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Exhibit 4 (c)
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THE CLEVELAND ELECTRIC ILLUMINATING COMPANY
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$150,000,000 7.43% SERIES C SECURED NOTES DUE 2009
$300,000,000 7.88% SERIES C SECURED NOTES DUE 2017
$150,000,000 7.43% SERIES D SECURED NOTES DUE 2009
$300,000,000 7.88% SERIES D SECURED NOTES DUE 2017
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FIRST SUPPLEMENTAL INDENTURE
DATED OCTOBER 24, 1997
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THE CHASE MANHATTAN BANK
Trustee
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FIRST SUPPLEMENTAL INDENTURE, dated October 24, 1997, between THE
CLEVELAND ELECTRIC ILLUMINATING COMPANY, a corporation duly organized and
existing under the laws of the State of Ohio (herein called "Cleveland Electric"
or the "Company"), having its principal office at 0000 Xxx Xxxx Xxxxxxxxx,
Xxxxxxxxxxxx, Xxxx 00000, and THE CHASE MANHATTAN BANK, a New York banking
corporation, as Trustee (herein called the "Trustee") under the Indenture dated
as of October 24, 1997 between the Company and the Trustee (the "Indenture").
RECITALS OF THE COMPANY
The Company has executed and delivered the Indenture to the Trustee to
provide for the issuance from time to time of its securities (the "Securities"),
said Securities to be issued in one or more series as in the Indenture provided.
Unless otherwise defined in Article III hereof, capitalized terms used herein
shall have the meaning ascribed to such terms in the Indenture.
Pursuant to the terms of the Indenture, the Company desires to provide
for the establishment of four new series of its Securities to be known as its
7.43% Series C Secured Notes Due 2009 (herein called the "Initial 2009 Notes")
and 7.88% Series C Secured Notes Due 2017 (herein called the "Initial 2017
Notes" and, together with the Initial 2009 Notes, the "Initial Notes") and, if
and when issued pursuant to a Registered Exchange Offer, 7.43% Series D Secured
Notes Due 2009 (herein called the "Exchange 2009 Notes") and 7.88% Series D
Secured Notes Due 2017 (herein called the "Exchange 2017 Notes" and, together
with the Exchange 2009 Notes, the "Exchange Notes" and, together with the
Initial Notes, the "Notes"), the form and substance of such Notes and the terms,
provisions, and conditions thereof to be set forth as provided in the Indenture
and this First Supplemental Indenture.
All things necessary to make this First Supplemental Indenture a valid
agreement of the Company, and to make the Notes, when executed by the Company
and authenticated and delivered by the Trustee, the valid obligations of the
Company, have been done.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, and for the purpose of setting forth, as provided in the
Indenture, the form and substance of the Notes and the terms, provisions, and
conditions thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Notes, as follows:
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ARTICLE I.
GENERAL TERMS AND CONDITIONS OF THE NOTES
SECTION 1.01 ESTABLISHMENT OF NOTES.
(a) INITIAL NOTES. There shall be and are hereby
authorized two series of Securities as follows:
Designation Principal Amount
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7.43% Series C Secured Notes due 2009 $150,000,000
7.88% Series C Secured Notes due 2017 $300,000,000
The Initial Notes shall mature and the principal thereof shall be due and
payable together with all accrued and unpaid interest thereon on the following
dates:
Series Maturity Date
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Initial 2009 Notes November 1, 2009
Initial 2017 Notes November 1, 2017
The Initial Notes are being offered and sold by the Company pursuant to the
Placement Agreement and shall be issued in the form of registered Initial Notes
without interest coupons. Principal of, and premium, if any, and interest on the
Initial Notes will be payable, the transfer of Initial Notes will be registrable
and Initial Notes will be exchangeable for Exchange Notes bearing identical
terms and provisions (except with respect to transfer restrictions), at the
office or agency of the Company in the Borough of Manhattan, The City and State
of New York; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the registered holder at such address
as shall appear in the Security Register.
(b) EXCHANGE NOTES. There shall be and are hereby authorized
two series of Securities as follows:
Designation Principal Amount
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7.43% Series D Secured Notes due 2009 $150,000,000
7.88% Series D Secured Notes due 2017 $300,000,000
The Exchange Notes are issuable only in exchange for the Initial Notes in the
Registered Exchange Offer, as described in the Registration Agreement. The
Exchange Notes shall mature and the principal shall be due and payable together
with all accrued and unpaid interest thereon on the following dates:
Series Maturity Date
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Exchange 2009 Notes November 1, 2009
Exchange 2017 Notes November 1, 2017
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SECTION 1.02 FORM OF INITIAL NOTES, GLOBAL NOTES AND DEFINITIVE
NOTES.
(a) FORM OF INITIAL NOTES. The Initial Notes shall be
substantially in the form of Exhibit A hereto, which is hereby
incorporated in and expressly made a part of this First Supplemental
Indenture.
(b) GLOBAL NOTES.
(i) Initial Notes offered and sold to a QIB in
reliance on Rule 144A under the Securities Act ("Rule 144A"),
as provided in the Placement Agreement, shall be issued
initially in the form of one or more permanent global
securities in definitive, fully registered form without
interest coupons with the global notes legend and the
restricted notes legend set forth in Exhibit A hereto (each, a
"Restricted Global Note"), which shall be deposited on behalf
of the Purchasers with the Trustee, at its New York office, as
Securities Custodian, and registered in the name of the
Depository or a nominee of the Depository, duly executed by
the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of each Restricted
Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the
Depository or its nominee, as the case may be, as hereinafter
provided.
(ii) Initial Notes offered and sold in reliance on
Regulation S under the Securities Act ("Regulation S"), as
provided in the Placement Agreement, shall be issued initially
in the form of one or more permanent global securities in
definitive, fully registered form without interest coupons
with the global notes legend and the restricted notes legend
set forth in Exhibit A hereto (each, a "Regulation S Global
Note" and, together with the Restricted Global Notes, the
"Global Notes"), which shall be deposited on behalf of the
Purchasers with the Trustee, at its New York office, as
Securities Custodian, and registered in the name of the
Depository or a nominee of the Depository, duly executed by
the Company and authenticated by the Trustee as hereinafter
provided. Prior to the 40th day after the Closing Date,
beneficial interests in the Regulation S Global Note may only
be held for the accounts of designated agents holding on
behalf of the Euroclear System ("Euroclear") or Cedel Bank
("Cedel"). Following the 40th day after the Closing Date,
beneficial interests in the Regulation S Global Note may be
held through Euroclear, Cedel or other participants having
accounts at the Depository. The aggregate principal amount of
each Regulation S Global Note may from time to time be
increased or decreased by adjustments made on the records of
the Trustee and the Depository or its nominee, as the case may
be, as hereinafter provided.
(iii) Members of, or participants in, the Depository
("Agent Members") shall have no rights under this First
Supplemental Indenture or the Indenture with respect to any
Global Note held on their behalf by the Depository or by the
Trustee as the Securities Custodian or under such Global Note,
and the Depository may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute
owner of such Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy
or other authorization furnished by the Depository or impair,
as between the Depository and its Agent Members, the operation
of
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customary practices of such Depository governing the exercise
of the rights of a holder of a beneficial interest in any
Global Note.
(iv) The provisions of the "Operating Procedures of
the Euroclear System" and "Terms and Conditions Governing Use
of Euroclear" and the "Management Regulations" and
"Instructions to Participants" of Cedel shall be applicable to
interests in the Regulations S Global Notes that are held by
Agent Members through Euroclear or Cedel. The Trustee shall
have no obligation to notify Holders of any such procedures or
to monitor or enforce compliance with the same.
(c) DEFINITIVE NOTES. Except as provided in this Section 1.02
or Article II, owners of beneficial interests in Global Notes will not
be entitled to receive physical delivery of Initial Notes. Purchasers
of Initial Notes who are Institutional Accredited Investors and are not
QIBs and did not purchase Initial Notes sold in reliance on Regulation
S will receive Definitive Notes; provided, however, that upon transfer
of such Definitive Notes to a QIB or in accordance with Regulation S,
such Definitive Notes will, unless the relevant Global Note has
previously been exchanged, be exchanged for an interest in a Global
Note pursuant to the provisions of Article II.
SECTION 1.03 INTEREST ON THE INITIAL NOTES.
(a) THE INITIAL 2009 NOTES. Each Initial 2009 Note will bear
interest at the rate of 7.43% per annum from October 24, 1997 until the
principal thereof is paid or duly provided for, and on any overdue
principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of
interest at the same rate per annum, payable on May 1 and November 1 of
each year, commencing on May 1, 1998 to the Person in whose name such
Initial 2009 Note or any predecessor Initial Note is registered, at the
close of business on the April 15 or October 15 next preceding such
interest payment date; provided, however, that the interest payable at
maturity will be payable to the Person to whom principal shall be
payable. Interest on each Initial 2009 Note will cease to accrue upon
the exchange of such Note for an Exchange 2009 Note, and if the record
date for the interest payment date next following that exchange occurs
after that exchange, the accrued and unpaid interest on that Initial
2009 Note will be payable to the Person in whose name such Exchange
2009 Note is registered on that record date. Each Initial 2009 Note
will bear Additional Interest as and to the extent required under and
in accordance with Section 1.03(e) hereof.
(b) THE INITIAL 2017 NOTES. Each Initial 2017 Note will bear
interest at the rate of 7.88% per annum from October 24, 1997 until the
principal thereof is paid or duly provided for, and on any overdue
principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of
interest at the same rate per annum, payable on May 1 and November 1 of
each year, commencing on May 1, 1998 to the Person in whose name such
Initial 2017 Note or any predecessor Initial Note is registered, at the
close of business on the April 15 or October 15 next preceding such
interest payment date; provided, however, that the interest payable at
maturity will be payable to the Person to whom principal shall be
payable. Interest on each Initial 2017 Note will cease to accrue upon
the exchange of such Note for an Exchange 2017 Note, and if the record
date for the interest payment date next following that exchange occurs
after that exchange, the accrued and unpaid interest on that Initial
2017 Note will be payable to the Person in whose name such Exchange
2017 Note is registered on that record date. Each Initial
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2017 Note will bear Additional Interest as and to the extent required
under and in accordance with Section 1.03(e) hereof.
(c) DEFAULTED INTEREST ON THE INITIAL NOTES. Any interest
installment on the Initial Notes not punctually paid or duly provided
for shall forthwith cease to be payable to the registered holders on
the Regular Record Date, and may be paid to the Person in whose name
the Initial Note (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date to be fixed by the
Trustee for the payment of such defaulted interest, notice of which
shall be given to the registered holders of the Initial Notes not less
than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements
of any securities exchange on which the Initial Notes may be listed,
and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture.
(d) CALCULATION OF INTEREST ON THE INITIAL NOTES. The amount
of interest or Additional Interest payable for any period on the
Initial Notes will be computed on the basis of a 360 day year of twelve
30-day months. In the event that any date on which interest or
Additional Interest is payable on the Initial Notes is not a Business
Day, then payment of interest or Additional Interest payable on such
date will be made on the next preceding day that is a Business Day.
(e) ADDITIONAL INTEREST UNDER CERTAIN CIRCUMSTANCES.
(i) Additional interest (the "Additional Interest")
with respect to the Initial Notes will accrue as follows if
any of the following events occurs (each event identified in
clause (A), (B) or (C) below, a "Failure to Register"):
(A) If by the 150th day after the date of the original
issue of the Initial Notes (that date of issue, the
"Closing Date"), neither the Exchange Offer
Registration Statement nor a Shelf Registration
Statement has been filed with the Commission;
(B) If by the 180th day after the Closing Date, the
Registered Exchange Offer is not consummated and, if
required in lieu thereof, the Shelf Registration
Statement is not declared effective by the Commission;
or
(C) If, after the 180th day after the Closing Date,
and after either the Exchange Offer Registration
Statement or the Shelf Registration Statement is
declared effective, (1) that Registration Statement
thereafter ceases to be effective prior to completion
of the Exchange Offer or the sale of all the Transfer
Restricted Notes registered pursuant to the Shelf
Registration Statement, as the case may be; or (2)
that Registration Statement or the related prospectus
ceases to be usable in connection with resales of
Transfer Restricted Notes during the periods specified
in the Registration Agreement (except as permitted in
paragraph (ii) of this paragraph (e)) because either
(x) any event occurs as a result of which the related
prospectus forming part of that Registration Statement
would include any untrue statement of a material fact
or omit to state any material fact necessary to make
the statements therein in the light of the
circumstances under which they were made not
misleading, or (y) it shall be necessary to amend that
Registration Statement, or
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supplement the related prospectus, to comply with the
Securities Act or the Exchange Act or the respective
rules thereunder.
Additional Interest shall accrue on the Initial Notes of each
series over and above the interest set forth in the title of the
Initial Notes of that series from and including the date on which any
such Failure to Register shall occur to but excluding the date on which
all such Failures to Register have been cured, at a rate of 0.50% per
annum.
(ii) A Failure to Register referred to in Section
1.03(e)(i)(C) is deemed not to be continuing in relation to a
Registration Statement or the related prospectus if (A) that
Failure to Register has occurred solely as a result of (x) the
filing of a post-effective amendment to that Registration
Statement to incorporate annual audited financial information
with respect to the Company, when such post-effective
amendment is not yet effective and needs to be declared
effective to permit Holders to use the related prospectus or
(y) the occurrence of other material events or developments
with respect to the Company or its Affiliates that would need
to be described in that Registration Statement or the related
prospectus, and (B) in the case of clause (y), the Company is
proceeding promptly and in good faith to amend or supplement
that Registration Statement and related prospectus to describe
those events or, in the case of material developments that the
Company determines in good faith must remain confidential for
business reasons, the Company is proceeding promptly and in
good faith to take such steps as are necessary so that those
developments need no longer remain confidential, but in any
case, if any Failure to Register (including any referred to in
clause (x) or (y), above) continues for a period in excess of
45 days, Additional Interest will be payable in accordance
with the above paragraph from the day following the last day
of that 45-day period until the date on which that Failure to
Register is cured.
(iii) Any Additional Interest payable will be payable
on the regular interest payment dates with respect to the
Initial Notes, in the same manner as the manner in which
regular interest is payable. The amount of Additional Interest
for any period will be determined by multiplying the
applicable Additional Interest rate by the principal amount of
the applicable Initial Notes, multiplied by a fraction, the
numerator of which is the number of days that Additional
Interest rate was applicable during that period (determined on
the basis of a 360-day year comprised of twelve 30-day
months), and the denominator of which is 360.
(iv) For all purposes of the Indenture, this First
Supplemental Indenture and the Initial Notes, the Trustee is
permitted to assume for all purposes that Additional Interest
is not due in respect of an Initial Note until such time as
the Company shall deliver an Officer's Certificate to the
Trustee stating that Additional Interest is due in respect of
one or more series of Initial Notes (such Officer's
Certificate to also state the date on which Additional
Interest began to accrue). Upon receipt of such an Officer's
Certificate, the Trustee is permitted to assume for all
purposes that Additional Interest shall be due as set forth in
such Officer's Certificate until such time as such Officer's
Certificate shall be superseded by a subsequent Officer's
Certificate pursuant to this Section 1.03 stating that
Additional Interest is no longer due in respect of the Initial
Notes (such Officer's Certificate to also state the date on
which Additional Interest ceased to accrue). Absent receipt by
it of
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an Officer's Certificate specifying that Additional Interest
has begun accruing or an Officer's Certificate that Additional
Interest is no longer accruing, the Trustee shall not be
charged with knowledge of such matters unless a Responsible
Officer of the Trustee assigned to the Corporate Trustee
Administration of the Trustee (or any successor division or
department of the Trustee) shall have actual knowledge that a
Failure to Register has occurred and is continuing, or has
been cured, as applicable.
SECTION 1.04 THE EXCHANGE NOTES. The Exchange Notes shall be
substantially in the form of, and contain the terms and provisions set forth in,
Exhibit B hereto, which is hereby incorporated in and expressly made a part of
this First Supplemental Indenture. The Trustee shall authenticate and deliver
Exchange Notes of any series for issue only in a Registered Exchange Offer
pursuant to the Registration Agreement, for a like principal amount of Initial
Notes of the series bearing interest at the same rate, in each case pursuant to
a Company Order. Such Company Order shall specify the series and the amount of
the Exchange Notes to be authenticated and the date on which the original issue
of such Exchange Notes is to be authenticated. Prior to authenticating and
delivering Exchange Notes pursuant to this Section 1.04, the Trustee may request
that the Company deliver an Officer's Certificate and/or an Opinion of Counsel
stating that the Exchange Notes are being issued pursuant to an effective
registration statement in accordance with the Registration Agreement. Except as
provided in the Indenture, the aggregate principal amount of Notes outstanding
at any time may not exceed (x) $150,000,000 with respect to the Initial 2009
Notes and the Exchange 2009 Notes and (y) $300,000,000 with respect to the
Initial 2017 Notes and the Exchange 2017 Notes. If an Exchange Note is
authenticated and delivered in exchange for an Initial Note between a record
date for the payment of interest on that Initial Note and the related interest
payment date, the interest that accrues on such Exchange Note from the date of
authentication thereof to that interest payment date shall be payable to the
Person in whose name such Exchange Note was issued on its issuance date.
SECTION 1.05 INTEREST ON THE EXCHANGE NOTES.
(a) THE EXCHANGE 2009 NOTES. Each Exchange 2009 Note will bear
interest at the rate of 7.43% per annum from its date of authentication
until the principal thereof is paid or duly provided for, and on any
overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of
interest at the same rate per annum, payable on May 1 and November 1 of
each year, commencing on May 1, 1998 to the Person in whose name such
Exchange 2009 Note or any predecessor Exchange Note is registered, at
the close of business on the April 15 or October 15 next preceding such
interest payment date; provided, however, that the interest payable at
maturity will be payable to the Person to whom principal shall be
payable.
(b) THE EXCHANGE 2017 NOTES. Each Exchange 2017 Note will bear
interest at the rate of 7.88% per annum from its date of authentication
until the principal thereof is paid or duly provided for, and on any
overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of
interest at the same rate per annum, payable on May 1 and November 1 of
each year, commencing on May 1, 1998 to the Person in whose name such
Exchange 2017 Note or any predecessor Exchange Note is registered, at
the close of business on the April 15 or October 15 next preceding such
interest payment date; provided, however, that the interest payable at
maturity will be payable to the Person to whom principal shall be
payable.
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(c) DEFAULTED INTEREST ON THE EXCHANGE NOTES. Any interest
installment on the Exchange Notes not punctually paid or duly provided
for shall forthwith cease to be payable to the registered holders on
the Regular Record Date, and may be paid to the Person in whose name
the Exchange Note (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date to be fixed by the
Trustee for the payment of such defaulted interest, notice of which
shall be given to the registered holders of the Exchange Notes not less
than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements
of any securities exchange on which the Exchange Notes may be listed,
and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture.
(d) CALCULATION OF INTEREST ON THE EXCHANGE NOTES. The amount
of interest payable for any period on the Exchange Notes will be
computed on the basis of a 360 day year of twelve 30-day months. In the
event that any date on which interest is payable on the Exchange Notes
is not a Business Day, then payment of interest payable on such date
will be made on the next preceding day that is a Business Day.
SECTION 1.06 FIRST MORTGAGE BONDS.
(a) The Company hereby delivers to the Trustee, for the
benefit of the holders of the Notes, First Mortgage Bonds, which shall
serve equally and ratably as security for any and all obligations of
the Company under the Notes, including, but not limited to, the payment
of principal and interest on such Notes when and as the same shall
become due and payable. The First Mortgage Bonds so delivered consist
of $150,000,000 principal amount of First Mortgage Bonds, 7.43% Series
Due 2009-D, and $300,000,000 principal amount of First Mortgage Bonds,
7.88% Series Due 2017-B. The aggregate principal amount of the First
Mortgage Bonds being delivered hereunder is subject to reduction in
accordance with the terms of the First Mortgage.
(b) The Trustee acknowledges receipt of and accepts the First
Mortgage Bonds in the aggregate principal amount of $450,000,000, for
the benefit of the holders of the Notes, as security for any and all
obligations of the Company under the Notes, including, but not limited
to, the payment of principal and interest on the Notes when and as the
same shall become due and payable.
SECTION 1.07 OPTIONAL REDEMPTION. (a) At its option, the Company may,
from time to time, redeem all or any part of the Notes, upon notice as provided
in the Indenture 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 discounted to the date of
redemption on a semiannual basis (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Yield plus twenty-five (25) basis points, plus in
each case accrued interest to the date of redemption.
(b) For purposes of this Section 1.07, the following terms
shall have the meanings set forth below:
"Treasury Yield" means, with respect to any redemption date,
the rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
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"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 applicable Notes 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 the applicable Notes. "Independent Investment Banker" means
Xxxxxx Xxxxxxx & Co. Incorporated or, if such firm is unwilling or unable to
select the Comparable Treasury Issue, another independent banking institution of
national standing selected by the Company.
"Comparable Treasury Price" means, with respect to any
redemption date (i) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
on the third business day preceding such redemption date, as set forth in the
daily statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if fewer than four such Reference Treasury Dealer Quotations are obtained,
the average of all such Quotations. "Reference Treasury Dealer Quotations"
means, with respect to each Reference Treasury Dealer and any redemption date,
the average 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 by such Reference Treasury Dealer at 5:00 p.m. on the third business day
preceding such redemption date.
"Reference Treasury Dealer" means each of Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Chase
Securities Inc., and First Chicago Capital Markets, Inc., and their respective
successors; provided, however, that if any of the foregoing shall cease to be a
primary U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary Treasury Dealer.
The Trustee shall be under no duty to inquire into, may conclusively
presume the correctness of, and shall be fully protected in acting upon the
Company's calculation of any redemption price.
(c) For purposes of this Section 1.07: (i) the related series
of First Mortgage Bonds for the Notes Due 2009 is the Company's First
Mortgage Bonds, 7.43% Series Due 2009-D, and (ii) the related series of
First Mortgage Bonds for the Notes Due 2017 is the Company's First
Mortgage Bonds, 7.88% Series Due 2017-B.
(d) When the obligation of the Company to make payments with
respect to the principal of, and premium, if any, and interest on all
or any part of the Note shall be satisfied or deemed satisfied pursuant
to the Indenture or pursuant to Section 1.07 of this First Supplemental
Indenture, the Trustee shall, upon written request of the Company,
deliver to the Company without charge therefor all of the related
Series of First Mortgage Bonds so satisfied or deemed satisfied,
together with such appropriate instruments of transfer or release as
may be reasonably requested by the Company. All First Mortgage Bonds
delivered to the Company in accordance with this Section 1.07(d) shall
be delivered by the Company to the Mortgage Trustee for cancellation.
SECTION 1.08 DEFEASANCE. The Notes shall be defeasible pursuant to
Section 14.02 and Section 14.03 of the Indenture.
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SECTION 1.09 PAYING AGENT. The Chase Manhattan Bank will be the Paying
Agent for the Notes. The Depository Trust Company will be the Depository for the
Notes.
ARTICLE II.
TRANSFER AND EXCHANGE OF NOTES
SECTION 2.01 TRANSFER AND EXCHANGE OF DEFINITIVE NOTES. When Definitive
Notes are presented to the Security Registrar with a request to register the
transfer of such Definitive Notes or to exchange such Definitive Notes for an
equal principal amount of Definitive Notes of other authorized denominations,
the Security Registrar shall register the transfer or make the exchange as
requested if its reasonable requirements for such transaction are met; provided,
however, that the Definitive Notes surrendered for transfer or exchange:
(a) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company
and the Security Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing; and
(b) are being transferred or exchanged pursuant to an
effective registration statement under the Securities Act pursuant to
Section 2.02, or pursuant to clause (i), (ii) or (iii) below, and are
accompanied by the following additional information and documents, as
applicable:
(i) if such Definitive Notes are being delivered to
the Security Registrar by a Holder for registration in the
name of such Holder, without transfer, a certification from
such Holder to that effect (in the form set forth on the
reverse of the Note); or
(ii) if such Definitive Notes are being transferred
to the Company, a certification to that effect (in the form
set forth on the reverse of the Note); or
(iii) if such Definitive Notes are being transferred
(x) pursuant to an exemption from registration in accordance
with Rule 144, (y) in reliance on another exemption from the
registration requirements of the Securities Act or (z) to an
Institutional Accredited Investor that is acquiring the Note
for its own account, or for the account of such an
Institutional Accredited Investor, in each case for investment
purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the
Securities Act: (A) a certification to that effect (in the
form set forth on the reverse of the Note) and (B) in the case
of clause (y), an Opinion of Counsel from such Holder or the
transferee reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act
and (C) in the case of clause (z), if the aggregate principal
amount of such Definitive Notes being transferred is less than
$100,000, an opinion of counsel addressed to the Company as to
the compliance with the restrictions set forth in the legend
set forth in Exhibit A hereto.
SECTION 2.02 RESTRICTIONS ON TRANSFER OF A DEFINITIVE NOTE FOR A
BENEFICIAL INTEREST IN A GLOBAL NOTE. A Definitive Note may not be exchanged for
a beneficial interest in a Global Note except upon
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satisfaction of the requirements set forth below. Upon receipt by the Trustee of
a Definitive Note, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Trustee, together with:
(a) certification, in the form set forth on the reverse of the
Note, that such Definitive Note is being transferred (A) to a QIB in
accordance with Rule 144A, or (B) outside the United States in an
offshore transaction within the meaning of Regulation S and in
compliance with Rule 904 under the Securities Act; and
(b) written instructions directing the Trustee to make, or to
direct the Securities Custodian to make, an adjustment on its books and
records with respect to the Restricted Global Note or the Regulation S
Global Note, as the case may be, to reflect an increase in the
aggregate principal amount of the Notes represented by such Global
Note, such instructions to contain information regarding the Depository
account (or in the case of the Regulation S Global Note only, the
Euroclear or Cedel account) to be credited with such increase,
then the Trustee shall cancel such Definitive Note and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian
(including the rules of Euroclear and Cedel, if applicable), the aggregate
principal amount of Notes represented by the Restricted Global Note or the
Regulation S Global Note, as the case may be, to be increased by the principal
amount of the Definitive Note to be exchanged and shall credit or cause to be
credited to the account of the Person specified in such instructions a
beneficial interest in such Global Note equal to the principal amount of the
Definitive Note so canceled. If no Global Notes are then outstanding, the
Company shall issue and the Trustee shall authenticate, pursuant to a Company
Order, a new Restricted Global Note or Regulation S Global Note, as the case may
be, in the appropriate principal amount.
SECTION 2.03 TRANSFER AND EXCHANGE OF GLOBAL NOTES AND BENEFICIAL
INTERESTS THEREIN.
(a) The transfer and exchange of Global Notes or beneficial
interests therein shall be effected through the Depository in
accordance with this First Supplemental Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures
of the Depository therefor, including the rules and procedures of
Euroclear and Cedel, if applicable. A transferor of a beneficial
interest in a Global Note shall deliver to the Security Registrar a
written order given in accordance with the Depository's procedures
containing information regarding the Euroclear, Cedel or other
participant account of the Depository to be credited with a beneficial
interest in the Global Note. The Security Registrar shall, in
accordance with such instructions instruct the Depository to credit to
the account of the Person specified in such instructions a beneficial
interest in the Global Note and to debit the account of the Person
making the transfer the beneficial interest in the Global Note being
transferred.
Transfers of beneficial interests in the Global Notes to
Persons required to take delivery in the form of an interest in another
Global Note shall be permitted as follows:
(i) Restricted Global Note to Regulation S
Global Note. If, at any time, an owner of a beneficial
interest in a Restricted Global Note deposited with the
Depository (or the Trustee as custodian for the Depository)
wishes to transfer its beneficial
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interest in such Restricted Global Note to a Person who is
required or permitted to take delivery thereof in the form of
an interest in a Regulation S Global Note, such owner shall,
subject to the Depository's procedures, exchange or cause the
exchange of such interest for an equivalent beneficial
interest in a Regulation S Global Note as provided in this
Section 2.03(a)(i). Upon receipt by the Trustee of (1)
instructions given in accordance with the Depository's
procedures from an Agent Member directing the Trustee to
credit or cause to be credited a beneficial interest in the
Regulation S Global Note in an amount equal to the beneficial
interest in the Restricted Global Note to be exchanged, (2) a
written order given in accordance with the Depository's
procedures containing information regarding the Agent Member
account of the Depository and the Euroclear or Cedel account
to be credited with such increase, and (3) a certificate given
by the owner of such beneficial interest stating that the
transfer of such interest has been made in compliance with the
transfer restriction applicable to the Global Notes and
pursuant to and in accordance with Rule 903 or Rule 904 of
Regulation S, then the Security Registrar shall instruct the
Depository to reduce or cause to be reduced the aggregate
principal amount at maturity of the applicable Restricted
Global Note and to increase or cause to be increased the
aggregate principal amount at maturity of the applicable
Regulation S Global Note by the principal amount at maturity
of the beneficial interest in the Restricted Global Note to be
exchanged or transferred, to credit or cause to be credited to
the account of the Person specified in such instructions, a
beneficial interest in the Regulation S Global Note equal to
the reduction in the aggregate principal amount at maturity of
the Restricted Global Note, and to debit, or cause to be
debited, from the account of the Person making such exchange
or transfer the beneficial interest in the Restricted Note
that is being exchanged or transferred.
(ii) Regulation S Global Note to Restricted
Global Note. If, at any time, after the expiration of the
40-day restricted period (as defined in Regulation S), an
owner of a beneficial interest in a Regulation S Global Note
deposited with the Depository or with the Trustee as custodian
for the Depository wishes to transfer its beneficial interest
in such Regulation S Global Note to a Person who is required
or permitted to take delivery thereof in the form of an
interest in a Restricted Global Note, such owner shall,
subject to the Depository's procedures, exchange or cause the
exchange of such interest for an equivalent beneficial
interest of a Restricted Global Note as provided in this
Section 2.03(a)(ii). Upon receipt by the Trustee of (1)
instructions from Euroclear or Cedel, if applicable, and the
Depository, directing the Security Registrar to credit or
cause to be credited a beneficial interest in the Restricted
Global Note equal to the beneficial interest in the Regulation
S Global Note to be exchanged, such instructions to contain
information regarding the Agent Member account with the
Depository to be credited with such increase, (2) a written
order given in accordance with the Depository's procedures
containing information regarding the participant account of
the Depository and (3) a certificate given by the owner of
such beneficial interest stating (A) if the transfer is
pursuant to Rule 144A, that the Person transferring such
interest in a Regulation S Global Note reasonably believes
that the Person acquiring such interest in the Regulation S
Global Note is a QIB and is obtaining such beneficial interest
in a transaction meeting the requirement of Rule 144A and any
applicable blue sky or securities laws of any state of the
United States, (B) that the transfer complies with the
requirements of Rule 144 under the Securities Act, or (C) if
the transfer is pursuant to any other exemption from the
registration requirements of the Securities Act, that the
transfer of such interest has been made in compliance with the
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transfer restrictions applicable to the Global Notes and
pursuant to and in accordance with the requirements of the
exemption claimed, such statement to be supported by an
Opinion of Counsel from the transferee or the transferor in
form reasonably acceptable to the Company and to the Security
Registrar and in each case, in accordance with any applicable
securities laws of any state of the United States or any other
applicable jurisdiction, then the Security Registrar shall
instruct the Depository to reduce or cause to be reduced the
aggregate principal amount at maturity of such Regulation S
Global Note and to increase or cause to be increased the
aggregate principal amount at maturity of the applicable
Restricted Global Note by the principal amount at maturity of
the beneficial interest in the Regulation S Global Note to be
exchanged or transferred, and the Security Registrar shall
instruct the Depository, concurrently with such reduction, to
credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the
applicable Restricted Global Note equal to the reduction in
the aggregate principal amount at maturity of such Regulation
S Global Note and to debit or cause to be debited from the
account of the Person making such transfer the beneficial
interest in the Regulation S Global Note that is being
exchanged or transferred.
(b) Notwithstanding any other provisions of this First
Supplemental Indenture (other than the provisions set forth in Section
2.09), a Global Note may not be transferred as a whole except by the
Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository or by
the Depository or any such nominee to a successor Depository or a
nominee of such successor Depository.
(c) The Company shall advise the Trustee as to the
commencement of the Registered Exchange Offer or the effectiveness of
the Shelf Registration Statement and the Trustee may rely conclusively
thereon.
(d) In the event that a Global Note is exchanged for Notes in
definitive registered form pursuant to this First Supplemental
Indenture or Section 3.05 of the Indenture, prior to the consummation
of a Registered Exchange Offer or the effectiveness of a Shelf
Registration Statement with respect to such Notes, such Notes may be
exchanged only in accordance with such procedures as are substantially
consistent with the provisions of this Section 2.03 (including the
certification requirements set forth on the reverse of the Initial
Notes intended to ensure that such transfers comply with Rule 144A or
Regulation S, as the case may be) and such other procedures as may from
time to time be adopted by the Company.
SECTION 2.04 TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL NOTE FOR A
DEFINITIVE NOTE.
(a) Subject to Section 2.03(b), any Person having a beneficial
interest in a Transfer Restricted Note that is a Global Note may
transfer such beneficial interest to an Institutional Accredited
Investor that is acquiring the Note for its own account, or for the
account of such an Institutional Accredited Investor, in each case for
investment purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the Securities Act;
provided, however, that any written order or such other form of
instructions as is customary for the Depository, from the Depository or
its nominee on behalf of any Person having a beneficial interest in
such Global Note shall be accompanied by (i) a certification from the
transferee or transferor with respect to the transfer (in the form set
forth on the reverse of the Note) and such other
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certifications as the Trustee may reasonably request and (ii) if the
aggregate principal amount of the applicable Global Note being
transferred is less than $100,000, an opinion of counsel addressed to
the Company as to the compliance with the restrictions set forth in the
legend described in Section 2.05(a). Upon receipt by the Trustee of
such information and documents, the Trustee or the Securities
Custodian, at the direction of the Trustee, will cause, in accordance
with the standing instructions and procedures existing between the
Depository and the Securities Custodian, including the rules and
procedures of Euroclear or Cedel, if applicable, the aggregate
principal amount of the applicable Global Note to be reduced on its
books and records and, following such reduction, the Company will
execute and the Trustee will authenticate and deliver to the transferee
a Definitive Note.
(b) Definitive Notes issued in exchange for a beneficial
interest in a Global Note pursuant to this Section 2.04 shall be
registered in such names and in such authorized denominations as
Euroclear or Cedel, if applicable, and the Depository, pursuant to
instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such Definitive
Notes to the Persons in whose names such Notes are so registered in
accordance with the instructions of the Depository.
SECTION 2.05 LEGENDS.
(a) Except as permitted by the following paragraphs (b), (c)
and (d), each Note certificate evidencing the Global Notes and the
Definitive Notes (and all Notes issued in exchange or in substitution
therefor) shall bear the restricted notes legend set forth in Exhibit A
hereto ("Restricted Notes Legend").
(b) Upon any sale or transfer of a Transfer Restricted Note
(including any Transfer Restricted Note represented by a Global Note)
pursuant to Rule 144 under the Securities Act:
(i) in the case of any Transfer Restricted Note that
is a Definitive Note, the Security Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Note for a certificated
Note that does not bear the Restricted Notes Legend and rescind any
restriction on the transfer of such Transfer Restricted Note; and
(ii) in the case of any Transfer Restricted Note that
is represented by a Global Note, the Security Registrar shall permit
the Holder thereof to exchange such Transfer Restricted Note for a
certificated Note that does not bear the Restricted Notes Legend and
rescind any restriction on the transfer of such Transfer Restricted
Note, if the Holder certifies in writing to the Security Registrar that
its request for such exchange was made in reliance on Rule 144 (such
certification to be in the form set forth on the reverse of the Note).
(c) After a transfer of any Initial Notes under and in the
manner described in a Shelf Registration Statement with respect to such
Initial Notes, all requirements pertaining to legends on such Initial
Note will cease to apply, the requirements requiring any such Initial
Note issued to certain Holders to be issued in global form will cease
to apply, and a certificated Initial Note without legends will be
available to the transferee of the Holder of such Initial Notes upon
exchange of such transferring Holder's certificated Initial Note or
directions to transfer such Holder's interest in the Global Note, as
applicable.
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(d) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Notes pursuant to which Holders of such Initial
Notes are offered Exchange Notes in exchange for their Initial Notes,
all requirements pertaining to such Initial Notes that Initial Notes
issued to certain Holders be issued in global form will cease to apply
and certificated Initial Notes with the Restricted Notes Legend set
forth in Exhibit A hereto will be available to Holders of such Initial
Notes that do not exchange their Initial Notes, and Exchange Notes in
certificated or global form will be available to Holders that exchange
such Initial Notes in such Registered Exchange Offer.
SECTION 2.06 CANCELLATION OR ADJUSTMENT OF GLOBAL NOTE. At such time as
all beneficial interests in a Global Note have either been exchanged for
certificated Notes, redeemed, repurchased or canceled, such Global Note shall be
returned to the Depository for cancellation or retained and canceled by the
Trustee. At any time prior to such cancellation, if any beneficial interest in a
Global Note is exchanged for certificated Notes, redeemed, repurchased or
canceled, the principal amount of Notes represented by such Global Note shall be
reduced and an adjustment shall be made on the books and records of the Trustee
(if it is then the Securities Custodian for such Global Note) with respect to
such Global Note, by the Trustee or the Securities Custodian, to reflect such
reduction.
SECTION 2.07 OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF
NOTES.
(a) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Definitive
Notes and Global Notes at the Security Registrar's request.
(b) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith.
(c) Prior to the due presentation for registration of transfer
of any Note, the Company, the Trustee, the Paying Agent or the Security
Registrar may deem and treat the Person in whose name a Note is
registered as the absolute owner of such Note for the purpose of
receiving payment of principal of and interest on such Note and for all
other purposes whatsoever, whether or not such Note is overdue, and
none of the Company, the Trustee, the Paying Agent or the Security
Registrar shall be affected by notice to the contrary.
(d) All Notes issued upon any transfer or exchange pursuant to
the terms of this First Supplemental Indenture and the Indenture shall
evidence the same debt and shall be entitled to the same benefits under
this First Supplemental Indenture and the Indenture as the Notes
surrendered upon such transfer or exchange.
SECTION 2.08 NO OBLIGATION OF THE TRUSTEE.
(a) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Note, a member of, or a participant in
the Depository or other Person with respect to the accuracy of the
records of the Depository or its nominee or of any participant or
member thereof, with respect to any ownership interest in the Notes or
with respect to the delivery to any participant, member, beneficial
owner or other Person (other than the Depository) of any notice
(including any notice of redemption) or the payment of any amount,
under or with respect to such Notes. All
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notices and communications to be given to the Holders and all payments
to be made to Holders under the Notes shall be given or made only to or
upon the order of the registered Holders (which shall be the Depository
or its nominee in the case of a Global Note). The rights of beneficial
owners in any Global Note shall be exercised only through the
Depository subject to the applicable rules and procedures of the
Depository. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to
its members, participants and any beneficial owners.
(b) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this First Supplemental Indenture or the Indenture or
under applicable law with respect to any transfer of any interest in
any Note (including any transfers between or among Depository
participants, members or beneficial owners in any Global Note) other
than to require delivery of such certificates and other documentation
or evidence as are expressly required by, and to do so if and when
expressly required by, the terms of this First Supplemental Indenture
or the Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
SECTION 2.09 ISSUANCE OF DEFINITIVE NOTES.
(a) A Global Note deposited with the Depository or with the
Securities Custodian pursuant to Section 1.02 shall be transferred to
the beneficial owners thereof in the form of Definitive Notes in an
aggregate principal amount equal to the principal amount of such Global
Note, in exchange for such Global Note, only if such transfer complies
with Section 2.03 and (i) the Depository notifies the Company that it
is unwilling or unable to continue as Depository for such Global Note
or if at any time such Depository ceases to be a "clearing agency"
registered under the Exchange Act and a successor depositary is not
appointed by the Company within 90 days of such notice, (ii) an Event
of Default has occurred and is continuing or (iii) the Company, in its
sole discretion, notifies the Trustee in writing that it elects to
cause the issuance of Definitive Notes under this First Supplemental
Indenture.
(b) Any Global Note that is transferable to the beneficial
owners thereof pursuant to this Section 2.09 shall be surrendered by
the Depository to the Trustee located in New York, New York, to be so
transferred, in whole or from time to time in part, without charge, and
the Trustee shall authenticate and deliver, upon such transfer of each
portion of such Global Note, an equal aggregate principal amount of
Definitive Notes of authorized denominations. Any portion of a Global
Note transferred pursuant to this Section 2.09 shall be executed,
authenticated and delivered only in denominations of $1,000 and any
integral multiple thereof and registered in such names as the
Depository shall direct. Any Definitive Note delivered in exchange for
an interest in the Global Note shall, except as otherwise provided by
Section 2.05, bear the restricted notes legend set forth in Exhibit A
hereto.
(c) Subject to the provisions of this Section 2.09, the
registered Holder of a Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action that a Holder is
entitled to take under this First Supplemental Indenture or the
Indenture or the Notes.
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(d) In the event of the occurrence of any of the events
specified in Section 2.09(a), the Company will promptly make available
to the Trustee a reasonable supply of Definitive Notes in definitive,
fully registered form without interest coupons.
ARTICLE III.
DEFINITIONS
SECTION 3.01 DEFINITIONS. For the purposes of this First Supplemental
Indenture the following terms shall have the meanings indicated below:
"Definitive Note" means a certificated Initial Note which may be held
by an Institutional Accredited Investor in accordance with Section 1.02(c).
"Depository" means The Depository Trust Company, New York, New York,
its nominees and their respective successors.
"Exchange Notes" has the meaning set forth in the second paragraph
under "RECITALS OF THE COMPANY."
"Exchange Offer Registration Statement" has the meaning set forth in
Section 1 of the Registration Agreement.
"Institutional Accredited Investor" means an institutional "accredited
investor" as described in Rule 501(a) (1), (2), (3) or (7) under the Securities
Act.
"Paying Agent" means The Chase Manhattan Bank.
"Placement Agreement" means the Placement Agreement dated October 16,
1997 between the Company and the Purchasers.
"Purchasers" means Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, Chase Securities Inc., First Chicago
Capital Markets, Inc., XxXxxxxx & Company Securities, Inc., and TD Securities
(USA) Inc.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registered Exchange Offer" means the offer by the Company, pursuant to
the Registration Agreement, to certain Holders of Initial Notes, to issue and
deliver to such Holders, in exchange for the Initial Notes, a like aggregate
principal amount of Exchange Notes registered under the Securities Act.
"Registration Agreement" means the Registration Agreement dated October
24, 1997 between the Company and the Purchasers.
"Registration Statement" means each of the Exchange Offer Registration
Statement and the Shelf Registration Statement.
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"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a Global
Note (as appointed by the Depository), or any successor Person thereto and shall
initially be the Trustee.
"Shelf Registration Statement" means any registration statement filed
by the Company in connection with the offer and sale of Initial Notes pursuant
to the Registration Agreement.
"Transfer Restricted Notes" means each Definitive Note and each Note
that bears or is required to bear the legend described in Section 2.05 until (i)
the date on which that Note has been exchanged by a person other than a
broker-dealer for a freely transferrable Exchange Note in the Registered
Exchange Offer; (ii) following the exchange by a broker-dealer in the Registered
Exchange Offer of a Transfer Restricted Note for an Exchange Note, the date on
which that Exchange Note is sold to a purchaser who receives from that
broker-dealer on or prior to the date of that sale a copy of the prospectus
contained in the Exchange Offer Registration Statement; (iii) the date on which
that Note has been effectively registered under the Securities Act and disposed
of in accordance with the Shelf Registration Statement; or (iv) the date on
which that Note is distributed to the public pursuant to Rule 144 under the
Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act.
ARTICLE IV.
SUNDRY PROVISIONS
SECTION 4.01 TERMS. Except as otherwise expressly provided in this
First Supplemental Indenture or in the forms of Notes or otherwise clearly
required by the context hereof or thereof, all terms used herein or in said
forms of Notes that are defined in the Indenture shall have the several meanings
respectively assigned to them thereby.
SECTION 4.02 INDENTURE. This First Supplemental Indenture shall be
deemed part of the Indenture in the manner and to the extent herein and therein
provided.
SECTION 4.03 TRUSTEE. The Trustee hereby accepts the trusts herein
declared, provided, created, supplemented, or amended and agrees to perform the
same upon the terms and conditions herein and in the Indenture, as heretofore
and hereafter supplemented and amended, set forth and upon the following terms
and conditions: the Trustee shall not be responsible in any manner whatsoever
for or in respect of the validity or sufficiency of this First Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made by the Company solely. In general, each and every term and
condition contained in Article VII of the Indenture shall apply to and form part
of this First Supplemental Indenture with the same force and effect as if the
same were herein set forth in full. If there is a conflict in the terms of the
Indenture and this First Supplemental Indenture that affects the Trustee's
rights and obligations, then the terms of the Indenture shall govern.
SECTION 4.04 COUNTERPARTS. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the day and year first above
written.
THE CLEVELAND ELECTRIC
ILLUMINATING COMPANY
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
THE CHASE MANHATTAN BANK, as Trustee
By:
-----------------------------------
Name:
-----------------------------------
Title:
----------------------------------
S-1
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[FORM OF FACE OF INITIAL NOTE]
[___% Series C Secured Note Due ____]
THE CLEVELAND ELECTRIC ILLUMINATING COMPANY
No............... $ .............
CUSIP No.
--------------
The Cleveland Electric Illuminating Company hereby promises to pay to ,
or registered assigns, the principal sum of.......................Dollars
on .......................
Interest Payment Dates: May 1 and November 1, commencing May 1, 1998.
Record Dates: April 15 and October 15.
Reference is hereby made to the further provisions of this Note
attached hereto which further provisions shall for all purposes have the same
effect as if set forth in this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officer.
Dated:
--------------------------------
THE CLEVELAND ELECTRIC ILLUMINATING
COMPANY
By:
-----------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By:
-------------------------------
Name:
Title:
Date of Authentication:
-----------
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EXHIBIT A
[FORM OF REVERSE SIDE OF INITIAL NOTE]
[___% Series C Secured Note Due ____]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENTS 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 TO 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 INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Notes Legend]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT), OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT, IF IT IS A
PURCHASER OTHER THAN A FOREIGN PURCHASER OUTSIDE THE UNITED STATES, IT WILL NOT,
WITHIN THE TIME PERIOD REFERRED TO IN RULE 144(k) UNDER THE SECURITIES ACT AS IN
EFFECT WITH RESPECT TO SUCH TRANSFER, RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE CLEVELAND ELECTRIC ILLUMINATING COMPANY ("COMPANY"), (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF NOTES AT THE TIME OF TRANSFER
A-2
23
EXHIBIT A
OF LESS THAN $100,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD
REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE SIDE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS
SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS.
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. The Cleveland Electric Illuminating Company, a corporation
duly organized and existing under the laws of the State of Ohio ("CLEVELAND
ELECTRIC" or the "COMPANY", which term includes any successor Person under the
Indenture hereinafter referred to), hereby promises to pay interest on the
principal amount of this Note and Additional Interest, if any. The Company will
pay interest from the later of October 24, 1997 or the most recent Interest
Payment Date to which interest has been paid or duly provided for, semiannually
on May 1 and November 1 in each year, commencing May 1, 1998, at the rate of
___% per annum, until the principal and premium, if any, hereof is paid or made
available for payment and will pay Additional Interest, if any. The interest and
any Additional Interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Note (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the April 15 or October 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest or Additional 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
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice of
which shall be given to Holders of Notes 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 on
which the Notes of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
A-3
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EXHIBIT A
Interest on this Note shall cease to accrue upon the exchange of this
Note for an Exchange Note in like principal amount and having substantially
identical terms to this Note pursuant to a Registered Exchange Offer. If the
record date for the interest payment date next following the exchange of this
Note occurs after the exchange of this Note, the accrued and unpaid interest on
this Note will be payable to the Person in whose name the Exchange Note is
registered on that record date.
The amount of interest or Additional Interest payable for any period
will be computed on the basis of a 360 day year of twelve 30-day months. In the
event that any date on which interest or Additional Interest is payable on this
Note is not a Business Day, then payment of interest or Additional Interest
payable on such date will be made on the next preceding day that is a Business
Day.
2. METHOD OF PAYMENT. Payment of the principal of (and premium, if
any), interest and Additional Interest, if any, on this Note will be made at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, New York, New York, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts or, at the option of the Company payment of interest or Additional
Interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register; provided that
payment by wire transfer of immediately available funds shall be required with
respect to principal of, and interest and Additional Interest, if any, on all
Global Notes and all other Notes the Holders of which shall have provided
written wire transfer instructions to the Company or the Paying Agent.
3. PAYING AGENT AND SECURITY REGISTRAR. Initially, the Trustee shall
act as the Paying Agent and Security Registrar. The Company may change any
Paying Agent or Security Registrar without notice to any Holder.
The Company or any of its Affiliates may act in any such capacity.
4. INDENTURE. This Note is one of a duly authorized issue of Securities
of the Company (herein called the "NOTES"), issued and to be issued in one or
more series under an Indenture, dated as of October 24, 1997 (herein called the
"INDENTURE", which term shall have the meaning assigned to it in such
instrument), between the Company and The Chase Manhattan Bank, as Trustee
(herein called the "TRUSTEE", which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Notes and of the terms upon
which the Notes are, and are to be, authenticated and delivered. This Note is
one of the series designated on the face hereof, limited in aggregate principal
amount to $____________.
5. SECURITY. This Note will be secured equally and ratably by First
Mortgage Bonds (the "FIRST MORTGAGE BONDS") delivered by the Company to the
Trustee for the benefit of the Holders of the Notes. Such First Mortgage Bonds
shall be issued under the Mortgage and Deed of Trust between Cleveland Electric
and Guaranty Trust Company of New York (now The Chase Manhattan Bank as
successor trustee), as trustee (the "MORTGAGE TRUSTEE"), dated as of July 1,
1940, as supplemented and amended from time to time (the "FIRST MORTGAGE").
Reference is made to the First Mortgage for a description of property mortgaged
and pledged thereunder, the nature and extent of the security, the rights of the
holders of first mortgage bonds under the First Mortgage and of the Mortgage
Trustee in respect thereof, the duties and immunities of the Mortgage Trustee
and the terms and conditions upon which the First Mortgage Bonds are secured and
the circumstances under which additional first mortgage bonds may be issued
under the First Mortgage.
A-4
25
EXHIBIT A
6. REGISTRATION. Pursuant to the Registration Agreement by and between
the Company and the Purchasers, the Company will be obligated to consummate an
exchange offer pursuant to which the Holders of the Notes shall have the right
to exchange the Notes for ___% Series D Secured Notes Due ____, of the Company,
which are to be registered under the Securities Act, in like principal amount
and having identical terms as the Notes except with respect to transfer
restrictions. If the Exchange Offer is not accomplished, the Company will be
obligated to file a shelf registration statement to cover resales of the Notes
under certain circumstances. The Holders of the Notes shall be entitled to
receive certain additional interest payments in the event such exchange offer is
not consummated, the shelf registration statement is not filed and upon certain
other conditions, all pursuant to and in accordance with the terms of the
Registration Agreement.
7. REDEMPTION. At any time at the option of the Company, the Notes of
this series are subject to redemption, in whole or in part from time to time,
upon not less than 30 days' notice by mail, 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
discounted to the date of redemption on a semiannual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Yield plus twenty-five
(25) basis points, plus in each case accrued interest to the date of redemption.
"Treasury Yield" means, with respect to any redemption date,
the rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
"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 applicable Notes 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 the applicable Notes. "Independent Investment Banker" means
Xxxxxx Xxxxxxx & Co. Incorporated or, if such firm is unwilling or unable to
select the Comparable Treasury Issue, another independent banking institution of
national standing selected by the Company.
"Comparable Treasury Price" means, with respect to any
redemption date (i) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
on the third business day preceding such redemption date, as set forth in the
daily statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if fewer than four such Reference Treasury Dealer Quotations are obtained,
the average of all such Quotations. "Reference Treasury Dealer Quotations"
means, with respect to each Reference Treasury Dealer and any redemption date,
the average 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 by such Reference Treasury Dealer at 5:00 p.m. on the third business day
preceding such redemption date.
A-5
26
EXHIBIT A
"Reference Treasury Dealer" means each of Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Chase
Securities Inc., and First Chicago Capital Markets, Inc., and their respective
successors; provided however, that if any of the foregoing shall cease to be a
primary U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary Treasury Dealer.
If notice has been given as provided in the Indenture and
funds for the redemption of any Notes (or any portion thereof) called for
redemption shall have been made available on the redemption date referred to in
such notice, such Notes (or any portion thereof) will cease to bear interest on
the date fixed for such redemption specified in such notice and the only right
of the Holders of such Notes will be to receive payment of the Redemption Price.
Notice of any optional redemption of Notes of this series (or
any portion thereof) will be given to Holders at their addresses, as shown in
the security register for such Notes, not more than 60 nor less than 30 days
prior to the date fixed for redemption. The notice of redemption will specify,
among other items, the redemption price and the principal amount of the Notes
held by such Holder to be redeemed. If less than all of the Notes are to be
redeemed at the option of the Company, the Trustee shall select, in such manner
as it shall deem fair and appropriate, the portion of such Notes to be redeemed
in whole or in part as provided in the Indenture.
In the event of redemption of this Note in part only, a new
Note or Notes of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.
The Company shall not be required to make mandatory redemption
or sinking fund payments with respect to the Notes.
8. DEFAULT AND REMEDIES. If an Event of Default with respect to Notes
of this series 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 and, upon such declaration, the Trustee can demand the acceleration of
the payment of principal of the First Mortgage Bonds as provided in the
Indenture.
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 of this series, the Holders of not less than a majority in principal
amount of the Notes of this series 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 Notes of this series 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 any premium or interest
hereon on or after the respective due dates expressed herein.
A-6
27
EXHIBIT A
9. AMENDMENT, SUPPLEMENT AND WAIVER. 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 Notes 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 Notes 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 Notes of each series at the
time Outstanding, on behalf of the Holders of all Notes of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange therefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
10. DENOMINATIONS, TRANSFER AND EXCHANGE. The Notes of this series are
issuable only in registered form without coupons in denominations of $1,000 and
any integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Notes of this series are exchangeable for
a like aggregate principal amount of Notes of this series and of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same.
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.
11. PERSONS DEEMED OWNERS. Prior to due presentment of this Note for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Note is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
12. UNCLAIMED MONEY. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee or Paying Agent shall pay the money
back to the Company at its request unless an abandoned property law designates
another person. After any such payment, Holders entitled to any portion of such
money must look only to the Company, and not to the Trustee or Paying Agent, for
payment as general creditors, or, as applicable law designates, another person.
13. TRUSTEE DEALINGS WITH THE COMPANY. Subject to certain limitations
imposed by the Trust Indenture Act, the Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of the Notes,
and may otherwise deal with and collect obligations owed to it by the Company or
its Affiliates and may otherwise deal with the Company or its Affiliates with
the same rights it would have if it were not Trustee.
14. DISCHARGE PRIOR TO MATURITY. The Company's obligations pursuant to
the Indenture will be discharged, except for obligations pursuant to certain
sections thereof, subject to the terms of the Indenture, upon the payment of all
the Securities or upon the irrevocable deposit with the Trustee of money or U.S.
Government Obligations sufficient to pay when due the principal of and interest
on the Notes to maturity.
A-7
28
EXHIBIT A
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Note or certain restrictive covenants and Events of
Default with respect to this Note, in each case upon compliance with certain
conditions set forth in the Indenture.
15. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to the Holders. No representation is
made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
16. NO RECOURSE AGAINST OTHERS. No director, officer, employee, or
stockholder of the Company shall have any liability for any obligation of the
Company under the Notes or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. By accepting a Note, each
Holder hereof waives and releases all such liability. The waiver and release are
part of the consideration for the issue of this Note.
17. AUTHENTICATION. Unless the certificate of authentication hereon has
been executed by the Trustee, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
The Company shall furnish to any Holder upon written request
and without charge a copy of the Indenture or the Registration Agreement.
Requests may be made to:
Xxxxx X. Xxxxxx, Secretary
Centerior Energy Corporation
X.X. Xxx 00000
Xxxxxxxxx, Xxxx 00000-0000
A-8
29
EXHIBIT A
--------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
--------------------------------------------------------------------------------
(Insert assignee's Soc. Sec. or Tax I.D. No.)
And irrevocably appoint_________________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
--------------------------------------------------------------------------------
Date:_____________________ Your Signature:___________________________
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Note.
In connection with any transfer of any of the Notes evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act of 1933 after the later of the date of original
issuance of such Notes and the last date, if any, on which such Notes were owned
by the Company or any Affiliate of the Company, the undersigned confirms that
such Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) [ ] inside the United States to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of
1933) that purchases for its own account or for the account of
a qualified institutional buyer to whom notice is given that
such transfer is being made in reliance on Rule 144A, in each
case pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
(4) [ ] outside the United States in an offshore transaction
within the meaning of Regulation S under the Securities Act in
compliance with Rule 904 under the Securities Act of 1933; or
A-9
30
EXHIBIT A
(5) [ ] inside the United States to an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act of 1933) that, prior to
such transfer, furnishes to the Trustee a signed letter
containing certain representations and agreements (the form of
which letter can be obtained from the Trustee) and, if such
transfer is in respect of an aggregate principal amount of
Notes at the time of transfer of less than $100,000, an
opinion of counsel acceptable to the Company that such
transfer is in compliance with the restrictions set forth in
the legend on the Notes; or
(6) [ ] pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered holder thereof; provided, however, that if box (4), (5) or (6) is
checked, the Trustee may require, prior to registering any such transfer of the
Notes, such legal opinions, certifications and other information as the Company
has reasonably requested to confirm that such transfer is being made pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided by
Rule 144 under such Act.
-----------------------------------------
Signature
-------------------------- -----------------------------------------
Signature Guarantee: (Signature must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Security
Registrar, which requirements include
membership or participation in the
Security Transfer Agent Medallion Program
("STAMP") or such other "signature
guarantee program" as may be determined
by the Security Registrar in addition to,
or in substitution for, STAMP, all in
accordance with the Securities Exchange
Act of 1934, as amended.)
A-10
31
EXHIBIT A
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Note for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated: ____________________ ----------------------------------------------
NOTICE: To be executed by an executive officer
A-11
32
EXHIBIT A
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have
been made:
Principal amount of
Amount of decrease in Amount of increase in this Global Note Signature of authorized
Date of Principal Amount of Principal Amount of following such officer of Trustee or
Exchange this Global Note this Global Note decrease or increase Securities Custodian
-------- --------------------- --------------------- -------------------- -----------------------
A-12
33
[FORM OF FACE OF EXCHANGE NOTE]
[____% Series D Secured Note Due ____]
THE CLEVELAND ELECTRIC ILLUMINATING COMPANY
No. .............. $ .............
CUSIP No. ____________
The Cleveland Electric Illuminating Company hereby promises to pay
to................. ,or registered assigns, the principal sum of
........................................... Dollars on ...................
Interest Payment Dates: May 1 and November 1, commencing May 1, 1998.
Record Dates: April 15 and October 15.
Reference is hereby made to the further provisions of this Note
attached hereto which further provisions shall for all purposes have the same
effect as if set forth in this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officer.
Dated: ___________________
THE CLEVELAND ELECTRIC ILLUMINATING
COMPANY
By:
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the
series designated therein referred to in
the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By:
------------------------------------
Name:
Title:
Date of Authentication: _______________
34
EXHIBIT B
[FORM OF REVERSE SIDE OF EXCHANGE NOTE]
[___% Series D Secured Note Due ____]
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. The Cleveland Electric Illuminating Company, a corporation
duly organized and existing under the laws of the State of Ohio ("CLEVELAND
ELECTRIC" or the "COMPANY", which term includes any successor Person under the
Indenture hereinafter referred to), hereby promises to pay interest on the
principal amount of this Note from the date of authentication of this Note.
Interest shall be payable semiannually on May 1 and November 1 in each year,
commencing May 1, 1998, at the rate of ___% per annum, until the principal and
premium, if any, hereof is paid or made available for payment. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose name this
Note (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be the April
15 or October 15 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. If this Note is authenticated and
delivered in exchange for an Initial Note between a record date for the payment
of interest on that Initial Note and the related interest payment date, the
interest that accrues on this Note from the date of authentication hereof to
that interest payment date shall be payable to the Person in whose name this
Note was issued on its issuance date. Any interest on this Note not 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 Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Notes 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 on which the Notes of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture.
The amount of interest payable for any period will be computed on the
basis of a 360 day year of twelve 30-day months. In the event that any date on
which interest is payable on this Note is not a Business Day, then payment of
interest payable on such date will be made on the next preceding day that is a
Business Day.
2. METHOD OF PAYMENT. Payment of the principal of, and premium, if any,
and interest on this Note will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, New York, New York, in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts or, at the option of the
Company payment of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall
----------
1. If the Note is to be issued in global form add the global notes legend
from Exhibit A and the attachment from such Exhibit A captioned "TO BE
ATTACHED TO GLOBAL NOTES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL
NOTE."
B-2
35
EXHIBIT B
appear in the Security Register; provided that payment by wire transfer of
immediately available funds shall be required with respect to principal of and
interest on all Global Notes and all other Notes the Holders of which shall
have provided written wire transfer instructions to the Company or the Paying
Agent.
3. PAYING AGENT AND SECURITY REGISTRAR. Initially, the Trustee shall
act as the Paying Agent and Security Registrar. The Company may change any
Paying Agent or Security Registrar without notice to any Holder.
The Company or any of its Affiliates may act in any such capacity.
4. INDENTURE. This Note is one of a duly authorized issue of Securities
of the Company (herein called the "NOTES"), issued and to be issued in one or
more series under an Indenture, dated as of October 24, 1997 (herein called the
"INDENTURE", which term shall have the meaning assigned to it in such
instrument), between the Company and The Chase Manhattan Bank, as Trustee
(herein called the "TRUSTEE", which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Notes and of the terms upon
which the Notes are, and are to be, authenticated and delivered. This Note is
one of the series designated on the face hereof, limited in aggregate principal
amount to $___________.
5. SECURITY. This Note will be secured by First Mortgage Bonds (the
"FIRST MORTGAGE BONDS") delivered by the Company to the Trustee for the benefit
of the Holders of the Notes. Such First Mortgage Bonds shall be issued under the
Mortgage and Deed of Trust between Cleveland Electric and Guaranty Trust Company
of New York (now The Chase Manhattan Bank as successor trustee), as trustee (the
"MORTGAGE TRUSTEE"), dated as of July 1, 1940, as supplemented and amended from
time to time (the "FIRST MORTGAGE"). Reference is made to the First Mortgage
for a description of property mortgaged and pledged thereunder, the nature and
extent of the security, the rights of the holders of first mortgage bonds under
the First Mortgage and of the Mortgage Trustee in respect thereof, the duties
and immunities of the Mortgage Trustee and the terms and conditions upon which
the First Mortgage Bonds are secured and the circumstances under which
additional first mortgage bonds may be issued under the First Mortgage.
6. EXCHANGE OFFER. This Note is issued pursuant to a Registered
Exchange Offer under which the Initial Note of the Company, in like principal
amount and having substantially identical terms to this Note, was exchanged for
this Note.
7. REDEMPTION. At any time at the option of the Company, the Notes of
this series are subject to redemption, in whole or in part from time to time,
upon not less than 30 days' notice by mail, 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
discounted to the date of redemption on a semiannual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Yield plus twenty-five
(25) basis points, plus in each case accrued interest to the date of redemption.
"Treasury Yield" means, with respect to any redemption date,
the rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
B-3
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EXHIBIT B
"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 applicable Notes 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 the applicable Notes. "Independent Investment Banker" means
Xxxxxx Xxxxxxx & Co. Incorporated or, if such firm is unwilling or unable to
select the Comparable Treasury Issue, another independent banking institution of
national standing selected by the Company.
"Comparable Treasury Price" means, with respect to any
redemption date (i) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
on the third business day preceding such redemption date, as set forth in the
daily statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if fewer than four such Reference Treasury Dealer Quotations are obtained,
the average of all such Quotations. "Reference Treasury Dealer Quotations"
means, with respect to each Reference Treasury Dealer and any redemption date,
the average 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 by such Reference Treasury Dealer at 5:00 p.m. on the third business day
preceding such redemption date.
"Reference Treasury Dealer" means each of Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Chase
Securities Inc., and First Chicago Capital Markets, Inc., and their respective
successors; provided, however, that if any of the foregoing shall cease to be a
primary U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary Treasury Dealer.
If notice has been given as provided in the Indenture and
funds for the redemption of any Notes (or any portion thereof) called for
redemption shall have been made available on the redemption date referred to in
such notice, such Notes (or any portion thereof) will cease to bear interest on
the date fixed for such redemption specified in such notice and the only right
of the Holders of such Notes will be to receive payment of the Redemption Price.
Notice of any optional redemption of Notes of this series (or
any portion thereof) will be given to Holders at their addresses, as shown in
the security register for such Notes, not more than 60 nor less than 30 days
prior to the date fixed for redemption. The notice of redemption will specify,
among other items, the redemption price and the principal amount of the Notes
held by such Holder to be redeemed. If less than all of the Notes are to be
redeemed at the option of the Company, the Trustee shall select, in such manner
as it shall deem fair and appropriate, the portion of such Notes to be redeemed
in whole or in part as provided in the Indenture.
B-4
37
EXHIBIT B
In the event of redemption of this Note in part only, a new
Note or Notes of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.
The Company shall not be required to make mandatory redemption
or sinking fund payments with respect to the Notes.
8. DEFAULT AND REMEDIES. If an Event of Default with respect to Notes
of this series 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 and, upon such declaration, the Trustee can demand the acceleration of
the payment of principal of the First Mortgage Bonds as provided in the
Indenture.
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 of this series, the Holders of not less than a majority in principal
amount of the Notes of this series 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 Notes of this series 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 any premium or interest
hereon on or after the respective due dates expressed herein.
9. AMENDMENT, SUPPLEMENT AND WAIVER. 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 Notes 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 Notes 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 Notes of each series at the
time Outstanding, on behalf of the Holders of all Notes of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange therefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
10. DENOMINATIONS, TRANSFER AND EXCHANGE. The Notes of this series are
issuable only in registered form without coupons in denominations of $1,000 and
any integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Notes of this series are exchangeable for
a like aggregate principal amount of Notes of this series and of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same.
B-5
38
EXHIBIT B
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.
11. PERSONS DEEMED OWNERS. Prior to due presentment of this Note for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Note is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
12. UNCLAIMED MONEY. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee or Paying Agent shall pay the money
back to the Company at its request unless an abandoned property law designates
another person. After any such payment, Holders entitled to any portion of such
money must look only to the Company, and not to the Trustee or Paying Agent, for
payment as general creditors, or, as applicable law designates, another person.
13. TRUSTEE DEALINGS WITH THE COMPANY. Subject to certain limitations
imposed by the Trust Indenture Act, the Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of the Notes,
and may otherwise deal with and collect obligations owed to it by the Company or
its Affiliates and may otherwise deal with the Company or its Affiliates with
the same rights it would have if it were not Trustee.
14. DISCHARGE PRIOR TO MATURITY. The Company's obligations pursuant to
the Indenture will be discharged, except for obligations pursuant to certain
sections thereof, subject to the terms of the Indenture, upon the payment of all
the Securities or upon the irrevocable deposit with the Trustee of money or U.S.
Government Obligations sufficient to pay when due the principal of and interest
on the Notes to maturity.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Note or certain restrictive covenants and Events of
Default with respect to this Note, in each case upon compliance with certain
conditions set forth in the Indenture.
15. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company have caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to the Holders. No representation is
made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
16. NO RECOURSE AGAINST OTHERS. No director, officer, employee, or
stockholder of the Company shall have any liability for any obligation of the
Company under the Notes or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. By accepting a Note, each
Holder hereof waives and releases all such liability. The waiver and release are
part of the consideration for the issue of this Note.
B-6
39
EXHIBIT B
17. AUTHENTICATION. Unless the certificate of authentication hereon has
been executed by the Trustee, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
Xxxxx X. Xxxxxx, Secretary
Centerior Energy Corporation
X.X. Xxx 00000
Xxxxxxxxx, Xxxx 00000-0000
B-7
40
EXHIBIT B
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
--------------------------------------------------------------------------------
(Insert assignee's Soc. Sec. or Tax I.D. No.)
And irrevocably appoint_________________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
--------------------------------------------------------------------------------
Date: __________________ Your Signature: ________________________________
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Note.
---------------------------- -----------------------------------------
Signature Guarantee: (Signature must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Security
Registrar, which requirements include
membership or participation in the
Security Transfer Agent Medallion Program
("STAMP") or such other "signature
guarantee program" as may be determined
by the Security Registrar in addition to,
or in substitution for, STAMP, all in
accordance with the Securities Exchange
Act of 1934, as amended.)
B-8
