Exhibit 4.2
DOMINION RESOURCES, INC.
Issuer
TO
JPMORGAN CHASE BANK
(formerly known as The Chase Manhattan Bank)
Trustee
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Tenth Supplemental Indenture
Dated as of March 1, 2002
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Up to $330,000,000
2002 Series A 5.75% Senior Notes,
due May 15, 2008
TABLE OF CONTENTS*
ARTICLE I 2002 SERIES A 5.75% SENIOR NOTES ........................ 1
SECTION 101. Establishment ............................................... 1
SECTION 102. Definitions ................................................. 2
SECTION 103. Payment of Principal and Interest ........................... 5
SECTION 104. Denominations ............................................... 6
SECTION 105. Global Securities ........................................... 7
SECTION 106. Remarketing. ................................................ 7
SECTION 107. Sinking Fund ................................................ 11
SECTION 108. Additional Interest ......................................... 11
SECTION 109. Paying Agent ................................................ 11
SECTION 110. Limitation on Liens ......................................... 11
SECTION 111. Tax Event Redemption. ....................................... 14
SECTION 112. Tax Treatment. .............................................. 15
ARTICLE II MISCELLANEOUS PROVISIONS ............................... 16
SECTION 201. Recitals by Company ......................................... 16
SECTION 202. Ratification and Incorporation of Original Indenture ........ 16
SECTION 203. Executed in Counterparts .................................... 16
SECTION 204. Assignment .................................................. 16
______________________
* This Table of Contents does not constitute part of the Indenture or
have any bearing upon the interpretation of any of its terms and provisions.
THIS TENTH SUPPLEMENTAL INDENTURE is made as of the first day of March,
2002, by and between DOMINION RESOURCES, INC., a Virginia corporation, having
its principal office at 120 Tredegar Street, Richmond, Virginia 23219 (the
"Company"), and JPMORGAN CHASE BANK (formerly known as The Chase Manhattan
Bank), a New York banking corporation, as Trustee (herein called the "Trustee").
W I T N E S S E T H:
WHEREAS, the Company has heretofore entered into a Senior Indenture, dated
as of June 1, 2000 (the "Original Indenture"), as heretofore supplemented and
amended, with the Trustee;
WHEREAS, the Original Indenture is incorporated herein by this reference
and the Original Indenture, as heretofore supplemented and amended and as
further supplemented by this Tenth Supplemental Indenture, is herein called the
"Indenture";
WHEREAS, under the Original Indenture, a new series of Securities may at
any time be established in accordance with the provisions of the Original
Indenture and the terms of such series may be described by a supplemental
indenture executed by the Company and the Trustee;
WHEREAS, the Company proposes to create under the Indenture a series of
Securities;
WHEREAS, additional Securities of other series hereafter established,
except as may be limited in the Original Indenture as at the time supplemented
and modified, may be issued from time to time pursuant to the Indenture as at
the time supplemented and modified; and
WHEREAS, all conditions necessary to authorize the execution and delivery
of this Tenth Supplemental Indenture and to make it a valid and binding
obligation of the Company have been done or performed.
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
2002 SERIES A 5.75% SENIOR NOTES
SECTION 101. Establishment. There is hereby established a new series of
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Securities to be issued under the Indenture, to be designated as the Company's
2002 Series A 5.75% Senior Notes, due May 15, 2008 (the "Senior Notes").
There are to be authenticated and delivered $300,000,000 principal amount
of Senior Notes ($330,000,000 aggregate principal amount if the purchaser of the
certificates of which the Senior Notes are a part exercises its overallotment
option in full) and no further Senior Notes shall be authenticated and delivered
except as provided by Sections 304, 305, 306 or 905 of the Original Indenture or
by Section 106 hereof.
The Senior Notes shall be issued in definitive fully registered form
without coupons, in substantially the form set out in Exhibit A hereto. The
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entire principal amount of the Senior Notes shall initially be evidenced by one
or more certificates issued to JPMorgan Chase Bank, as Purchase Contract Agent
under the Purchase Contract Agreement (as defined below).
The form of the Trustee's Certificate of Authentication for the Senior
Notes shall be in substantially the form set forth in Exhibit B hereto.
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Each Senior Note shall be dated the date of authentication thereof and
shall bear interest from the date of original issuance thereof or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for.
SECTION 102. Definitions. The following defined terms used herein shall,
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unless the context otherwise requires, have the meanings specified below.
Capitalized terms used herein for which no definition is provided herein shall
have the meanings set forth in the Original Indenture, the Purchase Contract
Agreement, or the Remarketing Agreement, as the case may be and as the context
may require.
"Applicable Spread" means the spread determined as set forth below, based
on the Prevailing Rating of the Senior Notes in effect at the close of business
on the Business Day immediately preceding the date of the Failed Remarketing:
Prevailing Rating Spread
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AA/"Aa2" ......................................... 3.00%
A/"A2" ........................................... 4.00%
BBB/"Baa2" ....................................... 5.00%
Below BBB/"Baa2" ................................. 7.00%
"Business Day" has the meaning set forth in Section 1.1(d) of the Purchase
Contract Agreement.
"Interest Payment Dates" means February 15, May 15, August 15 and November
15 of each year, commencing on May 15, 2002.
"Lien" means any mortgage, lien, pledge, security interest or other
encumbrance of any kind.
"Material Subsidiary" means a Subsidiary of the Company whose total assets
(as determined in accordance with GAAP) represent at least 20% of the total
assets of the Company on a consolidated basis.
"Original Issue Date" means March 20, 2002.
"Outstanding", when used with respect to the Senior Notes, means, as of the
date of determination, all Senior Notes, theretofore authenticated and delivered
under the Indenture, except:
(i) Senior Notes theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
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(ii) Senior Notes for whose payment at Maturity the necessary amount
of money or money's worth has been theretofore deposited (other than pursuant to
Section 402 of the Original Indenture) with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for the Holders of
such Senior Notes.
(iii) Senior Notes with respect to which the Company has effected
defeasance or covenant defeasance has been effected pursuant to Section 402 of
the Original Indenture; and
(iv) Senior Notes that have been paid pursuant to Section 306 of the
Original Indenture or in exchange for or in lieu of which other Senior Notes
have been authenticated and delivered pursuant to the Indenture, other than any
such Senior Notes in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Senior Notes are held by a bona fide
purchaser in whose hands such Senior Notes are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Senior Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders of Senior Notes for quorum purposes, Senior Notes owned by
the Company or any other obligor upon the Senior Notes or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in making any such determination or relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Senior Notes which a
Responsible Officer of the Trustee knows to be so owned shall be so disregarded.
Senior Notes so owned which shall have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee (A) the pledgee's right so to act with respect to such Senior Notes and
(B) that the pledgee is not the Company or any other obligor upon the Senior
Notes or an Affiliate of the Company or such other obligor.
"Pledge Agreement" means the Pledge Agreement, dated as of March 20, 2002,
among the Company, Bank One Trust Company, N.A., as Collateral Agent and
Securities Intermediary, and JPMorgan Chase Bank, as Purchase Contract Agent.
"Prevailing Rating," for the purposes of the definition of Applicable
Spread, means:
(i) AA/"Aa2" if the Senior Notes have a credit rating of AA or better by
Standard & Poor's Ratings Services ("S&P") and "Aa2" or better by Moody's
Investors Service, Inc. ("Moody's") or the equivalent of such ratings by such
agencies or a substitute rating agency or substitute rating agencies selected by
the Remarketing Agent;
(ii) if not under clause (i) above, then A/"A2" if the Senior Notes have a
credit rating of A or better by S&P and "A2" or better by Moody's or the
equivalent of such ratings by such agencies or a substitute rating agency or
substitute rating agencies selected by the Remarketing Agent;
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(iii) if not under clauses (i) or (ii) above, then BBB/"Baa2" if the Senior
Notes have a credit rating of BBB or better by S&P and "Baa2" or better by
Moody's or the equivalent of such ratings by such agencies or a substitute
rating agency or substitute rating agencies selected by the Remarketing Agent;
or
(iv) if not under clauses (i), (ii) or (iii) above, then Below BBB/"Baa2".
Notwithstanding the foregoing, (A) if (i) the credit rating of the Senior
Notes by S&P shall be on the "Credit Watch" of S&P with a designation of
"negative implications" or "developing", or (ii) the credit rating of the Senior
Notes by Moody's shall be on the "Corporate Credit Watch List" of Moody's with a
designation of "downgrade" or "uncertain", or, in each case, on any successor
list of S&P or Moody's with a comparable designation, the Prevailing Ratings of
the Senior Notes shall be deemed to be within a range one full level lower in
the table set forth in the definition of Applicable Spread than those actually
assigned to the Senior Notes by S&P and Moody's and (B) if the Senior Notes are
rated by only one rating agency prior to or on the Remarketing Date, the
Prevailing Rating shall at all times be determined without reference to the
rating of any other rating agency; provided that if no such rating agency shall
have in effect a rating for the Senior Notes and the Remarketing Agent is unable
to identify a substitute rating agency or rating agencies, the Prevailing Rating
shall be below BBB/"Baa2".
"Principal Property" means any plant or facility of the Company located in
the United States that in the opinion of the Board of Directors or management of
the Company is of material importance to the business conducted by the Company
and its consolidated Subsidiaries taken as whole.
"Purchase Contract Agreement" means the Purchase Contract Agreement, dated
as of March 20, 2002, between the Company and JPMorgan Chase Bank, as Purchase
Contract Agent.
"Regular Record Date" means, with respect to each Interest Payment Date,
the close of business on the Business Day preceding such Interest Payment Date;
provided, that with respect to Senior Notes that are not in book-entry only
form, the Regular Record Date shall be the close of business on the 15th
Business Day preceding such Interest Payment Date.
"Remarketing" has the meaning set forth in Section 106.
"Remarketing Agreement" means the Remarketing Agreement, dated as of March
20, 2002, between the Company and Salomon Smith Barney Inc.
"Reset Rate" means the interest rate per annum with respect to the Senior
Notes that is determined by the Remarketing Agent pursuant to the Remarketing
Agreement as follows:
(i) in connection with a Successful Remarketing, the interest rate
determined by the Remarketing Agent sufficient to allow it to remarket the
Remarketing Senior Notes at a price at least equal to the Remarketing Value;
(ii) upon the occurrence of a Failed Remarketing, the Two-Year
Benchmark Rate plus the Applicable Spread; or
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(iii) if (a) there are no Pledged Senior Notes to be remarketed and
(b) none of the holders of Separated Senior Notes have elected to have their
Senior Notes remarketed in accordance with Section 106 hereof and Section 5.7 of
the Pledge Agreement, the Reset Rate shall be the rate determined, in its sole
discretion, by the Remarketing Agent, as the rate that, in its judgment, would
have been established had a Remarketing been held on the Final Remarketing Date.
"Separated Senior Notes" means Senior Notes that are not Pledged Senior
Notes.
"Stated Maturity" means May 15, 2008.
"Telerate" means the Dow Jones Telerate Service.
"Two-Year Benchmark Rate" means the bid side rate displayed at 10:00 a.m.
(New York City time) on the third Business Day preceding the Purchase Contract
Settlement Date for direct obligations of the United States having a maturity
comparable to the remaining term to the Stated Maturity of the Senior Notes, as
agreed upon by the Company and the Remarketing Agent as displayed in the
Telerate system or, if the Telerate system is no longer available or, in the
judgment of the Remarketing Agent (after consultation with the Company), no
longer an appropriate system from which to obtain such rate, such other
nationally recognized quotation system as, in the judgment of the Remarketing
Agent (after consultation with the Company) is appropriate. If this rate is not
so displayed, the Two-Year Benchmark Rate will be calculated by the Remarketing
Agent as the yield to maturity for direct obligations of the United States
having a maturity comparable to the remaining term to the Stated Maturity of the
Senior Notes, expressed as a bond equivalent on the basis of a year of 365 or
366 days, as applicable, and applied on a daily basis, and computed by taking
the arithmetic mean of the secondary market bid rates, as of 10:30 a.m. (New
York City time) on the third Business Day preceding the Purchase Contract
Settlement Date of three leading United States government securities dealers
selected by the Remarketing Agent (after consultation with the Company) (which
may include the Remarketing Agent or an Affiliate thereof). However, if, in the
judgment of the Remarketing Agent, after consultation with the Company, direct
obligations of the United States are no longer appropriate benchmarks for the
purpose of setting the Reset Rate if a Failed Remarketing has occurred, the
Remarketing Agent and the Company will agree upon another Two-Year Benchmark
Rate.
SECTION 103. Payment of Principal and Interest. The principal of the
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Senior Notes shall be due at the Stated Maturity. The unpaid principal amount of
the Senior Notes shall bear interest at the rate of 5.75% per annum from the
Original Issue Date to, but excluding, the earlier of (i) the Remarketing
Settlement Date or (ii) the Purchase Contract Settlement Date, and, thereafter,
at the Reset Rate to, but excluding, the Stated Maturity of the Senior Notes.
Interest shall be paid quarterly in arrears on each Interest Payment Date to the
Person in whose name the Senior Notes are registered on the Regular Record Date
for such Interest Payment Date; provided that interest payable at the Stated
Maturity of principal as provided herein will be paid to the Person to whom
principal is payable. Any such interest that is not so punctually paid or duly
provided for will forthwith cease to be payable to the Holders on such Regular
Record Date and may either be paid to the Person or Persons in whose name the
Senior Notes are registered at the close of business on a Special Record Date
for the payment of such defaulted interest to be fixed
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by the Trustee (in accordance with Section 307 of the Original Indenture),
notice whereof shall be given to Holders of the Senior Notes not less than ten
(10) days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange,
if any, on which the Senior Notes may be listed, and upon such notice as may be
required by any such exchange, all as more fully provided in the Original
Indenture.
Payments of interest on the Senior Notes will include interest accrued to
but excluding the respective Interest Payment Dates. Interest payments for the
Senior Notes shall be computed and paid (1) for any full quarterly period, on
the basis of a 360-day year of twelve 30-day months, (2) for any period shorter
than a full quarterly period, on the basis of a 30-day month and (3) for any
period less than a month, on the basis of the actual number of days elapsed per
30-day month. In the event that any date on which interest is payable on the
Senior Notes is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or payment in respect of any such delay), in each case with the
same force and effect as if made on the date the payment was originally payable.
However, if such Business Day is in the next calendar year, then such payment
will be made on the preceding Business Day.
Payment of the principal and interest on the Senior Notes shall be made at
the office of the Paying Agent 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, with any such payment that is due at the Stated Maturity of any
Senior Notes being made upon surrender of such Senior Notes to the Paying Agent.
Payments of interest (including interest on any Interest Payment Date) will be
made, subject to such surrender where applicable, at the option of the Company,
(i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) by wire transfer at such
place and to such account at a banking institution in the United States as may
be designated in writing to the Trustee at least sixteen (16) days prior to the
date for payment by the Person entitled thereto. In the event that any date on
which principal and interest is payable on the Senior Notes is not a Business
Day, then payment of the principal and interest payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or payment in respect of any such delay), in each case with the same force and
effect as if made on the date the payment was originally payable. However, if
such Business Day is in the next calendar year, then such payment will be made
on the preceding Business Day.
SECTION 104. Denominations. The Senior Notes may be issued in
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denominations of $50, or any integral multiple thereof.
SECTION 105. Global Securities. The Senior Notes that, in accordance with
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the Purchase Contract Agreement, are no longer part of the Corporate Units will
be issued initially in the form of one or more Global Securities registered in
the name of the Depositary (which shall be The Depository Trust Company) or its
nominee. Except under the limited circumstances described below, Senior Notes
represented by such Global Securities will not be exchangeable for, and will not
otherwise be issuable as, Senior Notes in definitive form. The Global Securities
described above may not be transferred except by the Depositary to a nominee of
the Depositary
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or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or to a successor Depositary or its nominee.
Owners of beneficial interests in such a Global Security will not be
considered the Holders thereof for any purpose under the Indenture, and no
Global Security representing a Senior Note shall be exchangeable, except for
another Global Security of like denomination and tenor to be registered in the
name of the Depositary or its nominee or to a successor Depositary or its
nominee or except as described below. The rights of Holders of such Global
Security shall be exercised only through the Depositary.
A Global Security shall be exchangeable for Senior Notes registered in the
names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as a
Depositary for such Global Security and no successor Depositary shall have been
appointed by the Company within 90 days of receipt by the Company of such
notification, or if at any time the Depositary ceases to be a clearing agency
registered under the Exchange Act at a time when the Depositary is required to
be so registered to act as such Depositary and no successor Depositary shall
have been appointed by the Company within 90 days after it becomes aware of such
cessation, or (ii) the Company in its sole discretion determines that such
Global Security shall be so exchangeable. Any Global Security that is
exchangeable pursuant to the preceding sentence shall be exchangeable for Senior
Notes registered in such names as the Depositary shall direct.
SECTION 106. Remarketing. The Pledged Senior Notes comprising part of
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Corporate Units and the Separated Senior Notes of holders of Separated Senior
Notes that have elected to participate in the Remarketing shall be remarketed by
the Remarketing Agent on the Remarketing Date. All Holders of Pledged Senior
Notes that fail to settle the related Purchase Contract through a Cash
Settlement or an Early Settlement pursuant to Section 5.9 of the Purchase
Contract Agreement thereof shall be deemed to have consented to the disposition
of the Pledged Senior Note pursuant to the Remarketing. Each holder of Separated
Senior Notes may elect to have all or a portion of its Senior Notes remarketed
by notifying the Trustee and the Collateral Agent of the aggregate principal
amount of Separated Senior Notes that it wishes to have remarketed prior to 5:00
p.m. (New York City time) on the Election Date. Any notice pursuant to the
preceding sentence shall be substantially in the form of Exhibit H to the
Purchase Contract Agreement and shall be irrevocable and may not be conditioned
upon the level at which the Reset Rate is established in the Remarketing.
Concurrently with the giving of such notice, the holder of Separated Senior
Notes, all or a portion of which is to be remarketed, shall deliver or cause
such Separated Senior Notes to be delivered to the Collateral Agent. If the
holder of the Separated Senior Notes delivers only such notice but not the
Separated Senior Notes subject to the Notice, then none of such holder's
Separated Senior Notes shall be included in the Remarketing. Once the holder of
Separated Senior Notes elects to participate in the Remarketing, such Separated
Senior Notes will be remarketed in the Initial Remarketing, any Subsequent
Remarketing and the Final Remarketing, as applicable.
On the seventh Business Day prior to the Initial Remarketing Date, the
Company shall give notice of Remarketing in an Authorized Newspaper, including
the specific U.S. Treasury
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security or securities (including the CUSIP number and/or the principal terms of
such Treasury security or securities) that must be delivered by Holders of
Corporate Units that elect not to participate in the Remarketing pursuant to
Section 5.4(f) of the Purchase Contract Agreement, no later than 5:00 p.m. (New
York City time) on the Election Date. Not later than 15 nor more than 30
calendar days prior to the Initial Remarketing Date, the Company shall request
the Depositary (or any successor Clearing Agency) to notify, directly or
indirectly, each Beneficial Owner or Clearing Agency Participant holding
Corporate Units and each Beneficial Owner of a Senior Note not a part of a
Corporate Unit of the Remarketing and of the procedures that must be followed in
connection with the Remarketing.
The Purchase Contract Agent shall notify, by 11:00 a.m. (New York City
time), on the Business Day immediately preceding the Initial Remarketing Date,
the Remarketing Agent, the Collateral Agent, the Trustee and the Company, by use
of a notice substantially in the form of Exhibit G of the Purchase Contract
Agreement, of the aggregate principal amount of Pledged Senior Notes of
Corporate Units Holders to be remarketed on the Initial Remarketing Date or
Subsequent Remarketing Date, as applicable, and the Collateral Agent, pursuant
to the Pledge Agreement, having separately notified the Remarketing Agent, the
Trustee and the Company of the aggregate principal amount of Separated Senior
Notes to be included on the Initial Remarketing Date or any Subsequent
Remarketing Date, as applicable, by 11:00 a.m. (New York City time), on the
Business Day immediately preceding the Initial Remarketing Date, shall
concurrently therewith, pursuant to the Pledge Agreement, deliver for
Remarketing to the Remarketing Agent all Remarketing Senior Notes. Upon receipt
of such notice from the Purchase Contract Agent and the Collateral Agent and
such Remarketing Senior Notes from the Collateral Agent, the Remarketing Agent,
pursuant to the Remarketing Agreement, will use its commercially reasonable
efforts to remarket such Remarketing Senior Notes on such date pursuant to the
Remarketing Procedures and the Remarketing Agreement.
The right of each Holder of Senior Notes to have its Senior Notes tendered
for purchase will be limited to the extent that (i) the Remarketing Agent
conducts a Remarketing pursuant to the terms of the Remarketing Agreement, (ii)
the Remarketing Agent is able to find a purchaser or purchasers for the tendered
Senior Notes and (iii) such purchaser or purchasers deliver the purchase price
therefor to the Remarketing Agent.
If there has been a Successful Initial Remarketing or a Successful
Subsequent Remarketing, the Remarketing Agent will on the Remarketing Settlement
Date:
(i) deduct and retain for itself the Remarketing Fee;
(ii) use the remaining proceeds attributable to the Pledged Senior Notes
from such Successful Remarketing to purchase the Treasury Portfolio described in
clauses 1(i) and 2(i) of the definition of Remarketing Value related to the
Senior Notes of Holders of Corporate Units that were remarketed;
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(iii) if any Separated Senior Notes were remarketed, remit to the
Collateral Agent for payment to the holders of such Separated Senior Notes the
amounts specified in clauses 1(ii) and 2(ii) of the definition of Remarketing
Value; and
(iv) if there then remain any proceeds from the Successful Remarketing,
after the application of such proceeds as set forth in clauses (i) through (iii)
above, then remit any such remaining proceeds to the Purchase Contract Agent for
the benefit of holders of the remarketed Senior Notes and to the Collateral
Agent for the benefit of the holders of such Separated Senior Notes, on a pro
rata basis, provided, however, that if such Successful Remarketing is
consummated after 4:30 p.m. (New York City time) on the Remarketing Date and,
despite using its commercially reasonable efforts, the Remarketing Agent cannot
cause the applications of the proceeds specified above to occur on the
Remarketing Settlement Date, then the Remarketing Agent may make such
applications and remittances on the next succeeding Business Day.
If a Successful Final Remarketing shall have occurred, the Remarketing
Agent will on the Remarketing Settlement Date or Purchase Contract Settlement
Date, as applicable, (i) deduct and retain for itself the Remarketing Fee, (ii)
cause the remaining proceeds of the Remarketing with respect to the Pledged
Senior Notes in an amount equal to the aggregate principal amount of such Senior
Notes to be delivered to the Collateral Agent, on the Remarketing Settlement
Date, (iii) if any Separated Senior Notes were remarketed, remit to the
Collateral Agent for payment to the holders of such Separated Senior Notes sold
in the Remarketing the remaining proceeds from such Successful Remarketing
attributable to the Separated Senior Notes in an amount equal to the principal
amount of such Senior Notes and (iv) if there remain any proceeds from such
Successful Remarketing, after the application of such proceeds as set forth in
clauses (i) through (iii) of this sentence, then remit such remaining proceeds
to the Purchase Contract Agent for the benefit of the holders of the Pledged
Senior Notes and to the Collateral Agent for the benefit of holders of Separated
Senior Notes, on a pro rata basis, provided, however, that if the Successful
Final Remarketing is consummated after 4:30 p.m. (New York City time) on the
Remarketing Date and, despite using its commercially reasonable efforts, the
Remarketing Agent cannot cause the application of the proceeds specified above
to occur on the Remarketing Settlement Date, then the Remarketing Agent may make
such applications and remittances on the next succeeding Business Day.
If a Successful Remarketing occurs, by approximately 4:30 p.m. (New York
City time) on the Remarketing Date, the Remarketing Agent shall advise, by
telephone (promptly confirmed in writing in the case of clause (i)):
(i) the Company, the Purchase Contract Agent, the Collateral Agent, the
Securities Intermediary, the Depositary, and the Trustee of the Reset Rate
determined in the Remarketing;
(ii) each purchaser (or the Depositary Participant thereof) of Senior
Notes in the Remarketing of the Reset Rate and the number of Senior Notes such
purchaser is to purchase; and
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(iii) each purchaser to give instructions to its Depositary Participant to
pay the purchase price on the Remarketing Settlement Date in same day funds
against delivery of the Remarketed Senior Notes purchased through the facilities
of the Depositary.
If a Failed Remarketing occurs, the Remarketing Agent and the Company, as
applicable, shall take the following actions:
(i) The Remarketing Agent shall notify by telephone the Company, the
Purchase Contract Agent, the Collateral Agent and the Trustee, that a Failed
Remarketing has occurred, whereupon the Company shall notify the Clearing
Agency, by telephone, that a Failed Remarketing has occurred.
(ii) The Company shall cause a notice of the Failed Remarketing to be sent
to the holders of all Senior Notes and to be published in an Authorized
Newspaper in New York City, in each case, no later than the Business Day
immediately preceding Purchase Contract Settlement Date.
(iii) The Remarketing Agent shall determine the Reset Rate in accordance
with clause (ii) of the Reset Rate definition.
(iv) The Remarketing Agent shall remit the Pledged Senior Notes that were
to be remarketed and the Separated Senior Notes that were to be remarketed to
the Collateral Agent.
Notwithstanding anything herein to the contrary, the Reset Rate shall in no
event exceed the maximum rate, if any, permitted by applicable law.
In accordance with the Depositary's normal procedures, on the Remarketing
Settlement Date or the Purchase Contract Settlement Date, as applicable, the
transactions described above with respect to each Senior Notes remarketed in the
Remarketing shall be executed through the Depositary, and the accounts of the
respective Depositary Participants shall be debited and credited and such
Remarketed Senior Notes delivered by book entry as necessary to effect purchases
and sales of such Remarketed Senior Notes. The Depositary shall make payment in
accordance with its normal procedures.
If any Holder of Senior Notes selling Senior Notes in the Remarketing fails
to deliver such Senior Notes, the direct or indirect Depositary Participant of
such selling Holder and of any other Person who was to have purchased Senior
Notes in the Remarketing may deliver to any such other Person an aggregate
principal amount of Senior Notes that is less than the aggregate principal
amount of Senior Notes that otherwise was to be purchased by such Person. In
such event, the aggregate principal amount of Senior Notes to be so delivered
shall be determined by such direct or indirect Depositary Participant, and
delivery of such lesser aggregate principal amount of Senior Notes shall
constitute good delivery.
The Remarketing Agent is not obligated to purchase any Senior Notes that
otherwise would remain unsold in the Remarketing. Neither the Company nor the
Remarketing Agent shall be obligated in any case to provide funds to make
payment upon tender of the Senior Notes for Remarketing.
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Under the Remarketing Agreement, the Company, in its capacity as issuer of
the Senior Notes, shall be liable for, and shall pay, any and all costs and
expenses incurred in connection with the Remarketing, other than the Remarketing
Fee.
The settlement procedures set forth herein, including provisions for
payment by purchasers of the Remarketed Senior Notes in the Remarketing, shall
be subject to modification to the extent required by the Depositary or if the
book-entry system is no longer available for the Remarketed Senior Notes at the
time of the Remarketing, to facilitate the remarketing of the Remarketed Senior
Notes in certificated form, and shall provide for the authentication and
delivery of Senior Notes in a principal amount equal to the unremarketed portion
of such Senior Notes. In addition, the Remarketing Agent may modify the
settlement procedures set forth herein in order to facilitate the settlement
process.
SECTION 107. Sinking Fund. The Senior Notes shall not have a sinking fund.
------------
SECTION 108. Additional Interest. Any principal of and installment of
-------------------
interest on the Senior Notes that is overdue shall bear interest at the rate of
5.75% (to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or made
available for payment, and such interest shall be payable on demand.
SECTION 109. Paying Agent. The Trustee shall initially serve as Paying
------------
Agent with respect to the Senior Notes, with the Place of Payment initially
being the Corporate Trust Office of the Trustee.
SECTION 110. Limitation on Liens. The Company will not, while any of the
-------------------
Senior Notes remain Outstanding, create, or suffer to be created or to exist,
any Lien upon any Principal Property of the Company or upon any shares of stock
of any Material Subsidiary of the Company, whether such Principal Property is,
or shares of stock are, now owned or hereafter acquired, to secure any
indebtedness for borrowed money of the Company, unless it shall make effective
provision whereby the Senior Notes then Outstanding shall be secured by such
Lien equally and ratably with any and all indebtedness for borrowed money
thereby secured so long as any such indebtedness shall be so secured; provided,
however, that nothing in this Section shall be construed to prevent the Company
from creating, or from suffering to be created or to exist, any Liens, or any
agreements, with respect to:
(1) purchase money mortgages, or other purchase money liens, pledges,
security interests or encumbrances of any kind upon property hereafter
acquired by the Company, or Liens of any kind existing on any property
or any shares of stock at the time of the acquisition thereof
(including Liens which exist on any property or any shares of stock of
a Person which is consolidated with or merged with or into the Company
or which transfers or leases all or substantially all of its
properties to the Company), or conditional sales agreements or other
title retention agreements and leases in the nature of title retention
agreements with respect to any property hereafter acquired; provided,
however, that no such Lien shall extend to or cover any other property
of the Company;
11
(2) Liens upon any property of the Company or any shares of stock of any
Material Subsidiary of the Company existing as of the date of the
initial issuance of the Senior Notes or upon the shares of stock of
any corporation, which Liens existed at the time such corporation
became a Material Subsidiary of the Company; liens for taxes or
assessments or other governmental charges or levies; pledges to secure
other governmental charges or levies; pledges or deposits to secure
obligations under worker's compensation laws, unemployment insurance
and other social security legislation, including liens of judgments
thereunder which are not currently dischargeable; pledges or deposits
to secure performance in connection with bids, tenders, contracts
(other than contracts for the payment of money) or leases to which the
Company is a party; pledges or deposits to secure public or statutory
obligations of the Company; builders', materialmen's, mechanics',
carriers', warehousemen's, workers', repairmen's, operators',
landlords' or other like liens in the ordinary course of business, or
deposits to obtain the release of such liens; pledges or deposits to
secure, or in lieu of, surety, stay, appeal, indemnity, customs,
performance or return-of-money bonds; other pledges or deposits for
similar purposes in the ordinary course of business; liens created by
or resulting from any litigation or proceeding which at the time is
being contested in good faith by appropriate proceedings; liens
incurred in connection with the issuance of bankers' acceptances and
lines of credit, bankers' liens or rights of offset and any security
given in the ordinary course of business to banks or others to secure
any indebtedness payable on demand or maturing within 12 months of the
date that such indebtedness is originally incurred; liens incurred in
connection with repurchase, swap or other similar agreements
(including, without limitation, commodity price, currency exchange and
interest rate protection agreements); leases made, or existing on
property acquired, in the ordinary course of business; liens securing
industrial revenue or pollution control bonds; liens, pledges,
security interests or other encumbrances on any property arising in
connection with any defeasance, covenant defeasance or in-substance
defeasance of indebtedness of the Company, including the Senior Notes;
liens created in connection with, and created to secure, a
non-recourse obligation; zoning restrictions, easements, licenses,
rights-of-way, restrictions on the use of property or minor
irregularities in title thereto, which do not, in the opinion of the
Company, materially impair the use of such property in the operation
of the business of the Company or the value of such property for the
purpose of such business;
(3) Liens in favor of the United States, any foreign country or any
department, agency or instrumentality or political subdivision of any
such jurisdiction, to secure partial, progress, advance or other
payments pursuant to any contract or statute or to secure any
indebtedness incurred for the purpose of financing all or any part of
the purchase price or the cost of constructing or improving the
property subject to such mortgages, including, without limitation,
mortgages to secure indebtedness of the pollution control or
industrial revenue bond type;
(4) indebtedness which may be issued by the Company in connection with a
consolidation or merger of the Company or any Material Subsidiary of
the
12
Company with or into any other Person (which may be an Affiliate of
the Company or any Material Subsidiary of the Company) in exchange for
or otherwise in substitution for secured indebtedness of such Person
("Third Party Debt") which by its terms (i) is secured by a mortgage
on all or a portion of the property of such Person, (ii) prohibits
secured indebtedness from being incurred by such Person, unless the
Third Party Debt shall be secured equally and ratably with such
secured indebtedness or (iii) prohibits secured indebtedness from
being incurred by such Person;
(5) indebtedness of any Person which is required to be assumed by the
Company in connection with a consolidation or merger of such Person,
with respect to which any property of the Company is subjected to a
Lien;
(6) Liens of any kind upon any property acquired, constructed, developed
or improved by the Company (whether alone or in association with
others) after the date of the initial issuance of the Senior Notes
which are created prior to, at the time of, or within 18 months after
such acquisition (or in the case of property constructed, developed or
improved, after the completion of such construction, development or
improvement and commencement of full commercial operation of such
property, whichever is later) to secure or provide for the payment of
any part of the purchase price or cost thereof; provided that in the
case of such construction, development or improvement the Liens shall
not apply to any property theretofore owned by the Company other than
theretofore unimproved real property;
(7) Liens in favor of the Company, one or more Material Subsidiaries of
the Company, one or more wholly-owned Subsidiaries of the Company or
any of the foregoing in combination;
(8) the replacement, extension or renewal (or successive replacements,
extensions or renewals), as a whole or in part, of any Lien, or of any
agreement, referred to above in clauses (1) through (7) inclusive, or
the replacement, extension or renewal (not exceeding the principal
amount of indebtedness secured thereby together with any premium,
interest, fee or expense payable in connection with any such
replacement, extension or renewal) of the indebtedness secured
thereby; provided that such replacement, extension or renewal is
limited to all or a part of the same property that secured the Lien
replaced, extended or renewed (plus improvements thereon or additions
or accessions thereto); or
(9) any other Lien not excepted by the foregoing clauses (1) through (8);
provided that immediately after the creation or assumption of such
Lien, the aggregate principal amount of indebtedness for borrowed
money of the Company secured by all Liens created or assumed under the
provisions of this clause (9) shall not exceed an amount equal to 10%
of the common shareholders' equity of the Company, as shown on its
consolidated balance sheet for the accounting period occurring
immediately prior to the creation or assumption of such Lien.
13
This Section 110 has been included in this Tenth Supplemental Indenture
expressly and solely for the benefit of the Senior Notes and shall be subject to
covenant defeasance pursuant to Section 402(3) of the Original Indenture.
SECTION 111. Tax Event Redemption. If a Tax Event shall occur and be
--------------------
continuing, the Company may, at its option, redeem the Senior Notes in whole
(but not in part) at any time at a price per Senior Note equal to the Redemption
Price (as defined in the Purchase Contract Agreement). Installments of interest
on the Senior Notes which are due and payable on or prior to the date of
redemption (the "Tax Event Redemption Date") will be payable to the Holders of
the Senior Notes registered as such at the close of business on the Regular
Record Date for such interest payment.
If the Company exercises its option to redeem the Senior Notes following
the occurrence of a Tax Event prior to the Initial Remarketing Date, or if there
has not been a Successful Initial Remarketing or a Successful Subsequent
Remarketing, prior to the Purchase Contract Settlement Date, the Company shall
in the notice to the Trustee pursuant to Section 105 of the Original Indenture
specify the Redemption Price. Upon the specification of the Redemption Price by
the Company, the Company shall appoint the Quotation Agent to assemble the
Redemption Treasury Portfolio in consultation with the Company. The Collateral
Agent shall then apply, out of the aggregate Redemption Price for the Pledged
Senior Notes, an amount equal to the aggregate Redemption Amount for the Pledged
Senior Notes to purchase on behalf of the Holders of Corporate Units the
Redemption Treasury Portfolio and promptly remit the remaining portion, if any,
of such Redemption Price to the Purchase Contract Agent for payment to the
Holders of such Corporate Units. The Redemption Treasury Portfolio will be
substituted for the Pledged Senior Notes, and will be held by the Collateral
Agent in accordance with the terms of the Pledge Agreement to secure the
obligation of each Holder of a Corporate Unit to purchase Common Stock of the
Company under the Purchase Contract constituting a part of such Corporate Unit.
If a Tax Event Redemption occurs after the Remarketing Settlement Date or
the Purchase Contract Settlement Date, payment of the Redemption Price to each
Holder of Senior Notes shall be made by the Trustee (subject to its receipt of
funds), no later than 12:00 noon, New York City time, on the Tax Event
Redemption Date, by check or wire transfer in immediately available funds
(provided the necessary wire instructions have been provided to the Trustee at
least 15 days prior to the Tax Event Redemption Date) at such place and to such
account as may be designated by each such Holder of Senior Notes, including the
Collateral Agent. If the Trustee holds immediately available funds sufficient to
pay the Redemption Price of the Senior Notes, then, on such Tax Event Redemption
Date, such Senior Notes will cease to be Outstanding.
The Trustee shall have no duty or liability to determine or verify the
Redemption Price. Notice of any redemption will be mailed at least 20 days but
not more than 60 days before the Tax Event Redemption Date to each registered
Holder of the Senior Notes to be repaid at its registered address. Unless the
Company defaults in payment of the Redemption Price, on and after the Tax Event
Redemption Date interest shall cease to accrue on the Senior Notes, whether or
not such Senior Notes have been received by the Company, and all other rights of
the Holders in respect of the Senior Notes shall terminate and lapse (other than
the right to receive the
14
Redemption Price upon delivery of such Senior Notes but without interest on such
Redemption Price).
SECTION 112. Tax Treatment. The Company agrees, and by purchasing a
-------------
beneficial ownership interest in the Senior Notes each Holder of the Senior
Notes will be deemed to have agreed, for United States federal income tax
purposes (i) to treat the acquisition of a Corporate Unit as the acquisition of
a unit consisting of a stock purchase contract and a note issued by the Company
and to treat the Senior Notes as indebtedness that is subject to Treas. Reg.
Sec. 1.1275-4 (the "Contingent Payment Regulations") and (ii) to be bound by the
Company's determination of the "comparable yield" and "projected payment
schedule" within the meaning of the Contingent Payment Regulations, with respect
to the Senior Notes. The Company has determined that the comparable yield is an
annual rate of 6.364% compounded quarterly. Based on the comparable yield, the
projected payment schedule per Senior Note is $0.44 for the period ending on May
15, 2002; $0.72 for each subsequent quarter ending on or prior to the Initial
Remarketing Date; $0.98 for each quarter ending after the Initial Remarketing
Date; and $50.98 at maturity.
15
ARTICLE II
MISCELLANEOUS PROVISIONS
SECTION 201. Recitals by Company. The recitals in this Tenth Supplemental
-------------------
Indenture are made by the Company only and not by the Trustee, and all of the
provisions contained in the Original Indenture in respect of the rights,
privileges, immunities, powers and duties of the Trustee shall be applicable in
respect of the Senior Notes and of this Tenth Supplemental Indenture as fully
and with like effect as if set forth herein in full.
SECTION 202. Ratification and Incorporation of Original Indenture. As
----------------------------------------------------
supplemented hereby, the Original Indenture is in all respects ratified and
confirmed, and the Original Indenture and this Tenth Supplemental Indenture
shall be read, taken and construed as one and the same instrument.
SECTION 203. Executed in Counterparts. This Supplemental Indenture may be
------------------------
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts shall together constitute but one and the same
instrument.
SECTION 204. Assignment. The Company shall have the right at all times to
----------
assign any of its rights or obligations under the Indenture with respect to the
Senior Notes to a direct or indirect wholly-owned subsidiary of the Company;
provided that, in the event of any such assignment, the Company shall remain
primarily liable for the performance of all such obligations. The Indenture may
also be assigned by the Company in connection with a transaction described in
Article Eight of the Original Indenture.
16
IN WITNESS WHEREOF, each party hereto has caused this instrument to be
signed in its name and behalf by its duly authorized officer, all as of the day
and year first above written.
DOMINION RESOURCES, INC.
By: ___________________________________
Name: _________________________________
Title: ________________________________
JPMORGAN CHASE BANK, as Trustee
By: ___________________________________
Name: _________________________________
Title: ________________________________
17
EXHIBIT A
FORM OF
2002 SERIES A 5.75% SENIOR NOTE,
DUE MAY 15, 2008
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF [CEDE & CO.] OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT IS MADE TO [CEDE & CO.], 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.]**
[THIS SERIES A SENIOR NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE THEREOF. THIS SERIES A SENIOR NOTE MAY NOT BE EXCHANGED IN WHOLE OR
IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SERIES A SENIOR NOTE
IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH
DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE.]**
=====================================
DOMINION RESOURCES, INC.
=====================================
$
2002 SERIES A 5.75% SENIOR NOTE,
DUE MAY 15, 2008
No. CUSIP No. 25746U AH 2
Dominion Resources, Inc., a corporation duly organized and existing under
the laws of Virginia (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to [Cede & Co.] **, or registered assigns (the
"Holder"), the principal sum of ____________ Dollars ($_____)[, or such other
principal amount as shall be set forth in the Schedule of Increases or Decreases
attached hereto,]*** on May 15, 2008 and to pay interest thereon from March 20,
2002 or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, quarterly in arrears
__________________
** Insert in Global Securities.
*** Insert in Global Securities and Pledged Senior Notes.
on February 15, May 15, August 15 and November 15 of each year, commencing on
May 15, 2002, at the rate of 5.75% per annum to, but excluding, the earlier of
(i) the Remarketing Settlement Date or (ii) the Purchase Contract Settlement
Date, and, thereafter, at the Reset Rate to, but excluding, the Stated Maturity
of the Senior Notes. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Senior Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the close of business on the Business Day
preceding such Interest Payment Date; provided that interest payable at the
Stated Maturity of principal will be paid to the Person to whom principal is
payable. With respect to Senior Notes that are not in book-entry only form, the
Regular Record Date shall be the close of business on the 15/th/ Business Day
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Senior Note (or one or more Predecessor 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, notice whereof shall be given to Holders of Senior
Notes not less than 10 days prior to such Special Record Date, or be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Senior Notes may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture.
Payments of interest on the Senior Notes will include interest accrued to
but excluding the respective Interest Payment Dates. Interest payments for the
Senior Notes shall be computed and paid (1) for any full quarterly period on the
basis of a 360-day year of twelve 30-day months, (2) for any period shorter than
a full quarterly period, on the basis of a 30-day month and (3) for any period
less than a month, on the basis of the actual number of days elapsed per 30-day
month. In the event that any date on which interest is payable on the Senior
Notes is not a Business Day, then payment of the interest payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or payment in respect of any such delay), in each case with the same
force and effect as if made on the date the payment was originally payable.
However, if such Business Day is in the next calendar year, then such payment
will be made on the preceding Business Day.
Payment of the principal of and interest on this Senior Note will be made
at the office of the Paying Agent, in the Borough of Manhattan, City and State
of New York, 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, with
any such payment that is due at the Stated Maturity of any Senior Note being
made upon surrender of such Senior Note to such office or agency; provided,
however, that at the option of the Company payment of interest, subject to such
surrender where applicable, may be made (i) by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register or (ii) by wire transfer at such place and to such account at a banking
institution in the United States as may be designated in writing to the Trustee
at least sixteen (16) days prior to the date for payment by the Person entitled
thereto.
Reference is hereby made to the further provisions of this Senior Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
2
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Senior Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: Dominion Resources, Inc.
By: ___________________________________
Name: _________________________________
Title: ________________________________
3
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
JPMORGAN CHASE BANK,
as Trustee
By: ________________________________
Authorized Officer
4
[REVERSE OF SERIES A SENIOR NOTE]
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of June 1, 2000, as heretofore supplemented
and amended and as further supplemented by a Tenth Supplemental Indenture dated
as of March 20, 2002 (collectively, as amended or supplemented from time to
time, herein called the "Indenture", which term shall have the meaning assigned
to it in such instrument), between the Company and JPMorgan Chase Bank (formerly
known as 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 Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one
of the series designated on the face hereof (the "Senior Notes") which is
limited in aggregate principal amount to $300,000,000 (subject to increase to
$330,000,000 if the related overallotment option is exercised in full).
The Reset Rate shall be equal to the rate per annum that results from:
(i) in connection with a Successful Remarketing, the interest rate
determined by the Remarketing Agent sufficient to allow it to remarket the
Remarketing Senior Notes at a price at least equal to the Remarketing Value;
(ii) upon the occurrence of a Failed Remarketing, the Two-Year Benchmark
Rate plus the Applicable Spread; or
(iii) if (a) there are no Pledged Senior Notes to be remarketed and (b)
none of the holders of Separated Senior Notes have elected to have their Senior
Notes remarketed in accordance with Section 106 hereof and Section 5.7 of the
Pledge Agreement, the Reset Rate shall be the rate determined, in its sole
discretion, by the Remarketing Agent, as the rate that, in its judgment, would
have been established had a Remarketing been held on the Final Remarketing Date.
The term "Two-Year Benchmark Rate" shall mean the bid side rate displayed
at 10:00 a.m. (New York City time) on the third Business Day preceding the
Purchase Contract Settlement Date for direct obligations of the United States
having a maturity comparable to the remaining term to the Stated Maturity of the
Senior Notes, as agreed upon by the Company and the Remarketing Agent as
displayed in the Telerate system or, if the Telerate system is no longer
available or, in the judgment of the Remarketing Agent (after consultation with
the Company), no longer an appropriate system from which to obtain such rate,
such other nationally recognized quotation system as, in the judgment of the
Remarketing Agent (after consultation with the Company) is appropriate. If this
rate is not so displayed, the Two-Year Benchmark Rate will be calculated by the
Remarketing Agent as the yield to maturity for direct obligations of the United
States having a maturity comparable to the remaining term to the Stated Maturity
of the Senior Notes, expressed as a bond equivalent on the basis of a year of
365 or 366 days, as applicable, and applied on a daily basis, and computed by
taking the arithmetic mean of the secondary market bid rates, as of 10:30 a.m.
(New York City time) on the third Business Day preceding the Purchase Contract
Settlement Date of three leading United States government securities dealers
selected by the Remarketing Agent (after consultation with the Company) (which
may include the Remarketing Agent or an Affiliate thereof). However, if, in the
judgment of the
5
Remarketing Agent, after consultation with the Company, direct obligations of
the United States are no longer appropriate benchmarks for the purpose of
setting the Reset Rate if a Failed Remarketing has occurred, the Remarketing
Agent and the Company will agree upon another Two-Year Benchmark Rate.
The term "Applicable Spread" shall mean the spread determined as set forth
below, based on the Prevailing Rating of the Senior Notes in effect at the close
of business on the Business Day immediately preceding the date of the Failed
Remarketing:
Prevailing Rating Spread
----------------- ------
AA/"Aa2" ......................................... 3.00%
A/"A2" ........................................... 4.00%
BBB/"Baa2" ....................................... 5.00%
Below BBB/"Baa2" ................................. 7.00%
For purposes of this definition, the term "Prevailing Rating" of the Senior
Notes shall mean:
(w) AA/"Aa2" if the Senior Notes have a credit rating of AA or better by
Standard & Poor's Ratings Services ("S&P") and "Aa2" or better by Moody's
Investors Service, Inc. ("Moody's") or the equivalent of such ratings by such
agencies or a substitute rating agency or substitute rating agencies selected by
the Remarketing Agent;
(x) if not under clause (w) above, then A/"A2" if the Senior Notes have a
credit rating of A or better by S&P and "A2" or better by Moody's or the
equivalent of such ratings by such agencies or a substitute rating agency or
substitute rating agencies selected by the Remarketing Agent;
(y) if not under clauses (w) or (x) above, then BBB/"Baa2" if the Senior
Notes have a credit rating of BBB or better by S&P and "Baa2" or better by
Moody's or the equivalent of such ratings by such agencies or a substitute
rating agency or substitute rating agencies selected by the Remarketing Agent;
or
(z) if not under clauses (w), (x) or (y) above, then Below BBB/"Baa2".
Notwithstanding the foregoing, (A) if (i) the credit rating of the Senior Notes
by S&P shall be on the "Credit Watch" of S&P with a designation of "negative
implications" or "developing", or (ii) the credit rating of the Senior Notes by
Moody's shall be on the "Corporate Credit Watch List" of Moody's with a
designation of "downgrade" or "uncertain", or, in each case, on any successor
list of S&P or Moody's with a comparable designation, the Prevailing Ratings of
the Senior Notes shall be deemed to be within a range one full level lower in
the above table than those actually assigned to the Senior Notes by S&P and
Moody's and (B) if the Senior Notes are rated by only one rating agency prior to
or on the Remarketing Date, the Prevailing Rating shall at all times be
determined without reference to the rating of any other rating agency; provided
that if no such rating agency shall have in effect a rating for the Senior Notes
and the Remarketing Agent is unable to identify a substitute rating agency or
rating agencies, the Prevailing Rating shall be below BBB/"Baa2".
6
The Senior Notes shall not be entitled to any sinking fund and shall not be
redeemable prior to Stated Maturity.
If an Event of Default with respect to Senior Notes shall occur and be
continuing, the principal of the Senior Notes may be declared due and payable in
the manner and with the effect provided in the Indenture.
The Pledged Senior Notes comprising part of Corporate Units and the
Separated Senior Notes of holders of Separated Senior Notes that have elected to
participate in the Remarketing shall be remarketed by the Remarketing Agent on
the Remarketing Date. All Holders of Pledged Senior Notes that fail to settle
the related Purchase Contract through a Cash Settlement or an Early Settlement
pursuant to Section 5.9 of the Purchase Contract Agreement thereof shall be
deemed to have consented to the disposition of the Pledged Senior Note pursuant
to the Remarketing. Each holder of Separated Senior Notes may elect to have all
or a portion of its Senior Notes remarketed by notifying the Trustee and the
Collateral Agent of the aggregate principal amount of Separated Senior Notes
that it wishes to have remarketed prior to 5:00 p.m. (New York City time) on the
Election Date. Any notice pursuant to the preceding sentence shall be
substantially in the form of Exhibit H to the Purchase Contract Agreement and
shall be irrevocable and may not be conditioned upon the level at which the
Reset Rate is established in the Remarketing. Concurrently with the giving of
such notice, the holder of Separated Senior Notes, all or a portion of which is
to be remarketed, shall deliver or cause such Separated Senior Notes to be
delivered to the Collateral Agent. If the holder of the Separated Senior Notes
delivers only such notice but not the Separated Senior Notes subject to the
Notice, then none of such holder's Separated Senior Notes shall be included in
the Remarketing. Once the holder of Separated Senior Notes elects to participate
in the Remarketing, such Separated Senior Notes will be remarketed in the
Initial Remarketing, the Subsequent Remarketing and the Final Remarketing, as
applicable.
On the seventh Business Day prior to the Initial Remarketing Date, the
Company shall give notice of Remarketing in an Authorized Newspaper, including
the specific U.S. Treasury security or securities (including the CUSIP number
and/or the principal terms of such Treasury security or securities) that must be
delivered by Holders of Corporate Units that elect not to participate in the
Remarketing pursuant to Section 5.4(f) of the Purchase Contract Agreement, no
later than 5:00 p.m. (New York City time) on the Election Date. Not later than
15 nor more than 30 calendar days prior to the Initial Remarketing Date, the
Company shall request the Depositary (or any successor Clearing Agency) to
notify, directly or indirectly, each Beneficial Owner or Clearing Agency
Participant holding Corporate Units and each Beneficial Owner of a Senior Note
not a part of a Corporate Unit of the Remarketing and of the procedures that
must be followed in connection with the Remarketing.
The Purchase Contract Agent shall notify, by 11:00 a.m. (New York City
time), on the Business Day immediately preceding the Initial Remarketing Date,
the Remarketing Agent, the Collateral Agent, the Trustee and the Company, by use
of a notice substantially in the form of Exhibit G of the Purchase Contract
Agreement, of the aggregate principal amount of Pledged Senior Notes of
Corporate Units Holders to be remarketed on the Initial Remarketing Date or
Subsequent Remarketing Date, as applicable, and the Collateral Agent, pursuant
to the Pledge Agreement, having separately notified the Remarketing Agent, the
Trustee and the Company of the aggregate principal amount of Separated Senior
Notes to be included on the Initial Remarketing Date or Subsequent Remarketing
Date, as applicable, by 11:00 a.m. (New York City time), on the Business Day
7
immediately preceding the Initial Remarketing Date, shall concurrently
therewith, pursuant to the Pledge Agreement, deliver for Remarketing to the
Remarketing Agent all Remarketing Senior Notes. Upon receipt of such notice from
the Purchase Contract Agent and the Collateral Agent and such Remarketing Senior
Notes from the Collateral Agent, the Remarketing Agent, pursuant to the
Remarketing Agreement, will use its commercially reasonable efforts to remarket
such Remarketing Senior Notes on such date pursuant to the Remarketing
Procedures and the Remarketing Agreement.
The right of each Holder of Senior Notes to have its Senior Notes tendered
for purchase will be limited to the extent that (i) the Remarketing Agent
conducts a Remarketing pursuant to the terms of the Remarketing Agreement, (ii)
the Remarketing Agent is able to find a purchaser or purchasers for the tendered
Senior Notes and (iii) such purchaser or purchasers deliver the purchase price
therefor to the Remarketing Agent.
If there has been a Successful Initial Remarketing or a Successful
Subsequent Remarketing, the Remarketing Agent will on the Remarketing Settlement
Date:
(i) deduct and retain for itself the Remarketing Fee;
(ii) use the remaining proceeds attributable to the Pledged Senior Notes
from such Successful Remarketing to purchase the Treasury Portfolio described in
clauses 1(i) and 2(i) of the definition of Remarketing Value related to the
Senior Notes of Holders of Corporate Units that were remarketed;
(iii) if any Separated Senior Notes were remarketed, remit to the
Collateral Agent for payment to the holders of such Separated Senior Notes the
amounts specified in clauses 1(ii) and 2(ii) of the definition of Remarketing
Value; and
(iv) if there then remain any proceeds from such Successful Remarketing,
after the application of such proceeds as set forth in clauses (i) through (iii)
above, then remit any such remaining proceeds to the Purchase Contract Agent for
the benefit of holders of the remarketed Senior Notes and to the Collateral
Agent for the benefit of the holders of such Separated Senior Notes, on a pro
rata basis, provided, however, that if such Successful Remarketing is
consummated after 4:30 p.m. (New York City time) on the Remarketing Date and,
despite using its commercially reasonable efforts, the Remarketing Agent cannot
cause the applications of the proceeds specified above to occur on the
Remarketing Settlement Date, then the Remarketing Agent may make such
applications and remittances on the next succeeding Business Day.
If a Successful Final Remarketing shall have occurred, the Remarketing
Agent will on the Remarketing Settlement Date or Purchase Contract Settlement
Date, as applicable, (i) deduct and retain for itself the Remarketing Fee, (ii)
cause the remaining proceeds of the Remarketing with respect to the Pledged
Senior Notes in an amount equal to the aggregate principal amount of such Senior
Notes to be delivered to the Collateral Agent, on the Remarketing Settlement
Date, (iii) if any Separated Senior Notes were remarketed, remit to the
Collateral Agent for payment to the holders of such Separated Senior Notes sold
in the Remarketing the remaining proceeds from such Successful Remarketing
attributable to the Separated Senior Notes in an amount equal to the principal
amount of
8
such Separated Senior Notes and (iv) if there remain any proceeds from such
Successful Remarketing, after the application of such proceeds as set forth in
clauses (i) through (iii) of this sentence, then remit such remaining proceeds
to the Purchase Contract Agent for the benefit of the holders of the Pledged
Senior Notes and to the Collateral Agent for the benefit of holders of Separated
Senior Notes, on a pro rata basis, provided, however, that if such Successful
Final Remarketing is consummated after 4:30 p.m. (New York City time) on the
Remarketing Date and, despite using its commercially reasonable efforts, the
Remarketing Agent cannot cause the application of the proceeds specified above
to occur on the Remarketing Settlement Date, then the Remarketing Agent may make
such applications and remittances on the next succeeding Business Day.
If a Successful Remarketing occurs, by approximately 4:30 p.m. (New York
City time) on the Remarketing Date, the Remarketing Agent shall advise, by
telephone (promptly confirmed in writing in the case of clause (i)):
(i) the Company, the Purchase Contract Agent, the Collateral Agent, the
Securities Intermediary, the Depositary, and the Trustee of the Reset Rate
determined in the Remarketing;
(ii) each purchaser (or the Depositary Participant thereof) of Senior
Notes in the Remarketing of the Reset Rate and the number of Senior Notes such
purchaser is to purchase; and
(iii) each purchaser to give instructions to its Depositary Participant to
pay the purchase price on the Remarketing Settlement Date in same day funds
against delivery of the Remarketed Senior Notes purchased through the facilities
of the Depositary.
If a Failed Remarketing occurs, the Remarketing Agent and the Company, as
applicable, shall take the following actions:
(i) The Remarketing Agent shall notify by telephone the Company, the
Purchase Contract Agent, the Collateral Agent and the Trustee, that a Failed
Remarketing has occurred, whereupon the Company shall notify the Clearing
Agency, by telephone, that a Failed Remarketing has occurred.
(ii) The Company shall cause a notice of the Failed Remarketing to be sent
to the holders of all Senior Notes and to be published in an Authorized
Newspaper in New York City, in each case, no later than the Business Day
immediately preceding Purchase Contract Settlement Date.
(iii) The Remarketing Agent shall determine the Reset Rate in accordance
with clause (ii) of the Reset Rate definition.
(iv) The Remarketing Agent shall remit the Pledged Senior Notes that were
to be remarketed and the Separated Senior Notes that were to be remarketed to
the Collateral Agent.
Notwithstanding anything herein to the contrary, the Reset Rate shall in no
event exceed the maximum rate, if any, permitted by applicable law.
9
In accordance with the Depositary's normal procedures, on the Remarketing
Settlement Date or the Purchase Contract Settlement Date, as applicable, the
transactions described above with respect to each Senior Notes remarketed in the
Remarketing shall be executed through the Depositary, and the accounts of the
respective Depositary Participants shall be debited and credited and such
Remarketed Senior Notes delivered by book entry as necessary to effect purchases
and sales of such Remarketed Senior Notes. The Depositary shall make payment in
accordance with its normal procedures.
If any Holder of Senior Notes selling Senior Notes in the Remarketing fails
to deliver such Senior Notes, the direct or indirect Depositary Participant of
such selling Holder and of any other Person who was to have purchased Senior
Notes in the Remarketing may deliver to any such other Person an aggregate
principal amount of Senior Notes that is less than the aggregate principal
amount of Senior Notes that otherwise was to be purchased by such Person. In
such event, the aggregate principal amount of Senior Notes to be so delivered
shall be determined by such direct or indirect Depositary Participant, and
delivery of such lesser aggregate principal amount of Senior Notes shall
constitute good delivery.
The Remarketing Agent is not obligated to purchase any Senior Notes that
otherwise would remain unsold in the Remarketing. Neither the Company nor the
Remarketing Agent shall be obligated in any case to provide funds to make
payment upon tender of the Senior Notes for Remarketing.
Under the Remarketing Agreement, the Company, in its capacity as issuer of
the Senior Notes, shall be liable for, and shall pay, any and all costs and
expenses incurred in connection with the Remarketing, other than the Remarketing
Fee.
The settlement procedures set forth herein, including provisions for
payment by purchasers of the Remarketed Senior Notes in the Remarketing, shall
be subject to modification to the extent required by the Depositary or if the
book-entry system is no longer available for the Remarketed Senior Notes at the
time of the Remarketing, to facilitate the remarketing of the Remarketed Senior
Notes in certificated form, and shall provide for the authentication and
delivery of Senior Notes in a principal amount equal to the unremarketed portion
of such Senior Notes. In addition, the Remarketing Agent may modify the
settlement procedures set forth herein in order to facilitate the settlement
process.
If a Tax Event shall occur and be continuing, the Company may, at its
option, redeem the Senior Notes in whole (but not in part) at any time at a
price per Senior Note equal to the Redemption Price. Installments of interest on
the Senior Notes which are due and payable on or prior to the date of redemption
(the "Tax Event Redemption Date") will be payable to the Holders of the Senior
Notes registered as such at the close of business on the Regular Record Date for
such interest payment.
Each Holder of Senior Notes is deemed to have agreed to be bound by the
Company's determination of the comparable yield and projected payment schedule
for the Senior Notes for United Stated federal income tax purposes.
10
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities 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 majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Senior Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Senior Note and of any Senior Note issued upon the
registration of transfer hereof or in exchange therefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Senior Note.
As provided in and subject to the provisions of the Indenture, the Holder
of this Senior Note 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
Senior Notes, the Holders of not less than a majority in principal amount of the
Senior Notes at the time Outstanding 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 Senior Notes at
the time Outstanding 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 Senior Note for the enforcement of any
payment of principal hereof or premium, if any, or interest hereon on or after
the respective due dates expressed or provided for herein.
No reference herein to the Indenture and no provision of this Senior Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Senior Note at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Senior Note is registrable in the Security Register,
upon surrender of this Senior Note for registration of transfer at the office or
agency of the Company in any place where the principal of, premium, if any, and
interest on this Senior Note are payable, 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 Senior Notes and of like
tenor, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Senior Notes are issuable only in registered form without coupons in
denominations of $50 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Senior Notes are
exchangeable for a like aggregate principal amount of Senior Notes having the
same Stated Maturity and of like tenor of any authorized denominations as
requested by the Holder upon surrender of the Senior Note or Senior Notes to be
exchanged at the office or agency of the Company.
11
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 Senior 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 Security is registered as the owner hereof for all
purposes, whether or not this Senior Note be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Senior Note that are defined in the Indenture or the
Purchase Contract Agreement, as the case may be, shall have the meanings
assigned to them in the Indenture or the Purchase Contract Agreement, as the
case may be and as the context may require.
12
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with rights of survivorship and
not as tenants in common
UNIF GIFT MIN ACT - ________________________________ Custodian for
(Cust)
________________________________
(Minor)
Under Uniform Gifts to Minors Act of
________________________________
(State)
Additional abbreviations may also be used though not on the above list.
__________________________________________________________________________
13
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
______________________________________________________________________________.
(please insert Social Security or other identifying number of assignee)
______________________________________________________________________________.
______________________________________________________________________________.
______________________________________________________________________________.
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
the within Senior Note and all rights thereunder, hereby irrevocably
constituting and appointing
______________________________________________________________________________.
______________________________________________________________________________.
______________________________________________________________________________.
______________________________________________________________________________.
______________________________________________________________________________.
______________________________________________________________________________.
agent to transfer said Senior Note on the books of the Company, with full power
of substitution in the premises.
Dated: __________________ __, ____
______________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular without
alteration or enlargement, or any change whatever.
14
[TO BE ATTACHED TO GLOBAL CERTIFICATES AND PLEDGED SENIOR NOTES]
SCHEDULE OF INCREASES OR DECREASES
The following increases or decreases in this [Global
Certificate][Pledged Senior Note] have been made:
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Principal amount of
Amount of decrease in Amount of increase in Senior Notes
principal amount of principal amount of evidenced by the
Senior Notes Senior Notes [Global Signature of
evidenced by the evidenced by the Certificate][Pledged authorized officer
[Global [Global Senior Note] of Trustee or
Certificate][Pledged Certificate][Pledged following such Securities
Date Senior Note] Senior Note] decrease or increase Custodian
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15
EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
JPMORGAN CHASE BANK,
as Trustee
By: ________________________________
Authorized Officer