the Company, Attention: Investor Relations. 16. You shall advise by facsimile transmission or telephone, and promptly thereafter confirm in writing to the Assistant Treasurer of the Company and such other person or persons as it may request, daily (and more frequently during the week immediately preceding the Expiration Date and if otherwise requested) up to and including the Expiration Date, as to the number of Old Debentures which have been tendered pursuant to the Exchange Offer and the items received by you pursuant to this Agreement, separately reporting and giving cumulative totals as to items properly received and items improperly received. In addition, you will also inform, and cooperate in making available to, the Company or any such other person or persons upon oral request made from time to time prior to the Expiration Date of such other information as it or he or she reasonably requests. Such cooperation shall include, without limitation, the granting by you to the Company and such person as the Company may request of access to those persons on your staff who are responsible for receiving tenders, in order to ensure that immediately prior to the Expiration Date the Company shall have received information in sufficient detail to enable it to decide whether to extend the Exchange Offer. You shall prepare a final list of all persons whose tenders were accepted, the aggregate principal amount of Old Debentures tendered and the aggregate principal amount of Old Debentures accepted, and deliver said list to the Company. Upon receipt of said list, the Company will promptly provide you with a calculation of the principal amount of Exchange Debentures to be issued to each holder. 17. Letters of Transmittal and Notices of Guaranteed Delivery shall be stamped by you as to the date and the time of receipt thereof and shall be preserved by you for a period of time at least equal to the period of time you preserve other records pertaining to the transfer of Debentures. You shall dispose of unused Letters of Transmittal and other surplus materials by returning them to the Company. 18. You hereby expressly waive any lien, encumbrance or right of set-off whatsoever that you may have with respect to funds deposited with you for the payment of transfer taxes by reasons of amounts, if any, borrowed by the Company, or any of its subsidiaries or affiliates pursuant to any loan or credit agreement with you or for compensation owed to you hereunder. 5 6 19. For services rendered as Exchange Agent hereunder, you shall be entitled to such compensation as set forth on Schedule I attached hereto. 20. You hereby acknowledge receipt of the Prospectus and the Letter of Transmittal attached hereto and further acknowledge that you have examined each of them. Any inconsistency between this Agreement, on the one hand, and the Prospectus and the Letter of Transmittal (as they may be amended from time to time), on the other hand, shall be resolved in favor of the latter two documents, except with respect to the duties, liabilities and indemnification of you as Exchange Agent, which shall be controlled by this Agreement. 21. The Company covenants and agrees to indemnify and hold you harmless in your capacity as Exchange Agent hereunder against any loss, liability, cost or expense, including reasonable attorney's fees and expenses, arising out of or in connection with any act, omission, delay or refusal made by you in reliance upon any signature, endorsement, assignment, certificate, order, request, notice, instruction or other instrument or document reasonably believed by you to be valid, genuine and sufficient and in accepting any tender or effecting any transfer of Old Debentures reasonably believed by you in good faith to be authorized, and in delaying or refusing in good faith to accept any tenders or effect any transfer of Old Debentures; provided, however, that the Company shall not be liable for indemnification or otherwise for any loss, liability, cost or expense to the extent arising out of your gross negligence or willful misconduct. In no case shall the Company be liable under this indemnity with respect to any claim against you unless the Company shall be notified by you, by letter or cable or by facsimile confirmed by letter, of the written assertion of a claim against you or of any other action commenced against you, promptly after you shall have received any such written assertion or commencement of action. The Company shall be entitled to participate at its own expense in the defense of any such claim or other action, and, if the Company so elects, the Company shall assume the defense of any suit brought to enforce any such claim. In the event that the Company shall assume the defense of any such suit, the Company shall not be liable for the fees and expenses of any counsel thereafter incurred by you so long as the Company shall retain counsel reasonably satisfactory to you to defend such suit. 22. You shall arrange to comply with all requirements under the tax laws of the United States, including those relating to missing Taxpayer Identification Numbers, and shall file any appropriate reports with the Internal Revenue Service. The Company understands that you are required to deduct 31% on payments to holders who have not supplied their correct Taxpayer Identification Number or required certification. Such funds will be turned over to the Internal Revenue Service in accordance with applicable regulations. 23. You shall deliver or cause to be delivered, in a timely manner to each governmental authority to which any transfer taxes are payable in respect of the exchange of Old Debentures, your check in the amount of all transfer taxes so payable, and the Company shall reimburse you for the amount of any and all transfer taxes payable in respect of the exchange of Old Debentures; provided, however, that you shall reimburse the Company for amounts refunded to you in respect of your payment of any such transfer taxes, at such time as such refund is received by you and, provided further, that if Exchange Debentures and/or substitute Old Debentures not exchanged are to be delivered to, or are to be registered or issued in the name of, any person other than the registered holder of the Old Debentures tendered in the Exchange 6 7 Offer, or if tendered Old Notes are registered in the name of any person other than the person signing the Letter of Transmittal, or if a transfer tax is imposed for any reason other than the transfer of Old Debentures to the Company or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering holder and will not be reimbursed to you by the Company. In no event, however, will the Exchange Agent be responsible for the payment of any applicable transfer tax imposed for any reason other than the exchange of Old Debentures. 24. This Agreement and your appointment as Exchange Agent hereunder shall be construed and enforced in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within such state, and without regard to conflicts of law principles, and shall inure to the benefit of, and the obligations created hereby shall be binding upon, the successors and assigns of each of the parties hereto. 25. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 26. In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 27. This Agreement shall not be deemed or construed to be modified, amended, rescinded, cancelled or waived, in whole or in part, except by a written instrument signed by a duly authorized representative of the party to be charged. This Agreement may not be modified orally. 28. Unless otherwise provided herein, all notices, requests and other communications to any party hereunder shall be in writing (including facsimile or similar writing) and shall be given to such party, addressed to it, at its address or telecopy number set forth below: If to the Company: _________________________ _________________________ _________________________ _________________________ Facsimile: Attention: If to the Exchange Agent: The Bank of New York 101 Barclay Street Floor 21 West New York, New York 10286 7 8 Facsimile: (212) 815-5915 Attention: Corporate Trust Trustee Administration 29. Unless terminated earlier by the parties hereto, this Agreement shall terminate after all obligations of the parties hereunder shall have been fulfilled. Notwithstanding the foregoing, Paragraphs 19, 21 and 23 shall survive the termination of this Agreement. Upon any termination of this Agreement, you shall promptly deliver to the Company any certificates for Debentures, funds or property then held by you as Exchange Agent under this Agreement. 30. This Agreement shall be binding and effective as of the date hereof. Please acknowledge receipt of this Agreement and confirm the arrangements herein provided by signing and returning the enclosed copy. By: _____________________________ Name: Title: Accepted as the date first above written: THE BANK OF NEW YORK, as Exchange Agent By: _______________________________ Name: Title: 8 -----END PRIVACY-ENHANCED MESSAGE-----