Exhibit 4.4
VIRGINIA ELECTRIC AND POWER COMPANY
Issuer
TO
JPMORGAN CHASE BANK
Trustee
_________________________
Seventh Supplemental Indenture
Dated as of September 1, 2002
_________________________
$1,600,000,000
Medium-Term Notes, Series H
TABLE OF CONTENTS*
ARTICLE I
MEDIUM-TERM NOTES, SERIES H
SECTION 101. Establishment ........................................................... 1
SECTION 102. Definitions ............................................................. 2
SECTION 103. Payment of Principal and Interest ....................................... 7
SECTION 104. Fixed Rate Notes ........................................................ 8
SECTION 105. Floating Rate Notes ..................................................... 9
SECTION 106. CD Rate Notes ........................................................... 11
SECTION 107. Commercial Paper Rate Notes ............................................. 11
SECTION 108. Federal Funds Rate Notes ................................................ 12
SECTION 109. LIBOR Notes ............................................................. 13
SECTION 110. Prime Rate Notes ........................................................ 14
SECTION 111. Treasury Rate Notes ..................................................... 15
SECTION 112. CMT Rate Notes .......................................................... 16
SECTION 113. Denominations ........................................................... 19
SECTION 114. Global Securities ....................................................... 19
SECTION 115. Redemption .............................................................. 20
SECTION 116. Sinking Fund; Repayment at Holder's Option .............................. 21
SECTION 117. Currency ................................................................ 22
SECTION 118. Paying Agent; Payments .................................................. 22
SECTION 119. Additional Terms ........................................................ 24
SECTION 120. Establishment of Procedures for Authentication of Notes Pursuant to
Section 303 of the Indenture ............................................ 24
ARTICLE II
MISCELLANEOUS PROVISIONS
SECTION 201. Recitals by Company ..................................................... 24
SECTION 202. Ratification and Incorporation of Original Indenture .................... 25
SECTION 203. Executed in Counterparts ................................................ 25
SECTION 204. Assignment .............................................................. 25
Exhibit A Form Of Fixed Rate Note
Exhibit B Form Of Floating Rate Note
Exhibit C Form Of Authentication Certificate
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* 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.
(i)
THIS SEVENTH SUPPLEMENTAL INDENTURE is made as of the first day of
September, 2002 by and between VIRGINIA ELECTRIC AND POWER COMPANY, a Virginia
corporation, having its principal office at 701 East Cary 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, 1998 (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 Seventh 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 forms of the Securities for such series 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, to establish the forms for such series of Securities and to
establish the procedures for the authentication and delivery of specific
Securities of the series from time to time;
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 Seventh 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
MEDIUM-TERM NOTES, SERIES H
SECTION 101. Establishment. There is hereby established pursuant to Section
301 of the Indenture a new series of Securities to be issued under the
Indenture, to be designated as the Company's Medium-Term Notes, Series H (the
"Notes").
There shall be no limitation on the aggregate principal amount of the
Notes; provided, however, unless otherwise specified in an Authentication
Certificate, the aggregate principal amount of the Notes to be issued pursuant
to this Seventh Supplemental Indenture is limited to
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$1,600,000,000 or the equivalent thereof in Foreign Currency (except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Sections 304, 305, 306, 906 or 1106
of the Indenture and except for any Notes which, pursuant to Section 303 of the
Indenture, are deemed never to have been authenticated and delivered). In the
case of Notes denominated in Foreign Currency, the U.S. Dollar equivalent
thereof will be determined by application of the Market Exchange Rate on the
Business Day immediately preceding the date on which the pricing of such Notes
takes place.
All Notes need not be issued at the same time and any issuance of a tranche
of Notes may be reopened at any time, without the consent of any Holder, for
issuances of additional Notes of such tranche. Any such additional Notes will,
if so specified in the Authentication Certificate therefor, have the same
interest rate, maturity and other terms as Notes of such tranche previously
issued.
It is hereby established pursuant to Section 201 of the Indenture that the
Notes denominated and payable in United States dollars shall be substantially in
the forms attached as Exhibits A and B hereto, unless a different form is
provided in the applicable Authentication Certificate (which Authentication
Certificate shall, in accordance with the applicable Board Resolution,
constitute action taken pursuant to a Board Resolution within the meaning of
Section 201 of the Indenture). The Notes shall have such additional terms as
shall be set forth in the applicable Authentication Certificate and delivered to
the Trustee or its authenticating agent. Upon receipt (including by facsimile)
of such Authentication Certificate, the Trustee or its authenticating agent is
hereby instructed to insert such terms on the face of the Notes relating
thereto. Each Note shall be dated the date of authentication thereof.
The form of the Trustee's Certificate of Authentication for the Notes shall
be in substantially the form set forth in Section 205 of the Indenture.
SECTION 102. Definitions. The following defined terms used herein shall,
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.
"Adjusted Treasury Rate" means, with respect to any Redemption Date: (i)
the yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated "H.15(519)" or any successor publication which is published weekly by
the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities adjusted to constant
maturity under the caption "Treasury Constant Maturities," for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three
months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue shall be
determined and the Adjusted Treasury Rate shall be interpolated or extrapolated
from such yields on a straight line basis, rounding to the nearest month); or
(ii) if such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date.
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"Authentication Certificate" shall have the meaning ascribed to such term
in Section 120 of this Seventh Supplemental Indenture.
"Base Rate" shall have the meaning ascribed to such term in Section 105 of
this Seventh Supplemental Indenture.
"Business Day" means with respect to any Note, any day, other than a
Saturday or Sunday, that is neither (a) a legal holiday nor (b) a day on which
banking institutions are authorized or required by law, regulation or executive
order to close in New York City; provided, however, that for Notes denominated
in a Specified Currency other than United States dollars that day is also not a
day on which commercial banking institutions are authorized or required by law,
regulation or executive order to close in the Principal Financial Center of the
country issuing the Specified Currency (or for Notes denominated in euros, that
day is also a day on which the Trans-European Automated Real-time Gross
Settlement Express Transfer System, commonly referred to as "TARGET," is
operating); provided, further, that with respect to a LIBOR Note, the day must
also be a London Business Day.
"Calculation Agent" shall have the meaning ascribed to such term in Section
105 of this Seventh Supplemental Indenture.
"Calculation Date" shall have the meaning ascribed to such term in Section
105 of this Seventh Supplemental Indenture.
"CD Rate" shall have the meaning ascribed to such term in Section 106 of
this Seventh Supplemental Indenture.
"CD Rate Note" shall have the meaning ascribed to such term in Section 105
of this Seventh Supplemental Indenture.
"CMT Rate" shall have the meaning ascribed to such term in Section 112 of
this Seventh Supplemental Indenture.
"CMT Rate Note" shall have the meaning ascribed to such term in Section 105
of this Seventh Supplemental Indenture.
"Commercial Paper Rate" shall have the meaning ascribed to such term in
Section 107 of this Seventh Supplemental Indenture.
"Commercial Paper Rate Note" shall have the meaning ascribed to such term
in Section 105 of this Seventh Supplemental Indenture.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Notes ("Remaining Life").
"Comparable Treasury Price" means, with respect to a Redemption Date, (i)
the average of five Reference Treasury Dealer Quotations for such Redemption
Date, after excluding the highest and
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lowest Reference Treasury Dealer Quotations, or (ii) if the Independent
Investment Banker obtains fewer than five such Reference Treasury Dealer
Quotations, the average of all such quotations.
"Corporate Trust Office" means, for purposes of Section 118 hereof, the
Trustee's office located at GIS Unit Trust Window, 4 New York Plaza, 1st Floor,
New York, New York 10024-2413.
"Designated LIBOR Page" means either: (i) if "LIBOR Reuters" is designated
in the applicable Authentication Certificate, the display on the Reuters Monitor
Money Rates Service for the purpose of displaying the London interbank rates of
major banks for the applicable Index Currency or its designated successor; or
(ii) if "LIBOR Telerate" is designated in the applicable Authentication
Certificate, the display on the Telerate page specified in the applicable
Authentication Certificate, or any other page as may replace that page on that
service, for the purpose of displaying the London interbank rates of major banks
for the applicable Index Currency.
"Exchange Rate Agent" shall have the meaning ascribed to such term in
Section 118 of this Seventh Supplemental Indenture.
"Federal Funds Rate" shall have the meaning ascribed to such term in
Section 108 of this Seventh Supplemental Indenture.
"Federal Funds Rate Note" shall have the meaning ascribed to such term in
Section 105 of this Seventh Supplemental Indenture.
"Fixed Rate Note" shall have the meaning ascribed to such term in Section
103 of this Seventh Supplemental Indenture.
"Floating Rate/Fixed Rate Note" shall have the meaning ascribed to such
term in Section 105 of this Seventh Supplemental Indenture.
"Floating Rate Note" shall have the meaning ascribed to such term in
Section 103 of this Seventh Supplemental Indenture.
"Foreign Currency Note" shall have the meaning ascribed to such term in
Section 117 of this Seventh Supplemental Indenture.
"H.15 Daily Update" means the daily update of H.15(519), available through
the world wide web site of the Board of Governors of the Federal Reserve System
at http://www.federalreserve.gov/releases/ h15/ update or any successor site or
publication.
"H.15(519)" means the Statistical Release H.15(519), Selected Interest
Rates, published by the Board of Governors of the Federal Reserve System, or any
successor publication of the Board of Governors of the Federal Reserve System.
"Independent Investment Banker" means Merrill Lynch, Pierce, Fenner & Smith
Incorporated and its successors as selected by the Company, or if such firm is
unwilling or unable to serve as such, an independent investment and banking
institution of national standing appointed by the Company.
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"Index Currency" means the currency specified in the applicable
Authentication Certificate as the currency for which LIBOR will be calculated,
or, if the euro is substituted for that currency, the index currency will be the
euro. If no currency is specified in the applicable Authentication Certificate,
the Index Currency will be U.S. dollars.
"Index Maturity" means the period of maturity of the instrument or
obligation from which the Base Rate is calculated, as specified in the
applicable Authentication Certificate.
"Initial Interest Rate" shall have the meaning ascribed to such term in
Section 105 of this Seventh Supplemental Indenture.
"Interest Determination Date" means, with respect to any Interest Reset
Date, the day the Calculation Agent will refer to when determining the new
interest rate at which a Floating Rate Note will reset, which is applicable as
follows: for Commercial Paper Rate Notes, Federal Funds Rate Notes and Prime
Rate Notes, the Interest Determination Date will be the Business Day prior to
the Interest Reset Date; for LIBOR Notes, the Interest Determination Date will
be the second London Business Day prior to the Interest Reset Date, except that
the Interest Determination Date pertaining to an Interest Reset Date for a LIBOR
Note for which the Index Currency is pounds sterling will be the Interest Reset
Date; for CD Rate Notes and CMT Rate Notes, the Interest Determination Date will
be the second Business Day next preceding the Interest Reset Date; and for
Treasury Rate Notes, the Interest Determination Date will be the day of the week
in which the Interest Reset Date falls on which Treasury bills would normally be
auctioned. Treasury bills are normally sold at auction on Monday of each week,
unless that day is a legal holiday, in which case the auction is normally held
on the following Tuesday, but the auction may be held on the preceding Friday.
If, as the result of a legal holiday, the auction is held on the preceding
Friday, that Friday will be the Interest Determination Date pertaining to the
Interest Reset Date occurring in the next succeeding week. If an auction falls
on a day that is an Interest Reset Date, the Interest Reset Date will be the
next following Business Day.
"Interest Payment Date" shall have the meaning ascribed to such term in
Section 103 of this Seventh Supplemental Indenture.
"Interest Period" shall have the meaning ascribed to such term in Section
105 of this Seventh Supplemental Indenture.
"Interest Reset Date" means the first day of each Interest Reset Period.
"Interest Reset Period" shall have the meaning ascribed to such term in
Section 105 of this Seventh Supplemental Indenture.
"Inverse Floating Rate Note" shall have the meaning ascribed to such term
in Section 105 of this Seventh Supplemental Indenture.
"LIBOR Rate" shall have the meaning ascribed to such term in Section 109 of
this Seventh Supplemental Indenture.
"LIBOR Note" shall have the meaning ascribed to such term in Section 105 of
this Seventh Supplemental Indenture.
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"Limitation Date" shall have the meaning ascribed to such term in Section
115 of this Seventh Supplemental Indenture.
"London Business Day" means any day on which commercial banks are open for
business (including for dealings in deposits in the relevant Index Currency) in
London.
"Market Exchange Rate" shall have the meaning ascribed to such term in
Section 118 of this Seventh Supplemental Indenture.
"Maximum Interest Rate" shall have the meaning ascribed to such term in
Section 105 of this Seventh Supplemental Indenture.
"Minimum Interest Rate" shall have the meaning ascribed to such term in
Section 105 of this Seventh Supplemental Indenture.
"Original Issue Discount Notes" shall have the meaning ascribed to such
term in Section 103 of this Seventh Supplemental Indenture.
"Prime Rate" shall have the meaning ascribed to such term in Section 110 of
this Seventh Supplemental Indenture.
"Prime Rate Note" shall have the meaning ascribed to such term in Section
105 of this Seventh Supplemental Indenture.
"Principal Financial Center" means, as applicable, the capital city of the
country issuing the Specified Currency; or the capital city of the country to
which the Index Currency relates; provided, however, that the Principal
Financial Center will be New York City for United States dollars, Sydney and
Melbourne (the latter solely in the case of the Index Currency) for Australian
dollars, Toronto for Canadian dollars, Brussels for euros, Johannesburg for
South African rand and Zurich for Swiss francs.
"Redemption Price" shall have the meaning ascribed to such term in Section
115 of this Seventh Supplemental Indenture.
"Reference Treasury Dealer" means: (i) Merrill Lynch, Pierce, Fenner &
Smith Incorporated and its successors; provided that, if such firm ceases to be
a primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), the Company shall substitute another Primary Treasury Dealer;
and (ii) up to four other Primary Treasury Dealers selected by the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Independent Investment Banker, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Independent Investment Banker at 5:00
p.m., New York City time, on the third Business Day preceding such Redemption
Date.
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"Regular Record Date" means, with respect to each Interest Payment Date,
the close of business on the fifteenth calendar day (whether or not a Business
Day) preceding such Interest Payment Date.
"Reuters Screen USPRIME 1 Page" means the display designated as page
"USPRIME 1" on the Reuters Monitor Money Rates Service, or any successor
service, or any other page as may replace the USPRIME 1 Page on that service for
the purpose of displaying prime rates or base lending rates of major United
States banks.
"Specified Currency" shall have the meaning ascribed to such term in
Section 117 of this Seventh Supplemental Indenture.
"Spread" means the number of basis points to be added to or subtracted from
the Base Rate for a Floating Rate Note, as specified in the applicable
Authentication Certificate as being applicable to such Floating Rate Note for
such Interest Period. Each basis point is 0.01%.
"Spread Multiplier" means the percentage specified in the applicable
Authentication Certificate as being applicable to the Base Rate for a Floating
Rate Note for each Interest Period.
"Stated Maturity Date" means the date on which a Note matures, as specified
in such Note and in the applicable Authentication Certificate, as described in
Section 103 of this Seventh Supplemental Indenture.
"TARGET Settlement Day" means any day on which the Trans-European Automated
Real-Time Gross Settlement Express Transfer System is open.
"Telerate" means Moneyline Telerate, or any successor service.
"Treasury Rate" shall have the meaning ascribed to such term in Section 111
of this Seventh Supplemental Indenture.
"Treasury Rate Note" shall have the meaning ascribed to such term in
Section 105 of this Seventh Supplemental Indenture.
SECTION 103. Payment of Principal and Interest. Unless previously redeemed
or repaid, each Note shall mature on the date 9 months or more from its date of
issue as specified in such Note and in the applicable Authentication Certificate
(the "Stated Maturity Date"). If the Stated Maturity Date or any earlier
Redemption Date or Repayment Date falls on a day that is not a Business Day with
respect to such Note, the payment of principal will be made on the next
succeeding Business Day with the same force and effect as if made on such Stated
Maturity Date, Redemption Date or Repayment Date.
Each Note within such series that bears interests will bear interest at
either (a) a fixed rate (the "Fixed Rate Notes") or (b) a floating rate (the
"Floating Rate Notes") determined by reference to one or more specified Base
Rates based on the Index Maturity, which may be adjusted by a Spread and/or
Spread Multiplier. Notes may be issued as "Original Issue Discount Notes" at a
discount from the
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principal amount thereof due at the Stated Maturity Date as specified in the
applicable Authentication Certificate.
Each Note that bears interest will bear interest from and including its
date of issue or from and including the most recent Interest Payment Date to
which interest on such Note (or any predecessor Note) has been paid or duly
provided for until the principal thereof is paid or made available for payment.
Interest will be payable on each Interest Payment Date and at the Stated
Maturity Date or any earlier Redemption Date or Repayment Date. The first
payment of interest on any Note originally issued after a Regular Record Date
and on or before an Interest Payment Date will be made on the Interest Payment
Date following the next succeeding Regular Record Date to the registered Holder
on such next succeeding Regular Record Date.
The Interest Payment Dates for the Notes shall be as specified in the
applicable Authentication Certificate (the "Interest Payment Dates").
The interest rate on a Note for any Interest Period will in no event be
higher than the maximum rate permitted by New York law as the same may be
modified by United States law of general application.
The applicable Authentication Certificate will specify: (i) the issue
price, Interest Payment Dates and Regular Record Dates; (ii) the date on which
the Note will be issued and the Stated Maturity Date; (iii) the Specified
Currency in which the Note is denominated; (iv) with respect to any Fixed Rate
Note, the interest rate, (v) with respect to any Floating Rate Note, the Initial
Interest Rate, the method (which may vary from Interest Period to Interest
Period) of calculating the interest rate applicable to each Interest Period
(including, if applicable, the Index Maturity, the Spread and/or Spread
Multiplier, the Interest Determination Dates, the Interest Reset Dates and any
Minimum Interest Rate or Maximum Interest Rate); (vi) with respect to any
Floating Rate Note, whether such Note is an Inverse Floating Rate Note and, if
so, the fixed interest rate for such Note; (vii) with respect to any Floating
Rate Note, whether such Note is a Floating Rate/Fixed Rate Note and, if so, the
interest rates for such Note and the fixed rate commencement date; (viii)
whether such Note is an Original Issue Discount Note; and (ix ) any other terms
consistent with the Indenture including the redemption or repayment terms, if
any for such Note.
SECTION 104. Fixed Rate Notes. Each Fixed Rate Note, whether or not issued
as an Original Issue Discount Note, will bear interest at the annual rate
specified on its face until the principal is paid or made available for payment.
Interest on Fixed Rate Notes will be computed and paid on the basis of a 360-day
year of twelve 30-day months. Interest payments for Fixed Rate Notes will
include accrued interest from and including the date of issue or from and
including the last date in respect of which interest has been paid or duly
provided for, as the case may be, to but excluding the relevant Interest Payment
Date or Stated Maturity Date or any earlier Redemption Date or Repayment Date,
as the case may be, except when the Interest Payment Date is not a Business Day.
In the event that any Interest Payment Date on a Fixed Rate Note is not a
Business Day, interest will be paid on the next succeeding Business Day with the
same force and effect as if made on such Interest Payment Date, but interest on
that payment will not accrue during the period from and after the scheduled
Interest Payment Date.
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SECTION 105. Floating Rate Notes. A Floating Rate Note will bear interest
determined by reference one or more specified Base Rates based on the Index
Maturity, which may be adjusted by a Spread and/or a Spread Multiplier. Any
Floating Rate Note may also have either or both of the following as set forth in
the applicable Authentication Certificate: (i) a maximum interest rate
limitation, or ceiling, on the rate of interest which may accrue during any
Interest Period (the "Maximum Interest Rate"); and (ii) a minimum interest rate
limitation, or floor, on the rate of interest which may accrue during any
Interest Period (the "Minimum Interest Rate").
Floating Rate Notes may be issued as "Inverse Floating Rate Notes" in which
case the particular Floating Rate Note will bear interest at a fixed interest
rate minus the rate determined by reference to the applicable Base Rate (i) plus
or minus the applicable Spread, if any, and/or (ii) multiplied by the applicable
Spread Multiplier, if any; provided, however, that interest on an Inverse
Floating Rate Note will not be less than zero. Commencing on the first Interest
Reset Date, the rate at which interest on an Inverse Floating Rate Note is
payable will be reset as of each Interest Reset Date; provided, further, that
the interest rate in effect for the period, if any, from the date of issue to
the first Interest Reset Date will be the Initial Interest Rate.
Floating Rate Notes may be issued as "Floating Rate/Fixed Rate Notes" in
which case the particular Floating Rate Note will bear interest from the date of
issue to the first Interest Reset Date for such Note at the Initial Interest
Rate specified in the applicable Authentication Certificate and thereafter the
rate of interest on such Note will be reset as of each Interest Reset Date to a
rate determined by reference to the applicable Base Rate (i) plus or minus the
applicable Spread, if any, and/or (ii) multiplied by the applicable Spread
Multiplier, if any; provided, however, that the interest rate in effect
commencing on the fixed rate commencement date specified in the applicable
Authentication Certificate will be the fixed rate of interest specified in such
Authentication Certificate, or if no such fixed rate is specified, the rate of
interest beginning on the fixed rate commencement date shall be the interest
rate in effect on the day immediately preceding the fixed rate commencement
date.
The applicable Authentication Certificate may designate any of the
following interest rates or interest rate formulas (the "Base Rate") as
applicable to one or more Interest Periods on each Floating Rate Note: (a) the
CD Rate, in which case such note will be a "CD Rate Note" with respect to such
Interest Period or Interest Periods; (b) the Commercial Paper Rate, in which
case such Note will be a "Commercial Paper Rate Note" with respect to such
Interest Period or Interest Periods; (c) the CMT Rate, in which case such Note
will be a "CMT Rate Note" with respect to such Interest Period or Interest
Periods; (d) the Federal Funds Rate, in which case such Note will be a "Federal
Funds Rate Note" with respect to such Interest Period or Interest Periods; (e)
LIBOR, in which case such Note will be a "LIBOR Note" with respect to such
Interest Period or Interest Periods; (f) the Prime Rate, in which case such Note
will be a "Prime Rate Note" with respect to such Interest Period or Interest
Periods; (g) the Treasury Rate, in which case such Note will be a "Treasury Rate
Note" with respect to such Interest Period or Interest Periods; (h) such other
rate or interest rate formula as set forth in the applicable Authentication
Certificate.
The interest rate on each Floating Rate Note for each Interest Period will
be determined by reference to the applicable Base Rate specified in the
applicable Authentication Certificate for such Interest Period, plus or minus
the applicable Spread, if any, and/or multiplied by the applicable Spread
Multiplier, if any.
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In the event that any Interest Payment Date, other than the Stated Maturity
Date or any earlier Redemption Date or Repayment Date, for any Floating Rate
Note falls on a day that is not a Business Day, the Interest Payment Date will
be postponed to the next following day that is a Business Day, except that, in
the case of a LIBOR Note, if that Business Day would fall in the next calendar
month, the Interest Payment Date will be the immediately preceding Business Day.
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semi-annually or annually (that period being the
"Interest Reset Period" for the Note), as specified in the applicable
Authentication Certificate.
The interest rate in effect from the date of issue to the first Interest
Reset Date for a Floating Rate Note (the "Initial Interest Rate") will be the
Initial Interest Rate specified in the applicable Authentication Certificate. If
any Interest Reset Date for any Floating Rate Note would otherwise be a day that
is not a Business Day, such Interest Reset Date shall be postponed to the next
day that is a Business Day, except that in the case of a LIBOR Note, if such
Business Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Business Day.
Unless otherwise specified in the applicable Authentication Certificate,
interest for a Floating Rate Note will accrue from and including the most recent
Interest Payment Date to which interest has been paid or duly provided for, or,
if no interest has been paid or duly provided for, from and including the issue
date or any other date specified in an Authentication Certificate on which
interest begins to accrue and interest will accrue to but excluding the next
Interest Payment Date or, if earlier, the date on which the principal has been
paid or duly made available for payment (each such interest accrual period, an
"Interest Period").
Upon the request of the Holder of any Floating Rate Note, the Calculation
Agent will provide the interest rate then in effect and, if determined, the
interest rate that will become effective on the next Interest Reset Date for
that Floating Rate Note.
For a Floating Rate Note, accrued interest will be calculated by
multiplying the principal amount of the Floating Rate Note by an accrued
interest factor. This accrued interest factor will be computed by adding the
interest factors calculated for each day in the period for which interest is
being paid. The interest factor for each day is computed by dividing the
interest rate applicable to that day: (i) by 360, in the case of CD Rate Notes,
Commercial Paper Rate Notes, Federal Funds Rate Notes, LIBOR Notes (except for
LIBOR Notes denominated in pounds sterling) and Prime Rate Notes; (ii) by 365,
in the case of LIBOR Notes denominated in pounds sterling; or (iii) by the
actual number of days in the year, in the case of Treasury Rate Notes or CMT
Rate Notes.
For these calculations, the interest rate in effect on any Interest Reset
Date will be the applicable rate as reset on that date. The interest rate
applicable to any other day is the interest rate from the immediately preceding
Interest Reset Date or, if none, the Initial Interest Rate.
All percentages used in or resulting from any calculation of the rate of
interest on a Floating Rate Note will be rounded, if necessary, to the nearest
one hundred-thousandth of a percentage point (.0000001), with five
one-millionths of a percentage point rounded upward, (e.g. 9.876545% (or
..09876545) would be rounded to 9.87655% (or .0987655)) and all United States
dollar amounts used
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in or resulting from these calculations on Floating Rate Notes will be rounded
to the nearest cent, with one-half cent rounded upward.
Unless otherwise specified in the applicable Authentication Certificate, JP
Morgan Chase Bank will be the "Calculation Agent." Unless otherwise specified it
the applicable Authentication Certificate, the "Calculation Date," if
applicable, pertaining to any Interest Determination Date on a Floating Rate
Note will be the earlier of (i) the tenth calendar day after such Interest
Determination Date, or, if any such day is not a Business Day, the next
succeeding Business Day, and (ii) the Business Day immediately preceding the
applicable Interest Payment Date or Stated Maturity Date or for any principal
amount to be redeemed or repaid, the Redemption Date or Repayment Date, as the
case may be.
SECTION 106. CD Rate Notes. CD Rate Notes will bear interest at the
interest rates specified in the CD Rate Notes and in the applicable
Authentication Certificate. Those interest rates will be based on the CD Rate
and any Spread or Spread Multiplier and will be subject to the Minimum Interest
Rate and the Maximum Interest Rate, if any.
Unless otherwise specified in the applicable Authentication Certificate,
the CD Rate will be, for any Interest Determination Date, the rate on that date
for negotiable U.S. dollar certificates of deposit having the Index Maturity
specified in the applicable Authentication Certificate as published in H.15(519)
under the heading "CDs (secondary market)."
The following procedures will apply if the CD Rate cannot be determined as
described above: If the above rate is not published in H.15(519) by 3:00 p.m.,
New York City time, on the Calculation Date pertaining to the applicable
Interest Determination Date, the CD Rate will be the rate on that Interest
Determination Date set forth in the H.15 Daily Update, or such other recognized
electronic source used for the purpose of displaying such rate, or any successor
site or publication, which is commonly referred to as the "H.15 Daily Update,"
for the Interest Determination Date for negotiable certificates of deposit
having the Index Maturity specified in the applicable Authentication
Certificate, under the caption "CDs (secondary market). If the above rate is not
yet published in either H.15(519), the H.15 Daily Update or some other
recognized source for the purpose of displaying the rate, by 3:00 p.m., New York
City time, on the Calculation Date, the Calculation Agent will determine the CD
Rate to be the arithmetic mean of the secondary market offered rates as of 10:00
a.m., New York City time, on that Interest Determination Date of three leading
nonbank dealers in negotiable U.S. dollar certificates of deposit in New York
City selected by the Calculation Agent, after consultation with the Company, for
negotiable certificates of deposit of major United States money center banks of
the highest credit standing in the market for negotiable certificates of deposit
with a remaining maturity closest to the Index Maturity specified in the
applicable Authentication Certificate in an amount that is representative for a
single transaction in that market at that time. If the dealers selected by the
Calculation Agent are not quoting as set forth above, the CD Rate for the
applicable Interest Reset Period will be the same as the CD Rate in effect for
the immediately preceding Interest Reset Period (or, if there was no Interest
Reset Period, the rate of interest payable on the CD Rate Notes for which the CD
Rate is being determined shall be the Initial Interest Rate).
SECTION 107. Commercial Paper Rate Notes. Commercial Paper Rate Notes will
bear interest at the interest rates specified in the Commercial Paper Rate Notes
and in the applicable
11
Authentication Certificate. Those interest rates will be based on the Commercial
Paper Rate and any Spread or Spread Multiplier and will be subject to the
Minimum Interest Rate and the Maximum Interest Rate, if any.
The Commercial Paper Rate will be, for any Interest Determination Date, the
Money Market Yield, calculated as described below, of the rate on that date for
commercial paper having the Index Maturity specified in the applicable
Authentication Certificate, as that rate is published in H.15(519), under the
heading "Commercial Paper - Nonfinancial."
The following procedures will apply if the Commercial Paper Rate cannot be
determined as described above: If the above rate is not published by 3:00 p.m.,
New York City time, on the Calculation Date pertaining to the applicable
Interest Determination Date, then the Commercial Paper Rate will be the Money
Market Yield of the rate on that Interest Determination Date for commercial
paper of the Index Maturity specified in the applicable Authentication
Certificate as published in H.15 Daily Update or some other recognized
electronic source for the purpose of displaying the rate, under the heading
"Commercial Paper - Nonfinancial." If by 3:00 p.m., New York City time, on that
Calculation Date the rate is not yet published in either H.15(519) or the H.15
Daily Update, or some other recognized electronic source for the purpose of
displaying the rate, then the Calculation Agent will determine the Commercial
Paper Rate to be the Money Market Yield of the arithmetic mean of the offered
rates as of 11:00 a.m., New York City time, on that Interest Determination Date
of three leading dealers of U.S. dollar commercial paper in New York City
selected by the Calculation Agent, after consultation with the Company, for
commercial paper of the Index Maturity specified in the applicable
Authentication Certificate, placed for an industrial issuer whose bond rating is
"AA," or the equivalent, from a nationally recognized statistical rating
organization. If the dealers selected by the Calculation Agent are not quoting
as mentioned above, the Commercial Paper Rate for the applicable Interest Reset
Period will be the same as the Commercial Paper Rate in effect for the
immediately preceding Interest Reset Period (or, if there was no Interest Reset
Period, the rate of interest payable on the Commercial Paper Rate Notes for
which the Commercial Paper Rate is being determined shall be the Initial
Interest Rate).
The "Money Market Yield" will be a yield calculated in accordance with the
following formula:
Money Market Yield = D x 360
-------------- x 100
360 - (D x M)
"D" refers to the applicable per year rate for commercial paper quoted on a
bank discount basis and expressed as a decimal; and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
SECTION 108. Federal Funds Rate Notes. Federal Funds Rate Notes will bear
interest at the interest rates specified in the Federal Funds Rate Notes and in
the applicable Authentication Certificate. Those interest rates will be based on
the Federal Funds Rate and any Spread or Spread Multiplier and will be subject
to the Minimum Interest Rate and the Maximum Interest Rate, if any.
12
The Federal Funds Rate will be, for any Interest Determination Date, the
rate on that date for U.S. dollar federal funds as published in H.15(519) under
the heading "Federal Funds (Effective)" as that rate is displayed on the
Telerate on page 120 or any other page as may replace the applicable page on
that service, which is commonly referred to as "Telerate Page 120."
The following procedures will apply if the Federal Funds Rate cannot be
determined as described above: If the above rate is not published by 3:00 p.m.,
New York City time, on the Calculation Date pertaining to the Interest
Determination Date, the Federal Funds Rate will be the rate on that Interest
Determination Date as published in the H.15 Daily Update under the heading
"Federal Funds/ Effective Rate," or another recognized electronic source used
for the purpose of displaying that rate, under the caption "Federal Funds
(Effective)." If that rate is not yet published in either H.15(519) or the H.15
Daily Update or some other recognized electronic source for the purpose of
displaying the rate, by 3:00 p.m., New York City time, on the Calculation Date
pertaining to the Interest Determination Date then the Calculation Agent will
determine the Federal Funds Rate to be the arithmetic mean of the rates for the
last transaction in overnight U.S. dollar federal funds, as of 9:00 a.m., New
York City time, on the Interest Determination Date, arranged by each of three
leading brokers of federal funds transactions in New York City selected by the
Calculation Agent. If the brokers selected by the Calculation Agent are not
quoting as mentioned above, the Federal Funds Rate for the applicable Interest
Reset Period will be the same as the Federal Funds Rate in effect for the
immediately preceding Interest Reset Period (or, if there was no Interest Reset
Period, the rate of interest payable on the Federal Funds Rate Notes for which
the Federal Funds Rate is being determined shall be the Initial Interest Rate).
SECTION 109. LIBOR Notes. LIBOR Notes will bear interest at the interest
rates specified in the LIBOR Notes and in the applicable Authentication
Certificate. That interest rate will be based on the London Interbank Offered
Rate, which is commonly referred to as "LIBOR," and any Spread or Spread
Multiplier and will be subject to the Minimum Interest Rate and the Maximum
Interest Rate, if any.
The Calculation Agent will determine "LIBOR" for each Interest
Determination Date as follows: As of the Interest Determination Date, LIBOR will
be either: (a) if "LIBOR Reuters" is specified in the applicable Authentication
Certificate, the arithmetic mean of the offered rates for deposits in the Index
Currency having the Index Maturity designated in the applicable Authentication
Certificate, commencing on the second London Business Day immediately following
that Interest Determination Date, that appear on the Designated LIBOR Page as of
11:00 a.m., London time, on that Interest Determination Date, if at least two
offered rates appear on the Designated LIBOR Page, except that if the specified
Designated LIBOR Page, by its terms provides only for a single rate, that single
rate will be used; or (b) if "LIBOR Telerate" is specified in the applicable
Authentication Certificate, the rate for deposits in the Index Currency having
the Index Maturity designated in the applicable Authentication Certificate,
commencing on the second London Business Day immediately following that Interest
Determination Date or, if pounds sterling is the Index Currency, commencing on
that Interest Determination Date, that appears on the Designated LIBOR Page at
approximately 11:00 a.m., London time, on that Interest Determination Date. If
fewer than the required number of offered rates appear, then the Calculation
Agent will request the principal London offices of each of four major reference
banks in the London interbank market, as selected by the Calculation Agent
13
after consultation with the Company, to provide the Calculation Agent with its
offered quotation for deposits in the Index Currency for the period of the Index
Maturity specified in the applicable Authentication Certificate commencing on
the second London Business Day immediately following the Interest Determination
Date or, if pounds sterling is the Index Currency, commencing on that Interest
Determination Date, to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on that Interest Determination Date and
in a principal amount of not less than $1,000,000 (or the equivalent in the
Index Currency, if the Index Currency is not the U.S. dollar) that is
representative of a single transaction in the Index Currency in the market at
that time. If at least two quotations are provided, LIBOR determined on that
Interest Determination Date will be the arithmetic mean of those quotations. If
fewer than two quotations are provided, LIBOR will be determined on that
Interest Determination Date as the arithmetic mean of the rates quoted at
approximately 11:00 a.m., London time, or some other time specified in the
applicable Authentication Certificate, in the applicable Principal Financial
Center for the country of the Index Currency on the Interest Determination Date,
by three major banks in that Principal Financial Center selected by the
Calculation Agent, after consultation with the Company, for loans in the Index
Currency to leading European banks, having the Index Maturity specified in the
applicable Authentication Certificate and in a principal amount of not less than
$1,000,000 (or the equivalent in the Index Currency, if the Index Currency is
not the U.S. dollar) that is representative of a single transaction in that
Index Currency in the market at that time. If the banks so selected by the
Calculation Agent are not quoting as mentioned in the previous sentence, LIBOR
for the applicable Interest Reset Period will be the same as LIBOR in effect for
the immediately preceding Interest Reset Period (or, if there was no Interest
Reset Period, the rate of interest payable on the LIBOR Notes for which LIBOR is
being determined shall be the Initial Interest Rate).
If neither LIBOR Reuters nor LIBOR Telerate is specified in the applicable
Authentication Certificate, LIBOR for the applicable Index Currency will be
determined as if LIBOR Telerate were specified, and, if the U.S. dollar is the
Index Currency, as if Page 3750, had been specified.
SECTION 110. Prime Rate Notes. Prime Rate Notes will bear interest at the
interest rates specified in the Prime Rate Notes and in the applicable
Authentication Certificate. That interest rate will be based on the Prime Rate
and any Spread or Spread Multiplier and will be subject to the Minimum Interest
Rate and the Maximum Interest Rate, if any.
The Prime Rate will be, for any Interest Determination Date, the rate set
forth on that date in H.15(519) under the heading "Bank Prime Loan."
The following procedures will apply if the Prime Rate cannot be determined
as described above: If the above rate is not published prior to 3:00 p.m., New
York City time, on the Calculation Date pertaining to the applicable Interest
Determination Date, then the Prime Rate will be the rate on that Interest
Determination Date as published in H.15 Daily Update, or such other recognized
electronic source used for the purpose of displaying such rate, under the
heading "Bank Prime Loan." If the rate is not published prior to 3:00 p.m., New
York City time, on the Calculation Date in either H.15(519) or the H.15 Daily
Update, or some other recognized electronic source for the purpose of displaying
the rate, then the Calculation Agent will determine the Prime Rate to be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen USPRIME 1 Page as that bank's prime rate or base
lending rate as in effect as of 11:00 a.m., New
14
York City time, on that Interest Determination Date as quoted on the Reuters
Screen USPRIME 1 Page on the Interest Determination Date. If fewer than four
rates appear on the Reuters Screen USPRIME 1 Page for that Interest
Determination Date, the Calculation Agent will determine the Prime Rate to be
the arithmetic mean of the prime rates or base lending rates quoted on the basis
of the actual number of days in the year divided by 360 as of the close of
business on that Interest Determination Date by three major banks in New York
City selected by the Calculation Agent, after consultation with the Company,
from which quotations are requested. If fewer than two quotations are provided,
the Prime Rate shall be calculated by the Calculation Agent and shall be
determined as the arithmetic mean on the basis of the prime rates in New York
City by the appropriate number of substitute banks or trust companies organized
and doing business under the laws of the United States, or any State thereof, in
each case having total equity capital of at least U.S. $500 million and being
subject to supervision or examination by federal or state authority, selected by
the Calculation Agent to quote the rate or rates. If the banks or trust
companies selected by the Calculation Agent are not quoting as mentioned above,
the Prime Rate for the applicable Interest Reset Period will be the same as the
Prime Rate in effect for the immediately preceding Interest Reset Period (or, if
there was no Interest Reset Period, the rate of interest payable on the Prime
Rate Notes for which the Prime Rate is being determined shall be the Initial
Interest Rate).
SECTION 111. Treasury Rate Notes. Treasury Rate Notes will bear interest at
the interest rates specified in the Treasury Rate Notes and in the applicable
Authentication Certificate. That interest rate will be based on the Treasury
Rate and any Spread or Spread Multiplier and will be subject to the Minimum
Interest Rate and the Maximum Interest Rate, if any.
The Treasury Rate will be the rate from the auction held on the applicable
Interest Determination Date of direct obligations of the United States, which
are commonly referred to as "Treasury Bills," having the Index Maturity
specified in the applicable Authentication Certificate as that rate appears
under the caption "Investment Rate" on the display on the Telerate on page 56 or
any other page as may replace page 56 on that service, referred to as "Telerate
Page 56," or page 57 or any other page as may replace page 57 on that service,
referred to as "Telerate Page 57."
The following procedures will apply if the Treasury Rate cannot be
determined as described above: If the rate described above is not published by
3:00 p.m., New York City time, on the Calculation Date pertaining to the
applicable Interest Determination Date, the Treasury Rate for the Interest
Determination Date will be the yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable and applied
on a daily basis) of the rate of the applicable Treasury Bills, published in the
H.15 Daily Update, or any other recognized electronic source used for the
purpose of displaying the rate, under the caption "U.S. Government
Securities/Treasury Bills/Auction High" on the Interest Determination Date, or
if not so published by 3:00 p.m., New York City time on the Calculation Date,
the yield to maturity (expressed as a bond equivalent, on the basis of a year of
365 or 366 days, as applicable and applied on a daily basis) of the auction rate
of the applicable Treasury Bills as otherwise announced by the United States
Department of the Treasury. In the event that the results of the auction of
Treasury Bills having the Index Maturity designated in the applicable
Authentication Certificate are not published or reported as provided above by
3:00 p.m., New York City time, on the Calculation Date or if no auction is held
on the Interest Determination Date, then the Treasury Rate will be the yield to
maturity (expressed as a bond equivalent, on the basis of a year of 365 or 366
days, as applicable and applied on a daily basis) of the
15
rate on the Interest Determination Date of Treasury Bills having the Index
Maturity specified in the applicable Authentication Certificate published in
H.15(519), or such other recognized electronic source used for the purpose of
displaying that rate, under the caption "U.S. Government Securities/ Treasury
Bills/ Secondary Market." If the rate referred to in the immediately preceding
sentence is not so published by 3:00 p.m., New York City time, on the
Calculation Date pertaining to the applicable Interest Determination Date, the
Treasury Rate shall be the yield to maturity (expressed as a bond equivalent, on
the basis of a year of 365 or 366 days, as applicable and applied on a daily
basis) of the rate on the Interest Determination Date of such Treasury Bills as
published in the H.15 Daily Update, or other recognized electronic source used
for the purpose of displaying that rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market." If the rate referred to above is
not published in H.15(519), H.15 Daily Update, or another recognized electronic
source, by 3:00 p.m., New York City time, on the Calculation Date pertaining to
the applicable Interest Determination Date, the Treasury Rate shall be
calculated by the Calculation Agent and shall be a yield to maturity (expressed
as a bond equivalent, on the basis of a year of 365 or 366 days, as applicable
and applied on a daily basis) calculated using the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 p.m., New York City time,
on the applicable Interest Determination Date, of three primary United States
government securities dealers, selected by the Calculation Agent, after
consultation with the Company, for the issue of Treasury Bills with a remaining
maturity closest to the Index Maturity specified in the applicable
Authentication Certificate. If the dealers selected by the Calculation Agent are
not quoting as mentioned in the immediately preceding sentence, the Treasury
Rate for the applicable Interest Reset Period will be the same as the Treasury
Rate in effect for the immediately preceding Interest Reset Period (or, if there
was no Interest Reset Period, the rate of interest payable on the Treasury Rate
Notes for which the Treasury Rate is being determined shall be the Initial
Interest Rate).
SECTION 112. CMT Rate Notes. CMT Rate Notes will bear interest at the
interest rate (calculated with reference to the CMT Rate and the Spread and/or
Spread Multiplier, if any, and subject to the Minimum Interest Rate and the
Maximum Interest Rate, if any) specified in the CMT Rate Notes and in the
applicable Authentication Certificate.
Unless otherwise indicated in an applicable Authentication Certificate, if
CMT Telerate Page 7051 is specified in the applicable Authentication
Certificate, CMT Rate means the percentage equal to the yield for U.S. Treasury
securities at "constant maturity" having the Index Maturity specified in the
applicable Authentication Certificate as published in H.15(519) under the
caption "Treasury Constant Maturities", as the yield is displayed on the
Telerate on page 7051 (or any other page as may replace the specified page on
that service) ("Telerate Page 7051"), for the particular Interest Determination
Date. The following paragraphs detail the procedures to be followed in the event
that CMT Telerate Page 7051 is specified in the applicable Authentication
Certificate, but the foregoing method for determining CMT Rate is not available.
.. If the rate referred to in the preceding paragraph does not so appear on
Telerate Page 7051 by 3:30 p.m., New York City time, on the Calculation
Date for the applicable Interest Determination Date, the CMT Rate will be
the percentage equal to the yield for U.S. Treasury securities at "constant
maturity" having the particular Index Maturity and for the particular
Interest Determination Date as published in H.15(519) under the caption
"Treasury Constant Maturities".
16
.. If the rate referred to in the preceding paragraph does not so appear in
H.15(519) by 3:30 p.m., New York City time, on the Calculation Date for the
applicable Interest Determination Date, the CMT Rate will be the rate on
the particular Interest Determination Date for the period of the particular
Index Maturity as may then be published by either the Federal Reserve
System Board of Governors or the U.S. Department of the Treasury that the
Calculation Agent determines to be comparable to the rate which would
otherwise have been published in H.15(519).
.. If the rate referred to in the preceding paragraph is not so published by
3:30 p.m., New York City time, on the Calculation Date for the applicable
Interest Determination Date, the CMT Rate will be the rate on the
particular Interest Determination Date calculated by the Calculation Agent
as a yield to maturity based on the arithmetic mean of the secondary market
bid prices at approximately 3:30 p.m., New York City time, on that Interest
Determination Date of three leading primary U.S. government securities
dealers in New York City (each, a "Reference Dealer"), selected by the
Calculation Agent from five Reference Dealers selected by the Calculation
Agent and eliminating the highest quotation, or, in the event of equality,
one of the highest, and the lowest quotation or, in the event of equality,
one of the lowest, for U.S. Treasury securities with an original maturity
equal to the particular Index Maturity, a remaining term to maturity no
more than 1 year shorter than that Index Maturity and in a principal amount
that is representative for a single transaction in the securities in that
market at that time.
.. If fewer than five but more than two of the prices referred to in the
preceding paragraph are provided as requested, the CMT Rate will be the
rate on the particular Interest Determination Date calculated by the
Calculation Agent based on the arithmetic mean of the bid prices obtained
and neither the highest nor the lowest of the quotations shall be
eliminated.
.. If fewer than three of the prices referred to two paragraphs above are
provided as requested, the CMT Rate will be the rate on the particular
Interest Determination Date calculated by the Calculation Agent as a yield
to maturity based on the arithmetic mean of the secondary market bid prices
as of approximately 3:30 p.m., New York City time, on that Interest
Determination Date of three Reference Dealers selected by the Calculation
Agent from five Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation or, in the event of equality, one of the
highest and the lowest quotation or, in the event of equality, one of the
lowest, for U.S. Treasury securities with an original maturity greater than
the particular Index Maturity, a remaining term to maturity closest to that
Index Maturity and in a principal amount that is representative for a
single transaction in the securities in that market at that time.
.. If fewer than five but more than two prices referred to in the preceding
paragraph are provided as requested, the CMT Rate will be the rate on the
particular Interest Determination Date calculated by the Calculation Agent
based on the arithmetic mean of the bid prices obtained and neither the
highest nor the lowest of the quotations will be eliminated.
.. If fewer than three prices referred to two paragraphs above are provided as
requested, the CMT Rate for the applicable Interest Reset Date will be the
same as the CMT Rate for the immediately preceding Interest Reset Period
(or, if there was no Interest Reset Period, the rate of interest payable on
the CMT Rate Notes for which the CMT Rate is being determined shall be the
Initial Interest Rate).
17
Unless otherwise indicated in an applicable Authentication Certificate, if
CMT Telerate Page 7052 is specified in the applicable Authentication
Certificate, CMT Rate means the percentage equal to the one-week or one-month,
as specified in the applicable Authentication Certificate, average yield for
U.S. Treasury securities at "constant maturity" having the Index Maturity
specified in the applicable Authentication Certificate as published in H.15(519)
opposite the caption "Treasury Constant Maturities", as the yield is displayed
on the Telerate on page 7052 (or any other page as may replace the specified
page on that service) ("Telerate Page 7052"), for the week or month, as
applicable, ended immediately preceding the week or month, as applicable, in
which the particular Interest Determination Date falls. The following paragraphs
detail the procedures to be followed in the event that CMT Telerate Page 7052 is
specified in the applicable Authentication Certificate, but the foregoing method
for determining CMT Rate is not available.
.. If the rate referred to in the preceding paragraph does not so appear on
Telerate Page 7052 by 3:30 p.m., New York City time, on the Calculation
Date for the applicable Interest Determination Date, the CMT Rate will be
the percentage equal to the one-week or one-month, as specified in the
applicable Authentication Certificate, average yield for U.S. Treasury
securities at "constant maturity" having the particular Index Maturity and
for the week or month, as applicable, preceding the particular Interest
Determination Date as published in H.15(519) opposite the caption "Treasury
Constant Maturities."
.. If the rate referred to in the preceding paragraph does not so appear in
H.15(519) by 3:30 p.m., New York City time, on the Calculation Date for the
applicable Interest Determination Date, the CMT Rate will be the one-week
or one-month, as specified in the applicable Authentication Certificate,
average yield for U.S. Treasury securities at "constant maturity" having
the particular Index Maturity as otherwise announced by the Federal Reserve
Bank of New York for the week or month, as applicable, ended immediately
preceding the week or month, as applicable, in which the particular
Interest Determination Date falls.
.. If the rate referred to in the preceding paragraph is not so published by
3:30 p.m., New York City time, on the Calculation Date for the applicable
Interest Determination Date, the CMT Rate will be the rate on the
particular Interest Determination Date calculated by the Calculation Agent
as a yield to maturity based on the arithmetic mean of the secondary market
bid prices at approximately 3:30 p.m., New York City time, on that Interest
Determination Date of three Reference Dealers selected by the Calculation
Agent from five Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation, or, in the event of equality, one of the
highest, and the lowest quotation or, in the event of equality, one of the
lowest, for U.S. Treasury securities with an original maturity equal to the
particular Index Maturity, a remaining term to maturity no more than 1 year
shorter than that Index Maturity and in a principal amount that is
representative for a single transaction in the securities in that market at
that time.
.. If fewer than five but more than two of the prices referred to in the
preceding paragraph are provided as requested, the CMT Rate will be the
rate on the particular Interest Determination Date calculated by the
Calculation Agent based on the arithmetic mean of the bid prices obtained
and neither the highest nor the lowest of the quotations shall be
eliminated.
.. If fewer than three prices referred to two paragraphs above are provided as
requested, the CMT Rate will be the rate on the particular Interest
Determination Date calculated by the Calculation
18
Agent as a yield to maturity based on the arithmetic mean of the secondary
market bid prices as of approximately 3:30 p.m., New York City time, on
that Interest Determination Date of three Reference Dealers selected by the
Calculation Agent from five Reference Dealers selected by the Calculation
Agent and eliminating the highest quotation or, in the event of equality,
one of the highest and the lowest quotation or, in the event of equality,
one of the lowest, for U.S. Treasury securities with an original maturity
greater than the particular Index Maturity, a remaining term to maturity
closest to that Index Maturity and in a principal amount that is
representative for a single transaction in the securities in that market at
the time.
.. If fewer than five but more than two prices referred to in the preceding
paragraph are provided as requested, the CMT Rate will be the rate on the
particular Interest Determination Date calculated by the Calculation Agent
based on the arithmetic mean of the bid prices obtained and neither the
highest or the lowest of the quotations will be eliminated.
.. If fewer than three prices referred to two paragraphs above are provided as
requested, the CMT Rate for the applicable Interest Reset Date will be the
same as the CMT Rate for the immediately preceding Interest Reset Period
(or, if there was no Interest Reset Period, the rate of interest payable on
the CMT Rate Notes for which the CMT Rate is being determined shall be the
Initial Interest Rate).
For purposes of the above calculations (whether CMT Telerate Page 7051 or
CMT Telerate Page 7052 is specified in the applicable Authentication
Certificate), if two U.S. Treasury securities with an original maturity greater
than the Index Maturity specified in the applicable Authentication Certificate
have remaining terms to maturity equally close to the particular Index Maturity,
the quotes for the U.S. Treasury security with the shorter remaining term to
maturity will be used.
If no CMT Telerate Page is specified in the applicable Authentication
Certificate, CMT Telerate Page 7052, for the most recent week, shall be deemed
specified.
SECTION 113. Denominations. Unless otherwise specified in the applicable
Authentication Certificate, Notes, other than Foreign Currency Notes, shall be
issued only in denominations of $25 or $1,000, as specified in the
Authentication Certificate, and any integral multiple of such denomination in
excess thereof. Foreign Currency Notes will be issued in equivalent
denominations, as determined by reference to the Market Exchange Rate on the
Business Day immediately preceding the date of issuance unless otherwise
specified in the applicable Authentication Certificate.
SECTION 114. Global Securities. The Notes will be issued initially in the
form of one or more permanent 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, Notes represented by such
Global Securities will not be exchangeable for, and will not otherwise be
issuable as, Notes in definitive form. The Global Securities described above may
not be transferred except by the Depositary to a nominee of the Depositary or by
a nominee of the Depositary to the Depositary or another nominee of the
Depositary or to a successor Depositary or its nominee.
19
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 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 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 Notes registered in such names as
the Depositary shall direct.
SECTION 115. Redemption. If a "make whole" redemption option is specified
in the applicable Authentication Certificate, the Notes will be redeemable at
the option of the Company at any time, at a redemption price equal to the
greater of (i) 100% of their principal amount and (ii) the sum of the present
values of the remaining scheduled payments of principal and interest thereon
(not including any portion of such payments of interest accrued as of the
Redemption Date) discounted to the Redemption Date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate, as calculated by an Independent Investment Banker, plus a number
of basis points specified in the Authentication Certificate plus, in each case,
accrued and unpaid interest on the Notes to the Redemption Date, but interest
installments whose maturity is prior to such Redemption Date will be payable to
the Holders of such Notes of record at the close of business on the relevant
Regular Record Dates referred to on the face thereof, all as provided in the
Indenture. Notwithstanding Section 1104 of the Original Indenture, any notice of
such redemption need not set forth the Redemption Price but only the manner of
calculation thereof.
If so specified in the applicable Authentication Certificate, the Notes
will be redeemable at the option of the Company on the date or dates prior to
the Stated Maturity Date specified in the applicable Authentication Certificate
at the price or prices ("Redemption Prices") specified in the applicable
Authentication Certificate, together with accrued interest, if any, to the
Redemption Date. Notwithstanding the foregoing, if a date prior to which the
Company may not redeem the Note as part of, or in anticipation of, a refunding
operation (a "Limitation Date") is specified in the applicable Authentication
Certificate and on the applicable Note, the Company may not redeem the Note
prior to the Limitation Date as a part of, or in anticipation of, any refunding
operation by the application, directly or indirectly, of monies borrowed having
an interest cost to the Company of less than the rate specified in the
Authentication Certificate and on the applicable Note.
Unless otherwise specified in the applicable Authentication Certificate,
the Company may redeem any of the Notes which are redeemable and remain
outstanding either in whole or from time to time in part upon the terms and
conditions set forth in Article Eleven of the Indenture.
20
SECTION 116. Sinking Fund; Repayment at Holder's Option. Unless otherwise
specified in the applicable Authentication Certificate, the Company shall not be
obligated to redeem or purchase any Note pursuant to any sinking fund or
analogous provision, or at the option of the Holder, before its Stated Maturity
Date. If the applicable Authentication Certificate specifies one or more dates
on which a Note may be repayable at the option of the Holder, the Note will be
repayable at the Holder's option on the specified Repayment Dates at the
specified repayment price. Unless otherwise specified in the applicable
Authentication Certificate, the repayment price will be equal to 100% of the
principal amount of the Note, together with accrued interest to the date of
repayment. For Notes issued with Original Issue Discount, the Authentication
Certificate will specify the amount payable upon repayment.
If applicable, the repayment option may be exercised by the Holder of a
Note for less than the entire principal amount of that Note, but in that event,
the principal amount remaining outstanding after repayment must be in an
authorized denomination. In the event of repayment of a Note in part only, a new
Note or Notes of this series and of like tenor for the unpurchased portion
thereof will be issued in the name of the Holder upon cancellation.
For the Company to repay a Note, the Paying Agent must receive at least 30
days but not more than 60 days prior to the Repayment Date: (i) the Note with
the form entitled "Option to Elect Repayment" on the reverse of the Note duly
completed; or (ii) a telegram, telex, facsimile transmission or a letter form a
broker-dealer, commercial bank or trust company in the United States setting
forth the name of the Holder, the principal amount of the Note, the principal
amount of the Note to be repaid, the certificate number or a description of the
tenor and terms of the Note, a statement that the option to elect repayment is
being exercised and a guarantee that the Note to be repaid, together with the
duly completed form entitled "Option to Elect Repayment" on the reverse of the
Note will be received by the Paying Agent by the fifth Business Day after the
date of that telegram, telex, facsimile transmission or letter; provided,
however, that the telegram, telex, facsimile transmission or letter will only be
effective if that Note and completed form are received by the Paying Agent by
the fifth Business Day after the date of that telegram, telex, facsimile
transmission or letter.
If Notes of any series are subject to repayment in whole or in part at the
option of the Holders, the Company, on or before the Repayment Date, will
deposit with the Trustee or with a Paying Agent (or, if the Company is acting as
its own Paying Agent, segregate and hold in trust as provided in Section 1003 of
the Indenture) an amount of money sufficient to pay the principal (or, if so
provided by the terms of the Notes of any series, a percentage of the principal)
of, and accrued interest on, all the Notes or portions thereof, as the case may
be, to be repaid on such date.
Exercise of the repayment option by the Holder of a Note will be
irrevocable. The Holder may exercise the repayment option for less than the
entire principal amount of the Note. In that event, the principal amount of the
Note remaining outstanding after repayment must be an authorized denomination.
If a Note is represented by a Global Security, the Depositary or its
nominee will be the Holder of the Note and therefore will be the only entity
that can exercise a right to repayment.
21
SECTION 117. Currency. The Notes may be denominated, and payments of
principal of and interest on the Notes will be made, in United States dollars or
in such foreign currencies or composite currencies (a "Specified Currency") as
may be specified in the applicable Authentication Certificate (each such Note
denominated in a Specified Currency other than United States dollars, a "Foreign
Currency Note").
SECTION 118. Paying Agent; Payments. (i) The Trustee shall initially serve
as Paying Agent with respect to the Notes, with the Place of Payment initially
being the Corporate Trust Office of the Trustee; (ii) payment of principal of
and any premium and interest on Notes represented by any Global Security (as
defined below) will be made to the Depositary (as specified below) or its
nominee, as the case may be, as the sole registered owner and the sole Holder of
the Notes represented thereby for all purposes under the Indenture; (iii) unless
otherwise specified in the applicable Authentication Certificate and except as
provided in Section 307 of the Original Indenture, payments of interest with
respect to any Note payable in United States dollars (other than interest
payable at the Stated Maturity Date or any earlier Redemption Date or Repayment
Date) will be made by check mailed to the Holder at the address of such Holder
appearing on the Security Register for the Notes at the applicable Regular
Record Date, and (iv) except as provided in Section 307 of the Original
Indenture, interest payable on any Interest Payment Date (other than interest
payable at the Stated Maturity Date or any earlier Redemption Date or Repayment
Date) with respect to a Note will be paid to the Person in whose name that Note
is registered on the Security Register at the applicable Regular Record Date for
the payment of such interest, provided that interest payable on any Interest
Payment Date that is also the Stated Maturity Date or any earlier Redemption
Date or Repayment Date will be made to the Person to whom principal is payable.
A Holder of Notes shall be entitled to payment by wire transfer of
immediately available funds if appropriate payment instructions have been
received in writing by the Trustee at its Corporate Trust Office on or prior to
the Regular Record Date for an Interest Payment Date or at least 16 days prior
to the Stated Maturity Date or any earlier Redemption Date or Repayment Date. In
the event that payment is so made in accordance with instructions of the Holder,
such wire transfer shall be deemed to constitute full and complete payment of
such interest, principal and any premium on the Notes. Payment of the principal
of and any premium due with respect to any Note at the Stated Maturity Date or
any earlier Redemption Date or Repayment Date, together with any interest
payable at such date, will be made in immediately available funds against
presentation and surrender of such Note at the Corporate Trust Office of the
Trustee accompanied by wire transfer instructions, provided that the Note is
presented to the Trustee in time for the Trustee to make payments in such funds
in accordance with its normal procedures.
Unless otherwise specified in the applicable Authentication Certificate,
payments of principal and any premium and interest on a Foreign Currency Note
will be made in United States dollars unless the Holder elects to receive all or
a portion of the payments on such Foreign Currency Notes in the Specified
Currency. To do so, the Holder must send a written request to the Paying Agent
as follows: for payments of interest, on or prior to the applicable Regular
Record Date; or for payments of principal, at least 16 calendar days prior to
the Stated Maturity Date or any earlier Redemption Date or Repayment Date. To
revoke this election for all or a portion of the payments on the Foreign
Currency Notes, the Holder must send written notice to the Paying Agent as
follows: on or prior to the applicable Regular Record Date, for payments of
interest; or at least 16 calendar days prior to the
22
Stated Maturity Date or any earlier Redemption Date or Repayment Date, for
payments of principal. If the Holder elects to be paid in the Specified
Currency, the Paying Agent will pay the principal, premium, if any, or interest,
if any, on the Foreign Currency Notes by wire transfer of immediately available
funds in the Specified Currency to the Holder's account at a bank located
outside the United States, and in the case of a Foreign Currency Note payable in
euros, in a country for which the euro is a lawful currency, if the Paying Agent
has received the Holder's written wire transfer instructions on or prior to the
Regular Record Date for an Interest Payment Date and at least 16 calendar days
prior to the payment date for principal or premium, if any. If a payment cannot
be made by wire transfer because the required information has not been received
by the Trustee on or before the requisite date, a notice will be mailed to the
Holder at its registered address requesting the relevant information, and no
payment will be made until a designation is made. The Paying Agent will only pay
the principal of the Foreign Currency Notes, premium, if any, and interest, if
any, due at the Stated Maturity Date or any earlier Redemption Date or Repayment
Date, upon surrender of the Foreign Currency Notes at the office or agency of
the Paying Agent.
The Exchange Rate Agent specified in the applicable Authentication
Certificate (the "Exchange Rate Agent") will convert the Specified Currency into
United States dollars for Holders who do not elect to receive payments in the
Specified Currency. The conversion will be based on a bid quotation in New York
City received by the Exchange Rate Agent at approximately 11:00 a.m., New York
City time, on the second Business Day preceding the applicable payment date from
a recognized foreign exchange dealer for the purchase by the quoting dealer of
the Specified Currency for United States dollars for settlement on the payment
date, in the aggregate amount of the United States dollars payable to those
Holders of Notes, and at which the dealer commits to execute a contract. The
dealer providing the quotation may be the Exchange Rate Agent unless the
Exchange Rate Agent is an affiliate of the Company. If no bid quotation is
available, payments will be made in the Specified Currency. The Holders of
Foreign Currency Notes will pay all currency exchange costs by deductions from
the amounts payable on the Foreign Currency Notes.
If the Specified Currency is unavailable due to the imposition of exchange
controls or other circumstances beyond the control of the Company, the Company
may satisfy its obligations to Holders of Foreign Currency Notes by making those
payments on the date of payment in United States dollars on the basis of the
noon dollar buying rate in New York City for the cable transfers of the
Specified Currency, published by the Federal Reserve Bank of New York on the
second Business Day prior to the applicable payment date (the "Market Exchange
Rate"). If that rate of exchange is not then available or is not published for a
Specified Currency, the Market Exchange Rate will be based on the most recently
available Market Exchange Rate, or as otherwise specified in the applicable
Authentication Certificate.
The foregoing provisions do not apply if a Specified Currency is
unavailable because it has been replaced by the euro. If the euro has been
substituted for a Specified Currency, the Company may, at its option, or will,
if required by applicable law, without consent of the Holders of the affected
Foreign Currency Notes, pay the principal, premium, if any, or interest, if any,
on any Foreign Currency Note denominated in the Specified Currency in euros
instead of the Specified Currency, in conformity with legally applicable
measures taken pursuant to, or by virtue of, the treaty established by the
European Community, as amended by the treaty on European Union. Any
23
payment made in United States dollars or in euros as described above where
required payment is in an unavailable Specified Currency will not constitute an
Event of Default under the Indenture.
The portion of the principal amount of the Notes, other than Original Issue
Discount Notes which shall be payable upon declaration of acceleration of
maturity thereof shall not be other than the principal amount thereof. The
portion of the principal amount of any Original Issue Discount Notes which shall
be payable upon declaration of acceleration of the Maturity thereof pursuant to
Section 502 of the Indenture shall be determined by an Officer from time to time
and shall be specified in the applicable Authentication Certificate.
SECTION 119. Additional Terms.
(i) Unless otherwise specified in the applicable Authentication
Certificate, the Notes shall be defeasible pursuant to Sections 1302 and
1303 of the Indenture.
(ii) Unless otherwise specified in the applicable Authentication
Certificate, the Notes shall be subject to the Events of Default specified
in Section 501, paragraphs (1) through (6), of the Indenture.
(iii) Unless otherwise specified in the applicable Authentication
Certificate, the Notes shall be subject to the covenants specified in
Article Ten of the Indenture.
(iv) Subject to the terms of the Indenture including, without
limitation, this supplemental indenture, the Notes shall have such other
terms (which may be in addition to or different from the terms set forth
herein) as are specified in the applicable Authentication Certificate.
SECTION 120. Establishment of Procedures for Authentication of Notes
Pursuant to Section 303 of the Indenture. Pursuant to Section 303 of the
Indenture, Notes may be authenticated by the Trustee and issued in accordance
with the administrative procedures agreed upon from time to time by the Company,
the Trustee and the distribution agents for the Notes and upon receipt by the
Trustee (including by facsimile) of an Authentication Certificate supplemental
to this supplemental indenture, in substantially the form attached as Exhibit C
hereto (an "Authentication Certificate"), setting forth the information
specified or contemplated therein for the particular Notes to be authenticated
and issued.
ARTICLE II
MISCELLANEOUS PROVISIONS
SECTION 201. Recitals by Company. The recitals in this Seventh 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 Notes and of this Seventh Supplemental Indenture as fully and
with like effect as if set forth herein in full.
24
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 Seventh Supplemental Indenture
shall be read, taken and construed as one and the same instrument.
SECTION 203. Executed in Counterparts. This Seventh 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
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.
25
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.
VIRGINIA ELECTRIC AND POWER COMPANY
By: /s/ G. Scott Hetzer
------------------------------------------
Name: G. Scott Hetzer
Title: Senior Vice President and Treasurer
JPMORGAN CHASE BANK, as Trustee
By: /s/ Natalia Rodriguez
------------------------------------------
Name: Natalia Rodriguez
Title: Assistant Vice President
26
EXHIBIT A
FORM OF FIXED RATE NOTE
REGISTERED NO.
CUSIP NO.
VIRGINIA ELECTRIC AND POWER COMPANY
MEDIUM-TERM NOTE, SERIES H
(Fixed Rate)
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (DTC) TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF [CEDE & CO.] OR SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF 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.]*
[THIS MEDIUM-TERM NOTE, SERIES H, 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 MEDIUM-TERM NOTE, SERIES H, MAY NOT BE EXCHANGED IN
WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS MEDIUM TERM
NOTE, SERIES H, 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.]*
Principal Amount: Interest Rate: Stated Maturity Date:
Original Issue Date: Authorized Denomination (if other Specified Currency:
than U.S. $1,000 and integral
multiples thereof):
Interest Payment Date(s): Regular Record Dates: Exchange Rate Agent:
Limitation Date: Refunding Rate:
Redemption Terms: Make Whole Redemption: ____ Repayment Terms:
Basis points:
Other Redemption Price:
Original Issue Discount Note: Yield to Maturity:
__ Original Issue Discount __ Original Issue Discount
Security Subject to Special Security for Tax Purposes Only
Provisions Herein
Additional Terms (if any):
- ---------------------
* Insert in Global Securities
A-1
FOR PURPOSES OF SECTION 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT ON THIS NOTE IS THE PERCENTAGE OF ITS PRINCIPAL
AMOUNT SET FORTH ABOVE AND THE YIELD TO MATURITY IS THE PERCENTAGE SET FORTH
ABOVE.
VIRGINIA ELECTRIC AND POWER COMPANY, 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 principal sum of ______________ on the Stated Maturity Date shown above (or
upon earlier redemption or repayment) (such Stated Maturity Date or earlier date
of redemption or repayment referred to herein as the "Maturity Date"), and to
pay interest thereon from the Original Issue Date shown above, or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semiannually in arrears on each Interest Payment Date as specified above in
each year, commencing on the Interest Payment Date next succeeding the Original
Issue Date shown above and on the Maturity Date at the rate per annum shown
above until the principal hereof is paid or made available for payment. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date (other than an Interest Payment Date that is the Maturity Date)
will, as provided in such Indenture, be paid to the Person in whose name this
Medium-Term Note, Series A (the "Note"), or one or more predecessor Notes, is
registered at the close of business on the Regular Record Date for such
interest, which shall be the Regular Record Date as specified above (whether or
not a Business Day, as hereinafter defined), as the case may be, next preceding
such Interest Payment Date, provided, however, that, if the Original Issue Date
shown above is between a Regular Record Date and the next succeeding Interest
Payment Date, interest payments will commence on the second Interest Payment
Date next succeeding the Original Issue Date to the holder of this Note on the
Regular Record Date with respect to such second Interest Payment Date; and
provided, further, that interest payable on an Interest Payment Date that is the
Maturity Date will be paid to the Person to whom principal is payable. Except as
otherwise provided in the Indenture (hereinafter defined), 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 Note (or one or more predecessor Notes) 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
Securities of this series 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, if any, on which the Securities of
this series shall be listed, and upon such notice as may be required by any such
exchange, all as more fully provided in the Indenture.
Payment of the principal of (and premium, if any) and interest on this Note
will be made in immediately available funds upon surrender of this Note, in the
case of payment due at the Maturity Date, at the corporate trust office of the
Trustee, maintained for that purpose in the Borough of Manhattan, New York City
and currently located at GIS Unit Trust Window, 4 New York Plaza, 1st Floor, New
York, New York 10024-2413; provided, however, that if such payment of principal
or interest is to be made in a Specified Currency other than U.S. dollars, as
provided on the reverse hereof, by wire transfer to an account maintained by the
Holder hereof in the country of such Specified Currency shown above (the
Holder's Overseas Account), as designated by the Holder of this Note by written
notice to the Trustee on or prior to the Regular Record Date or at least 16 days
prior to the Maturity Date or in connection with any transfer after such
sixteenth day. In the absence of such designation or if such wire transfer
cannot be made for any other reason, the Trustee will mail a notice to the
address of the Person entitled thereto as such address shall appear on the
Security Register on the Regular Record Date for any payment of interest or on
the date of such notice in connection with payment of principal, as the case may
be, requesting a designation pursuant to which such wire transfer can be made
and no such payment shall be made until such designation is made. As more fully
provided on the reverse hereof, if payment of principal of (and premium, if any)
and interest on this Note is to be made in U.S. dollars, payment will be made
(upon surrender of the Note, in the case of payment due at the Maturity Date, at
the foregoing corporate trust office) by wire transfer to an account designated
by the Holder (the Holder's U.S. Account) by written notice to the Trustee on or
prior to the Regular Record Date or at least 16 days prior to the Maturity Date,
or, in the absence of such designation, by check mailed to the address of the
Person entitled thereto as such address shall appear on the Security Register on
the Regular Record Date for any payment of interest or the Maturity Date shown
above for payment of principal, as the case may be. As more fully provided on
the reverse hereof, payment of the principal of (and premium, if any) and
interest on this Note will be made 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 or, if payment of the principal of and interest on this Note is to
be made in a Specified Currency other than U.S. dollars, subject to applicable
laws and regulations, in the Specified Currency shown above.
A-2
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Security 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: VIRGINIA ELECTRIC AND POWER Company
[Seal of Virginia Electric
and Power Company Appears Here]
By:__________________________________
Name:________________________________
Title:_______________________________
Attest:______________________________
Name:________________________________
Title:_______________________________
A-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
A-4
VIRGINIA ELECTRIC AND POWER COMPANY
MEDIUM-TERM NOTE, SERIES H
This Note 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, 1998, as heretofore supplemented and
amended and as further supplemented by a Seventh Supplemental Indenture dated as
of September 1, 2002 (the "Seventh Supplemental Indenture") (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 (the "Trustee", which term includes any successor trustee under the
Indenture), to which the Indenture and all indentures supplemental thereto
reference is hereby made 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 issued thereunder 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 as Medium-Term Notes, Series H (the
"Notes"). There is no limit on the aggregate principal amount of the Notes and,
in addition, any issuance of a tranche of Notes may be reopened at any time for
the issuance of additional Notes having the same interest rate, maturity and
other terms as Notes of such tranche previously issued.
The fixed rate Securities of this series are identical except for Specified
Currency, denomination, interest rate, issue date, Stated Maturity Date,
redemption or repayment terms, if any, extent of original issue discount, if
any, and any additional terms set forth on the face hereof.
The principal of (and premium, if any) and interest on this Note are
payable by the Company in the Specified Currency shown on the face hereof. If
this Note is denominated in a Specified Currency other than U.S. dollars, unless
the Holder hereof shall have elected to receive payments in such Specified
Currency, payment of the principal of (and premium, if any) and interest on this
Note will be made in U.S. dollars. JPMorgan Chase Bank, in its capacity as
exchange rate agent, or such other Person as shall be appointed by the Company
(the "Exchange Rate Agent"), will convert payments of principal of (and premium,
if any) and interest on this Note to U.S. dollars. The amount to be received by
a Holder of this Note not electing to receive payments in such Specified
Currency will be based on a bid quotation in New York City received by the
Exchange Rate Agent at approximately 11:00 A.M. New York City time on the second
Business Day preceding the applicable payment date from a recognized foreign
exchange dealer (which may be the Exchange Rate Agent) for the purchase by the
quoting dealer of the Specified Currency for U.S. dollars for settlement on such
payment date in the aggregate amount of the U.S. dollars payable to all Holders
of Notes receiving payment in U.S. dollars and at which the dealer commits to
execute a contract. If such bid quotation is not available, payments will be
made in the Specified Currency. All currency exchange costs will be borne pro
rata by the Holders by deductions from such payments in U.S. dollars.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither (a) a legal holiday nor (b) a day on which banking
institutions are authorized or required by law, regulation or executive order to
close in New York City; provided, however, that for Notes denominated in a
Specified Currency other than United States dollars that day is also not a day
on which commercial banking institutions are authorized or required by law,
regulation or executive order to close in the Principal Financial Center of the
country issuing the Specified Currency (or for Notes denominated in euros, that
day is also a day on which the Trans-European Automated Real-time Gross
Settlement Express Transfer System, commonly referred to as "TARGET," is
operating). "Principal Financial Center" means , as applicable, the capital city
of the country issuing the Specified Currency; provided, however, that the
Principal Financial Center will be New York City for United States dollars,
Sydney for Australian dollars, Toronto for Canadian dollars, Brussels for euros,
Johannesburg for South African rand and Zurich for Swiss francs.
If this Note is denominated in a Specified Currency other than U.S.
dollars, the Holder of this Note may elect to receive payment of the principal
of and interest on this Note in the Specified Currency by transmitting a written
request for such payment to the Trustee at its corporate trust office in New
York City on or prior to the Regular Record Date or at least 16 calendar days
prior to the Maturity Date, as the case may be. Such request may be in writing
(mailed or hand delivered) or may be by cable, telex or other form of facsimile
transmission. The Holder of this Note need not file a separate election for each
such payment. Such election, once properly made, will remain in effect until
this Note is transferred or until changed by written notice to the Trustee, but
written notice of any such change must be received by the Trustee on or prior to
the Regular Record Date or at least 16 calendar days prior to the Maturity Date,
as the case may
A-5
be.
In order for the Holder of this Note to receive payments by wire transfer,
such Holder shall designate an appropriate account (being either the Holder's
Overseas Account or the Holder's U.S. Account, as the case may be). Such
designation shall be made by filing the appropriate information with the Trustee
at its corporate trust office in New York City on or prior to the Regular Record
Date for an Interest Payment Date or at least 16 calendar days prior to the
Maturity Date, except as provided on the face hereof. The Trustee will, subject
to applicable laws and regulations (in the case of a Specified Currency other
than U.S. dollars), and until it receives notice to the contrary or until this
Note is transferred, make such payment and all succeeding payments to such
Holders by wire transfer to the designated Holder's Overseas Account or Holder's
U.S. Account, as the case may be. The Company will pay any administrative costs
imposed by banks in connection with making wire transfer of payments, but any
tax, assessment, governmental or other charge imposed upon such payments will be
borne by the Holder of this Note and deducted therefrom.
If the Specified Currency other than U.S. dollars is not available for the
payment of principal or interest with respect to this Note due to the imposition
of exchange controls or other circumstances beyond the control of the Company,
the Company will be entitled to satisfy its obligations to the Holder of this
Note by making such payment in U.S. dollars on the basis of the Market Exchange
Rate (defined as the noon dollar buying rate in New York City for cable
transfers for such Specified Currency, as certified for customs purposes (or, if
not so certified, as otherwise determined) by the Federal Reserve Bank of New
York) as of the second Business Day prior to payment or, if the Market Exchange
Rate is not then available, on the basis of the most recently available Market
Exchange Rate, or as otherwise specified in the terms of this Note. The Market
Exchange Rate determined as provided above by the Exchange Rate Agent and
certified by the Company to the Trustee shall be conclusive absent manifest
error. Any payment made in U.S. dollars under those circumstances where the
required payment is in a Specified Currency other than U.S. dollars will not
constitute an Event of Default under the Indenture with respect to the Notes. A
good faith determination by the Exchange Rate Agent that the Specified Currency
is unavailable shall be binding upon the Trustee and the Holder of this Note.
In the case where the Interest Payment Date or the Maturity Date does not
fall on a Business Day, payment of principal (and premium, if any) or interest
otherwise payable on such day need not be made on such day, but may be made on
the next succeeding Business Day with the same force and effect as if made on
the Interest Payment Date or the Maturity Date and no interest shall accrue for
the period from and after the Interest Payment Date or the Maturity Date.
Payments of interest on this Note will include interest accrued to but
excluding the respective Interest Payment Dates. Interest payments for this Note
shall be computed and paid on the basis of a 360-day year of twelve 30-day
months.
If so provided on the face of this Note, this Note may be redeemed by the
Company in accordance with the Redemption Terms set forth on the face hereof. If
no Redemption Terms are set forth on the face hereof, this Note may not be
redeemed prior to the Maturity Date. On and after the initial Redemption Date
specified in the Redemption Terms, if any, this Note may be redeemed at any time
in whole or in part (provided that any remaining principal amount of this Note
shall be equal to an authorized denomination) at the option of the Company, at
the applicable Redemption Price specified in the Redemption Terms, together with
interest thereon payable to the Redemption Date, on notice given not more than
60 nor less than 30 calendar days prior to the Redemption Date. In the event of
redemption of this Note in part only, a new Note for the unredeemed portion
hereof shall be issued in the name of the Holder hereof upon the surrender
hereof.
Notwithstanding the foregoing, the Company may not, prior to the Limitation
Date specified on the face hereof, if any, redeem this Note as contemplated by
the next preceding paragraph as a part of, or in anticipation of, any refunding
operation by the application, directly or indirectly, of monies borrowed having
an interest cost to the Company (calculated in accordance with generally
accepted financial practice) of less than the Refunding Rate specified on the
face hereof, if any. If a Make-Whole Redemption option is specified on the face
hereof, this Note will be redeemable at the option of the Company at any time at
the Redemption Price described in Section 115 of the Seventh Supplemental
Indenture, calculated, where applicable, on the basis of the Adjusted Treasury
Rate referred to therein plus a number of basis points specified on the face
hereof, plus accrued and unpaid interest to the Redemption Date.
The Notes will not have a sinking fund.
A-6
If Repayment Terms are indicated on the face of this Note, the Company may
be required to repurchase this Note at the option of the Holder, in whole or in
part, on the Repayment Date(s) and at the applicable Repayment Price(s)
specified in the Repayment Terms, plus accrued interest, if any, to the
applicable Repayment Date. On or before the applicable Repayment Date, the
Company shall deposit with the Trustee money sufficient to pay the applicable
Repayment Price and any interest accrued on the portion of this Note to be
tendered for repayment. On and after such Repayment Date, interest will cease to
accrue on this Note or any portion hereof tendered for repayment.
The repayment option may be exercised by the Holder of this Note for less
than the entire principal amount hereof, but in that event, the principal amount
hereof remaining outstanding after repayment must be in an authorized
denomination. In the event of repurchase of this Note in part only, a new Note
or Notes of this series and of like tenor for the unpurchased portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.
In order for this Note to be repaid, the Trustee must receive at least 30
calendar days but not more than 60 calendar days prior to the Repayment Date (i)
this Note with the form entitled "Option to Elect Repayment" attached to this
Note duly completed or (ii) a facsimile transmission or a letter from a member
of a national securities exchange or the National Association of Securities
Dealers, Inc. or a commercial bank or trust company in the United States setting
forth the name of the Holder of this Note, the principal amount of this Note,
the principal amount of this Note to be repaid, the registered number or a
description of the tenor and terms of this Note, a statement that the option to
elect repayment is being exercised thereby, and a guarantee that this Note to be
repaid, together with the duly completed form entitled "Option to Elect
Repayment" attached to this Security, will be received by the Trustee not later
than the fifth Business Day after the date of such facsimile transmission or
letter; however, such facsimile transmission or letter shall only be effective
if this Note and duly completed form are received by the Trustee by such fifth
Business Day. Such notice, once given, will be irrevocable unless waived by the
Company.
Unless otherwise indicated on the face hereof, this Note will not be
subject to repayment at the option of the Holder.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture; provided, however, that if
this Note is an Original Issue Discount Note, the provisions set forth below
under the caption "Special Provisions" shall supercede and replace the
provisions of this paragraph.
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 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, the Holder
of this 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
Notes, the Holders of not less than a majority in principal amount of the 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 the 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 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 Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, place and rate, in the coin or currency, and
to the manner, herein prescribed.
A-7
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable in the Security Register, upon
surrender of this Note, for registration of transfer at the office or agency of
the Company in any place where the principal of and any premium and interest on
this 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 Notes having the same Stated Maturity Date and
Original Issue Date, of authorized denominations and of like tenor and for the
same aggregate principal amount in the same Specified Currency, will be issued
to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons and unless
otherwise specified on the face hereof, in denominations of U.S. $1,000 and in
integral multiples of U.S. $1,000 in excess thereof or the approximate
equivalent of U.S. $1,000 in the Specified Currency in which this Note is
denominated (if not U.S. dollars) at the Market Exchange Rate on the Business
Day immediately preceding the trade date for the original issuance of each
tranche of Notes, as determined by the Exchange Rate Agent. As provided in the
Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes having the same
Specified Currency, Stated Maturity Date and Original Issue Date of any
authorized denominations as requested by the Holder surrendering the same, upon
surrender of the Note or Notes to be exchanged at the office or agency of the
Company.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company, or the Trustee may treat the
Person in whose name this Note is registered as the absolute owner hereof for
all purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
Reference in this Note to "U.S.$" or "U.S. dollars", is to the currency of
the United States of America. Reference in this Note to the "Specified Currency"
is to the Specified Currency shown on the face hereof. All terms used in this
Note and not otherwise defined herein which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
This Note shall be governed by and construed in accordance with the laws of
the State of New York, without regard to conflicts of laws principles thereof.
SPECIAL PROVISIONS
Unless otherwise indicated on the face hereof under "Additional Terms", if
this Note is an Original Issue Discount Note subject to these Special
Provisions, as indicated on the face hereof, the amount due and payable on this
Note in the event that the principal amount hereof is declared due and payable
prior to the Stated Maturity Date hereof or in the event that this Note is
redeemed shall be the Amortized Face Amount (as defined below) of this Note or,
in the case of redemption, the specified percentage of the Amortized Face Amount
of this Note on the date such payment is due and payable as determined by the
Company, plus any accrued but unpaid "qualified stated interest" (as defined in
Section 1.1273-1 of the United States Treasury Department Regulations (the
"Treasury Regulations")).
The "Amortized Face Amount" of this Note shall be the amount equal to the
sum of (i) the issue price (as defined below) of this Note and (ii) that portion
of the difference between the issue price and the principal amount of this Note
that has been amortized at the Stated Yield (as defined below) of this Note
(computed in accordance with Section 1272(a)(4) of the Internal Revenue Code of
1986, as amended, and Section 1.1275-1(b) of the Treasury Regulations, in each
case as in effect on the issue date of this Note) at the date as of which the
Amortized Face Amount is calculated, but in no event can the Amortized Face
Amount exceed the principal amount of this Note due at the Stated Maturity Date
hereof. As used in the preceding sentence, the term "issue price" means the
principal amount of this Note due at the Stated Maturity Date hereof less the
Original Issue Discount of this Note specified above. The term "Stated Yield" of
this Note means the Yield to Maturity specified above for the period from the
Issue Date of this Note to the Stated Maturity Date hereof based on the issue
price and principal amount payable at the Stated Maturity Date hereof.
A-8
If this Note is issued with an original issue discount, in the case of a
default in payment of principal upon acceleration, redemption or at Maturity
hereof, in lieu of any interest otherwise payable, the overdue principal of this
Note shall bear interest at a rate of interest per annum equal to the Default
Rate set forth within the Additional Terms on the fact hereof (to the extent
that the payment of such interest shall be legally enforceable), which shall
accrue from the date of such acceleration, redemption or Maturity, as the case
may be, to the date payment has been made or duly provided for or such default
has been waived in accordance with the terms of the Indenture.
A-9
ABBREVIATIONS
The following abbreviations, when used in the inscription above in 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 UNIF GIFT MIN ACT _____Custodian ______
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of Under Uniform Gifts to Minors Act
survivorship and not as tenants in (State)
common
Additional abbreviations may also be used though not in the above list.
A-10
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
________________________________________________________________________________
Insert Taxpayer Identification No.
________________________________________________________________________________
Please print or typewrite name and address including zip code of assignee
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
____________________________________________________________________
attorney to transfer said 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
elsewhere upon the within instrument in
every particular, without alteration or
enlargement or any change whatever.
A-11
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company to
repay the within Note (or portion thereof specified below) pursuant to its terms
at the applicable Repayment Price set forth on the face thereof, together with
the interest to the Repayment Date, to the undersigned at
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the Holder elects to have repaid:
______________; and specify the denomination or denominations (which shall not
be less than the minimum authorized denomination) of the Notes to be issued to
the Holder for the portion of the within Note not being repaid (in the absence
of any such specification, one such Note will be issued for the portion not
being repaid): _________________.
Dated: __________________________ _______________________________
NOTE: The signature on this Option to Elect Repayment must
correspond with the name as written upon the face of the within instrument in
every particular without alteration or enlargement.
A-12
EXHIBIT B
FORM OF FLOATING RATE NOTE
REGISTERED NO.
CUSIP NO.
VIRGINIA ELECTRIC AND POWER COMPANY
MEDIUM-TERM NOTE, SERIES H
(Floating Rate)
[FACE OF NOTE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (DTC) TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF [CEDE & CO.] OR SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF 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.]*
[THIS MEDIUM-TERM NOTE, SERIES H, 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 MEDIUM-TERM NOTE, SERIES H, MAY NOT BE EXCHANGED IN
WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS MEDIUM TERM
NOTE, SERIES H, 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.]*
PRINCIPAL AMOUNT:
BASE RATE: ORIGINAL ISSUE DATE: STATED MATURITY DATE:
IF LIBOR: IF CMT RATE: IF FLOATING RATE/FIXED RATE NOTE
[_] LIBOR Reuters Designated CMT Telerate Page: Fixed Interest Rate:________
[_] LIBOR Telerate If page 7052, one week ___ or one Fixed Rate Commencement
Alternate time for obtaining quotes, month Date:
if needed: ________
INDEX CURRENCY: IF INVERSE FLOATING RATE
NOTE
Fixed Interest Rate:_________
INDEX MATURITY: INITIAL INTEREST RATE: INITIAL INTEREST RESET DATE(S):
SPREAD: MINIMUM INTEREST RATE: INTEREST PAYMENT DATE(S):
SPREAD MULTIPLIER: MAXIMUM INTEREST RATE: INTEREST RESET DATE(S)
______________________________
* Insert in Global Securities
B-1
DAY COUNT CONVENTION SPECIFIED CURRENCY: AUTHORIZED DENOMINATION
[ ] Actual/360 for the period from (if other than U.S.
$1,000 and integral
_____ to _____ multiples thereof):
[ ] Actual/Actual for the period from
_____ to _____
REDEMPTION TERMS: REPAYMENT TERMS: LIMITATION DATE:
REFUNDING RATE: EXCHANGE RATE AGENT: CALCULATION AGENT:
OTHER/ADDITIONAL
PROVISIONS:
VIRGINIA ELECTRIC AND POWER COMPANY, 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 principal sum of ______________ on the Stated Maturity Date shown above (or
upon earlier redemption or repayment) (such Stated Maturity Date or earlier date
of redemption or repayment referred to herein as the "Maturity Date"), and to
pay interest thereon, at a rate per annum equal to the Initial Interest Rate
specified above until the Initial Interest Reset Date specified above and
thereafter at a rate determined in accordance with the provisions specified
above and on the reverse hereof with respect to the Base Rate specified above
until the principal hereof is paid or duly made available for payment. The
Company will pay interest in arrears on each Interest Payment Date, if any,
specified above (each, an "Interest Payment Date"), commencing with the first
Interest Payment Date next succeeding the Original Issue Date specified above,
and on the Maturity Date; provided, however, that if the Original Issue Date
occurs between a Record Date (as defined below) and the next succeeding Interest
Payment Date, interest payments will commence on the second Interest Payment
Date next succeeding the Original Issue Date to the holder of this Note on the
Record Date with respect to such second Interest Payment Date.
Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for (or from, and including, the Original Issue Date if no interest has been
paid or duly provided for with respect to this Note) to, but excluding, the
applicable Interest Payment Date or the Maturity Date, as the case may be (each,
an "Interest Period"). The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, subject to certain exceptions
described herein, be paid to the person in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on the Regular Record
Date for such interest, which shall be the close of business on the fifteenth
calendar day (whether or not a Business Day) preceding such Interest Payment
Date; provided, however, that interest payable on the Maturity Date will be
payable to the person to whom the principal hereof and premium, if any, hereon
shall be payable. Except as otherwise provided in the Indenture (hereinafter
defined), 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 Note (or one or more predecessor
Notes) 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 Securities of this series 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, if
any, on which the Securities of this series shall be listed, and upon such
notice as may be required by any such exchange, all as more fully provided in
the Indenture.
Payment of the principal of (and premium, if any) and interest on this Note
will be made in immediately available funds upon surrender of this Note, in the
case of payment due at the Maturity Date, at the corporate trust office of the
Trustee, maintained for that purpose in the Borough of Manhattan, New York City
and currently located at GIS Unit Trust Window, 4 New York Plaza, 1st Floor, New
York, New York 10024-2413; provided, however, that if such payment of principal
or interest is to be made in a Specified Currency other than U.S. dollars, as
provided on the reverse hereof, by wire transfer to an account maintained by the
Holder hereof in the country of such Specified Currency shown above (the
Holder's Overseas Account), as designated by the Holder of this Note by written
notice to the Trustee on or prior to the Regular Record Date or at least 16 days
prior to the Maturity Date or in connection with any transfer after such
sixteenth day. In the absence of such designation or if such wire transfer
cannot be made for any other reason, the
______________________________
* Insert in Global Securities
B-2
Trustee will mail a notice to the address of the Person entitled thereto as such
address shall appear on the Security Register on the Regular Record Date for any
payment of interest or on the date of such notice in connection with payment of
principal, as the case may be, requesting a designation pursuant to which such
wire transfer can be made and no such payment shall be made until such
designation is made. As more fully provided on the reverse hereof, if payment of
principal of (and premium, if any) and interest on this Note is to be made in
U.S. dollars, payment will be made (upon surrender of the Note, in the case of
payment due at the Maturity Date, at the foregoing corporate trust office) by
wire transfer to an account designated by the Holder (the Holder's U.S. Account)
by written notice to the Trustee on or prior to the Regular Record Date or at
least 16 days prior to the Maturity Date, or, in the absence of such
designation, by check mailed to the address of the Person entitled thereto as
such address shall appear on the Security Register on the Regular Record Date
for any payment of interest or the Maturity Date shown above for payment of
principal, as the case may be. As more fully provided on the reverse hereof,
payment of the principal of (and premium, if any) and interest on this Note will
be made 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 or, if
payment of the principal of and interest on this Note is to be made in a
Specified Currency other than U.S. dollars, subject to applicable laws and
regulations, in the Specified Currency shown above.
If any Interest Payment Date other than the Maturity Date would otherwise
be a day that is not a Business Day, such Interest Payment Date shall be
postponed to the next succeeding Business Day, except that if LIBOR is an
applicable Base Rate and such Business Day falls in the next succeeding calendar
month, such Interest Payment Date shall be the immediately preceding Business
Day. If the Maturity Date falls on a day that is not a Business Day, the
required payment of principal, premium, if any, and/or interest shall be made on
the next succeeding Business Day with the same force and effect as if made on
the date such payment was due, and no interest shall accrue with respect to such
payment for the period from and after the Maturity Date to the date of such
payment on the next succeeding Business Day.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Security 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: VIRGINIA ELECTRIC AND POWER Company
[Seal of Virginia Electric
and Power Company Appears Here]
By: __________________________________
Name: ________________________________
Title: _______________________________
Attest:_______________________________
Name:_________________________________
Title:________________________________
B-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
B-4
VIRGINIA ELECTRIC AND POWER COMPANY
MEDIUM-TERM NOTE, SERIES H
This Note 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, 1998, as heretofore supplemented and
amended and as further supplemented by a Seventh Supplemental Indenture dated as
of September 1, 2002 (the "Seventh Supplemental Indenture") (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 (the "Trustee", which term includes any successor trustee under the
Indenture), to which the Indenture and all indentures supplemental thereto
reference is hereby made 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 issued thereunder 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 as Medium-Term Notes, Series H (the
"Notes"). There is no limit on the aggregate principal amount of the Notes and,
in addition, any issuance of a tranche of Notes may be reopened at any time for
the issuance of additional Notes having the same interest rate, maturity and
other terms as Notes of such tranche previously issued.
The floating rate Securities of this series are identical except for
Specified Currency, denomination, interest rate, issue date, Stated Maturity
Date, redemption or repayment terms, if any, whether regular floating rate
Notes, inverse floating rate Notes or floating rate/fixed rate Notes, and any
additional terms set forth on the face hereof.
The principal of (and premium, if any) and interest on this Note are
payable by the Company in the Specified Currency shown on the face hereof. If
this Note is denominated in a Specified Currency other than U.S. dollars, unless
the Holder hereof shall have elected to receive payments in such Specified
Currency, payment of the principal of (and premium, if any) and interest on this
Note will be made in U.S. dollars. JPMorgan Chase Bank, in its capacity as
exchange rate agent, or such other Person as shall be appointed by the Company
(the "Exchange Rate Agent"), will convert payments of principal of (and premium,
if any) and interest on this Note to U.S. dollars. The amount to be received by
a Holder of this Note not electing to receive payments in such Specified
Currency will be based on a bid quotation in New York City received by the
Exchange Rate Agent at approximately 11:00 A.M. New York City time on the second
Business Day preceding the applicable payment date from a recognized foreign
exchange dealer (which may be the Exchange Rate Agent) for the purchase by the
quoting dealer of the Specified Currency for U.S. dollars for settlement on such
payment date in the aggregate amount of the U.S. dollars payable to all Holders
of Notes receiving payment in U.S. dollars and at which the dealer commits to
execute a contract. If such bid quotation is not available, payments will be
made in the Specified Currency. All currency exchange costs will be borne pro
rata by the Holders by deductions from such payments in U.S. dollars.
As used herein, "Business Day" means with respect to any Note, any day,
other than a Saturday or Sunday, that is neither (a) a legal holiday nor (b) a
day on which banking institutions are authorized or required by law, regulation
or executive order to close in New York City; provided, however, that for Notes
denominated in a Specified Currency other than United States dollars that day is
also not a day on which commercial banking institutions are authorized or
required by law, regulation or executive order to close in the Principal
Financial Center of the country issuing the Specified Currency (or for Notes
denominated in euros, that day is also a day on which the Trans-European
Automated Real-time Gross Settlement Express Transfer System, commonly referred
to as "TARGET," is operating); provided, further, that with respect to a LIBOR
Note, the day must also be a London Business Day. "London Business Day" means
any day on which commercial banks are open for business (including for dealings
in deposits in the relevant Index Currency) in London. "Principal Financial
Center" means, as applicable, the capital city of the country issuing the
Specified Currency; or the capital city of the country to which the Index
Currency relates; provided, however, that the Principal Financial Center will be
New York City for United States dollars, Sydney and Melbourne (the latter solely
in the case of the Index Currency) for Australian dollars, Toronto for Canadian
dollars, Brussels for euros, Johannesburg for South African rand and Zurich for
Swiss francs.
If this Note is denominated in a Specified Currency other than U.S.
dollars, the Holder of this Note may elect to receive payment of the principal
of and interest on this Note in the Specified Currency by transmitting a written
request for such payment to the Trustee at its corporate trust office in New
York City on or prior to the Regular Record Date or at least 16 calendar days
prior to the Maturity Date, as the case may be. Such request may be in writing
(mailed or hand delivered) or may be by cable, telex or other form of facsimile
transmission. The Holder of this Note need not file a
B-5
separate election for each such payment. Such election, once properly made, will
remain in effect until this Note is transferred or until changed by written
notice to the Trustee, but written notice of any such change must be received by
the Trustee on or prior to the Regular Record Date or at least 16 calendar days
prior to the Maturity Date, as the case may be.
In order for the Holder of this Note to receive payments by wire transfer,
such Holder shall designate an appropriate account (being either the Holder's
Overseas Account or the Holder's U.S. Account, as the case may be). Such
designation shall be made by filing the appropriate information with the Trustee
at its corporate trust office in New York City on or prior to the Regular Record
Date for an Interest Payment Date or at least 16 calendar days prior to the
Maturity Date, except as provided on the face hereof. The Trustee will, subject
to applicable laws and regulations (in the case of a Specified Currency other
than U.S. dollars), and until it receives notice to the contrary or until this
Note is transferred, make such payment and all succeeding payments to such
Holders by wire transfer to the designated Holder's Overseas Account or Holder's
U.S. Account, as the case may be. The Company will pay any administrative costs
imposed by banks in connection with making wire transfer of payments, but any
tax, assessment, governmental or other charge imposed upon such payments will be
borne by the Holder of this Note and deducted therefrom.
If the Specified Currency other than U.S. dollars is not available for the
payment of principal or interest with respect to this Note due to the imposition
of exchange controls or other circumstances beyond the control of the Company,
the Company will be entitled to satisfy its obligations to the Holder of this
Note by making such payment in U.S. dollars on the basis of the Market Exchange
Rate (defined as the noon dollar buying rate in New York City for cable
transfers for such Specified Currency, as certified for customs purposes (or, if
not so certified, as otherwise determined) by the Federal Reserve Bank of New
York) as of the second Business Day prior to payment or, if the Market Exchange
Rate is not then available, on the basis of the most recently available Market
Exchange Rate, or as otherwise specified in the terms of this Note. The Market
Exchange Rate determined as provided above by the Exchange Rate Agent and
certified by the Company to the Trustee shall be conclusive absent manifest
error. Any payment made in U.S. dollars under those circumstances where the
required payment is in a Specified Currency other than U.S. dollars will not
constitute an Event of Default under the Indenture with respect to the Notes. A
good faith determination by the Exchange Rate Agent that the Specified Currency
is unavailable shall be binding upon the Trustee and the Holder of this Note.
Except as set forth below or on the face hereof, unless this Note is
identified on the face hereof as an Inverse Floating Rate Note or a Floating
Rate/Fixed Rate Note, this Note shall bear interest at the rate determined by
reference to the applicable Base Rate based on the Index Maturity (a) plus or
minus the Spread, if any, and/or (b) multiplied by the Spread Multiplier, if
any, in each case as specified on the face hereof. Commencing on the Initial
Interest Reset Date, the rate at which interest on this Note shall be payable
shall be reset as of each Interest Reset Date specified on the face hereof;
provided, however, that the interest rate in effect for the period, if any, from
the Original Issue Date to the Initial Interest Reset Date shall be the Initial
Interest Rate.
If this Note is identified on the face hereof as an Inverse Floating Rate
Note, this Note will bear interest at a fixed interest rate minus the rate
determined by reference to the applicable Base Rate (i) plus or minus the
applicable Spread, if any, and/or (ii) multiplied by the applicable Spread
Multiplier, if any; provided, however, that interest on an Inverse Floating Rate
Note will not be less than zero. Commencing on the first Interest Reset Date,
the rate at which interest on this Note is payable will be reset as of each
Interest Reset Date; provided, further, that the interest rate in effect for the
period, if any, from the Original Issue Date to the first Interest Reset Date
will be the Initial Interest Rate.
If this Note is identified on the face hereof as a Floating Rate/Fixed Rate
Note, this Note will bear interest from the Original Issue Date to the first
Interest Reset Date for such Note at the Initial Interest Rate set forth on the
face hereof and thereafter the rate of interest on such Note will be reset as of
each Interest Reset Date to a rate determined by reference to the applicable
Base Rate (i) plus or minus the applicable Spread, if any, and/or (ii)
multiplied by the applicable Spread Multiplier, if any; provided, however, that
the interest rate in effect commencing on the fixed rate commencement date
specified on the face hereof will be the fixed rate of interest specified on the
face hereof, or if no such fixed rate is specified, the rate of interest
beginning on the fixed rate commencement date shall be the interest rate in
effect on the day immediately preceding the fixed rate commencement date.
Unless otherwise specified on the face hereof, the rate with respect to
each Base Rate will be determined in accordance with the applicable provisions
below. Except as set forth above, the interest rate in effect on each day shall
be
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(i) if such day is an Interest Reset Date, the interest rate determined as of
the Interest Determination Date (as hereinafter defined) immediately preceding
such Interest Reset Date or (ii) if such day is not an Interest Reset Date, the
interest rate determined as of the Interest Determination Date immediately
preceding the most recent Interest Reset Date. If any Interest Reset Date would
otherwise be a day that is not a Business Day, such Interest Reset Date shall be
postponed to the next succeeding Business Day, except that if LIBOR is an
applicable Base Rate and such Business Day falls in the next succeeding calendar
month, such Interest Reset Date shall be the immediately preceding Business Day
as used herein, "Interest Reset Period" means the period of time beginning on an
Interest Reset Date for this Note and ending on the calendar day immediately
preceding the next succeeding Interest Reset Date.
"Interest Determination Date" means, with respect to any Interest Reset
Date, the day the Calculation Agent will refer to when determining the new
interest rate at which a Floating Rate Note will reset, which is applicable as
follows: for Commercial Paper Rate Notes, Federal Funds Rate Notes and Prime
Rate Notes, the Interest Determination Date will be the Business Day prior to
the Interest Reset Date; for LIBOR Notes, the Interest Determination Date will
be the second London Business Day prior to the Interest Reset Date, except that
the Interest Determination Date pertaining to an Interest Reset Date for a LIBOR
Note for which the Index Currency is pounds sterling will be the Interest Reset
Date; for CD Rate Notes and CMT Rate Notes, the Interest Determination Date will
be the second Business Day next preceding the Interest Reset Date; and for
Treasury Rate Notes, the Interest Determination Date will be the day of the week
in which the Interest Reset Date falls on which Treasury bills would normally be
auctioned. Treasury bills are normally sold at auction on Monday of each week,
unless that day is a legal holiday, in which case the auction is normally held
on the following Tuesday, but the auction may be held on the preceding Friday.
If, as the result of a legal holiday, the auction is held on the preceding
Friday, that Friday will be the Interest Determination Date pertaining to the
Interest Reset Date occurring in the next succeeding week. If an auction falls
on a day that is an Interest Reset Date, the Interest Reset Date will be the
next following Business Day.
Unless otherwise specified on the face hereof, the "Calculation Date,"
where applicable, pertaining to an Interest Determination Date will be the
earlier of (i) the tenth calendar day after such Interest Determination Date,
or, if such day is not a Business Day, the next succeeding Business Day, or (ii)
the Business Day preceding the applicable Interest Payment Date or Stated
Maturity Date or for any principal amount to be redeemed or repaid, the
Redemption Date or Repayment Date, as the case may be.
"H.15 Daily Update" means the daily update of H.15(519), available through
the world wide web site of the Board of Governors of the Federal Reserve System
at http://www.federalreserve.gov/releases/ h15/ update or any successor site or
publication.
"H.15(519)" means the Statistical Release H.15(519), Selected Interest
Rates, published by the Board of Governors of the Federal Reserve System, or any
successor publication of the Board of Governors of the Federal Reserve System.
"Telerate" means Moneyline Telerate, or any successor service.
CD Rate. If the Base Rate for this Note is specified on the face hereof as
the CD Rate, this Note will bear interest at the interest rate, calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any, and
subject to the Minimum Interest Rate, and the Maximum Interest Rate, if any,
specified on the face hereof. The CD Rate will be, for any Interest
Determination Date, the rate on that date for negotiable U.S. dollar
certificates of deposit having the Index Maturity specified on the face hereof
as published in H.15(519) under the heading "CDs (secondary market)." The
following procedures will apply if the CD Rate cannot be determined as described
above: If the above rate is not published in H.15(519) by 3:00 p.m., New York
City time, on the Calculation Date pertaining to the applicable Interest
Determination Date, the CD Rate will be the rate on that Interest Determination
Date set forth in the H.15 Daily Update, or such other recognized electronic
source used for the purpose of displaying such rate, or any successor site or
publication, which is commonly referred to as the "H.15 Daily Update," for the
Interest Determination Date for negotiable certificates of deposit having the
Index Maturity specified on the face hereof, under the caption "CDs (secondary
market)." If the above rate is not yet published in either H.15(519), the H.15
Daily Update or some other recognized source for the purpose of displaying the
rate, by 3:00 p.m., New York City time, on the Calculation Date, the Calculation
Agent will determine the CD Rate to be the arithmetic mean of the secondary
market offered rates as of 10:00 a.m., New York City time, on that Interest
Determination Date of three leading nonbank dealers in negotiable U.S. dollar
certificates
B-7
of deposit in New York City selected by the Calculation Agent, after
consultation with the Company, for negotiable certificates of deposit of major
United States money center banks of the highest credit standing in the market
for negotiable certificates of deposit with a remaining maturity closest to the
Index Maturity specified on the face hereof in an amount that is representative
for a single transaction in that market at that time. If the dealers selected by
the Calculation Agent are not quoting as set forth above, the CD Rate for the
applicable Interest Reset Period will be the same as the CD Rate in effect for
the immediately preceding Interest Reset Period (or, if there was no Interest
Reset Period, the rate of interest payable on the CD Rate Notes for which the CD
Rate is being determined shall be the Initial Interest Rate).
CMT Rate. If the Base Rate for this Note is specified on the face hereof as
the CMT Rate, this Note will bear interest at the interest rate, calculated with
reference to the CMT Rate and the Spread and/or Spread Multiplier, if any, and
subject to the Minimum Interest Rate, and the Maximum Interest Rate, if any,
specified on the face hereof. The CMT Rate shall be determined in the following
manner: if CMT Telerate Page 7051 is specified on the face hereof, CMT Rate
means the percentage equal to the yield for U.S. Treasury securities at
"constant maturity" having the Index Maturity specified on the face hereof as
published in H.15(519) under the caption "Treasury Constant Maturities", as the
yield is displayed on the Telerate on page 7051 (or any other page as may
replace the specified page on that service) ("Telerate Page 7051"), for the
particular Interest Determination Date. The following paragraphs detail the
procedures to be followed in the event that CMT Telerate Page 7051 is specified
on the face hereof, but the foregoing method for determining CMT Rate is not
available.
.. If the rate referred to in the preceding paragraph does not so appear on
Telerate Page 7051 by 3:30 p.m., New York City time, on the Calculation
Date for the applicable Interest Determination Date, the CMT Rate will be
the percentage equal to the yield for U.S. Treasury securities at "constant
maturity" having the particular Index Maturity and for the particular
Interest Determination Date as published in H.15(519) under the caption
"Treasury Constant Maturities".
.. If the rate referred to in the preceding paragraph does not so appear in
H.15(519) by 3:30 p.m., New York City time, on the Calculation Date for the
applicable Interest Determination Date, the CMT Rate will be the rate on
the particular Interest Determination Date for the period of the particular
Index Maturity as may then be published by either the Federal Reserve
System Board of Governors or the U.S. Department of the Treasury that the
Calculation Agent determines to be comparable to the rate which would
otherwise have been published in H.15(519).
.. If the rate referred to in the preceding paragraph is not so published by
3:30 p.m., New York City time, on the Calculation Date for the applicable
Interest Determination Date, the CMT Rate will be the rate on the
particular Interest Determination Date calculated by the Calculation Agent
as a yield to maturity based on the arithmetic mean of the secondary market
bid prices at approximately 3:30 p.m., New York City time, on that Interest
Determination Date of three leading primary U.S. government securities
dealers in New York City (each, a "Reference Dealer"), selected by the
Calculation Agent from five Reference Dealers selected by the Calculation
Agent and eliminating the highest quotation, or, in the event of equality,
one of the highest, and the lowest quotation or, in the event of equality,
one of the lowest, for U.S. Treasury securities with an original maturity
equal to the particular Index Maturity, a remaining term to maturity no
more than 1 year shorter than that Index Maturity and in a principal amount
that is representative for a single transaction in the securities in that
market at that time.
.. If fewer than five but more than two of the prices referred to in the
preceding paragraph are provided as requested, the CMT Rate will be the
rate on the particular Interest Determination Date calculated by the
Calculation Agent based on the arithmetic mean of the bid prices obtained
and neither the highest nor the lowest of the quotations shall be
eliminated.
.. If fewer than three of the prices referred to two paragraphs above are
provided as requested, the CMT Rate will be the rate on the particular
Interest Determination Date calculated by the Calculation Agent as a yield
to maturity based on the arithmetic mean of the secondary market bid prices
as of approximately 3:30 p.m., New York City time, on that Interest
Determination Date of three Reference Dealers selected by the Calculation
Agent from five Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation or, in the event of equality, one of the
highest and the lowest quotation or, in the event of equality, one of the
lowest, for U.S. Treasury securities with an original maturity greater than
the particular Index Maturity, a remaining term to maturity closest to that
Index
B-8
Maturity and in a principal amount that is representative for a single
transaction in the securities in that market at that time.
.. If fewer than five but more than two prices referred to in the preceding
paragraph are provided as requested, the CMT Rate will be the rate on the
particular Interest Determination Date calculated by the Calculation Agent
based on the arithmetic mean of the bid prices obtained and neither the
highest nor the lowest of the quotations will be eliminated.
.. If fewer than three prices referred to two paragraphs above are provided as
requested, the CMT Rate for the applicable Interest Reset Date will be the
same as the CMT Rate for the immediately preceding Interest Reset Period
(or, if there was no Interest Reset Period, the rate of interest payable on
the CMT Rate Notes for which the CMT Rate is being determined shall be the
Initial Interest Rate).
If CMT Telerate Page 7052 is specified on the face hereof, CMT Rate
means the percentage equal to the one-week or one-month, as specified on the
face hereof, average yield for U.S. Treasury securities at "constant maturity"
having the Index Maturity specified on the face hereof as published in H.15(519)
opposite the caption "Treasury Constant Maturities", as the yield is displayed
on the Telerate on page 7052 (or any other page as may replace the specified
page on that service) ("Telerate Page 7052"), for the week or month, as
applicable, ended immediately preceding the week or month, as applicable, in
which the particular Interest Determination Date falls. The following paragraphs
detail the procedures to be followed in the event that CMT Telerate Page 7052 is
specified on the face hereof, but the foregoing method for determining CMT Rate
is not available.
.. If the rate referred to in the preceding paragraph does not so appear on
Telerate Page 7052 by 3:30 p.m., New York City time, on the Calculation
Date for the applicable Interest Determination Date, the CMT Rate will be
the percentage equal to the one-week or one-month, as specified on the face
hereof, average yield for U.S. Treasury securities at "constant maturity"
having the particular Index Maturity and for the week or month, as
applicable, preceding the particular Interest Determination Date as
published in H.15(519) opposite the caption "Treasury Constant Maturities."
.. If the rate referred to in the preceding paragraph does not so appear in
H.15(519) by 3:30 p.m., New York City time, on the Calculation Date for the
applicable Interest Determination Date, the CMT Rate will be the one-week
or one-month, as specified on the face hereof, average yield for U.S.
Treasury securities at "constant maturity" having the particular Index
Maturity as otherwise announced by the Federal Reserve Bank of New York for
the week or month, as applicable, ended immediately preceding the week or
month, as applicable, in which the particular Interest Determination Date
falls.
.. If the rate referred to in the preceding paragraph is not so published by
3:30 p.m., New York City time, on the Calculation Date for the applicable
Interest Determination Date, the CMT Rate will be the rate on the
particular Interest Determination Date calculated by the Calculation Agent
as a yield to maturity based on the arithmetic mean of the secondary market
bid prices at approximately 3:30 p.m., New York City time, on that Interest
Determination Date of three Reference Dealers selected by the Calculation
Agent from five Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation, or, in the event of equality, one of the
highest, and the lowest quotation or, in the event of equality, one of the
lowest, for U.S. Treasury securities with an original maturity equal to the
particular Index Maturity, a remaining term to maturity no more than 1 year
shorter than that Index Maturity and in a principal amount that is
representative for a single transaction in the securities in that market at
that time.
.. If fewer than five but more than two of the prices referred to in the
preceding paragraph are provided as requested, the CMT Rate will be the
rate on the particular Interest Determination Date calculated by the
Calculation Agent based on the arithmetic mean of the bid prices obtained
and neither the highest nor the lowest of the quotations shall be
eliminated.
.. If fewer than three prices referred to two paragraphs above are provided as
requested, the CMT Rate will be the rate on the particular Interest
Determination Date calculated by the Calculation Agent as a yield to
maturity based on the arithmetic mean of the secondary market bid prices as
of approximately 3:30 p.m., New York City time, on thatInterest
Determination Date of three Reference Dealers selected by the Calculation
Agent from five Reference
B-9
Dealers selected by the Calculation Agent and eliminating the highest
quotation or, in the event of equality, one of the highest and the lowest
quotation or, in the event of equality, one of the lowest, for U.S. Treasury
securities with an original maturity greater than the particular Index
Maturity, a remaining term to maturity closest to that Index Maturity and in a
principal amount that is representative for a single transaction in the
securities in that market at the time.
.. If fewer than five but more than two prices referred to in the preceding
paragraph are provided as requested, the CMT Rate will be the rate on the
particular Interest Determination Date calculated by the Calculation Agent
based on the arithmetic mean of the bid prices obtained and neither the
highest or the lowest of the quotations will be eliminated.
.. If fewer than three prices referred to two paragraphs above are provided as
requested, the CMT Rate for the applicable Interest Reset Date will be the
same as the CMT Rate for the immediately preceding Interest Reset Period (or,
if there was no Interest Reset Period, the rate of interest payable on the CMT
Rate Notes for which the CMT Rate is being determined shall be the Initial
Interest Rate).
For purposes of the above calculations (whether CMT Telerate Page 7051 or
CMT Telerate Page 7052 is specified on the face hereof), if two U.S. Treasury
securities with an original maturity greater than the Index Maturity specified
on the face hereof have remaining terms to maturity equally close to the
particular Index Maturity, the quotes for the U.S. Treasury security with the
shorter remaining term to maturity will be used.
If no CMT Telerate Page is specified on the face hereof, CMT Telerate Page
7052, for the most recent week, shall be deemed specified.
Commercial Paper Rate. If the Base Rate for this Note is specified on the
face hereof as the Commercial Paper Rate, this Note will bear interest at the
interest rate, calculated with reference to the Commercial Paper Rate and the
Spread and/or Spread Multiplier, if any, and subject to the Minimum Interest
Rate and the Maximum Interest Rate, if any, specified on the face hereof. The
Commercial Paper Rate shall be determined to be for any Interest Determination
Date, the Money Market Yield, calculated as described below, of the rate on that
date for commercial paper having the Index Maturity specified on the face
hereof, as that rate is published in H.15(519), under the heading "Commercial
Paper - Nonfinancial."
The following procedures will apply if the Commercial Paper Rate cannot be
determined as described above: If the above rate is not published by 3:00 p.m.,
New York City time, on the Calculation Date pertaining to the applicable
Interest Determination Date, then the Commercial Paper Rate will be the Money
Market Yield of the rate on that Interest Determination Date for commercial
paper of the Index Maturity specified on the face hereof as published in H.15
Daily Update or some other recognized electronic source for the purpose of
displaying the rate, under the heading "Commercial Paper - Nonfinancial" If by
3:00 p.m., New York City time, on that Calculation Date the rate is not yet
published in either H.15(519) or the H.15 Daily Update, or some other recognized
electronic source for the purpose of displaying the rate, then the Calculation
Agent will determine the Commercial Paper Rate to be the Money Market Yield of
the arithmetic mean of the offered rates as of 11:00 a.m., New York City time,
on that Interest Determination Date of three leading dealers of U.S. dollar
commercial paper in New York City selected by the Calculation Agent, after
consultation with the Company, for commercial paper of the Index Maturity
specified on the face hereof, placed for an industrial issuer whose bond rating
is "AA," or the equivalent, from a nationally recognized statistical rating
organization. If the dealers selected by the Calculation Agent are not quoting
as mentioned above, the Commercial Paper Rate for the applicable Interest Reset
Period will be the same as the Commercial Paper Rate in effect for the
immediately preceding Interest Reset Period (or, if there was no Interest Reset
Period, the rate of interest payable on the Commercial Paper Rate Notes for
which the Commercial Paper Rate is being determined shall be the Initial
Interest Rate).
The "Money Market Yield" will be a yield calculated in accordance with the
following formula:
Money Market Yield = D x 360 x 100
--------------
360 - (D x M)
"D" refers to the applicable per year rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
B-10
Federal Funds Rate. If the Base Rate for this Note is specified on the face
hereof as the Federal Funds Rate, this Note will bear interest at the interest
rate, calculated with reference to the Federal Funds Rate and the Spread and/or
Spread Multiplier, if any, and subject to the Minimum Interest Rate and Maximum
Interest Rate, if any, specified on the face hereof. The Federal Funds Rate
shall be determined as of the applicable Interest Determination Date to be the
rate on that date for U.S. dollar federal funds as published in H.15(519) under
the heading "Federal Funds (Effective)" as that rate is displayed on the
Telerate on page 120 or any other page as may replace the applicable page on
that service, which is commonly referred to as "Telerate Page 120."
The following procedures will apply if the Federal Funds Rate cannot be
determined as described above: If the above rate is not published by 3:00 p.m.,
New York City time, on the Calculation Date pertaining to the Interest
Determination Date, the Federal Funds Rate will be the rate on that Interest
Determination Date as published in the H.15 Daily Update under the heading
"Federal Funds/ Effective Rate," or another recognized electronic source used
for the purpose of displaying that rate, under the caption "Federal Funds
(Effective)." If that rate is not yet published in either H.15(519) or the H.15
Daily Update or some other recognized electronic source for the purpose of
displaying the rate, by 3:00 p.m., New York City time, on the Calculation Date
pertaining to the Interest Determination Date then the Calculation Agent will
determine the Federal Funds Rate to be the arithmetic mean of the rates for the
last transaction in overnight U.S. dollar federal funds, as of 9:00 a.m., New
York City time, on the Interest Determination Date, arranged by each of three
leading brokers of federal funds transactions in New York City selected by the
Calculation Agent. If the brokers selected by the Calculation Agent are not
quoting as mentioned above, the Federal Funds Rate for the applicable Interest
Reset Period will be the same as the Federal Funds Rate in effect for the
immediately preceding Interest Reset Period (or, if there was no Interest Reset
Period, the rate of interest payable on the Federal Funds Rate Notes for which
the Federal Funds Rate is being determined shall be the Initial Interest Rate).
LIBOR. If the Base Rate for this Note is specified on the face hereof as
LIBOR, this Note will bear interest at the interest rate, calculated with
reference to LIBOR and the Spread and/or Spread Multiplier, if any, and subject
to the Minimum Interest Rate and the Maximum Interest Rate, if any, specified on
the face hereof. LIBOR shall be determined by the Calculation Agent as of the
applicable Interest Determination Date (a LIBOR Interest Determination Date) in
accordance with the following provisions:
(a) if "LIBOR Reuters" is specified on the face hereof, the arithmetic
mean of the offered rates for deposits in the Index Currency having
the Index Maturity designated on the face hereof, commencing on the
second London Business Day immediately following that Interest
Determination Date, that appear on the Designated LIBOR Page as of
11:00 a.m., London time, on that Interest Determination Date, if at
least two offered rates appear on the Designated LIBOR Page, except
that if the specified Designated LIBOR Page, by its terms provides
only for a single rate, that single rate will be used; or
(b) if "LIBOR Telerate" is specified in on the face hereof, the rate for
deposits in the Index Currency having the Index Maturity designated on
the face hereof, commencing on the second London Business Day
immediately following that Interest Determination Date or, if pounds
sterling is the Index Currency, commencing on that Interest
Determination Date, that appears on the Designated LIBOR Page at
approximately 11:00 a.m., London time, on that Interest Determination
Date.
If fewer than the required number of offered rates appear, then the
Calculation Agent will request the principal London offices of each of four
major reference banks in the London interbank market, as selected by the
Calculation Agent after consultation with the Company, to provide the
Calculation Agent with its offered quotation for deposits in the Index Currency
for the period of the Index Maturity specified on the face hereof commencing on
the second London Business Day immediately following the Interest Determination
Date or, if pounds sterling is the Index Currency, commencing on that Interest
Determination Date, to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on that Interest Determination Date and
in a principal amount of not less than $1,000,000 (or the equivalent in the
Index Currency, if the Index Currency is not the U.S. dollar) that is
representative of a single transaction in the Index Currency in the market at
that time. If at least two quotations are provided, LIBOR determined on that
Interest Determination Date will be the arithmetic mean of those quotations. If
fewer than two quotations are provided, LIBOR will be determined on that
Interest Determination Date as the arithmetic mean of the rates quoted at
approximately 11:00 a.m., London time, or some other time specified on the face
hereof, in the applicable Principal
B-11
Financial Center for the country of the Index Currency on the Interest
Determination Date, by three major banks in that Principal Financial Center
selected by the Calculation Agent, after consultation with the Company, for
loans in the Index Currency to leading European banks, having the Index Maturity
specified on the face hereof and in a principal amount of not less than
$1,000,000 (or the equivalent in the Index Currency, if the Index Currency is
not the U.S. dollar) that is representative of a single transaction in that
Index Currency in the market at that time. If the banks so selected by the
Calculation Agent are not quoting as mentioned in the previous sentence, LIBOR
for the applicable Interest Reset Period will be the same as LIBOR in effect for
the immediately preceding Interest Reset Period (or, if there was no Interest
Reset Period, the rate of interest payable on the LIBOR Notes for which LIBOR is
being determined shall be the Initial Interest Rate).
If neither LIBOR Reuters nor LIBOR Telerate is specified on the face
hereof, LIBOR for the applicable Index Currency will be determined as if LIBOR
Telerate were specified, and, if the U.S. dollar is the Index Currency, as if
Page 3750, had been specified.
"Designated LIBOR Page" means either: (i) if "LIBOR Reuters" is designated
on the face hereof, the display on the Reuters Monitor Money Rates Service for
the purpose of displaying the London interbank rates of major banks for the
applicable Index Currency or its designated successor; or (ii) if "LIBOR
Telerate" is designated on the face hereof, the display on the Telerate page
specified on the face hereof, or any other page as may replace that page on that
service, for the purpose of displaying the London interbank rates of major banks
for the applicable Index Currency.
Prime Rate. If the Base Rate for this Note is specified on the face hereof
as the Prime Rate, this Note will bear interest at the interest rate, calculated
with reference to the Prime Rate and the Spread and/or Spread Multiplier, if
any, and subject to the Minimum Interest Rate and the Maximum Interest Rate, if
any, specified on the face hereof. The Prime Rate shall be determined as of the
applicable Interest Determination Date to be the rate set forth on that date in
H.15(519) under the heading "Bank Prime Loan."
The following procedures will apply if the Prime Rate cannot be determined
as described above: If the above rate is not published prior to 3:00 p.m., New
York City time, on the Calculation Date pertaining to the applicable Interest
Determination Date, then the Prime Rate will be the rate on that Interest
Determination Date as published in H.15 Daily Update, or such other recognized
electronic source used for the purpose of displaying such rate, under the
heading "Bank Prime Loan." If the rate is not published prior to 3:00 p.m., New
York City time, on the Calculation Date in either H.15(519) or the H.15 Daily
Update, or some other recognized electronic source for the purpose of displaying
the rate, then the Calculation Agent will determine the Prime Rate to be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen USPRIME 1 Page as that bank's prime rate or base
lending rate as in effect as of 11:00 a.m., New York City time, on that Interest
Determination Date as quoted on the Reuters Screen USPRIME 1 Page on the
Interest Determination Date. If fewer than four rates appear on the Reuters
Screen USPRIME 1 Page for that Interest Determination Date, the Calculation
Agent will determine the Prime Rate to be the arithmetic mean of the prime rates
or base lending rates quoted on the basis of the actual number of days in the
year divided by 360 as of the close of business on that Interest Determination
Date by three major banks in New York City selected by the Calculation Agent,
after consultation with the Company, from which quotations are requested. If
fewer than two quotations are provided, the Prime Rate shall be calculated by
the Calculation Agent and shall be determined as the arithmetic mean on the
basis of the prime rates in New York City by the appropriate number of
substitute banks or trust companies organized and doing business under the laws
of the United States, or any State thereof, in each case having total equity
capital of at least U.S. $500 million and being subject to supervision or
examination by federal or state authority, selected by the Calculation Agent to
quote the rate or rates. If the banks or trust companies selected by the
Calculation Agent are not quoting as mentioned above, the Prime Rate for the
applicable Interest Reset Period will be the same as the Prime Rate in effect
for the immediately preceding Interest Reset Period (or, if there was no
Interest Reset Period, the rate of interest payable on the Prime Rate Notes for
which the Prime Rate is being determined shall be the Initial Interest Rate).
"Reuters Screen US PRIME 1 Page" means the display designated as Page "US
PRIME 1" on the Reuters Monitor Money Rates Service (or such other page as may
replace the US PRIME 1 Page on such service for the purpose of displaying prime
rates or base lending rates of major United States banks).
Treasury Rate. If the Base Rate for this Note is specified on the face
hereof as the Treasury Rate, this Note will bear interest at the interest rate,
calculated with reference to the Treasury Rate and the Spread and/or Spread
Multiplier, if
B-12
any, and subject to the Minimum Interest Rate and the Maximum Interest Rate, if
any, specified on the face hereof. The Treasury Rate shall be determined as of
the applicable Interest Determination Date to be the rate from the auction held
on the applicable Interest Determination Date of direct obligations of the
United States, which are commonly referred to as "Treasury Bills," having the
Index Maturity specified on the face hereof as that rate appears under the
caption "Investment Rate" on the display on the Telerate on page 56 or any other
page as may replace page 56 on that service, referred to as "Telerate Page 56,"
or page 57 or any other page as may replace page 57 on that service, referred to
as "Telerate Page 57."
The following procedures will apply if the Treasury Rate cannot be
determined as described above: If the rate described above is not published by
3:00 p.m., New York City time, on the Calculation Date pertaining to the
applicable Interest Determination Date, the Treasury Rate for the Interest
Determination Date will be the yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable and applied
on a daily basis) of the rate of the applicable Treasury Bills, published in the
H.15 Daily Update, or any other recognized electronic source used for the
purpose of displaying the rate, under the caption "U.S. Government
Securities/Treasury Bills/Auction High" on the Interest Determination Date, or
if not so published by 3:00 p.m., New York City time on the Calculation Date,
the yield to maturity (expressed as a bond equivalent, on the basis of a year of
365 or 366 days, as applicable and applied on a daily basis) of the auction rate
of the applicable Treasury Bills as otherwise announced by the United States
Department of the Treasury. In the event that the results of the auction of
Treasury Bills having the Index Maturity designated on the face hereof are not
published or reported as provided above by 3:00 p.m., New York City time, on the
Calculation Date or if no auction is held on the Interest Determination Date,
then the Treasury Rate will be the yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable and applied
on a daily basis) of the rate on the Interest Determination Date of Treasury
Bills having the Index Maturity specified on the face hereof published in
H.15(519), or such other recognized electronic source used for the purpose of
displaying that rate, under the caption "U.S. Government Securities/ Treasury
Bills/ Secondary Market." If the rate referred to in the immediately preceding
sentence is not so published by 3:00 p.m., New York City time, on the
Calculation Date pertaining to the applicable Interest Determination Date, the
Treasury Rate shall be the yield to maturity (expressed as a bond equivalent, on
the basis of a year of 365 or 366 days, as applicable and applied on a daily
basis) of the rate on the Interest Determination Date of such Treasury Bills as
published in the H.15 Daily Update, or other recognized electronic source used
for the purpose of displaying that rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market." If the rate referred to above is
not published in H.15(519), H.15 Daily Update, or another recognized electronic
source, by 3:00 p.m., New York City time, on the Calculation Date pertaining to
the applicable Interest Determination Date, the Treasury Rate shall be
calculated by the Calculation Agent and shall be a yield to maturity (expressed
as a bond equivalent, on the basis of a year of 365 or 366 days, as applicable
and applied on a daily basis) calculated using the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 p.m., New York City time,
on the applicable Interest Determination Date, of three primary United States
government securities dealers, selected by the Calculation Agent, after
consultation with the Company, for the issue of Treasury Bills with a remaining
maturity closest to the Index Maturity specified in on the face hereof. If the
dealers selected by the Calculation Agent are not quoting as mentioned in the
immediately preceding sentence, the Treasury Rate for the applicable Interest
Reset Period will be the same as the Treasury Rate in effect for the immediately
preceding Interest Reset Period (or, if there was no Interest Reset Period, the
rate of interest payable on the Treasury Rate Notes for which the Treasury Rate
is being determined shall be the Initial Interest Rate).
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, specified on the face hereof. The interest rate on this
Note will in no event be higher than the maximum rate permitted by New York law,
as the same may be modified by United States law of general application.
The Calculation Agent shall calculate the interest rate hereon in
accordance with the foregoing on or before each Calculation Date. At the request
of the Holder hereof, the Calculation Agent will provide to the Holder hereof
the interest rate hereon then in effect and, if determined, the interest rate
which will become effective as a result of a determination made for the next
succeeding Interest Reset Date.
With respect to this Note, accrued interest shall be calculated by
multiplying the principal amount of this Note by an accrued interest factor.
Such accrued interest factor will be computed by adding the interest factors
calculated for each day in the period for which interest is being paid. Unless
otherwise specified on the face hereof, the interest factor for
each day is computed by dividing the interest rate applicable to that day: (i)
by 360, in the case of CD Rate Notes, Commercial Paper Rate Notes, Federal Funds
Rate Notes, LIBOR Notes (except for LIBOR Notes denominated in
B-13
pounds sterling) and Prime Rate Notes; (ii) by 365, in the case of LIBOR Notes
denominated in pounds sterling; or (iii) by the actual number of days in the
year, in the case of Treasury Rate Notes or CMT Rate Notes. All percentages used
in or resulting from any calculation of the rate of interest on this Note 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 used in or resulting from such calculation on this Note will be
rounded to the nearest cent, with one-half cent rounded upward, or in the case
of a foreign currency, to the nearest unit, with one-half unit being rounded
upward. The interest rate in effect on any Interest Reset Date will be the
applicable rate as reset on such date. The interest rate applicable to any other
day is the interest rate from the immediately preceding Interest Reset Date (or,
if none, the Initial Interest Rate).
If so provided on the face of this Note, this Note may be redeemed by the
Company in accordance with the Redemption Terms set forth on the face hereof. If
no Redemption Terms are set forth on the face hereof, this Note may not be
redeemed prior to the Maturity Date. On and after the initial Redemption Date
specified in the Redemption Terms, if any, this Note may be redeemed at any time
in whole or in part (provided that any remaining principal amount of this Note
shall be equal to an authorized denomination) at the option of the Company, at
the applicable Redemption Price specified in the Redemption Terms, together with
interest thereon payable to the Redemption Date, on notice given not more than
60 nor less than 30 calendar days prior to the Redemption Date. In the event of
redemption of this Note in part only, a new Note for the unredeemed portion
hereof shall be issued in the name of the Holder hereof upon the surrender
hereof.
Notwithstanding the foregoing, the Company may not, prior to the Limitation
Date specified on the face hereof, if any, redeem this Note as contemplated by
the next preceding paragraph as a part of, or in anticipation of, any refunding
operation by the application, directly or indirectly, of monies borrowed having
an interest cost to the Company (calculated in accordance with generally
accepted financial practice) of less than the Refunding Rate specified on the
face hereof, if any.
The Notes will not have a sinking fund.
If Repayment Terms are indicated on the face of this Note, the Company may
be required to repurchase this Note at the option of the Holder, in whole or in
part, on the Repayment Date(s) and at the applicable Repayment Price(s)
specified in the Repayment Terms, plus accrued interest, if any, to the
applicable Repayment Date. On or before the applicable Repayment Date, the
Company shall deposit with the Trustee money sufficient to pay the applicable
Repayment Price and any interest accrued on the portion of this Note to be
tendered for repayment. On and after such Repayment Date, interest will cease to
accrue on this Note or any portion hereof tendered for repayment.
The repayment option may be exercised by the Holder of this Note for less
than the entire principal amount hereof, but in that event, the principal amount
hereof remaining outstanding after repayment must be in an authorized
denomination. In the event of repurchase of this Note in part only, a new Note
or Notes of this series and of like tenor for the unpurchased portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.
In order for this Note to be repaid, the Trustee must receive at least 30
calendar days but not more than 60 calendar days prior to the Repayment Date (i)
this Note with the form entitled "Option to Elect Repayment" attached to this
Note duly completed or (ii) a facsimile transmission or a letter from a member
of a national securities exchange or the National Association of Securities
Dealers, Inc. or a commercial bank or trust company in the United States setting
forth the name of the Holder of this Note, the principal amount of this Note,
the principal amount of this Note to be repaid, the registered number or a
description of the tenor and terms of this Note, a statement that the option to
elect repayment is being exercised thereby, and a guarantee that this Note to be
repaid, together with the duly completed form entitled "Option to Elect
Repayment" attached to this Security, will be received by the Trustee not later
than the fifth Business Day after the date of such facsimile transmission or
letter; however, such facsimile transmission or letter shall only be effective
if this Note and duly completed form are received by the Trustee by such fifth
Business Day. Such notice, once given, will be irrevocable unless waived by the
Company.
Unless otherwise indicated on the face hereof, this Note will not be
subject to repayment at the option of the Holder.
B-14
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
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 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, the Holder
of this 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
Notes, the Holders of not less than a majority in principal amount of the 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 the 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 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 Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, place and rate, in the coin or currency, and
to the manner, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable in the Security Register, upon
surrender of this Note, for registration of transfer at the office or agency of
the Company in any place where the principal of and any premium and interest on
this 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 Notes having the same Stated Maturity Date and
Original Issue Date, of authorized denominations and of like tenor and for the
same aggregate principal amount in the same Specified Currency, will be issued
to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons and unless
otherwise specified on the face hereof, in denominations of U.S. $1,000 and in
integral multiples of U.S. $1,000 in excess thereof or the approximate
equivalent of U.S. $1,000 in the Specified Currency in which this Note is
denominated (if not U.S. dollars) at the Market Exchange Rate on the Business
Day immediately preceding the trade date for the original issuance of each
tranche of Notes, as determined by the Exchange Rate Agent. As provided in the
Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes having the same
Specified Currency, Stated Maturity Date and Original Issue Date of any
authorized denominations as requested by the Holder surrendering the same, upon
surrender of the Note or Notes to be exchanged at the office or agency of the
Company.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company, or the Trustee may treat the
Person in whose name this Note is registered as the absolute owner hereof for
all purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
Reference in this Note to "U.S.$" or "U.S. dollars", is to the currency of
the United States of America. Reference in this Note to the "Specified Currency"
is to the Specified Currency shown on the face hereof. All terms used in this
Note and not otherwise defined herein which are defined in the Indenture shall
have the meanings assigned to them
B-15
in the Indenture.
This Note shall be governed by and construed in accordance with the laws of
the State of New York, without regard to conflicts of laws principles thereof.
B-16
ABBREVIATIONS
The following abbreviations, when used in the inscription above in 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 UNIF GIFT MIN ACT ____Custodian _____
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of Under Uniform Gifts to Minors Act
survivorship and not as tenants in common (State)
Additional abbreviations may also be used though not in the above list.
B-17
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
Insert Taxpayer Identification No.
______________________________________________________________________________
Please print or typewrite name and address including zip code of assignee
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
________________________________________________________________________________
attorney to transfer said 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 elsewhere upon the within
instrument in every particular,
without alteration or enlargement
or any change whatever.
B-18
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company
to repay the within Note (or portion thereof specified below) pursuant to its
terms at the applicable Repayment Price set forth on the face thereof, together
with the interest to the Repayment Date, to the undersigned at
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the Holder elects to have repaid:
______________; and specify the denomination or denominations (which shall not
be less than the minimum authorized denomination) of the Notes to be issued to
the Holder for the portion of the within Note not being repaid (in the absence
of any such specification, one such Note will be issued for the portion not
being repaid): _________________.
Dated: __________________________ _______________________________
NOTE: The signature on this Option to Elect Repayment must correspond with the
name as written upon the face of the within instrument in every particular
without alteration or enlargement.
B-19
EXHIBIT C
FORM OF
VIRGINIA ELECTRIC AND POWER COMPANY
Medium-Term Notes, Series H (the "Notes")
Authentication Certificate Supplemental to the Seventh Supplemental
Indenture dated as of September 1, 2002 (the "Indenture")
___ Original Issue Discount Note
CUSIP Number: ________________________ ___ Subject to special provisions set forth therein
___ For federal income tax purposes only
Form of Note: Original issue discount: _________%
___ Book-Entry Yield to maturity: __________ %
___ Certificated Method used to determine yield to maturity:
___ Approximate
Name and Address of Registered Owner: ___ Exact
Cede & Company Original issue discount applicable to short accrual
P.O. Box 20, Bowling Green Station period: ________%
New York, NY 10004 Amount payable upon acceleration: ________%
Taxpayer Identification Number of Interest Rate/Initial Interest Rate:_________________________
Registered Owner:______________________________
Interest Payment Dates:______________________________________
Principal Amount: U.S. $______________________
Regular Record Dates:________________________________________
Specified Currency:
___ United States dollars Interest Reset Dates:________________________________________
___ Other: ______________
Interest Reset Period:_______________
Denominations:
___ $25 Calculation Dates:___________________________________________
___ $1,000
___ Other: _______ Interest Determination Dates:________________________________
Original Issue Date: ________ Time of calculation:_________________________________________
Stated Maturity Date: ________ Index Currency:___________________________________________
Agents' Commission: $ _____________ Index Maturity:______________________________________________
Issue Price (Dollar Amount and Percentage of Principal Spread:______________________________________________________
Amount): $ _________ / ________ %
Net Proceeds to the Company: $ _____________ Spread Multiplier:___________________________________________
Trade Date: ___________ Maximum Interest Rate:_______________________________________
Settlement Date: ____________ Minimum Interest Rate:_______________________________________
Refunding Rate:______________________________________________
C-1
Interest Rate Basis (and, if applicable, related Interest Period): Aggregate initial offering price of Securities issued under
___ Fixed Rate Note Registration statement no. 333-55904 through date hereof
___ Regular Floating Rate Note (including this Note): $ _________
___ Inverse Floating Rate Note
Fixed Interest Rate:_________
___ Floating Rate/Fixed Rate Note Aggregate initial offering price of Notes issued through date
Fixed Interest Rate:_________ hereof (including this Note): $ _________
Fixed Rate Commencement Date: _________
Calcualtion Agent:_____________________________
Exchange Rate Agent:___________________________
Base Rate: Paying Agent:__________________________________
___ CD Rate
___ Commercial Paper Rate
___ CMT Rate
___ CMT Telerate Page 7051
___ CMT Telerate Page 7052
___ one-week average rate
___ one-month average rate
___ Federal Funds Rate
___ LIBOR Rate
___ LIBOR Reuters
___ LIBOR Telerate
Time for rate quotes if not 11:00 a.m., London time:_________
___ Prime Rate
___ Treasury Rate
___ Other Base Rate (as described below):
Redemption:
___ Not Redeemable Prior to Stated Maturity Date
___ Redeemable Prior to Stated Maturity Date
Redemption Price:
___ Make Whole
Basis Points: _________
___ Other Redemption Price (as described below):
Limitation Date: __________
Other Terms (as described below):
Repayment:
___ Not subject to repayment prior to the Stated Maturity Date
___ Subject to repayment prior to the Stated Maturity Date at the
option of the holder of the Notes.
Repayment Price: ________% Each of the undersigned certifies that s/he has made such
___ 100% examination of the applicable provisions of the Indenture as
___ Other (as described below) s/he deems necessary or advisable for purposes of this
Limitation Date: ___________ Authentication Certificate and that all conditions precedent
relating to the completion, authentication and delivery of
the Notes by you, asTrustee, in accordance with the terms
hereof have been complied with.
VIRGINIA ELECTRIC AND POWER COMPANY *
By:__________________________________
Other Terms
By:__________________________________
_________________
* To be signed by the Chairman of the Board, its Vice Chairman of the Board,
President, or a Vice President, and by its Treasurer, Assistant Treasurer, its
Secretary or an Assistant Secretary.
C-2