CAROLINA POWER & LIGHT COMPANY
OFFICER'S CERTIFICATE
Mark F. Mulhern, the Vice President and Treasurer of Carolina Power &
Light Company (the "Company"), pursuant to the authority granted in the Board
Resolutions dated December 9, 1998, July 14, 1999, and October 25, 1999 and the
Indenture as defined herein, does hereby certify to The Chase Manhattan Bank
(the "Trustee"), as Trustee under the Indenture (for Debt Securities) of the
Company dated as of October 28, 1999 (as amended by this Officer's Certificate,
the "Indenture") that he has authorized the issue and sale of Extendible Notes
due October 28, 2009 (the "Notes") by the Company, and, in connection with such
issuance, has determined, approved or appointed, as the case may be, the
following:
1) The notes of the first series issued under the Indenture shall be
designated "Extendible Notes due October 28, 2009." The Form of Note is
attached hereto as Exhibit A. All capitalized terms used in this
certificate which are not defined herein shall have the meanings (if
any) set forth in Exhibit A hereto; all capitalized terms used in this
certificate which are not defined herein or in Exhibit A hereto shall
have the meanings set forth in the Indenture.
2) The Notes shall initially be limited in aggregate principal amount to
$500,000,000 at any time Outstanding, except as may otherwise be
permitted under the Indenture and the Notes.
3) If not redeemed earlier pursuant to their terms, the Notes shall mature
and the principal thereof shall be due and payable together with all
accrued and unpaid interest thereon on October 28, 2009.
4) The Notes shall be issued as Global Securities registered in the name
of a nominee of The Depository Trust Company. The Notes shall be issued
in denominations of $1,000 and integral multiples thereof.
5) The Notes shall bear interest, and the interest rate shall reset as
provided in Exhibit A. The Notes will bear interest (a) during the
Initial Spread Period, from and including October 28, 1999 to but
excluding July 28, 2000, at a rate that will reset monthly equal to the
one month LIBOR plus a spread of .33% and (b) during each Subsequent
Spread Period either at a fixed or floating interest rate as determined
by the Company with the recommendation of the Remarketing Agent.
6) Pursuant to the Calculation Agency Agreement and the Remarketing
Agreement, respectively, the Rate Agent (i) in Floating Rate Mode will
be The Chase Manhattan Bank and (ii) in Fixed Rate Mode will be Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
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7) The Notes may be redeemed on or after July 28, 2000, as provided in
Exhibit A. To the extent the provisions of Exhibit A are inconsistent
with Article IV of the Indenture, the provisions of Exhibit A shall
control.
8) On and after July 28, 2000, if the Company so elects with respect to a
Subsequent Spread Period, the Notes will be subject to repayment at the
option of holders thereof during such Subsequent Spread Period, as
provided in Exhibit A. To the extent the provisions of Exhibit A are
inconsistent with Article IV of the Indenture, the provisions of
Exhibit A shall control.
9) On the Remarketing Reset Date which commences each Subsequent Spread
Period, each Note will automatically be tendered, or deemed tendered to
the Remarketing Agent, for remarketing at 100% of the principal amount
thereof unless the beneficial holder affirmatively elects not to tender
such Note by following the procedures set forth in the prospectus
supplement.
10) The Notes shall not be subject to a sinking fund.
11) The purchase price of the Notes from the Company shall be 99.875% of
the principal amount thereof.
12) Principal and interest will be payable at the corporate trust office of
The Chase Manhattan Bank, presently located at 450 West 33rd Street,
New York, New York, 10001 or such other place as may be designated by
the Trustee from time to time.
13) The Notes will be subject to certain events of default and certain
covenants as set forth in the Indenture and the Notes.
14) The Trustee shall initially be The Chase Manhattan Bank, the principal
corporate trust office of which presently is located at 450 West 33rd
Street, New York, New York, 10001.
15) The Notes shall be senior unsecured obligations of the Company.
16) Any further terms of the Notes shall be as provided for in Exhibit A
hereto and in the Indenture.
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IN WITNESS WHEREOF, the undersigned Vice President and Treasurer of the
Company has executed this Certificate as of the 28th day of October, 1999.
/s/ Mark F. Mulhern
------------------------------
Mark F. Mulhern
Vice President and Treasurer
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EXHIBIT A--FORM OF NOTE
[depository legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (55 WATER STREET, NEW YORK, NEW
YORK) ("DTC"), TO CAROLINA POWER & LIGHT COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
[FORM OF FACE OF EXTENDIBLE NOTE]
REGISTERED REGISTERED
CAROLINA POWER & LIGHT COMPANY
EXTENDIBLE NOTE DUE OCTOBER 28, 2009
NO. _____ PRINCIPAL AMOUNT:
$_______________
CUSIP NO. ___________
CAROLINA POWER & LIGHT COMPANY, a corporation duly organized and existing under
the laws of the State of North Carolina (herein referred to as the "Company"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal amount of ________________ Dollars ($____________), on October 28,
2009 (the "Stated Maturity") (unless and to the extent earlier redeemed or
repaid prior to such date) and to pay interest thereon from October 28, 1999 or
from the most recent Interest Payment Date (as defined below) to which interest
has been paid or duly provided for in arrears on the 28th day of each month
during the Initial Spread Period and any other date as shall be established by
the Company as an interest payment date in accordance with the provisions set
forth below (each, an "Interest Payment Date"), and at maturity or earlier
redemption, until the principal hereof is paid or made available for payment.
Interest payments for this Note shall include interest accrued to but excluding
each Interest Payment Date. The interest so payable, and punctually paid or duly
provided for, on Notes held in global (i.e., book-entry) form, on any Interest
Payment Date shall, as provided in
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the Indenture (as defined below), be paid to the Person in whose name this Note
(or one or more Predecessor Debt Securities) is registered at the close of
business on the Regular Record Date, which shall be the calendar day (whether or
not a Business Day) next preceding such Interest Payment Date. Interest on Notes
held in definitive form will be payable on each Interest Payment Date specified
for the Initial Spread Period and any Subsequent Spread Period, in each case to
the person in whose name such Note is registered at the close of business on the
15th calendar day (whether or not a Business Day) preceding such Interest
Payment Date.
Except as otherwise provided in the Indenture, any interest not
punctually paid or duly provided for on any Interest Payment Date ("Defaulted
Interest") shall forthwith cease to be payable to the Holder on the Regular
Record Date with respect to such Interest Payment Date by virtue of having been
such Holder and may either (1) be paid to the Person in whose name this Note (or
one or more Predecessor Debt Securities) is registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee (as defined below), notice of which shall be given to Holders of
Notes not less than 10 days prior to such Special Record Date, or (2) be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture. Payment of the principal of (and premium, if any) and interest, if
any, on this Note shall be made at the Corporate Trust Office of the Trustee or
such other offices or agencies of the Trustee maintained for that purpose from
time to time, or at any other office or agency maintained by the Company for
such purpose, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
PROVIDED, HOWEVER, that at the option of the Company, payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Debt Security Register.
Reference is hereby made to the further provisions of this Note set
forth below, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee or its duly appointed co-authenticating agent by manual signature,
this Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this Instrument to be signed
by the signature or facsimile signature of its Chairman of the Board, its
President, a Vice President, its Treasurer or an Assistant Treasurer and
attested by its Secretary or an Assistant Secretary by his/her signature or a
facsimile thereof, and its corporate seal or a facsimile of its corporate seal
to be affixed hereunto or imprinted hereon.
(SEAL) CAROLINA POWER & LIGHT COMPANY
By ____________________________________
Name:
Title:
Attest:
- -------------------------------
Name:
Title:
Dated: October 28, 1999
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series designated herein referred to in
the within-mentioned Indenture.
Dated: October 28, 1999
THE CHASE MANHATTAN BANK, as Trustee
By: _________________________________
Name:
Title: Authorized Representative
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[FORM OF REVERSE OF NOTE]
This Note is one of a duly authorized issue of securities of the
Company (herein called the "Notes") issued and to be issued in one or more
series under an Indenture (For Debt Securities), dated October 28, 1999 (herein
called the "Indenture," which term shall have the meaning assigned to it in such
instrument) between the Company and The Chase Manhattan Bank, as trustee (herein
called the "Trustee," which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Notes and of the terms upon
which the Notes are, and are to be, authenticated and delivered. Capitalized
terms used but not defined in this Note have the meanings given to them in the
Indenture. This Note is a "Debt Security" as that term is defined in the
Indenture.
The Notes are senior unsecured obligations of the Company and
rank equally with all of the Company's other senior unsecured indebtedness from
time to time outstanding. Debt Securities may be issued under the Indenture from
time to time as a single series or in two or more separate series up to the
aggregate principal amount from time to time authorized for each series. The
Company may, from time to time, without the consent of the holder of this Note,
provide for the issuance of Notes or other Debt Securities under the Indenture
in addition to this Note.
The Notes will mature, unless previously redeemed, on October 28, 2009
(the "Stated Maturity"). This Note is one of the series designated on the face
hereof, initially limited in the aggregate principal amount of $500,000,000.
This series of Notes may be "reopened" and additional Notes issued under the
Indenture. The Notes will bear interest as described below for the Initial
Spread Period and any Subsequent Spread Period (each as defined below). Interest
on the Notes held in book-entry form will be payable on each Interest Payment
Date (as defined below) specified for the Initial Spread Period and any
Subsequent Spread Period, in each case to the person in whose name the Notes are
registered at the close of business on the calendar day (whether or not a
Business Day) next preceding such Interest Payment Date. Interest payable on any
Interest Payment Date or Stated Maturity or date of earlier redemption or
repayment will be the amount of interest accrued from and including the date of
original issuance or from and including the most recent Interest Payment Date on
which interest has been paid, to but excluding such Interest Payment Date or
Stated Maturity or date of earlier redemption or repayment, as the case may be.
Principal of and interest on the Notes will be payable, and the transfer of the
Notes will be registrable, at the Corporate Trust Office of the Trustee, or such
other offices or agencies of the Trustee from time to time designated by the
Trustee for such purpose, or at any other office or agency designated by the
Company for such purpose.
The Remarketing Agent (or its successor(s)) for the Notes of this
series shall be designated by the Company. The Remarketing Agent shall remarket
the Notes on terms and conditions as set forth herein and in the Remarketing
Agreement (as defined below).
The Notes will not be subject to a sinking fund.
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If the Stated Maturity for the Notes falls on a day that is not a
Business Day, the related payment of principal and interest will be made on the
next succeeding Business Day as if it were made on the date such payment was
due, and no interest will accrue on the amounts so payable for the period from
and after such date to the next succeeding Business Day.
The term "Business Day" means any day other than a Saturday or Sunday
or a day on which banking institutions in The City of New York are required or
authorized to close and, in the case of Notes in the Floating Rate Mode (as
defined below), that is also a London Business Day. The term "London Business
Day" means any day on which dealings in deposits in U.S. dollars are transacted
in the London interbank market.
All percentages resulting from any calculation of any interest rate for
the Notes will be rounded, if necessary, to the nearest one hundred thousandth
of a percentage point, with five one millionths of a percentage point rounded
upward and all dollar amounts will be rounded to the nearest cent, with one-half
cent being rounded upward.
INITIAL SPREAD PERIOD
The "Initial Spread Period" will be the period from and including
October 28, 1999, the date of original issuance of the Notes, to but excluding
the initial "Remarketing Reset Date" for the Notes. The initial Remarketing
Reset Date will be July 28, 2000.
During the Initial Spread Period for the Notes, interest on the Notes
will be payable in arrears monthly, on the 28th day of each month, commencing
November 28, 1999 (each such date an "Interest Payment Date" in respect of the
Initial Spread Period), except as described below. The interest rate on the
Notes will be reset monthly on the 28th day of each month, commencing November
28, 1999 (the "Interest Reset Date" in respect of the Initial Spread Period),
and the Notes will bear interest during the Initial Spread Period at a per annum
rate (computed on the basis of the actual number of days elapsed over a 360-day
year) equal to LIBOR (as defined below) for the applicable Interest Reset Period
(as defined below), plus the Initial Spread (as defined below). The "Initial
Interest Reset Period" will be the period from and including the date of
original issuance of the Notes, to but excluding November 28, 1999. Thereafter,
each "Interest Reset Period" during the Initial Spread Period will be the
monthly period from and including the most recent Interest Reset Date, to but
excluding the next succeeding Interest Reset Date or Remarketing Reset Date, as
the case may be.
The spread applicable to the Notes during the Initial Spread Period
will be .33% (the "Initial Spread"), and the interest rate mode used for the
Initial Spread Period will be the "Floating Rate Mode." Thus, the interest rate
per annum for the Notes during the Initial Interest Reset Period will be equal
to LIBOR, determined as of October 26, 1999, plus the Initial Spread. The
interest rate per annum for each succeeding Interest Reset Period during the
Initial Spread Period will equal LIBOR for such Interest Reset Period plus the
Initial Spread, calculated as described below under "Subsequent Spread Periods
- -- Floating Rate Mode."
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If, during the Initial Spread Period, any Interest Payment Date,
redemption date, Interest Reset Date or Remarketing Reset Date would otherwise
be a day that is not a Business Day, such Interest Payment Date, redemption
date, Interest Reset Date or Remarketing Reset Date will be postponed to the
next succeeding day that is a Business Day, except that if such Business Day is
in the next succeeding calendar month, such Interest Payment Date, redemption
date, Interest Reset Date or Remarketing Reset Date shall be the next preceding
Business Day.
SUBSEQUENT SPREAD PERIODS
The Spread (as defined below) will be determined in the manner
described below for each period from and including each Remarketing Reset Date,
to but excluding each next succeeding Remarketing Reset Date or, as the case may
be, Stated Maturity (a "Subsequent Spread Period"). A Subsequent Spread Period
will be one or more periods of at least three months (or any integral multiple
of three months), but not more than the period remaining to the Stated Maturity
of the Notes as designated by the Company, and commencing on the 28th day of
January, April, July or October (or as otherwise specified by the Company and
the Remarketing Agent on the applicable Duration/Mode Determination Date (as
defined below) in connection with the establishment of each Subsequent Spread
Period), as applicable (each such date, a "Remarketing Reset Date"); PROVIDED,
HOWEVER, that no Subsequent Spread Period may end on or after the Stated
Maturity.
Interest on the Notes during each Subsequent Spread Period shall accrue
and be payable, as applicable, either:
o at a floating interest rate (the Notes being in the "Floating Rate
Mode" and the interest rate being a "Floating Rate"), or
o at a fixed interest rate (the Notes being in the "Fixed Rate Mode"
and the interest rate being a "Fixed Rate"),
in each case as determined by the Company and the Remarketing Agent in
accordance with the Remarketing Agreement and the applicable Remarketing Agency
Agreement (each as defined below). The Spread that will be applicable to the
Notes during each Subsequent Spread Period will be the percentage (a)
recommended by the Remarketing Agent so as to result in a rate that, in the
reasonable opinion of the Remarketing Agent, will enable tendered Notes to be
remarketed by the Remarketing Agent at 100% of the principal amount thereof, as
described under "Tender of Notes; Remarketing Agency Agreement" below, and (b)
agreed to by the Company.
Unless notice of redemption of the Notes as a whole has been given, the
following terms will be established by 3:00 p.m., New York City time, on the
eighth Business Day prior to the Remarketing Reset Date which commences such
Subsequent Spread Period (the "Duration/Mode Determination Date"):
o duration,
o redemption dates,
o redemption type (I.E., par, premium or make-whole),
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o redemption prices (if applicable),
o repayment dates,
o Remarketing Reset Date,
o Interest Reset Dates,
o Interest Payment Dates,
o interest rate mode (I.E., Fixed Rate Mode or Floating Rate Mode),
o optional repayment terms, if any, and
o any other relevant terms for each Subsequent Spread Period.
In addition, the Spread for each Subsequent Spread Period will be established by
3:00 p.m., New York City time, on the fourth Business Day prior to the
Remarketing Reset Date commencing such Subsequent Spread Period (the "Spread
Determination Date").
The Company will, not less than ten nor more than twenty calendar days
prior to any Duration/Mode Determination Date:
o inform The Depository Trust Company ("DTC") that the Notes are
subject to mandatory, automatic tender on the Remarketing Reset
Date (subject to the right to elect not to tender), and
o request that DTC notify its participants of such Duration/Mode
Determination Date and of the procedures that must be followed if
any beneficial owner of a Note wishes to retain such Note as
described under "Tender of Notes; Remarketing Agency Agreement"
below.
In the event that DTC or its nominee is no longer the holder of record of the
Notes, the Company will notify the holders of the Notes of such information
within such period of time. This will be the only notice given by the Company or
the Remarketing Agent with respect to such Duration/Mode Determination Date and
procedures for electing not to tender Notes.
If the Company and the Remarketing Agent cannot agree on the Spread for
any Subsequent Spread Period, then the Company is required unconditionally to
repurchase and retire all of the Notes on the Remarketing Reset Date at a price
equal to 100% of the principal amount of the Notes, together with accrued and
unpaid interest, if any, thereon to but excluding the Remarketing Reset Date.
FLOATING RATE MODE
If the Notes are to be reset to the Floating Rate Mode, as agreed to by
the Remarketing Agent and the Company on a Duration/Mode Determination Date,
then during the corresponding Subsequent Spread Period:
o the interest rate on the Notes will be reset monthly, quarterly or
semiannually (each, an "Interest Reset Period") and interest on
the Notes will be payable either monthly, quarterly or
semiannually on such dates (each such date, an "Interest Payment
Date"
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in respect of such Subsequent Spread Period), in each case
as specified by the Remarketing Agent and the Company on the
applicable Duration/Mode Determination Date, and
o the Notes will bear interest at a per annum rate (computed on the
basis of the actual number of days elapsed over a 360-day year)
equal to LIBOR for the applicable Interest Reset Period, plus the
applicable Spread, as determined on the relevant Spread
Determination Date.
Unless otherwise specified on the applicable Duration/Mode Determination Date
for Notes in the Floating Rate Mode, interest on such Notes will be payable, in
the case of Notes which reset:
o monthly, on the 28th day of each month,
o quarterly, on the 28th day of each January, April, July and
October, or
o semiannually, on the 28th day of each April and October.
The first day of an Interest Reset Period is referred to in this Note as an
"Interest Reset Date" in respect of the Subsequent Spread Period and, unless
otherwise specified on the applicable Duration/Mode Determination Date, will be,
in the case of Notes which reset:
o monthly, on the 28th day of each month,
o quarterly, on the 28th day of each January, April, July and
October, or
o semiannually, on the 28th day of each April and October.
The interest rate in effect on each day will be:
o if such day is an Interest Reset Date, the interest rate
determined as of the Floating Rate Determination Date (as defined
below) immediately preceding such Interest Reset Date, or
o if such day is not an Interest Reset Date, the interest rate
determined as of the Floating Rate Determination Date immediately
preceding the most recent Interest Reset Date.
o If any Interest Payment Date (other than at Stated Maturity),
redemption date, repayment date, Interest Reset Date or
Remarketing Reset Date in the Floating Rate Mode would otherwise
be a day that is not a Business Day, such Interest Payment Date,
redemption date, repayment date, Interest Reset Date or
Remarketing Reset Date will be postponed to the next succeeding
day that is a Business Day, except that if such Business Day is in
the next succeeding calendar month, such Interest Payment Date,
redemption date, repayment date, Interest Reset Date or
Remarketing Reset Date shall be the next preceding Business Day.
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The interest rate applicable to each Interest Reset Period commencing
on the related Interest Reset Date will be the rate determined as of the
applicable Floating Rate Determination Date. The "Floating Rate Determination
Date" will be the second London Business Day immediately preceding the
applicable Interest Reset Date.
For the Initial Spread Period and if the Notes are reset to the
Floating Rate Mode for a Subsequent Spread Period, LIBOR will be determined by
the Rate Agent (as defined under "Tender of Notes; Remarketing Agency Agreement"
below) as of the applicable Floating Rate Determination Date in accordance with
the following provisions:
(i) LIBOR will be determined on the basis of the offered rates
for deposits in U.S. dollars of not less than U.S. $1,000,000 of the
applicable Index Maturity, commencing on the second London Business Day
immediately following such Floating Rate Determination Date, which
appears on Telerate Page 3750 (as defined below) as of approximately
11:00 a.m., London time, on such Floating Rate Determination Date.
"Telerate Page 3750" means the display designated on page "3750" on
Bridge Telerate, Inc. (or such other page as may replace the 3750 page
on that service, any successor service or such other service or
services as may be nominated by the British Bankers' Association for
the purpose of displaying London interbank offered rates for U.S.
dollar deposits). If no rate appears on Telerate Page 3750, LIBOR for
such Floating Rate Determination Date will be determined in accordance
with the provisions of paragraph (ii) below.
(ii) With respect to a Floating Rate Determination Date on
which no rate appears on Telerate Page 3750 as of approximately 11:00
a.m., London time, on such Floating Rate Determination Date, the Rate
Agent shall request the principal London offices of each of four major
reference banks in the London interbank market selected by the Rate
Agent to provide the Rate Agent with a quotation of the rate at which
deposits of the applicable Index Maturity in U.S. dollars, commencing
on the second London Business Day immediately following such Floating
Rate Determination Date, are offered by it to prime banks in the London
interbank market as of approximately 11:00 a.m., London time, on such
Floating Rate Determination Date in a principal amount equal to an
amount of not less than U.S. $1,000,000 that is representative for a
single transaction in such market at such time. If at least two such
quotations are provided, LIBOR for such Floating Rate Determination
Date will be the arithmetic mean of such quotations as calculated by
the Rate Agent. If fewer than two quotations are provided, LIBOR for
such Floating Rate Determination Date will be the arithmetic mean of
the rates quoted as of approximately 11:00 a.m., New York City time, on
such Floating Rate Determination Date by three major banks in The City
of New York selected by the Rate Agent (after consultation with the
Company) for loans in U.S. dollars to leading European banks of the
applicable Index Maturity commencing on the second London Business Day
immediately following such Floating Rate Determination Date and in a
principal amount equal to an amount of not less than U.S. $1,000,000
that is representative for a single transaction in such market at such
time; provided, however, that if the banks selected as aforesaid by the
Rate Agent are not quoting as mentioned in this sentence, LIBOR for
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such Floating Rate Determination Date will be LIBOR determined with
respect to the immediately preceding Floating Rate Determination Date,
or in the case of the first Floating Rate Determination Date, LIBOR for
the Initial Interest Reset Period.
The Index Maturity applicable to Notes in the Floating Rate Mode will
be, in the case of Notes resetting:
o monthly, one month,
o quarterly, three months, or
o semiannually, six months.
FIXED RATE MODE
If the Notes are to be reset to the Fixed Rate Mode, as agreed to by
the Company and the Remarketing Agent on a Duration/Mode Determination Date,
then the applicable Fixed Rate for the corresponding Subsequent Spread Period
will be determined by 4:00 p.m., New York City time, on the third Business Day
prior to the Remarketing Reset Date for such Subsequent Spread Period (the
"Fixed Rate Determination Date"), in accordance with the following provisions.
The Fixed Rate will be determined by adding:
o the applicable Spread (as determined by the Remarketing Agent and
agreed to by the Company on the immediately preceding Spread
Determination Date) and
o the yield to maturity determined by 4:00 p.m., New York City time,
on the Fixed Rate Determination Date (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) of the applicable United
States Treasury security, selected by the Rate Agent after
consultation with the Remarketing Agent, as having a maturity
comparable to the duration selected for the following Subsequent
Spread Period, which would be used in accordance with customary
financial practice in pricing new issues of corporate debt
securities of comparable maturity to the duration selected for the
following Subsequent Spread Period.
Interest in the Fixed Rate Mode will be computed on the basis of a
360-day year of twelve 30-day months. Such interest will be payable semiannually
in arrears on the Interest Payment Dates (i.e., April 28 and October 28, unless
otherwise specified by the Company and the Remarketing Agent on the applicable
Duration/Mode Determination Date) at the applicable Fixed Rate, as determined on
the Fixed Rate Determination Date, beginning on the applicable Remarketing Reset
Date and continuing for the duration of the relevant Subsequent Spread Period.
If any Interest Payment Date, redemption date or repayment date in the
Fixed Rate Mode would otherwise be a day that is not a Business Day (in either
case, other than any Interest Payment Date, redemption date or repayment date
that falls on a Remarketing Reset Date, in
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which case each such date will be postponed to the next succeeding day that is a
Business Day), the related payment of principal and interest will be made on the
next succeeding Business Day as if it were made on the date such payment was
due, and no interest will accrue on the amounts so payable for the period from
and after such date to the next succeeding Business Day.
TENDER OF NOTES; REMARKETING AGENCY AGREEMENT
The Company has entered into a Remarketing Agreement dated October 28,
1999 with Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch")
with respect to remarketing of the Notes (the "Remarketing Agreement") by the
Remarketing Agent. If the Company and the Remarketing Agent agree on the Spread
on the Spread Determination Date with respect to any Subsequent Spread Period,
the Company will enter into a Remarketing Agency Agreement (the "Remarketing
Agency Agreement") with the Remarketing Agent on such Spread Determination Date.
On the Remarketing Reset Date which commences such Subsequent Spread Period,
each Note will be automatically tendered, or deemed tendered, to the Remarketing
Agent for remarketing by the Remarketing Agent on the Remarketing Reset Date at
100% of the principal amount thereof (the "Purchase Price") unless the
beneficial owner of such Note, at such owner's option, upon giving notice as
provided below (the "Hold Notice"), elects not to tender such Note. If the Notes
are held in book-entry form, subject to the second succeeding paragraph, the
Purchase Price will be paid by the Remarketing Agent in accordance with the
standard procedures of DTC, which currently provide for payments in same-day
funds. Interest accrued on such Notes with respect to the preceding interest
period will be paid in the manner described under "Form, Denomination and
Registration" below.
The Hold Notice must be received by the Remarketing Agent (through DTC
if held in book-entry form) during the period commencing at 3:00 p.m., New York
City time, on the Duration/Mode Determination Date and ending at 12:00 noon, New
York City time, on the third Business Day prior to the Remarketing Reset Date
for such Subsequent Spread Period (the "Notice Date"); provided, however, that
if the Company is unable to agree with the Remarketing Agent on the Spread for
such Subsequent Spread Period, any Hold Notices received will be null and void.
Except as otherwise provided below, a Hold Notice shall be irrevocable. If a
Hold Notice is not received for any reason by the Remarketing Agent with respect
to any Note by 12:00 noon, New York City time, on the Notice Date, the
beneficial owner of such Note shall be deemed to have elected to tender such
Note for purchase by the Remarketing Agent. All of the Notes, whether or not
tendered, shall bear interest upon the same terms.
If the Remarketing Agent is unable to remarket some or all of the
tendered Notes and, in its sole discretion, elects not to purchase such tendered
Notes, the Company is obligated unconditionally to purchase and retire on the
Remarketing Reset Date the remaining unsold tendered Notes at a price equal to
100% of the principal amount thereof, plus accrued and unpaid interest, if any,
thereon to the applicable Remarketing Reset Date.
No beneficial owner of any Note shall have any rights or claims against
the Remarketing Agent as a result of the Remarketing Agent not purchasing such
Notes.
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Notwithstanding anything to the contrary contained herein, the
Remarketing Agent shall have the option, but not the obligation, to purchase any
Notes tendered to it that it is not able to remarket. If the Remarketing Agent
is unable to remarket the entire principal amount of all Notes tendered on any
Remarketing Reset Date and, in its sole discretion, the Remarketing Agent elects
not to purchase such tendered Notes, it will promptly notify the Company and the
Trustee. The Company or its affiliates may offer to purchase Notes in a
remarketing, provided that the Spread and related interest rate established with
respect to the Notes in connection with such remarketing are not different than
they would otherwise be if the Company or its affiliates had not purchased such
Notes.
The term "Remarketing Agent" means the nationally recognized
broker-dealer selected by the Company to act as Remarketing Agent. Pursuant to
the Remarketing Agreement, Merrill Lynch has agreed to act as Remarketing Agent.
The term "Rate Agent" means the entity selected by the Company as its agent to
determine:
o LIBOR and the interest rate on the Notes for any Interest Reset
Period, and/or
o the yield to maturity on the applicable United States Treasury
security that is used in connection with the determination of the
applicable Fixed Rate, and the ensuing applicable Fixed Rate.
Pursuant to the Remarketing Agreement, Merrill Lynch has agreed to act as the
initial Rate Agent in respect of any Notes in the Fixed Rate Mode, and pursuant
to a calculation agency agreement dated October 28, 1999, by and between the
Company and The Chase Manhattan Bank (the "Calculation Agency Agreement"), The
Chase Manhattan Bank has agreed to act as the initial Rate Agent in respect of
any Notes in the Floating Rate Mode. In the Company's sole discretion, it may
change the Remarketing Agent and the Rate Agent for any Subsequent Spread Period
at any time on or prior to 3:00 p.m., New York City time, on the Duration/Mode
Determination Date relating thereto.
REDEMPTION OF THE NOTES
The Notes may not be redeemed prior to the initial Remarketing Reset
Date. On each Remarketing Reset Date (including the initial Remarketing Reset
Date) and on those Interest Payment Dates or other dates specified as redemption
dates by the Company on the Duration/Mode Determination Date in connection with
any Subsequent Spread Period, the Notes may be redeemed, at the Company's
option, in whole or in part, upon notice thereof given at any time during the 30
calendar day period ending on the eighth Business Day prior to the redemption
date (or fifteen Business Days prior to the redemption date in the case of a
partial redemption), in accordance with the redemption type selected on the
Duration/Mode Determination Date. The Notes are also subject to redemption in
whole or in part as provided above under "Subsequent Spread Periods" and "
Tender of Notes; Remarketing Agency Agreement" below. If less than all of the
outstanding Notes are to be redeemed, the Notes to be redeemed shall be selected
by such method as the Company shall deem fair and appropriate. If DTC or its
nominee is the record holder of the Notes, however, the Company will give notice
to
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DTC, and DTC will determine the principal amount to be redeemed from the
account of each direct participant in accordance with its rules and procedures.
A direct or indirect participant may determine to redeem from some beneficial
owners (which may include a participant holding Notes for its own account)
without redeeming from the accounts of other beneficial owners.
The redemption type to be chosen by the Company and the Remarketing
Agent on the Duration/Mode Determination Date with respect to any Subsequent
Spread Period may be one of the following:
o "Par Redemption," meaning redemption at a redemption price equal
to 100% of the principal amount thereof, plus unpaid interest
thereon, if any, accrued to the redemption date,
o "Premium Redemption," meaning redemption at a redemption price or
prices greater than 100% of the principal amount thereof, plus
unpaid interest thereon, if any, accrued to the redemption date,
as determined on the Duration/Mode Determination Date, or
o "Make-Whole Redemption," meaning redemption at a redemption price
equal to the Make-Whole-Amount with respect to such Notes.
In connection with any optional redemption of any Note, "Make-Whole Amount"
means an amount equal to the greater of:
o 100% of its principal amount plus accrued interest, if any,
thereon to the date of redemption, or
o the sum of the present values of the remaining scheduled payments
of principal and interest thereon discounted to the date of
redemption on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the applicable Treasury
Yield plus the Reinvestment Spread.
Unless otherwise specified by the Remarketing Agent and the Company on any
Duration/Mode Determination Date, the redemption type will be Par Redemption.
Furthermore, the redemption in part of any Notes must be in increments of $1,000
or integral multiples thereof.
"Treasury Yield" means, with respect to any redemption date applicable
to any of the Notes, the rate per annum equal to the semiannual equivalent yield
to maturity of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the applicable Comparable Treasury Price for such redemption date.
"Comparable Treasury Issue" means, with respect to the Notes subject to
redemption, the United States Treasury security selected by the Remarketing
Agent as having a maturity comparable to the remaining term of the Notes that
would be utilized, at the time of selection and
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in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of the
Notes.
"Comparable Treasury Price" means, with respect to any redemption date
applicable to the Notes subject to redemption:
o the average of the applicable Reference Treasury Dealer Quotations
for such redemption date, after excluding the highest and lowest
of such applicable Reference Treasury Dealer Quotations, or
o if the Trustee obtains fewer than four such Reference Treasury
Dealer Quotations, the average of all such Quotations, or
o if only one Reference Treasury Dealer Quotation is received, such
Quotation.
"Reference Treasury Dealer" means, with respect to the Notes subject to
redemption, at least four primary U.S. Government securities dealers in New York
City as selected by the Company, which may include the Remarketing Agent or an
affiliate thereof.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date for the Notes subject to
redemption, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue for the Notes (expressed in each case
as a percentage of its principal amount) quoted in writing to the Trustee by
such Reference Treasury Dealer at 5:00 p.m. on the third business day preceding
such redemption date.
"Reinvestment Spread" means, with respect to the Notes subject to
redemption, a number, expressed as a number of basis points or as a percentage,
selected by the Company and agreed to by the Remarketing Agent on the
Duration/Mode Determination Date.
REPAYMENT AT THE OPTION OF THE HOLDERS
The Notes will not be subject to repayment at the option of the holders
thereof prior to the initial Remarketing Reset Date. Thereafter, if the Company
elects on the Duration/Mode Determination Date preceding a Subsequent Spread
Period, the Notes will be subject to repayment at the option of the holders
thereof during such Subsequent Spread Period, on such date(s) as the Company may
select, in whole or in part in increments of $1,000 or integral multiples
thereof, at a repayment price equal to 100% of the unpaid principal amount to be
repaid, together with unpaid interest accrued thereon to but excluding the date
of repayment. So long as DTC or its nominee is the record holder of the Notes,
beneficial owners that desire to have all or any portion of their Notes repaid
must instruct their broker or other designated direct or indirect participant to
direct DTC or its nominee to exercise the repayment option on their behalf by
forwarding the instructions to the Trustee, not more than 60 nor less than 30
calendar days prior to the date scheduled for repayment or within such other
notice period as may be specified on the applicable Duration/Mode Determination
Date.
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All instruction given to participants from beneficial owners of global
notes relating to the option to elect repayment shall be irrevocable. In
addition, at the time such instructions are given, each such beneficial owner
shall cause the broker or direct or indirect participant through which it owns
its interest to transfer such beneficial owner's interest in the global note or
notes representing the related book entry Notes, on DTC's records, to the
Trustee.
FORM, DENOMINATION AND REGISTRATION
The Notes will be issued only in fully registered form, without
coupons, in minimum denominations of $1,000 and any integral multiple of $1,000
in excess thereof. The Notes will be deposited with, or on behalf of, DTC. The
Notes will be represented by one or more global notes registered in the name of
Cede & Co., as nominee of DTC. The interests of beneficial owners in the global
notes will be represented through financial institutions acting on their behalf
as direct or indirect participants in DTC.
Ownership of beneficial interests in a global note will be limited to
persons who have accounts with DTC ("direct participants") or persons such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a direct participant, either directly or
indirectly ("indirect participants"). Ownership of beneficial interests in the
global notes will be shown on, and the transfer of these ownership interests
will be effected only through, records maintained by DTC or its nominee (with
respect to interests of direct participants) and the records of direct
participants (with respect to interests of persons other than direct
participants).
So long as DTC, or its nominee, is the registered owner or holder of a
global note, DTC or such nominee, as the case may be, will be considered the
sole owner or holder of the Notes represented by such global note for all
purposes under the Indenture and the Notes. In addition, no beneficial owner of
an interest in a global note will be able to transfer that interest except in
accordance with DTC's applicable procedures (in addition to those under the
Indenture referred to herein).
Payments on global notes will be made to DTC or its nominee, as the
registered owner thereof. Neither the Company, the Trustee nor any paying agent
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in the global
notes or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The Indenture provides that if:
o the Depository notifies the Company that it is unwilling or unable
to continue as Depository,
o if the Depository ceases to be eligible under the Indenture and
a successor depository is not appointed by the Company within
90 days, or
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o an Event of Default with respect to the Notes shall have occurred
and be continuing, and the holders of a majority in aggregate
principal amount of the Notes determine to discontinue the system
of book-entry transfers through DTC (or a successor depository),
the global notes will be exchanged for Notes in definitive form of like tenor
and of an equal aggregate principal amount, in authorized denominations. Such
definitive Notes shall be registered in such name or names as the Depository
shall instruct the Trustee. Interest on Notes held in definitive form will be
payable on each Interest Payment Date specified for the Initial Spread Period
and any Subsequent Spread Period, in each case to the person in whose name such
Note is registered at the close of business on the 15th calendar day (whether or
not a Business Day) preceding such Interest Payment Date.
CERTAIN INDENTURE PROVISIONS
The Indenture permits, in certain circumstances therein specified, the
amendment thereof without the consent of the Holders of any of the Debt
Securities. The Indenture also permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations under the Indenture of the Company and the rights of Holders of the
Debt Securities of each series to be affected under the Indenture at any time by
the Company and the Trustee with the consent of the Holders of a specified
percentage in aggregate principal amount of the Debt Securities at the time
Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of a specified percentage in aggregate
principal amount of the Debt Securities of each series at the time Outstanding,
on behalf of the Holders of all the Debt Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
As provided in and subject to the provisions of the Indenture, a Holder
of Debt Securities shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the Debt
Securities of this series, the Holders of not less than a specified percentage
in aggregate principal amount of the Debt Securities of all series at the time
Outstanding in respect of which an Event of Default shall have occurred and be
continuing shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have received from the
Holders of a majority in principal amount of Debt Securities of all series at
the time Outstanding in respect of which an Event of Default shall have occurred
and be continuing a direction inconsistent with such request, and shall have
failed to institute any such proceeding, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Note for the enforcement of any payment of
principal hereof or any premium
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or interest hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Note, subject to the provisions for satisfaction and discharge in Article
Seven of the Indenture, shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency, herein
prescribed.
The Indenture permits the Company, by irrevocably depositing,
in amounts and maturities sufficient to pay and discharge at the Stated
Maturity or redemption date, as the case may be, the entire indebtedness on
all Outstanding Notes, cash or U.S. Government Obligations with the Trustee
in trust solely for the benefit of the Holders of all Outstanding Notes, to
defease the Indenture with respect to such Notes, and upon such deposit the
Company shall be deemed to have paid and discharged its entire indebtedness
on such Notes. Thereafter, Holders would be able to look only to such trust
fund for payment of principal and interest at the Stated Maturity or
redemption date, as the case may be.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of Notes is registrable in the
Debt Security Register, upon surrender of a Note for registration of transfer
at the Corporate Trust Office of the Trustee or at such other offices or
agencies of the Trustee from time to time designated for such purpose, or at
such other offices or agencies as the Company may designate, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory
to the Company and the Security Registrar duly executed by, the Holder hereof
or his attorney duly authorized in writing, and thereupon one or more new
Notes of like tenor, of authorized denominations and for the same aggregate
principal amount, shall be issued to the designated transferee or
transferees.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection
therewith.
Prior to due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Note is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
All undefined terms used in this Note which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
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