Exhibit 10(ak)


 





 


	
  DATE:

  	
   

  	
  Sep 10. 2003

  
	
   

  	
   

  	
   

  
	
  TO:

  	
   

  	
  MAINE PUBLIC SERVICE COMPANY (Party B)

  
	
  ATTN:

  	
   

  	
  KURT A TORNQUIST

  
	
  FAX:

  	
   

  	
  207-764-6586

  
	
  PHONE:

  	
   

  	
  207-768-5811

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  FROM:

  	
   

  	
  Fleet National Bank (Party A)

  
	
  ATTN:

  	
   

  	
  Derivatives Confirmation Unit

  
	
  FAX:

  	
   

  	
  (617) 434-4284

  
	
    PHONE;

  	
   

  	
  (617)434-4787 or (617) 434-7878

  
	
   

  	
   

  	
   

  
	
  RE:

  	
   

  	
  INTEREST RATE SWAP

  Our Ref: 80644FB/129892

  



 


 


The purpose of this letter
agreement is to set forth the terms and conditions of the Transaction entered
into between Fleet National Bank Party A and MAINE PUBLIC SERVICE COMPANY Party
B on the Trade Date specified below (the “Transaction”). This letter
constitutes a “Confirmation” as referred to in the ISDA Master Agreement
specified below.


 


The definitions and provisions
contained in the 2000 ISDA Definitions (the “Definitions”), as published by the
International Swaps and Derivatives Association, Inc. (“ISDA”), are
incorporated into this Confirmation. In the event of any inconsistency between
the Definitions and provisions in this confirmation, this Confirmation will
govern.


 


1.                                       This
Confirmation constitutes a “Confirmation” as referred to in, and supplements,
forms a part of and is subject to, the ISDA Master Agreement dated as of
9//09/03, as amended and supplemented from time to time (the “Agreement”),
between you and us. All provisions contained in the Agreement govern this
Confirmation except as expressly modified below.


 


2.                                       The
terms of the particular Transaction to which this Confirmation relates are as
follows:


 


	
  Trade Date

  	
   

  	
  Sep 09, 2003

  
	
   

  	
   

  	
   

  
	
  Effective Date

  	
   

  	
  Sep 09, 2003

  
	
   

  	
   

  	
   

  
	
  Termination Date

  	
   

  	
  Jun 01, 2007 subject to
  adjustment in accordance with the Modified Following Business Day Convention.

  
	
   

  	
   

  	
   

  
	
  Notional Amount

  	
   

  	
  USD 8,740,000.00

  



 


1

















 


NOTIONAL AMOUNT - FLOATING AMOUNTS SIDE


 


	
  From Date

  	
   

  	
  To Date

  	
   

  	
  Ccy

  	
   

  	
  Notional

  	
   

  
	
  Sep 09, 2003

  	
   

  	
  Dec 01,2003

  	
   

  	
  USD

  	
   

  	
  8,740,000.00

  	
   

  
	
  Dec 01, 2003

  	
   

  	
  Jun 01,2004

  	
   

  	
  USD

  	
   

  	
  8,080,000.00

  	
   

  
	
  Jun 01, 2004

  	
   

  	
  Dec 01,2004

  	
   

  	
  USD

  	
   

  	
  7,375,000.00

  	
   

  
	
  Dec 01, 2004

  	
   

  	
  Jun 01,2005

  	
   

  	
  USD

  	
   

  	
  6,630,000.00

  	
   

  
	
  Jun 01, 2005

  	
   

  	
  Dec 01,2005

  	
   

  	
  USD

  	
   

  	
  5,840,000.00

  	
   

  
	
  Dec 01, 2005

  	
   

  	
  Jun 01,2006

  	
   

  	
  USD

  	
   

  	
  5,005,000.00

  	
   

  
	
  Jun 01, 2006

  	
   

  	
  Dec 01,2006

  	
   

  	
  USD

  	
   

  	
  4,115,000.00

  	
   

  
	
  Dec 01, 2006

  	
   

  	
  Jun 01,2007

  	
   

  	
  USD

  	
   

  	
  3,175,000.00

  	
   

  



 


NOTIONAL AMOUNT - FIXED AMOUNTS SIDE


 


	
  From Date

  	
   

  	
  To Date

  	
   

  	
  Ccy

  	
   

  	
  Notional

  	
   

  
	
  Sep 09, 2003

  	
   

  	
  Dec 01, 2003

  	
   

  	
  USD

  	
   

  	
  8,740,000.00

  	
   

  
	
  Dec 01, 2003

  	
   

  	
  Jun 01, 2004

  	
   

  	
  USD

  	
   

  	
  8,080,000.00

  	
   

  
	
  Jun 01, 2004

  	
   

  	
  Dec 01, 2004

  	
   

  	
  USD

  	
   

  	
  7,375,000.00

  	
   

  
	
  Dec 01, 2004

  	
   

  	
  Jun 01, 2005

  	
   

  	
  USD

  	
   

  	
  6,630,000.00

  	
   

  
	
  Jun 01, 2005

  	
   

  	
  Dec 01, 2005

  	
   

  	
  USD

  	
   

  	
  5,840,000.00

  	
   

  
	
  Dec 01, 2005

  	
   

  	
  Jun 01, 2006

  	
   

  	
  USD

  	
   

  	
  5,005,000.00

  	
   

  
	
  Jun 01, 2006

  	
   

  	
  Dec 01, 2006

  	
   

  	
  USD

  	
   

  	
  4,115,000.00

  	
   

  
	
  Dec 01, 2006

  	
   

  	
  Jun 01, 2007

  	
   

  	
  USD

  	
   

  	
  3,175,000,00

  	
   

  



 


Floating Amounts


 


	
  Floating
  Rate Payer

  	
   

  	
  Fleet
  National Bank

  
	
   

  	
   

  	
   

  
	
  Floating Rate
  Payment Dates

  	
   

  	
  Monthly on the 1st,
  commencing Oct 01, 2003 and ending on the Termination Date subject to
  adjustment in accordance with the Modified Following Business Day Convention.

  
	
   

  	
   

  	
   

  
	
  Floating
  Rate Option

  	
   

  	
  USD-LIBOR-BBA

  
	
   

  	
   

  	
   

  
	
  Designated
  Maturity

  	
   

  	
  1 month

  
	
   

  	
   

  	
   

  
	
  Spread

  	
   

  	
  None

  
	
   

  	
   

  	
   

  
	
  Floating
  Rate Day Count Fraction

  	
   

  	
  ACTUAL /
  ACTUAL

  
	
   

  	
   

  	
   

  
	
  Floating
  Rate Reset Dates

  	
   

  	
  The last
  Business Day of each Calculation Period

  
	
   

  	
   

  	
   

  
	
  Compounding

  	
   

  	
  Inapplicable

  
	
   

  	
   

  	
   

  
	
  Method of
  Averaging

  	
   

  	
  Weighted
  Average

  
	
   

  	
   

  	
   

  
	
  Business
  Days

  	
   

  	
  New York and
  London

  



 


2

















 


Fixed Amounts


 


	
  Fixed Rate Payer

  	
   

  	
  MAINE PUBLIC SERVICE
  COMPANY

  
	
   

  	
   

  	
   

  
	
  Fixed Rate Payment Dates

  	
   

  	
  Monthly on the 1st,
  commencing Oct 01, 2003 and ending on the Termination Date subject to adjustment
  in accordance with the Modified Following Business Day Convention.

  
	
   

  	
   

  	
   

  
	
  Fixed Rate

  	
   

  	
  2.790000%

  
	
   

  	
   

  	
   

  
	
  Fixed Rate Day Count
  Fraction

  	
   

  	
  ACTUAL /360

  
	
   

  	
   

  	
   

  
	
  Business Days

  	
   

  	
  New York and London

  
	
   

  	
   

  	
   

  
	
  Calculation Agent

  	
   

  	
  Fleet National Bank

  
	
   

  	
   

  	
   

  
	
  Governing  Law

  	
   

  	
  New York law

  
	
   

  	
   

  	
   

  
	
  Documentation

  	
   

  	
  ISDA Master Agreement to be
  provided by Fleet National Bank

  



 


3.                                       Relationship
Between Parties


 


Each party represents to the other party that:


 


(a) Non-Reliance. It is acting for
its own account, and it has made its own independent decisions to enter this
Transaction and as to whether this Transaction is appropriate or proper for it
based upon its own judgment and upon advice from such advisors as it has deemed
necessary. It is not relying on any communication (written or oral) from the
other party as investment advice or am a recommendation to enter into this
Transaction; it being understood that information and explanations related to
the terms and conditions of this Transaction shall not be considered investment
advice or a recommendation to enter into this Transaction. It has not received
from the other party any assurance or guarantee as to the expected results of
this Transaction.


 


(b) Evaluation and Understanding. It is
capable of evaluating and understanding (on its own behalf or through
independent professional advice), and understands and accepts, the terms,
conditions and risks  of this Transaction. It is also capable of
assuming, and assumes, the financial and other risks of this Transaction.


 


(c) Status of Parties. The other party is not
acting as a fiduciary or an advisor for it in  respect of this Transaction.


 


(d) Risk Management. It has entered into this
Transaction for the purpose of (i) managing its borrowings or investments, (ii)
hedging its underlying assets or liabilities or (iii) in
connection with its line of business.


 


(e) It is an “eligible contract
participant” as defined in Section la(12) of the Commodity Exchange Act.


 


3

















 


4.                                       Additional
Termination Event  will apply.


 


(i)                                     The
occurrence of any of the following shall constitute an Additional Termination
Event with respect to Party B for which Party B will be the Affected Party:


 


(1)                                  Party
A in  no
longer party to any or all of the Credit Support Documents identified in Part
4(f)(ii) of the Schedule to the Agreement, as such documents are amended,
modified, or supplemented from time to time.


 


(2)                                  Any
or all of the Credit Support Documents identified in Part 4(f)(ii) of the schedule
to the Agreement, as such documents are amended, modified, or supplemented from
time to time, are terminated or ceases to exist for any reason prior to the
satisfaction of the obligations of this Transaction


 


(ii)                                  Notwithstanding
section 6(b) of the Agreement or any other provision of the Agreement, Party A
shall not initially have the right to designate an Early Termination Date upon
the occurrence of an Additional Termination Event. In lieu of the right to
designate an Early Termination Date, Party A grants Party B the rights specified
in the following subparts (1) or (2) to assign, as applicable, either Party A
or Party B’s rights and obligation under this Transaction.


 


(1)                                  Party
B shall be permitted to instruct Party A to assign Party A’s rights and
obligation under the Agreement to a substitute swap provider reasonably
acceptable to Party A and Party B (“Substitute Swap Provider”), provided the
Substitute Swap Provider expressly assumes Party A’s rights and obligations
under this Agreement in a writing reasonably satisfactory to Party A and Party
B.


 


(2)                                  Party
B shall be permitted to assign its rights and obligations under the Agreement
to a Substitute Swap Provider, provided the Substitute Swap Provider expressly
assumes Party B’s rights and obligations under this Agreement in a writing
reasonably satisfactory to Party A and Party B.


 


Party A shall have the right to designate an
Early Termination Date under Section 6(b) of the Agreement and this Additional
Termination Event if this Transaction is not assigned pursuant within twenty
(20) Business Days from the date the Additional Termination Event occurs.


 


4

















 


5.                                       Acknowledgement


 


MAINE PUBLIC SERVICE COMPANY
acknowledges and agrees that:


 


(a)                                  absent an
express written agreement to the contrary, an agreement by the parties to
voluntarily terminate the Transaction before its scheduled termination date is
contingent upon the payment by one party to the other of the costs associated
with terminating the Transaction. Such costs shall include, but may not be
limited to, the aggregate difference between the market value of the terminated
portion of the Transaction and the market value of a similar transaction
executed on the termination date with a notional amount and term equal to the
terminated portion of the Transaction. Any  termination cost paid by MAINE PUBLIC
SERVICE COMPANY to terminate the Transaction is in addition to and not part of
any yield maintenance fee, prepayment penalty or other expense that MAINE
PUBLIC SERVICE COMPANY may pay in connection with the prepayment of a loan
transaction with Fleet National Bank or its affiliate; and


 


(b)                                 this acknowledgement or the provision by Fleet
National Bank of a valuation or indicative termination price does not
constitute a commitment by Fleet National Bank to terminate the Transaction at
such price, or otherwise, prior to its scheduled termination date. The price
and terms at which the Transaction may be terminated will be individually
negotiated and, accordingly, may vary from the price and terms offered by other
financial institutions. Any commitment to terminate the Transaction shall not
be binding upon the parties unless expressly agreed to by Fleet National Bank.


 


6.                                       Settlement
Instructions


 


Payments to
MAINE PUBLIC SERVICE COMPANY in USD


 


*** Payment Instructions  To Be Advised ***


 


Payments to Fleet National Bank  in USD


 


	
  To

  	
   

  	
  Fleet National Bank ABA:
  011000138

  
	
  Favor Of

  	
   

  	
  Fleet National Bank

  
	
  Account Number

  	
   

  	
  1026103-29480

  



 


 


7.                                       contact
Instructions


 


	
  Fleet National Bank:

  	
   

  	
  Tel: 617-434-7953

  
	
  Resets/Payments

  	
   

  	
   

  
	
   

  	
   

  	
  Fax: 617-431-3588

  
	
   

  	
   

  	
   

  
	
  Confirmations

  	
   

  	
  Tel: 617-434-4787

  
	
   

  	
   

  	
  Fax: 617-434-4284

  



 


5

















 


	
  MAINE PUBLIC
  SERVICE COMPANY:

  	
   

  	
  Tel:
  207-768-5811 

  
	
   

  	
   

  	
  Fax:
  207-764-6586

  



 


Very truly yours,


 


Fleet National Bank


 


 


	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
  Name:

  	
  Name:

  
	
  Title:

  	
  Title:

  



 


 


Agreed and accepted as of the
date first above written:


MAINE PUBLIC SERVICE COMPANY


 


	
  By:

  	
  /s/ Kurt A. Tornquist

  	
   

  
	
  Name:

  	
  Kurt A. Tornquist

  	
   

  
	
  Title:

  	
  Senior VP & CFO

  	
   

  
					



 


PLEASE COUNTERSIGN AND FAX TO:
(617) 434-4284


ATTN: Derivatives Confirmations


REQUEST CORRECTIONS: (617)
434-4787


Please be advised telephone
calls may be recorded to ensure

transaction accuracy.


80644FB


 


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