Exhibit 4(bo)


 




 


 





FPL GROUP, INC.


 


AND


 


THE BANK OF NEW YORK  MELLON,

as Purchase Contract Agent


 










 


PURCHASE CONTRACT AGREEMENT


 






 


DATED AS OF     


 




 





 

















 


TIE SHEET


 


	
  Section of

  	
   

  	
  Section of

  
	
  Trust Indenture Act

  	
   

  	
  Purchase
  Contract

  
	
  of 1939, as amended

  	
   

  	
  Agreement

  
	
   

  	
   

  	
   

  
	
  310(a)

  	
   

  	
  7.8

  
	
  310(b)

  	
   

  	
  7.9(d) and (g),
  11.8

  
	
  310(c)

  	
   

  	
  Inapplicable

  
	
  311(a)

  	
   

  	
  11.2(b)

  
	
  311(b)

  	
   

  	
  11.2(b)

  
	
  311(c)

  	
   

  	
  Inapplicable

  
	
  312(a)

  	
   

  	
  11.2(a)

  
	
  312(b)

  	
   

  	
  11.2(b)

  
	
  313

  	
   

  	
  11.3

  
	
  314(a)

  	
   

  	
  11.4

  
	
  314(b)

  	
   

  	
  Inapplicable

  
	
  314(c)

  	
   

  	
  11.5

  
	
  314(d)

  	
   

  	
  Inapplicable

  
	
  314(e)

  	
   

  	
  1.2

  
	
  314(f)

  	
   

  	
  11.1

  
	
  315(a)

  	
   

  	
  7.1(a)

  
	
  315(b)

  	
   

  	
  7.2

  
	
  315(c)

  	
   

  	
  7.1(e)

  
	
  315(d)(1)

  	
   

  	
  7.1(b)

  
	
  315(d)(2)

  	
   

  	
  7.1(b)

  
	
  315(d)(3)

  	
   

  	
  11.9

  
	
  316(a)(1)(A)

  	
   

  	
  11.9

  
	
  316(a)(1)(B)

  	
   

  	
  11.6

  
	
  316(b)

  	
   

  	
  6.1

  
	
  316(c)

  	
   

  	
  11.2

  
	
  317(a)

  	
   

  	
  Inapplicable

  
	
  317(b)

  	
   

  	
  Inapplicable

  
	
  318(a)

  	
   

  	
  11.1(b)

  



 






*      This Cross-Reference Table does not constitute part of
the Purchase Contract Agreement and shall not affect the interpretation of any
of its terms or provisions.


 





















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Definitions and
  Other Provisions

  	
   

  
	
  of General
  Application

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.1.

  	
   

  	
  Definitions

  	
  1

  
	
  SECTION 1.2.

  	
   

  	
  Compliance Certificates
  and Opinions

  	
  14

  
	
  SECTION 1.3.

  	
   

  	
  Form of Documents
  Delivered to Purchase Contract Agent

  	
  15

  
	
  SECTION 1.4.

  	
   

  	
  Acts of Holders; Record
  Dates

  	
  15

  
	
  SECTION 1.5.

  	
   

  	
  Notices

  	
  16

  
	
  SECTION 1.6.

  	
   

  	
  Notice to Holders;
  Waiver

  	
  17

  
	
  SECTION 1.7.

  	
   

  	
  Effect of Headings and
  Table of Contents

  	
  18

  
	
  SECTION 1.8.

  	
   

  	
  Successors and Assigns

  	
  18

  
	
  SECTION 1.9.

  	
   

  	
  Separability Clause

  	
  18

  
	
  SECTION 1.10.

  	
   

  	
  Benefits of Agreement

  	
  18

  
	
  SECTION 1.11.

  	
   

  	
  Governing Law

  	
  18

  
	
  SECTION 1.12.

  	
   

  	
  Legal Holidays

  	
  18

  
	
  SECTION 1.13.

  	
   

  	
  Counterparts

  	
  19

  
	
  SECTION 1.14.

  	
   

  	
  Inspection of Agreement

  	
  19

  
	
  SECTION 1.15.

  	
   

  	
  Force Majeure

  	
  19

  
	
  SECTION 1.16.

  	
   

  	
  Waiver of Jury Trial

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Certificate
  Forms

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.1.

  	
   

  	
  Forms of Certificates
  Generally

  	
  20

  
	
  SECTION 2.2.

  	
   

  	
  Form of Purchase
  Contract Agent’s Certificate of Authentication

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The Units

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.1.

  	
   

  	
  Title and Terms;
  Denominations

  	
  20

  
	
  SECTION 3.2.

  	
   

  	
  Rights and Obligations
  Evidenced by the Certificates

  	
  20

  
	
  SECTION 3.3.

  	
   

  	
  Execution,
  Authentication, Delivery and Dating

  	
  21

  
	
  SECTION 3.4.

  	
   

  	
  Temporary Certificates

  	
  22

  
	
  SECTION 3.5.

  	
   

  	
  Registration;
  Registration of Transfer and Exchange

  	
  23

  
	
  SECTION 3.6.

  	
   

  	
  Book-Entry Interests

  	
  24

  
	
  SECTION 3.7.

  	
   

  	
  Notices to Holders

  	
  25

  
	
  SECTION 3.8.

  	
   

  	
  Appointment of
  Successor Clearing Agency

  	
  25

  
	
  SECTION 3.9.

  	
   

  	
  Definitive Certificates

  	
  25

  
	
  SECTION 3.10.

  	
   

  	
  Mutilated, Destroyed,
  Lost and Stolen Certificates

  	
  25

  



 

















 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.11.

  	
   

  	
  Persons Deemed Owners

  	
  27

  
	
  SECTION 3.12.

  	
   

  	
  Cancellation

  	
  27

  
	
  SECTION 3.13.

  	
   

  	
  Creation or Recreation
  of Treasury Units by Substitution of Treasury Securities

  	
  28

  
	
  SECTION 3.14.

  	
   

  	
  Recreation of Corporate
  Units

  	
  30

  
	
  SECTION 3.15.

  	
   

  	
  Transfer of Collateral
  upon Occurrence of Termination Event

  	
  33

  
	
  SECTION 3.16.

  	
   

  	
  No Consent to
  Assumption

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The Debentures

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.1.

  	
   

  	
  Payment of Interest;
  Rights to Interest Preserved; Interest Rate Reset; Notice

  	
  33

  
	
  SECTION 4.2.

  	
   

  	
  Notice and Voting

  	
  35

  
	
  SECTION 4.3.

  	
   

  	
  Substitution of the
  Treasury Portfolio for the Debentures

  	
  35

  
	
  SECTION 4.4.

  	
   

  	
  Consent to Treatment
  for Tax Purposes

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The Purchase
  Contracts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.1.

  	
   

  	
  Purchase of Shares of
  Common Stock

  	
  36

  
	
  SECTION 5.2.

  	
   

  	
  Contract Adjustment
  Payments

  	
  38

  
	
  SECTION 5.3.

  	
   

  	
  Deferral of Payment
  Dates for Contract Adjustment Payments

  	
  39

  
	
  SECTION 5.4.

  	
   

  	
  Payment of Purchase
  Price

  	
  41

  
	
  SECTION 5.5.

  	
   

  	
  Issuance of Shares of
  Common Stock

  	
  45

  
	
  SECTION 5.6.

  	
   

  	
  Adjustment of Fixed
  Settlement Rate; Fundamental Change Early Settlement

  	
  46

  
	
  SECTION 5.7.

  	
   

  	
  Notice of Adjustments
  and Certain Other Events

  	
  55

  
	
  SECTION 5.8.

  	
   

  	
  Termination Event;
  Notice

  	
  56

  
	
  SECTION 5.9.

  	
   

  	
  Early Settlement

  	
  56

  
	
  SECTION 5.10.

  	
   

  	
  No Fractional Shares

  	
  59

  
	
  SECTION 5.11.

  	
   

  	
  Charges and Taxes

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Remedies

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.1.

  	
   

  	
  Unconditional Right of
  Holders to Receive Contract Adjustment Payments and to Purchase Shares of
  Common Stock

  	
  59

  
	
  SECTION 6.2.

  	
   

  	
  Restoration of Rights
  and Remedies

  	
  60

  
	
  SECTION 6.3.

  	
   

  	
  Rights and Remedies
  Cumulative

  	
  60

  
	
  SECTION 6.4.

  	
   

  	
  Delay or Omission Not
  Waiver

  	
  60

  
	
  SECTION 6.5.

  	
   

  	
  Undertaking for Costs

  	
  60

  
	
  SECTION 6.6.

  	
   

  	
  Waiver of Stay or
  Extension Laws

  	
  61

  



 


ii

















 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The Purchase
  Contract Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.1.

  	
   

  	
  Certain Duties and Responsibilities

  	
  61

  
	
  SECTION 7.2.

  	
   

  	
  Notice of Default

  	
  62

  
	
  SECTION 7.3.

  	
   

  	
  Certain Rights of
  Purchase Contract Agent

  	
  62

  
	
  SECTION 7.4.

  	
   

  	
  Not Responsible for
  Recitals or Issuance of Units

  	
  64

  
	
  SECTION 7.5.

  	
   

  	
  May Hold Units

  	
  64

  
	
  SECTION 7.6.

  	
   

  	
  Money Held in Custody

  	
  64

  
	
  SECTION 7.7.

  	
   

  	
  Compensation and
  Reimbursement

  	
  64

  
	
  SECTION 7.8.

  	
   

  	
  Corporate Purchase
  Contract Agent Required; Eligibility

  	
  65

  
	
  SECTION 7.9.

  	
   

  	
  Resignation and
  Removal; Appointment of Successor

  	
  65

  
	
  SECTION 7.10.

  	
   

  	
  Acceptance of
  Appointment by Successor

  	
  67

  
	
  SECTION 7.11.

  	
   

  	
  Merger, Conversion,
  Consolidation or Succession to Business

  	
  67

  
	
  SECTION 7.12.

  	
   

  	
  Preservation of
  Information; Communications to Holders

  	
  67

  
	
  SECTION 7.13.

  	
   

  	
  No Obligations of
  Purchase Contract Agent

  	
  68

  
	
  SECTION 7.14.

  	
   

  	
  Tax Compliance

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Supplemental
  Agreements

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.1.

  	
   

  	
  Supplemental Agreements
  Without Consent of Holders

  	
  69

  
	
  SECTION 8.2.

  	
   

  	
  Supplemental Agreements
  with Consent of Holders

  	
  69

  
	
  SECTION 8.3.

  	
   

  	
  Execution of
  Supplemental Agreements

  	
  70

  
	
  SECTION 8.4.

  	
   

  	
  Effect of Supplemental
  Agreements

  	
  71

  
	
  SECTION 8.5.

  	
   

  	
  Reference to
  Supplemental Agreements

  	
  71

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Consolidation,
  Merger, Sale, Conveyance, Transfer or Lease

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.1.

  	
   

  	
  Covenant Not to
  Consolidate, Merge, Sell, Convey, Transfer or Lease Property Except Under
  Certain Conditions

  	
  71

  
	
  SECTION 9.2.

  	
   

  	
  Rights and Duties of
  Successor Entity

  	
  71

  
	
  SECTION 9.3.

  	
   

  	
  Company Certificate and
  Opinion of Counsel Given to Purchase Contract Agent

  	
  72

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Covenants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.1.

  	
   

  	
  Performance Under
  Purchase Contracts

  	
  72

  
	
  SECTION 10.2.

  	
   

  	
  Maintenance of Office
  or Agency

  	
  72

  
	
  SECTION 10.3.

  	
   

  	
  Company to Reserve
  Common Stock

  	
  73

  
	
  SECTION 10.4.

  	
   

  	
  Covenants as to Common
  Stock

  	
  73

  



 


iii

















 


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.5.

  	
   

  	
  Covenants of Holders as
  to ERISA

  	
  73

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Trust Indenture
  Act

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.1.

  	
   

  	
  Trust Indenture Act;
  Application

  	
  74

  
	
  SECTION 11.2.

  	
   

  	
  Lists of Holders of
  Units

  	
  74

  
	
  SECTION 11.3.

  	
   

  	
  Reports by the Purchase
  Contract Agent

  	
  74

  
	
  SECTION 11.4.

  	
   

  	
  Periodic Reports to
  Purchase Contract Agent

  	
  74

  
	
  SECTION 11.5.

  	
   

  	
  Evidence of Compliance
  with Conditions Precedent

  	
  75

  
	
  SECTION 11.6.

  	
   

  	
  Defaults; Waiver

  	
  75

  
	
  SECTION 11.7.

  	
   

  	
  Conflicting Interests

  	
  75

  
	
  SECTION 11.8.

  	
   

  	
  Direction of Purchase Contract Agent

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
   

  	
  Form of
  Corporate Unit Certificate

  	
   

  
	
  EXHIBIT B

  	
   

  	
  Form of
  Treasury Unit Certificate

  	
   

  
	
  EXHIBIT C

  	
   

  	
  Notice to Settle
  by Separate Cash

  	
   

  



 


iv

















 


PURCHASE
CONTRACT AGREEMENT, dated as of
                        ,
between FPL Group, Inc., a Florida corporation (the “Company”),
and The Bank of New York Mellon, a New York banking corporation, acting as
purchase contract agent and attorney-in-fact for the Holders of Units from time
to time (in any one or more of such capacities, the “Purchase
Contract Agent”).


 


RECITALS


 


The Company has duly
authorized the execution and delivery of this Agreement and the Certificates
evidencing the Units.


 


All things necessary to
make the Purchase Contracts, when the Certificates are executed by the Company
and authenticated, executed on behalf of the Holders and delivered by the
Purchase Contract Agent, as provided in this Agreement, the valid obligations
of the Company and the Holders, and to constitute these presents a valid agreement
of the Company, in accordance with its terms, have been done.


 


WITNESSETH:


 


For and in consideration
of the premises and the purchase of the Units by the Holders thereof, it is
mutually agreed as follows:


 


ARTICLE I


 


Definitions and Other
Provisions

of General Application


 


SECTION 1.1.                      Definitions.


 


For all purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:


 


(a)           the terms defined in this Article have the
meanings assigned to them in this Article and include the plural as well
as the singular, and nouns and pronouns of the masculine gender include the
feminine and neuter genders;


 


(b)           all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted accounting
principles in the United States;


 


(c)           the words “herein,” “hereof”  and “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular Article, Section, Exhibit or
other subdivision; and


 


(d)           the following terms have the meanings given to them in
this Section 1.1(d).


 


“Act”
when used with respect to any Holder, has the meaning specified in Section 1.4.


 


“Adjustment
Factor” has the meaning specified in Section 5.6(a)(9).


 

















 


“Affiliate”
has the same meaning as given to that term in Rule 405 of the Securities
Act of 1933, as amended, or any successor rule thereunder.


 


“Agreement”
means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more agreements supplemental hereto entered
into pursuant to the applicable provisions hereof.


 


“Applicable
Market Value” has the meaning specified in Section 5.1.


 


“Applicable
Ownership Interest in Debentures” means a 1/20th, or 5%,
undivided beneficial ownership interest in $1,000 principal amount of
Debentures that is a component of a Corporate Unit, and “Applicable
Ownership Interests in Debentures” means the aggregate of each
Applicable Ownership Interest in Debentures that is a component of all Corporate
Units then Outstanding.


 


“Applicable
Ownership Interest in the Treasury Portfolio” means, with
respect to each Corporate Unit and the U.S. Treasury securities in a Treasury
Portfolio,


 


(i)            a 1/20, or 5%, undivided beneficial
ownership interest in $1,000 face amount of U.S. treasury securities (or
principal or interest strips thereof) included in the applicable Treasury
Portfolio which matures on or prior to
                        ,
and


 


(ii)           for each scheduled Payment Date on the
Debentures that occurs after the Special Event Redemption Date, the Mandatory
Redemption Date or the Reset Effective Date in the case of a Successful Early
Remarketing, as the case may be, and on or prior to the Purchase Contract
Settlement Date, a 1/20, or 5% undivided beneficial ownership interest in
$1,000 face amount of U.S. treasury securities (or principal or interest strips
thereof) included in such Treasury Portfolio that mature on or prior to the
Business Day immediately preceding such scheduled Payment Date.


 


“Applicable
Principal Amount” has the meaning specified in the Officer’s
Certificate.


 


“Applicants”
has the meaning specified in Section 7.12(b).


 


“Authorized
Officer” means the Chairman of the Board, the President, any
Vice President, the Treasurer, any Assistant Treasurer, the Secretary, any
Assistant Secretary or any other officer or agent of the Company duly
authorized by the Board of Directors to act in respect of matters relating to
this Agreement.


 


“Bankruptcy
Code” means Title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.


 


“Beneficial
Owner” means, with respect to a Book-Entry Interest, a Person
who is the beneficial owner of such Book-Entry Interest as reflected on the books
of the Clearing Agency or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such
Clearing Agency).


 


2

















 


“Board of
Directors” means the board of directors of the Company or a
duly authorized committee of that board.


 


“Board
Resolution” means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification and
delivered to the Purchase Contract Agent.


 


“Book-Entry
Interest” means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 3.6.


 


“Business
Day” means any day other than a Saturday, Sunday or any other
day on which banking institutions and trust companies in New York City (in the
State of New York) are permitted or required by any applicable law, regulation
or executive order to close; provided that for purposes of the second paragraph of Section 1.12
only, the term “Business Day” shall also be
deemed to exclude any day on which the Depositary is closed.


 


“Cash
Settlement” has the meaning specified in Section 5.4(a)(i).


 


“Certificate”
means a Corporate Unit Certificate or a Treasury Unit Certificate, as the case
may be.


 


“Clearing
Agency” means an organization registered as a “Clearing
Agency” pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Units and in whose name, or in the name of a nominee of that
organization, shall be registered as a Global Certificate and which shall
undertake to effect book-entry transfers and pledges of the Units.


 


“Clearing
Agency Participant” means a securities broker or dealer,
bank, trust company, clearing corporation, other financial institution or other
Person for whom from time to time the Clearing Agency effects book-entry
transfers and pledges of securities deposited with the Clearing Agency.


 


“Closing
Price” has the meaning specified in Section 5.1.


 


“Code”
means the Internal Revenue Code of 1986, as amended.


 


“Collateral”
has the meaning specified in Section 2.1
of the Pledge Agreement.


 


“Collateral
Agent” means
                        ,
as Collateral Agent under the Pledge Agreement until a successor Collateral
Agent shall have become such pursuant to the applicable provisions of the
Pledge Agreement, and thereafter “Collateral Agent”
shall mean the Person who is then the Collateral Agent thereunder.


 


“Collateral
Substitution” means the substitution of the pledged
components of one type of Unit for pledged components of the other type of Unit
(i.e., either Corporate Unit or Treasury Unit) in connection with the creation
or recreation of Treasury Units or Corporate Units, as described in Sections 3.13 and 3.14.


 


3

















 


“Common
Stock” means the Common Stock, par value $0.01 per share, of
the Company.


 


“Company”
means the Person named as the “Company” in the first
paragraph of this instrument until a successor shall have become
such pursuant to the applicable provisions of this Agreement, and thereafter “Company” shall mean such successor.


 


“Company
Certificate” means a certificate signed by an Authorized
Officer and delivered to the Purchase Contract Agent.


 


“Constituent
Person” has the meaning specified in Section 5.6(b)(i).


 


“Contract
Adjustment Payments” means the amounts payable by the Company
in respect of each Purchase Contract issued in connection with the Corporate
Units and the Treasury Units, which amounts shall be equal to
            % per
annum of the Stated Amount; computed on the basis of a 360-day year consisting
of twelve 30-day months, plus any Deferred Contract Adjustment Payments accrued
pursuant to Section 5.3.


 


“Corporate
Trust Office” means the corporate trust office of the
Purchase Contract Agent at which, at any particular time, its corporate trust
business shall be principally administered, which office at the date hereof is
located at
                        ,
                        ,
                        
                        ,
Attention: 
                        ,
or such other address as the Purchase Contract Agent may designate from time to
time by notice to the Holders and the Company, or the principal corporate trust
office of any successor Purchase Contract Agent (or such other address as such
successor Purchase Contract Agent may designate from time to time by notice to
the Holders and the Company).


 


“Corporate
Unit” means the collective rights and obligations of a Holder
of a Corporate Unit Certificate in respect of the Applicable Ownership Interest
in Debentures or the Applicable Ownership Interest in the Treasury Portfolio,
as the case may be, subject in each case to the Pledge thereof (except that the
Applicable Ownership Interest in the Treasury Portfolio as specified in clause (ii) of
the definition of such term shall not be subject to the Pledge), and the
related Purchase Contract.


 


“Corporate
Unit Certificate” means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Corporate Units
specified on such certificate.


 


“Coupon
Rate” with respect to a Debenture means the percentage rate
per annum at which such Debenture will bear interest.


 


“Current
Market Price” has the meaning specified in Section 5.6(a)(8).


 


“Debentures”
means the series of debentures of FPL Group Capital designated “Series         
Debentures due
                        “
to be issued under the Indenture.


 


“Default”
means a default by the Company in any of its obligations under this Agreement.


 


4














 


“Deferral Period”  has the
meaning specified in Section 5.3


 


“Deferred Contract Adjustment Payments” has the meaning specified in Section 5.3.


 


“Depositary” means, initially, The Depository Trust Company until
another Clearing Agency becomes its successor.


 


“Early Settlement” has the meaning specified in Section 5.9(a).


 


“Early Settlement Amount” has the meaning specified in Section 5.9(a).


 


“Early Settlement Date” has the meaning specified in Section 5.9(a).


 


“Effective Date” has the meaning specified in Section 5.6(b)(ii).


 


“ERISA” means the Employee Retirement Income Security Act of
1974, as amended.


 


“Exchange Act” means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the rules and
regulations promulgated thereunder.


 


“Exchange Property Unit” has the meaning specified in Section 5.6(b)(i).


 


“Expiration Date” has the meaning specified in Section 1.4.


 


“Expiration Time” has the meaning specified in Section 5.6(a)(6).


 


“Failed Remarketing” has the meaning specified in the Officer’s
Certificate.


 


“Fair Market Value” means


 


(i)            in the case of any Spin-Off that is
effected simultaneously with an Initial Public Offering of the securities being
distributed in the Spin-Off, the initial public offering price of those
securities, and


 


(ii)           in the case of any other Spin-Off, the
average of the Closing Prices of the securities being distributed in the
Spin-Off over the first 10 Trading Days after the effective date of such
Spin-Off.


 


“Final Three-Day Remarketing Period” has the meaning specified in the Officer’s
Certificate.


 


“Fixed Settlement Rate” means each of the Minimum Settlement
Rate and the Maximum Settlement Rate.


 


“FPL Group Capital” means FPL Group Capital Inc, a Florida corporation
and a wholly-owned subsidiary of the Company, or any successor under the
Indenture.


 


“Fundamental Change” means


 


5

















 


(i)            a “person” or “group” within the meaning of Section 13(d) of
the Exchange Act has become the direct or indirect “beneficial owner,” as
defined in Rule 13d-3 under the Exchange Act, of Common Stock representing
more than 50% of the voting power of the Common Stock; or


 


(ii)           the Company is involved in a consolidation with or
merger into any other person, or any merger of another person into the Company,
or any transaction or series of related transactions (other than a merger that
does not result in any reclassification, conversion, exchange or cancellation
of outstanding shares of the Common Stock), in each case in which 10% or more
of the total consideration paid to the Company’s shareholders consists of cash
or cash equivalents.


 


“Fundamental Change Early Settlement” has the meaning specified in Section 5.6(b)(ii).


 


“Fundamental Change Early Settlement Date” has the meaning specified in Section 5.6(b)(ii).


 


“Global Certificate” means a Certificate that evidences all
or part of the Units and is registered in the name of the Depositary or a
nominee thereof.


 


“Guarantee Agreement” means the Guarantee Agreement dated as
of June 1, 1999, between the Company and The Bank of New York Mellon, as
guarantee trustee, as originally executed and delivered and as it may from time
to time be supplemented or amended.


 


“Holder,” when used with respect to a Unit, means
the Person in whose name a Corporate Unit Certificate and/or a Treasury Unit
Certificate evidencing the Unit is registered on the Security Register.


 


“Indenture” means the Indenture (For Unsecured Debt Securities),
dated as of June 1, 1999, between FPL Group Capital and the Indenture
Trustee pursuant to which the Debentures are to be issued, as originally
executed and delivered and as it may from time to time be supplemented or
amended by one or more indentures supplemental thereto entered into pursuant to
the applicable provisions thereof and shall include the terms of a particular
series of securities established as contemplated by Section 301
thereof.


 


“Indenture Trustee” means The Bank of New York Mellon, as trustee under
the Indenture, or any successor thereto.


 


“Initial Public Offering” means the first time securities of the
same class or type as the securities being distributed in a Spin-Off are
offered to the public for cash.


 


“Issuer Order” or “Issuer Request”
means a written order or request signed in the name of the Company by an
Authorized Officer and delivered to the Purchase Contract Agent.


 


“Make-Whole Share Amount” has the meaning specified in Section 5.6(b)(ii).


 


“Mandatory Redemption” has the meaning specified in the Officer’s
Certificate.


 


6

















 


“Mandatory Redemption Date” means the date on which a Mandatory
Redemption is to occur.


 


“Maximum Settlement Rate” has the meaning specified in Section 5.1(c).


 


“Minimum Settlement Rate” has the meaning specified in Section 5.1(a).


 


“Minimum Stock Price” has the meaning specified in Section 5.6(b).


 


“NYSE” has the meaning specified in Section 5.1.


 


“Observation Period” means the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Purchase Contract
Settlement Date.


 


“Officer’s Certificate” means a certificate signed by an
authorized signatory of FPL Group Capital establishing the terms of the
Debentures pursuant to the Indenture.


 


“Opinion of Counsel” means an opinion in writing signed by
legal counsel, who may be an employee of or counsel to the Company or an
Affiliate and who shall be reasonably acceptable to the Purchase Contract
Agent.


 


“Outstanding,” with respect to any Corporate Units and Treasury
Units means, as of any date of determination, all Corporate Units and Treasury
Units evidenced by Certificates theretofore authenticated, executed and
delivered under this Agreement, except:


 


(i)            if a Termination Event has occurred, (A) Treasury
Units for which Treasury Securities have been deposited with the Purchase
Contract Agent in trust for the Holders of such Treasury Units and (B) Corporate
Units for which the Applicable Ownership Interest in Debentures or the
Applicable Ownership Interest in the Treasury Portfolio (or as contemplated in Section 3.15 hereto with
respect to a Holder’s interest in the Treasury Portfolio or any Treasury
Securities, cash) theretofore has been deposited with the Purchase Contract
Agent in trust for the Holders of such Corporate Units;


 


(ii)           Corporate Units and Treasury Units
evidenced by Certificates theretofore cancelled by the Purchase Contract Agent
or delivered to the Purchase Contract Agent for cancellation or deemed
cancelled pursuant to the provisions of this Agreement; and


 


(iii)          Corporate
Units and Treasury Units evidenced by Certificates in exchange for or in lieu
of which other Certificates have been authenticated, executed on behalf of the
Holder and delivered pursuant to this Agreement, other than any such
Certificate in respect of which there shall have been presented to the Purchase
Contract Agent proof satisfactory to it that such Certificate is held by a
protected purchaser in whose hands the Corporate Units or Treasury Units
evidenced by such Certificate are valid obligations of the Company;


 


provided, however, that in determining whether the
Holders of the requisite number of the Corporate Units or Treasury Units have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, Corporate Units or Treasury Units owned by the Company 


 


7

















 


or any Affiliate of the Company shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Purchase Contract Agent shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Corporate
Units or Treasury Units which a Responsible Officer of the Purchase Contract
Agent actually knows to be so owned shall be so disregarded.  Corporate Units or Treasury Units so owned
which have been pledged in good faith may be regarded as Outstanding Units if
the pledgee establishes to the satisfaction of the Purchase Contract Agent the
pledgee’s right so to act with respect to such Corporate Units or Treasury
Units and that the pledgee is not the Company or any Affiliate of the Company.


 


“Payment Date” means each
            ,
            ,
             and
             of
each year, commencing
            ,
            .


 


“Period for Early Remarketing” means the period beginning on and
including the third Business Day prior to
                        
and ending on and including the ninth Business Day prior to
                        ,
the last possible Remarketing Date prior to the Final Three-Day Remarketing
Period.


 


“Permitted Investments” has the meaning specified in Article I of the Pledge Agreement.


 


“Person” means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint-stock
company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof or any other entity
of whatever nature.


 


“Plan” means an employee benefit plan that is subject to
ERISA, a plan or individual retirement account that is subject to Section 4975
of the Code or any entity whose assets are considered assets of any such plan
or account.


 


“Pledge” means the lien and security interest in the
Collateral created by the Pledge Agreement.


 


“Pledge Agreement” means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Purchase Contract Agent, as purchase
contract agent and as attorney-in-fact for the Holders from time to time of
Units, and the Collateral Agent, as the collateral agent, the custodial agent
and the securities intermediary.


 


“Pledged Applicable Ownership Interests in
Debentures” has
the meaning specified in Article I of the
Pledge Agreement.


 


“Pledged Applicable Ownership Interests in the
Treasury Portfolio”
has the meaning specified in Article I of the
Pledge Agreement.


 


“Pledged Treasury Securities” has the meaning specified in Article I of the
Pledge Agreement.


 


8

















 


“Predecessor Certificate” means a Predecessor Corporate Unit
Certificate or a Predecessor Treasury Unit Certificate.


 


“Predecessor Corporate Unit Certificate” of any particular Corporate Unit
Certificate means every previous Corporate Unit Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Corporate Unit evidenced thereby; and, for the purposes of this definition, any
Corporate Unit Certificate authenticated and delivered under Section 3.10 in exchange for or
in lieu of a mutilated, destroyed, lost or stolen Corporate Unit Certificate
shall be deemed to evidence the same rights and obligations of the Company and
the Holder as the mutilated, destroyed, lost or stolen Corporate Unit
Certificate.


 


“Predecessor Treasury Unit Certificate” of any particular Treasury Unit Certificate
means every previous Treasury Unit Certificate evidencing all or a portion of
the rights and obligations of the Company and the Holder under the Treasury
Units evidenced thereby; and, for the purposes of this definition, any Treasury
Unit Certificate authenticated and delivered under Section 3.10
in exchange for or in lieu of a mutilated, destroyed, lost or stolen Treasury
Unit Certificate shall be deemed to evidence the same rights and obligations of
the Company and the Holder as the mutilated, destroyed, lost or stolen Treasury
Unit Certificate.


 


“Proceeds” has the meaning specified in Article I
of the Pledge Agreement.


 


“Prospectus” means the prospectus relating to the delivery of any
securities in connection with an Early Settlement pursuant to Section 5.9 or a Fundamental
Change Early Settlement pursuant to Section 5.6(b),
in the form in which filed with the Securities and Exchange Commission pursuant
to Rule 424(b) under the Securities Act, including the documents
incorporated by reference therein as of the date of such Prospectus.


 


“Purchase Contract,” when used with respect to any Unit,
means the contract forming a part of such Unit and obligating the Company to (i) sell,
and the Holder of such Unit to purchase, not later than the Purchase Contract
Settlement Date, for $50 in cash, a number of newly-issued shares of Common
Stock equal to the applicable Settlement Rate and (ii) pay the Holder of
such Unit Contract Adjustment Payments, if any, on the terms and subject to the
conditions set forth in Article V hereof.


 


“Purchase Contract Agent” means the Person named as the “Purchase Contract Agent” in the first
paragraph of this instrument until a successor Purchase Contract
Agent shall have become such pursuant to the applicable provisions of this
Agreement, and thereafter “Purchase Contract Agent”
shall mean such Person or any subsequent successor who is appointed pursuant to
this Agreement.


 


“Purchase Contract Settlement Date” means
                        .


 


“Purchase Contract Settlement Fund” has the meaning specified in Section 5.5.


 


“Purchase Price” has the meaning specified in Section 5.1.


 


“Quotation Agent” has the meaning specified in the Officer’s
Certificate.


 


9

















 


“Reacquired Shares” has the meaning specified in Section 5.6(a)(6).


 


“Record Date” for the payment of distributions and Contract
Adjustment Payments payable on any Payment Date means, as to any Global
Certificate, the Business Day next preceding such Payment Date, and as to any
other Certificate, a day selected by the Company which shall be at least one
Business Day but not more than 60 Business Days prior to such Payment Date (and
which shall correspond to the related record date for the Debentures, as
applicable).


 


“Redemption Amount” has the meaning specified in the Officer’s
Certificate.


 


“Redemption Price” has the meaning specified in the Indenture.


 


“Registration Statement” means a registration statement under the
Securities Act covering, inter alia, the delivery of any securities in
connection with an Early Settlement on the Early Settlement Date or a
Fundamental Change Early Settlement on the Fundamental Change Early Settlement
Date under Section 5.6(b)(ii),
including all exhibits thereto and the documents incorporated by reference in
the prospectus contained in such registration statement, and any post-effective
amendments thereto.


 


“Reference Dividend” has the meaning specified in Section 5.6(a)(5).


 


“Remarketing” means the remarketing of the Debentures by the
Remarketing Agent pursuant to the Remarketing Agreement.


 


“Remarketing Agent” has the meaning specified in the Officer’s
Certificate.


 


“Remarketing Agreement” has the meaning specified in the Officer’s
Certificate.


 


“Remarketing Dates” means one or more Business Days during the period
beginning on the third Business Day immediately preceding
                        
and ending on the third Business Day immediately preceding
                        
selected by the Company as a date on which the Remarketing Agent shall, in
accordance with the terms of the Remarketing Agreement, remarket the
Debentures.


 


“Remarketing Fee” has the meaning specified in the Officer’s
Certificate.


 


“Remarketing Treasury
Portfolio” has the meaning specified in the Officer’s
Certificate.


 


“Remarketing Treasury
Portfolio Purchase Price” has the meaning specified in the Officer’s
Certificate.


 


“Reorganization Event” means:


 


(i)            any consolidation or merger of the
Company with or into another Person or of another Person with or into the
Company (other than a merger or consolidation in which the Company is the
continuing Person and in which the Common Stock 


 


10

















 


outstanding immediately prior to the merger or consolidation is not
exchanged for cash, securities or other property of the Company or another
Person); or


 


(ii)           any sale, transfer, lease or conveyance
to another Person of the property of the Company as an entirety or
substantially as an entirety; or


 


(iii)          any
statutory share exchange business combination of the Company with another
Person (other than a statutory share exchange business combination in which the
Company is the continuing Person and in which the Common Stock outstanding
immediately prior to the statutory share exchange business combination is not
exchanged for cash, securities or other property of the Company or another
Person); or


 


(iv)          any liquidation, dissolution or winding
up of the Company (other than as a result of, or after the occurrence of, a
Termination Event).


 


“Reset Effective Date” has the meaning specified in the Officer’s
Certificate.


 


“Reset Rate” means the Coupon Rate to be in effect for the
Debentures on and after the Reset Effective Date and determined as provided in Section 4.1.


 


“Responsible Officer,” when used with respect to the Purchase
Contract Agent, means any officer within the corporate trust department of the
Purchase Contract Agent, including any vice president, assistant vice
president, assistant secretary, assistant treasurer, trust officer or any other
officer of the Purchase Contract Agent who customarily performs functions
similar to those performed by the Persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred
because of such persons’ knowledge of any familiarity with the particular
subject.


 


“Securities Act” means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time, and the rules and
regulations promulgated thereunder.


 


“Security Register” and “Securities Registrar”
have the respective meanings set forth in Section 3.5.


 


“Senior Indebtedness” means indebtedness of any kind of the
Company, existing or incurred in the future (including the guarantee of the
Debentures pursuant to the Guarantee Agreement), unless the instrument, if any,
under which such indebtedness is incurred expressly provides that it is on a
parity in right of payment with or subordinate in right of payment to the
Contract Adjustment Payments.


 


“Separate Debentures” means Debentures that are not components
of Corporate Units.


 


“Separate Debentures Purchase Price” means the amount in cash equal to the
product of (i) the Remarketing Treasury Portfolio Purchase Price divided
by the aggregate principal amount of the Debentures underlying the Applicable
Ownership Interests in Debentures on any Successful Remarketing Date during the
Period for Early Remarketing multiplied by (ii) the aggregate principal
amount of Separate Debentures remarketed in a Remarketing during the Period for
Early Remarketing.


 


11

















 


“Settlement Rate” has the meaning specified in Section 5.1.


 


“Special Event” has the meaning specified in the Officer’s
Certificate.


 


“Special Event Redemption” has the meaning specified in the Officer’s
Certificate.


 


“Special Event Redemption Date” has the meaning specified in the Officer’s
Certificate.


 


“Special Event Treasury Portfolio” means (i) interest or principal
strips of U.S. treasury securities that mature on or prior to
                        
in an aggregate amount at maturity equal to the aggregate principal amount of
Debentures underlying Applicable Ownership Interests in Debentures included in
the Corporate Units, and (ii) with respect to each scheduled Payment Date
on the Debentures that occurs after the Special Event Redemption Date and on or
prior to
                        ,
interest or principal strips of U.S. treasury securities which mature on or
prior to such scheduled Payment Date in an aggregate amount equal at maturity to
the aggregate interest payment that would be due on the aggregate principal
amount of the Debentures underlying Applicable Ownership Interests in
Debentures included in the Corporate Units on such Payment Date assuming that
the interest rate on the Debentures has not been reset.


 


“Special Event Treasury Portfolio Purchase Price”  means the lowest aggregate
price quoted by a primary U.S. government securities dealer in New York City to
the Quotation Agent on the third Business Day immediately preceding the Special
Event Redemption Date for the purchase of the Special Event Treasury Portfolio
for settlement on the Special
Event Redemption Date.


 


“Spin-Off” means payment of a dividend or other distribution on
the Common Stock of shares of capital stock of any class or series, or similar
equity interests, of or relating to a subsidiary or other business unit of the
Company.


 


“Stated Amount” means $50 per Unit.


 


“Stock Price” has the meaning specified in Section 5.6(b)(ii).


 


“Successful Early Remarketing” has the meaning specified in the Officer’s
Certificate.


 


“Successful Remarketing” has the meaning specified in the Officer’s
Certificate.


 


“Successful Remarketing Date” has the meaning specified in the Officer’s
Certificate.


 


“Termination Date” means the date, if any, on which a Termination Event
occurs.


 


“Termination Event” means the occurrence of any of the following events:


 


(i)            at any time on or prior to the Purchase
Contract Settlement Date, a judgment, decree or court order shall have been
entered granting relief under the Bankruptcy Code or any other similar
applicable Federal or State law, adjudicating the Company to be insolvent, or
approving as properly filed a petition seeking reorganization 


 


12

















 


or liquidation of the Company, and, unless such judgment, decree or
order shall have been entered within 60 days prior to the Purchase Contract
Settlement Date, such decree or order shall have continued undischarged and
unstayed for a period of 60 days; or


 


(ii)           at any time on or prior to the Purchase
Contract Settlement Date, a judgment, decree or court order for the appointment
of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency
of the Company or of its property, or for the winding up or liquidation of its
affairs, shall have been entered, and, unless such judgment, decree or order
shall have been entered within 60 days prior to the Purchase Contract
Settlement Date, such judgment, decree or order shall have continued
undischarged and unstayed for a period of 60 days; or


 


(iii)          at
any time on or prior to the Purchase Contract Settlement Date, the Company
shall file a petition for relief under the Bankruptcy Code, or shall consent to
the filing of a bankruptcy proceeding against it, or shall file a petition or
answer or consent seeking reorganization or liquidation under the Bankruptcy
Code or any other similar applicable Federal or State law, or shall consent to
the filing of any such petition, or shall consent to the appointment of a receiver
or liquidator or trustee or assignee in bankruptcy or insolvency of it or of
its property, or shall make an assignment for the benefit of creditors, or
shall admit in writing its inability to pay its debts generally as they become
due.


 


“Three-Day Remarketing Period” has the meaning specified in the Officer’s
Certificate.


 


“Threshold Appreciation Price” has the meaning specified in Section 5.1.


 


“TIA” means, as of any time, the Trust Indenture Act of
1939, as amended, or any successor statute, as in effect at such time.


 


“Trading Day” has the meaning specified in Section 5.1.


 


“Transfer” has the meaning specified in Article I
of the Pledge Agreement.


 


“Treasury Portfolio” means, as applicable, the Remarketing
Treasury Portfolio or the Special Event Treasury Portfolio.


 


“Treasury Portfolio Purchase Price” means, as applicable, the Remarketing
Treasury Portfolio Purchase Price or the Special Event Treasury Portfolio
Purchase Price.


 


“Treasury Security” means a zero-coupon U.S. Treasury security having a
principal amount at maturity equal to $1,000 and maturing on
                        
(CUSIP No.                         ).


 


“Treasury Unit” means, following the substitution of Treasury
Securities for Pledged Applicable Ownership Interests in Debentures or Pledged
Applicable Ownership Interests in the Treasury Portfolio, as the case may be,
as collateral to secure a Holder’s obligations under the Purchase Contract, the
collective rights and obligations of a Holder of a Treasury Unit Certificate 


 


13

















 


in respect of such
Treasury Securities, subject to the Pledge thereof, and the related Purchase
Contract.


 


“Treasury Unit Certificate” means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Treasury Units
specified on such certificate.


 


“Underwriting Agreement” means the Underwriting Agreement, dated
                        ,
relating to the offer and sale of Corporate Units among the Company, FPL Group
Capital, and Credit Suisse Securities (USA) LLC.


 


“Unit” means a Corporate Unit or a Treasury Unit, as the
case may be.


 


“Value” means, with respect to any item of Collateral on any
date, as to


 


(i)            Cash, the amount thereof;


 


(ii)           Treasury Securities, the aggregate
principal amount thereof at maturity;


 


(iii)          Applicable
Ownership Interests in Debentures, the appropriate aggregate principal amount
of the underlying Debentures; and


 


(iv)          Applicable Ownership Interests in the
Treasury Portfolio (as specified in clause (i) of the definition of such
term), the appropriate aggregate percentage of the aggregate principal amount
at maturity of the Treasury Portfolio.


 


“Vice President” means any vice president, whether or not designated
by a number or a word or words added before or after the title “vice president.”


 


SECTION 1.2.                                                                  Compliance Certificates and
Opinions.


 


Except as otherwise expressly provided by this
Agreement, upon any application or request by the Company to the Purchase
Contract Agent to take any action under any provision of this Agreement, the
Company shall furnish to the Purchase Contract Agent a Company Certificate
stating that all conditions precedent, if any, provided for in this Agreement
relating to the proposed action have been complied with and, if requested by the
Purchase Contract Agent, an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Agreement relating to such particular application or request, no additional
certificate or opinion need be furnished.


 


Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this Agreement shall
include:


 


(1)           a statement that each individual signing
such certificate or opinion has read such condition or covenant and the
definitions herein relating thereto;


 


14














 


(2)           a brief statement as to the nature and
scope of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;


 


(3)           a statement that, in the opinion of each
such individual, he or she has made such examination or investigation as is
necessary to enable such individual to express an informed opinion as to
whether or not such covenant or condition has been complied with; and


 


(4)           a statement as to whether, in the opinion
of each such individual, such condition or covenant has been complied with.


 


SECTION 1.3.                                                                  Form of Documents Delivered
to Purchase Contract Agent.


 


In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents.


 


Any certificate or opinion of an officer of the
Company may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous.  Any such
certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.


 


Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Agreement, they may, but need not, be
consolidated and form one instrument.


 


SECTION 1.4.                                                                  Acts of Holders; Record Dates.


 


(a)           Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Purchase Contract Agent and, where it is hereby expressly
required, to the Company.  Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the “Act”
of the Holders signing such instrument or instruments.  Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Agreement and (subject to Section 7.1)
conclusive in favor of the Purchase Contract Agent and the Company, if made in
the manner provided in this Section.


 


15





















 


(b)           The fact and date of the execution by any Person of
any such instrument or writing may be proved in any manner which the Purchase
Contract Agent deems sufficient.


 


(c)           The ownership of Units shall be proved by the Security
Register.


 


(d)           Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Certificate shall bind every
future Holder of the same Certificate and the Holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be done by the
Purchase Contract Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Certificate.


 


(e)           The Company may set any day as a record date for the
purpose of determining the Holders of Outstanding Units entitled to give, make
or take any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Agreement to be given, made or
taken by Holders of Units.  If any record
date is set pursuant to this paragraph, the Holders of the Outstanding
Corporate Units and the Outstanding Treasury Units, as the case may be, on such
record date, and no other Holders, shall be entitled to take the relevant
action with respect to the Corporate Units or the Treasury Units, as the case
may be, whether or not such Holders remain Holders after such record date;
provided that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the requisite number of
Outstanding Units on such record date. 
Nothing in this paragraph shall be construed to prevent the Company from
setting a new record date for any action for which a record date has previously
been set pursuant to this paragraph (whereupon the record date previously set
shall automatically and with no action by any Person be cancelled and of no
effect), and nothing in this paragraph shall be construed to render ineffective
any action taken by Holders of the requisite number of Outstanding Units on the
date such action is taken.  Promptly
after any record date is set pursuant to this paragraph, the Company, at its
own expense, shall cause notice of such record date, the proposed action by
Holders and the applicable Expiration Date to be given to the Purchase Contract
Agent in writing and to each Holder of Units in the manner set forth in Section 1.6.


 


With respect to any record date set pursuant to this
Section, the Company may designate any date as the “Expiration
Date” and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the Purchase Contract
Agent in writing, and to each Holder of Units in the manner set forth in Section 1.6, on or prior to the
existing Expiration Date.  If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the Company shall be deemed to have initially designated the
180th day after such record date as the Expiration Date with respect thereto,
subject to its right to change the Expiration Date as provided in this
paragraph.  Notwithstanding the
foregoing, no Expiration Date shall be later than the 180th day after the
applicable record date.


 


SECTION 1.5.                                                                  Notices.


 


Any request, demand, authorization, direction, notice,
consent, waiver or Act of the Holders or other document provided or permitted
by this Agreement to be made upon, given or furnished to, or filed with,


 


16

















 


(1)           the Purchase Contract Agent by any Holder
or by the Company shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if made, given, furnished or filed in
writing (including, without limitation, by telecopy) and personally delivered
or mailed, first-class postage prepaid, addressed to the Purchase Contract
Agent at The Bank of New York Mellon,
                        ,
                        ,
                        
                        ,
Attention:
                        
or at any other address previously furnished in writing by the Purchase
Contract Agent to the Holders and the Company;


 


(2)           the Company by the Purchase Contract
Agent or by any Holder shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if made, given, furnished or filed in
writing (including, without limitation, by telecopy) and personally delivered
or mailed, first-class postage prepaid, addressed to the Company at FPL Group, Inc.,
700 Universe Boulevard, Juno Beach, Florida 33408, Attention: Treasurer, or at
any other address previously furnished in writing to the Purchase Contract
Agent by the Company;


 


(3)           the Collateral Agent by the Purchase
Contract Agent, the Company or any Holder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if made, given,
furnished or filed in writing (including, without limitation, by telecopy) and
personally delivered or mailed, first-class postage prepaid, addressed to the
Collateral Agent at
                        ,
                        ,
                        ,
                        
                        ,
Attention: 
                        ,
or at any other address previously furnished in writing by the Collateral Agent
to the Purchase Contract Agent, the Company and the Holders; or


 


(4)           the Indenture Trustee by the Company shall
be sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing (including, without
limitation, by telecopy) and personally delivered or mailed, first-class
postage prepaid, addressed to the Indenture Trustee at The Bank of New York
Mellon,
                        ,
                        ,
                        
                        ,
Attention:
                        ,
or at any other address previously furnished in writing by the Indenture
Trustee to the Company.


 


SECTION 1.6.                                                                  Notice to Holders; Waiver.


 


Where this Agreement provides for notice to Holders of
any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at its address as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice.  In any case where notice to Holders is given
by mail, neither the failure to mail such notice, nor any defect in any notice
so mailed to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders.  Where
this Agreement provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Holders shall be filed
with the Purchase Contract Agent, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.


 


17

















 


In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification as shall be made with the approval of
the Purchase Contract Agent shall constitute a sufficient notification for
every purpose hereunder.


 


SECTION 1.7.                                                                  Effect of Headings and Table of
Contents.


 


The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.


 


SECTION 1.8.                                                                  Successors and Assigns.


 


All covenants and agreements in this Agreement by the
Company shall bind its successors and assigns, whether so expressed or not.


 


SECTION 1.9.                                                                  Separability Clause.


 


In case any provision in this Agreement or in the
Units shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof and thereof shall not in any
way be affected or impaired thereby.


 


SECTION 1.10.                                                           Benefits of Agreement.


 


Nothing in this Agreement or in the Units, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and, to the extent provided hereby, the Holders, any
benefits or any legal or equitable right, remedy or claim under this
Agreement.  The Holders from time to time
shall be beneficiaries of this Agreement and shall be bound by all of the terms
and conditions hereof and of the Units evidenced by their Certificates by their
acceptance of delivery of such Certificates.


 


SECTION 1.11.                                                           Governing Law.


 


THIS AGREEMENT AND THE
UNITS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREUNDER,
EXCEPT TO THE EXTENT THAT THE LAWS OF ANY OTHER JURISDICTION SHALL BE
MANDATORILY APPLICABLE.


 


SECTION 1.12.                                                           Legal Holidays.


 


In any case where any Payment Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement or
the Corporate Unit Certificates or the Treasury Unit Certificates) payment of
the Contract Adjustment Payments, if any, or other distributions, if any, shall
not be made on such date, but such payments shall be made on the next
succeeding Business Day with the same force and effect as if made on such
Payment Date, and no interest shall accrue or be payable by the Company or any
Holder for the period from and after any such Payment Date, except that, if
such next succeeding Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day with the same
force and effect as if made on such Payment Date.


 


18

















 


In any case where the Purchase Contract Settlement
Date or any Early Settlement Date or Fundamental Change Early Settlement Date
shall not be a Business Day, then (notwithstanding any other provision of this
Agreement, the Corporate Unit Certificates or the Treasury Unit Certificates),
the Purchase Contracts shall not be performed and Early Settlement and
Fundamental Change Early Settlement shall not be effected on such date, but the
Purchase Contracts shall be performed or Early Settlement or Fundamental Change
Early Settlement shall be effected, as applicable, on the immediately following
Business Day with the same force and effect as if performed on the Purchase
Contract Settlement Date, Early Settlement Date or Fundamental Change Early
Settlement Date, as applicable.


 


SECTION 1.13.                                                           Counterparts.


 


This Agreement may be executed in any number of
counterparts by the parties hereto on separate counterparts, each of which,
when so executed and delivered, shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.


 


SECTION 1.14.                                                           Inspection of Agreement


 


A copy of this Agreement shall be available at all
reasonable times during normal business hours at the Corporate Trust Office for
inspection by any Holder.


 


SECTION 1.15.                                                           Force Majeure.


 


In no event shall the Purchase Contract Agent be
responsible or liable for any failure or delay in the performance of its
obligations hereunder arising out of or caused by, directly or indirectly,
forces beyond its control, including, without limitation, strikes, work
stoppages, accidents, acts of war or terrorism, civil or military disturbances,
nuclear or natural catastrophes or acts of God, and interruptions, loss or
malfunctions of utilities, communications or computer (software and hardware)
services; it being understood that the Purchase Contract Agent shall use
reasonable efforts which are consistent with accepted practices in the banking
industry to resume performance as soon as practicable under the
circumstances.  The Purchase Contract
Agent shall use reasonable efforts which are consistent with accepted practices
in the banking industry to maintain its computer (hardware and software)
services in good working order.


 


SECTION 1.16.                                                           Waiver of Jury Trial.


 


EACH OF THE COMPANY AND THE PURCHASE CONTRACT AGENT
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE UNITS OR THE TRANSACTIONS CONTEMPLATED HEREBY.


 


19

















 


ARTICLE II


 


Certificate Forms


 


SECTION 2.1.                                                                  Forms of Certificates Generally.


 


The Certificates (including the form of Purchase
Contract forming part of each Unit evidenced thereby) shall be in substantially
the form set forth in Exhibit A
hereto (in the case of Corporate Unit Certificates) or Exhibit B
hereto (in the case of Treasury Unit Certificates), with such letters, numbers
or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required by
the rules of any securities exchange on which the Units may be listed or
any depositary therefor, or as may, consistently herewith, be determined by the
officers of the Company executing such Certificates, as evidenced by their
execution of the Certificates.


 


The definitive Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Units evidenced by such Certificates, consistent with the provisions of this
Agreement, as evidenced by their execution thereof.


 


Every Global Certificate authenticated, executed on
behalf of the Holders and delivered hereunder shall bear a legend substantially
in the form set forth in Exhibit A
and Exhibit B for a Global
Certificate.


 


SECTION 2.2.                                                                  Form of Purchase Contract
Agent’s Certificate of Authentication.


 


The form of the Purchase Contract Agent’s certificate
of authentication of the Units shall be in substantially the form set forth on
the form of the applicable Certificates.


 


ARTICLE III


 


The Units


 


SECTION 3.1.                                                                  Title and Terms; Denominations.


 


The aggregate number of Units evidenced by
Certificates authenticated, executed on behalf of the Holders and delivered
hereunder is limited to
                        
units (or
                        
if the overallotment option provided for in the Underwriting Agreement is exercised
in full) except for Certificates authenticated, executed and delivered upon
registration of transfer of, in exchange for, or in lieu of, other Certificates
pursuant to Section 3.4, 3.5, 3.10, 3.12, 3.13, 5.9
or 8.5.


 


The Certificates shall be issuable only in registered
form and only in denominations of a single Corporate Unit or Treasury Unit and
any integral multiple thereof.


 


SECTION 3.2.                                                                  Rights and Obligations Evidenced
by the Certificates.


 


Each Corporate Unit Certificate shall evidence the
number of Corporate Units specified therein, with each such Corporate Unit
representing (1) the ownership by the Holder thereof of an Applicable
Ownership Interest in Debentures or an Applicable Ownership Interest in the 


 


20

















 


Treasury Portfolio, as
the case may be, subject to the Pledge of such Applicable Ownership Interest in
Debenture or Applicable Ownership Interest in the Treasury Portfolio (as
specified in clause (i) of the definition of such term), as the case may
be, by such Holder pursuant to the Pledge Agreement, and (2) the rights
and obligations of the Holder thereof and the Company under one Purchase
Contract.  The Purchase Contract Agent as
attorney-in-fact for, and on behalf of, the Holder of each Corporate Unit shall
pledge, pursuant to the Pledge Agreement, each Applicable Ownership Interest in
Debentures or Applicable Ownership Interest in the Treasury Portfolio (as
specified in clause (i) of the definition of such term), as the case may
be, forming a part of such Corporate Unit, to the Collateral Agent and grant to
the Collateral Agent a security interest in the right, title, and interest of
such Holder in such Applicable Ownership Interest in Debentures or such
Applicable Ownership Interest in the Treasury Portfolio (as specified in clause
(i) of the definition of such term), as the case may be, for the benefit
of the Company, to secure the obligation of the Holder under one Purchase
Contract to purchase the Common Stock.


 


Upon the formation of a Treasury Unit pursuant to Section 3.13, each Treasury
Unit Certificate shall evidence the number of Treasury Units specified therein,
with each such Treasury Unit representing (1) the ownership by the Holder
thereof of a 1/20, or 5%, undivided beneficial interest in a Treasury Security,
subject to the Pledge of such interest by such Holder pursuant to the Pledge
Agreement, and (2) the rights and obligations of the Holder thereof and
the Company under one Purchase Contract. 
The Purchase Contract Agent as attorney-in-fact for, and on behalf of,
the Holder of each Treasury Unit shall pledge, pursuant to the Pledge
Agreement, each undivided beneficial interest in a Treasury Security forming a
part of such Treasury Unit, to the Collateral Agent and grant to the Collateral
Agent a security interest in the right, title, and interest of such Holder in
such undivided beneficial interest in a Treasury Security for the benefit of
the Company, to secure the obligation of the Holder under one Purchase Contract
to purchase the Common Stock.


 


Prior to the purchase of shares of Common Stock under
each Purchase Contract, such Purchase Contract shall not entitle the Holder of
a Unit to any of the rights of a holder of shares of Common Stock, including,
without limitation, the right to vote or receive any dividends or other
payments or to consent or to receive notice as a shareholder in respect of the
meetings of shareholders or for the election of directors of the Company or for
any other matter, or any other rights whatsoever as a shareholder of the
Company.


 


SECTION 3.3.                                                                  Execution, Authentication,
Delivery and Dating.


 


Subject to the provisions of Section 3.13
and Section 3.14 hereof, upon the execution and delivery of
this Agreement, and at any time and from time to time thereafter, the Company
may deliver Certificates executed by the Company to the Purchase Contract Agent
for authentication, execution on behalf of the Holders and delivery, together
with its Issuer Order for authentication of such Certificates, and the Purchase
Contract Agent in accordance with such Issuer Order shall authenticate, execute
on behalf of the Holders and deliver such Certificates.


 


The Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President, one of its Vice
Presidents, its Treasurer, one of its Assistant Treasurers, its Secretary or
one of its Assistant Secretaries.  The
signature of any of these officers on the Certificates may be manual or
facsimile.


 


21

















 


Certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificates.


 


No Purchase Contract evidenced by a Certificate shall
be valid until such Certificate has been executed on behalf of the Holder by
the manual signature of an authorized signatory of the Purchase Contract Agent,
as such Holder’s attorney-in-fact.  Such
signature by an authorized signatory of the Purchase Contract Agent shall be
conclusive evidence that the Holder of such Certificate has entered into the Purchase
Contracts evidenced by such Certificate.


 


Each Certificate shall be dated the date of its
authentication.


 


No Certificate shall be entitled to any benefit under
this Agreement or be valid or obligatory for any purpose unless there appears
on such Certificate a certificate of authentication substantially in the form
provided for herein executed by an authorized signatory of the Purchase
Contract Agent by manual signature, and such certificate of authentication upon
any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder.


 


SECTION 3.4.                                                                  Temporary Certificates.


 


Pending the preparation of definitive Certificates,
the Company shall execute and deliver to the Purchase Contract Agent, and the
Purchase Contract Agent shall authenticate, execute on behalf of the Holders,
and deliver, in lieu of such definitive Certificates, temporary Certificates
which are in substantially the forms set forth in Exhibit A
and Exhibit B hereto, with such
letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as may be
required by the rules of any securities exchange on which the Corporate
Units or Treasury Units, as the case may be, are listed, or as may,
consistently herewith, be determined by the officers of the Company executing
such Certificates, as evidenced by their execution of the Certificates.


 


If temporary Certificates are issued, the Company will
cause definitive Certificates to be prepared without unreasonable delay.  After the preparation of definitive
Certificates, the temporary Certificates shall be exchangeable for definitive
Certificates upon surrender of the temporary Certificates at the Corporate
Trust Office, at the expense of the Company and without charge to the
Holder.  Upon surrender for cancellation
of any one or more temporary Certificates, the Company shall execute and
deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall
authenticate, execute on behalf of the Holder, and deliver in exchange
therefor, one or more definitive Certificates of like tenor and denominations
and evidencing a like number of Corporate Units or Treasury Units, as the case
may be, as the temporary Certificate or Certificates so surrendered.  Until so exchanged, the temporary
Certificates shall in all respects evidence the same benefits and the same
obligations with respect to the Corporate Units or Treasury Units, as the case
may be, evidenced thereby as definitive Certificates.


 


22

















 


SECTION 3.5.                                                                  Registration; Registration of
Transfer and Exchange.


 


The Purchase Contract Agent shall keep at the
Corporate Trust Office a register (the “Security Register”)
in which, subject to such reasonable regulations as it may prescribe, the
Purchase Contract Agent shall provide for the registration of Certificates and
of transfers of Certificates (the Purchase Contract Agent, in such capacity,
the “Security Registrar”).  The Security Registrar shall record
separately the registration and transfer of the Certificates evidencing
Corporate Units and Treasury Units.


 


Upon surrender for registration of transfer of any
Certificate at the Corporate Trust Office, the Company shall execute and
deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall
authenticate, execute on behalf of the designated transferee or transferees,
and deliver, in the name of the designated transferee or transferees, one or more
new Certificates of any authorized denominations, of like tenor, and evidencing
a like number of Corporate Units or Treasury Units, as the case may be.


 


At the option of the Holder, Certificates may be
exchanged for other Certificates, of any authorized denominations and
evidencing a like number of Corporate Units or Treasury Units, as the case may
be, upon surrender of the Certificates to be exchanged at the Corporate Trust
Office.  Whenever any Certificates are so
surrendered for exchange, the Company shall execute and deliver to the Purchase
Contract Agent, and the Purchase Contract Agent shall authenticate, execute on
behalf of the Holder, and deliver the Certificates which the Holder making the
exchange is entitled to receive.


 


All Certificates issued upon any registration of
transfer or exchange of a Certificate shall evidence the ownership of the same
number of Corporate Units or Treasury Units, as the case may be, and be
entitled to the same benefits and subject to the same obligations under this
Agreement as the Corporate Units or Treasury Units, as the case may be,
evidenced by the Certificate surrendered upon such registration of transfer or
exchange.


 


Every Certificate presented or surrendered for
registration of transfer or exchange shall (if so required by the Company or
the Purchase Contract Agent) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Purchase
Contract Agent, duly executed by the Holder thereof or its attorney duly
authorized in writing.


 


No service charge shall be made for any registration
of transfer or exchange of a Certificate, but the Company and the Purchase
Contract Agent may require payment from the Holder of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Certificates, other than any exchanges
pursuant to Sections 3.6 and 8.5 not
involving any transfer.


 


Notwithstanding the foregoing, the Company will not be
obligated to execute and deliver to the Purchase Contract Agent, and the
Purchase Contract Agent will not be obligated to authenticate, execute on
behalf of the Holder and deliver any Certificate in exchange for any other
Certificate presented or surrendered for registration of transfer or for
exchange on or after the Business Day immediately preceding the earliest to
occur of any Early Settlement Date with respect to such 


 


23

















 


Certificate, any
Fundamental Change Early Settlement Date with respect to such Certificate, the
Purchase Contract Settlement Date or the Termination Date.  In lieu of delivery of a new Certificate,
upon satisfaction of the applicable conditions specified above in this Section and
receipt of appropriate registration or transfer instructions from such Holder,
the Purchase Contract Agent shall


 


(i) if the Purchase Contract Settlement Date or
any Early Settlement Date or Fundamental Change Early Settlement Date with
respect to such other Certificate (or portion thereof) has occurred, deliver
the shares of Common Stock issuable in respect of the Purchase Contracts
forming a part of the Units evidenced by such other Certificate (or portion
thereof), or


 


(ii) if a Termination Event, Early Settlement or
Fundamental Change Early Settlement shall have occurred prior to the Purchase
Contract Settlement Date, or a Cash Settlement shall have occurred, transfer
the Applicable Ownership Interests in Debentures, the Treasury Securities, or
the Applicable Ownership Interests in the Treasury Portfolio, as the case may
be, underlying such other Certificate,


 


in each case subject to the applicable conditions and
in accordance with the applicable provisions of Section 3.15
(with respect to a Termination Event) and Article V hereof.


 


SECTION 3.6.                                                                  Book-Entry Interests.


 


The Certificates, on original issuance, will be issued
in the form of one or more fully registered Global Certificates, to be
delivered to the Depositary or a nominee or custodian thereof by, or on behalf
of, the Company.  Such Global
Certificates shall initially be registered on the Security Register in the name
of Cede & Co., the nominee of the Depositary, and no Beneficial Owner
will receive a definitive Certificate representing such Beneficial Owner’s
interest in such Global Certificate, except as provided in Section 3.9.  The Purchase Contract Agent shall enter into
an agreement with the Depositary if so requested by the Company.  Following the issuance of such Global
Certificates and unless and until definitive, fully registered Certificates
have been issued to Beneficial Owners pursuant to Section 3.9:


 


(i)            the provisions of this
Section 3.6 shall be in full force and effect;


 


(ii)           the Company shall be
entitled to deal with the Clearing Agency for all purposes of this Agreement
(including the payment of Contract Adjustment Payments, if any, and receiving
approvals, votes or consents hereunder) as the Holder of the Units and the sole
holder of the Global Certificate(s) and shall have no obligation to the
Beneficial Owners;


 


(iii)          to the extent that the
provisions of this Section 3.6 conflict with any other provisions of this
Agreement, the provisions of this Section 3.6 shall control; and


 


(iv)          the rights of the
Beneficial Owners shall be exercised only through the Clearing Agency and shall
be limited to those established by law and agreements between such Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants.  The Clearing Agency will make book-entry
transfers among Clearing Agency Participants and receive and transmit payments
of Contract Adjustment Payments to such Clearing Agency Participants.


 


24














 


Transfers of Units evidenced by Global Certificates
shall be made through the facilities of the Depositary, and any cancellation
of, or increase or decrease in the number of, such Units (including the
creation of Treasury Units and the recreation of Corporate Units pursuant to Section 3.13 and Section 3.14 respectively)
shall be accomplished by making appropriate annotations on the Schedule of
Increases and Decreases set forth in such Global Certificate.


 


SECTION 3.7.                                                                  Notices
to Holders.


 


Whenever a notice or other communication to the
Holders is required to be given under this Agreement, the Company or the
Company’s agent shall give such notices and communications to the Holders and,
with respect to any Certificates registered in the name of a Clearing Agency or
the nominee of a Clearing Agency, the Company or the Company’s agent shall,
except as set forth herein, have no obligations to the Beneficial Owners.


 


SECTION 3.8.                                                                  Appointment
of Successor Clearing Agency.


 


If any Clearing Agency elects to discontinue its
services as securities depositary with respect to the Units, the Company may,
in its sole discretion, appoint a successor Clearing Agency with respect to the
Units.


 


SECTION 3.9.                                                                  Definitive
Certificates.


 


If (i) a Clearing Agency notifies the Company
that it is unwilling or unable to continue its services as securities
depositary with respect to the Units and a successor Clearing Agency is not
appointed within 90 days pursuant to Section 3.8
after such notice has been given and is continuing, or (ii) the Company
elects to terminate the book-entry system through the Clearing Agency with
respect to the Units, then upon surrender of the Global Certificates
representing the Book-Entry Interests with respect to the Units by the Clearing
Agency, accompanied by registration instructions, the Company shall cause
definitive Certificates to be delivered to Beneficial Owners in accordance with
the instructions of the Clearing Agency. 
The Company shall not be liable for any delay in delivery of such
instructions and may conclusively rely on and shall be protected in relying on,
such instructions.


 


SECTION 3.10.                                                           Mutilated,
Destroyed, Lost and Stolen Certificates.


 


If any mutilated Certificate is surrendered to the
Purchase Contract Agent, the Company shall execute and deliver to the Purchase
Contract Agent, and the Purchase Contract Agent shall authenticate, execute on
behalf of the Holder, and deliver in exchange therefor, a new Certificate at
the cost of the Holder, evidencing the same number of Corporate Units or
Treasury Units, as the case may be, and bearing a Certificate number not
contemporaneously outstanding.


 


If there shall be delivered to the Company and the
Purchase Contract Agent (i) evidence to their satisfaction of the
destruction, loss or theft of any Certificate, and (ii) such security or
indemnity at the cost of the Holder as may be required by the Company and the
Purchase Contract Agent to hold each of them and any agent of either of them
harmless, then, in the absence of notice to the Company or the Purchase
Contract Agent that such Certificate has been acquired by a protected
purchaser, the Company shall execute and deliver to the Purchase Contract
Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of
the Holder, and deliver to the Holder, in lieu of any such destroyed, lost or
stolen Certificate, a new


 


25

















 


Certificate, at the cost
of the Holder, evidencing the same number of Corporate Units or Treasury Units,
as the case may be, and bearing a Certificate number not contemporaneously
outstanding.


 


Notwithstanding the foregoing, the Company will not be
obligated to execute and deliver to the Purchase Contract Agent, and the
Purchase Contract Agent will not be obligated to authenticate, execute on
behalf of the Holder and deliver to the Holder, with respect to such lost,
stolen, destroyed or mutilated Certificate a new Certificate on or after the
Business Day immediately preceding the earliest of any Early Settlement Date, any
Fundamental Change Early Settlement Date, the Purchase Contract Settlement Date
or the Termination Date.  In addition, in
lieu of delivery of a new Certificate, upon satisfaction of the applicable
conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Purchase Contract
Agent shall


 


(i) if the Purchase Contract Settlement Date or
an Early Settlement Date or a Fundamental Change Early Settlement Date with
respect to such lost, stolen, destroyed or mutilated Certificate has occurred,
deliver the shares of Common Stock issuable in respect of the Purchase
Contracts forming a part of the Units evidenced by such Certificate, or


 


(ii) if a Fundamental Change Early Settlement or
an Early Settlement with respect to such lost, stolen, destroyed or mutilated
Certificate or a Termination Event shall have occurred prior to the Purchase
Contract Settlement Date or a Cash Settlement shall have occurred, transfer the
Applicable Ownership Interest in Debentures, the Applicable Ownership Interest
in the Treasury Portfolio or the Treasury Securities, as the case may be,
forming a part of the Units represented by such Certificate to such Holder,


 


in each case subject to the applicable conditions and
in accordance with the applicable provisions of Section 3.15
(with respect to a Termination Event) and Article V hereof.


 


Upon the issuance of any new Certificate under this
Section, the Company and the Purchase Contract Agent may require the payment by
the Holder of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other fees and expenses
(including, without limitation, the fees and expenses of the Purchase Contract
Agent) connected therewith.


 


Every new Certificate issued pursuant to this Section in
lieu of any destroyed, mutilated, lost or stolen Certificate shall constitute
an original additional contractual obligation of the Company and of the Holder
in respect of the Units evidenced thereby, whether or not the destroyed,
mutilated, lost or stolen Certificate (and the Units evidenced thereby) shall
be at any time enforceable by anyone, and shall be entitled to all the benefits
and be subject to all the obligations of this Agreement equally and proportionately
with any and all other Certificates delivered hereunder.


 


The provisions of this Section are exclusive and
shall preclude, to the extent lawful, all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Certificates.


 


26

















 


SECTION 3.11.                                                           Persons
Deemed Owners.


 


Prior to due presentment of a Certificate for
registration of transfer, the Company, FPL Group Capital and the Purchase
Contract Agent, and any agent of the Company, FPL Group Capital or the Purchase
Contract Agent, may treat the Person in whose name such Certificate is
registered on the Security Register as the owner of the Units evidenced thereby
for purposes of (subject to any applicable record date) any payment or
distribution with respect to the Applicable Ownership Interests in Debentures,
or with respect to the Applicable Ownership Interests in the Treasury Portfolio
(as specified in clause (ii) of the definition thereof), as applicable,
payment of Contract Adjustment Payments and performance of the Purchase
Contracts and for all other purposes whatsoever, in connection with such Units,
whether or not payment, distribution or performance shall be overdue and
notwithstanding any notice to the contrary, and neither the Company, FPL Group
Capital nor the Purchase Contract Agent, nor any agent of the Company, FPL
Group Capital or the Purchase Contract Agent, shall be affected by notice to
the contrary.


 


Notwithstanding the foregoing, with respect to any
Global Certificate, nothing herein shall prevent the Company, FPL Group
Capital, the Purchase Contract Agent or any agent of the Company, FPL Group
Capital or the Purchase Contract Agent, from treating the Clearing Agency as
the sole Holder of such Global Certificate or from giving effect to any written
certification, proxy or other authorization furnished by any Clearing Agency
(or its nominee), as a Holder, with respect to such Global Certificate or
impair, as between such Clearing Agency and owners of beneficial interests in
such Global Certificate, the operation of customary practices governing the
exercise of rights of such Clearing Agency (or its nominee) as Holder of such
Global Certificate.  None of the Company,
FPL Group Capital, the Purchase Contract Agent or any agent of the Company, FPL
Group Capital or the Purchase Contract Agent will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests of a Global Certificate or maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.


 


SECTION 3.12.                                                           Cancellation.


 


All Certificates surrendered for delivery of shares of
Common Stock on or after the Purchase Contract Settlement Date or in connection
with an Early Settlement or a Fundamental Change Early Settlement or for
delivery of the Debentures underlying the Applicable Ownership Interest in
Debentures, or for delivery of the Applicable Ownership Interests in the
Treasury Portfolio or Treasury Securities, as the case may be, after the
occurrence of a Termination Event or pursuant to a Cash Settlement, an Early
Settlement or a Fundamental Change Early Settlement, a Collateral Substitution,
or upon the registration of a transfer or exchange of a Unit, shall, if
surrendered to any Person other than the Purchase Contract Agent, be delivered
to the Purchase Contract Agent along with appropriate written instructions
regarding the cancellation thereof and, if not already cancelled, shall be
promptly cancelled by it.  The Company
may at any time deliver to the Purchase Contract Agent for cancellation any
Certificates previously authenticated, executed and delivered hereunder which
the Company may have acquired in any manner whatsoever, and all Certificates so
delivered shall, upon an Issuer Order, be promptly cancelled by the Purchase
Contract Agent.  No Certificates shall be
authenticated, executed on behalf of the Holder and delivered in lieu of or in
exchange for any Certificates cancelled as provided in this Section, except as
expressly permitted by this Agreement. 
All cancelled


 


27

















 


Certificates held by the
Purchase Contract Agent shall upon written request be returned to the Company.


 


If the Company or any Affiliate of the Company shall
acquire any Certificate, such acquisition shall not operate as a cancellation
of such Certificate unless and until such Certificate is delivered to the
Purchase Contract Agent cancelled or for cancellation.


 


SECTION 3.13.                                                           Creation
or Recreation of Treasury Units by Substitution of Treasury Securities.


 


A Holder of a Corporate Unit may, at any time on or
prior to 5:00 p.m., New York City time, on the seventh Business Day
immediately preceding the Purchase Contract Settlement Date, create or recreate
a Treasury Unit and separate the Applicable Ownership Interest in Debentures or
the Applicable Ownership Interest in the Treasury Portfolio, as applicable,
from the related Purchase Contract in respect of such Corporate Unit by
substituting Treasury Securities for the Applicable Ownership Interest in
Debentures or the Applicable Ownership Interest in the Treasury Portfolio that
form a part of such Corporate Unit in accordance with this Section 3.13;
provided, however, that if the Treasury Portfolio has replaced the Debentures
underlying the Applicable Ownership Interest in Debentures as a component of
Corporate Units as a result of a Successful Remarketing or a Mandatory
Redemption or a Special Event Redemption, such Collateral Substitutions may be
made at any time on or prior to the second Business Day immediately preceding
the Purchase Contract Settlement Date. 
Unless a Successful Remarketing or a Mandatory Redemption or a Special
Event Redemption has previously occurred, Holders shall not be permitted to
effect Collateral Substitutions in accordance with the provisions of this Section 3.13 during the period
commencing on and including the Business Day prior to the first of the three
sequential Remarketing Dates comprising a Three-Day Remarketing Period and
ending on and including the Reset Effective Date relating to a Successful
Remarketing during such Three-Day Remarketing Period or, if none of the
Remarketings during such Three-Day Remarketing Period is successful, the
Business Day following the last of the three sequential Remarketing Dates
occurring during such Three-Day Remarketing Period.


 


Holders of Corporate Units may make Collateral
Substitutions and establish Treasury Units (i) only in integral multiples
of 20 Corporate Units if Applicable Ownership Interests in Debentures are being
replaced with Treasury Securities, or (ii) only in integral multiples of
                        
Corporate Units (or such other number of Corporate Units as may be determined
by the Remarketing Agent following a Successful Remarketing if the Reset
Effective Date is not a Payment Date) if the Applicable Ownership Interests in
the Treasury Portfolio are being replaced with Treasury Securities.  To create 20 Treasury Units (if a Mandatory
Redemption or a Special Event Redemption has not occurred and the Applicable
Ownership Interest in Debentures remains a component of Corporate Units), or
                        
Treasury Units (or such other number of Treasury Units as may be determined by
the Remarketing Agent following a Successful Remarketing if the Reset Effective
Date is not a Payment Date) (if a Mandatory Redemption or a Special Event
Redemption has occurred or the Treasury Portfolio has replaced the Applicable
Ownership Interest in Debentures as a component of the Corporate Units as a
result of a Successful Remarketing), the Corporate Unit Holder shall


 


28

















 


(a)           if the Treasury
Portfolio has not replaced the Applicable Ownership Interest in Debentures as a
component of Corporate Units as a result of a Successful Remarketing or a
Mandatory Redemption or a Special Event Redemption, deposit with the Collateral
Agent a Treasury Security having a
principal amount at maturity of $1,000, which Treasury Security must have been
purchased in the open market at the Corporate Unit Holder’s expense, unless otherwise owned by the Corporate
Unit Holder; or


 


(b)           if the Treasury
Portfolio has replaced the Applicable Ownership Interest in Debentures as a
component of Corporate Units as a result of a Successful Remarketing or a
Mandatory Redemption or a Special Event Redemption, on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date,
deposit with the Collateral Agent Treasury Securities having an aggregate
principal amount at maturity of $1,000,000, which Treasury Securities must have been purchased in the open market
at the Corporate Unit Holder’s
expense, unless otherwise owned by the Corporate Unit Holder; and


 


(c)           in each case, Transfer
and surrender the related 20 Corporate Units, or, in the event the Treasury
Portfolio is a component of Corporate Units,
                        
Corporate Units (or such other number of Corporate Units as may be determined
by the Remarketing Agent following a Successful Remarketing if the Reset
Effective Date is not a Payment Date), to the Purchase Contract Agent
accompanied by an instruction to the Purchase Contract Agent, substantially in
the form of Exhibit B to the Pledge Agreement,
stating that the Holder has Transferred the relevant types and amounts of
Treasury Securities to the Collateral Agent and requesting that the Purchase
Contract Agent instruct the Collateral Agent to release the Debentures
underlying the Applicable Ownership Interest in Debentures or the Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, underlying
such Corporate Units, whereupon the Purchase Contract Agent shall promptly give
such instruction to the Collateral Agent, substantially in the form of Exhibit A to the Pledge Agreement.


 


Upon receipt of the Treasury Securities described in
clause (a) or (b) above and the instructions described in clause (c) above,
in accordance with the terms of the Pledge Agreement, the Collateral Agent will
release from the Pledge, to the Purchase Contract Agent, on behalf of the
Holder, the Debentures underlying the Applicable Ownership Interest in
Debentures or the Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, that had been components of such Corporate Unit, free and
clear of the Company’s security interest therein, and upon receipt thereof the
Purchase Contract Agent shall promptly:


 


(i)            cancel
the related Corporate Units surrendered and Transferred;


 


(ii)           Transfer
the Debentures underlying the Applicable Ownership Interest in Debentures, or
the Applicable Ownership Interest in the Treasury Portfolio, as the case may
be, that had been components of such Corporate Units to the Holder; and


 


(iii)          authenticate, execute on behalf of such
Holder and deliver a Treasury Unit Certificate executed by the Company in
accordance with Section 3.3
evidencing the same number of Purchase Contracts as were evidenced by the
cancelled Corporate Units.


 


29

















 


Holders who elect to separate the Applicable Ownership
Interest in Debentures or the Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, from the related Purchase Contracts and to
substitute Treasury Securities for such Applicable Ownership Interest in
Debentures or the Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, shall be responsible for any fees or expenses payable to the
Collateral Agent for its services as Collateral Agent in respect of the
substitution, and the Company shall not be responsible for any such fees or
expenses.


 


In the event a Holder making a Collateral Substitution
pursuant to this Section 3.13 fails to effect a book-entry transfer of the
Corporate Units or fails to deliver a Corporate Unit Certificate to the
Purchase Contract Agent after depositing the Treasury Securities with the
Collateral Agent, the Applicable Ownership Interest in Debentures or the
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
constituting a part of such Corporate Unit, and any interest on such Applicable
Ownership Interest in Debentures or distributions with respect to the
Applicable Ownership Interest in the Treasury Portfolio, as the case may be, shall
be held in the name of the Purchase Contract Agent or its nominee in trust for
the benefit of such Holder, until such Corporate Unit is so Transferred or the
Corporate Unit Certificate is so delivered, as the case may be, or, until such
Holder provides evidence satisfactory to the Company and the Purchase Contract
Agent that such Corporate Unit Certificate has been destroyed, lost or stolen,
together with any indemnity that may be required by the Purchase Contract Agent
and the Company.


 


Except as provided in this Section 3.13, for so
long as the Purchase Contract underlying a Corporate Unit remains in effect,
such Corporate Unit shall not be separable into its constituent parts, and the
rights and obligations of the Holder in respect of the Applicable Ownership
Interest in Debentures or the Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, and the Purchase Contract comprising such
Corporate Unit may be acquired, and may be Transferred and exchanged, only as
an entire Corporate Unit.


 


SECTION 3.14.                                                           Recreation
of Corporate Units.


 


A Holder of a Treasury Unit may, at any time on or
prior to 5:00 p.m., New York City time, on the second Business Day
immediately preceding the first day of the Final Three-Day Remarketing Period,
recreate Corporate Units by depositing with the Collateral Agent Debentures
underlying the Applicable Ownership Interest in Debentures or the Applicable
Ownership Interest in the Treasury Portfolio, as applicable, having an
aggregate principal amount equal to the aggregate principal amount at maturity
of, and in substitution for all, but not less than all, of the Treasury
Securities comprising part of the Treasury Unit in accordance with this Section 3.14;
provided, however, that if the Treasury Portfolio has replaced the Debentures
underlying the Applicable Ownership Interest in Debentures as a component of
Corporate Units as a result of a Successful Remarketing or a Mandatory
Redemption or a Special Event Redemption, such Collateral Substitutions may be
made at any time on or prior to the second Business Day immediately preceding
the Purchase Contract Settlement Date. 
Unless a Successful Remarketing or a Mandatory Redemption or a Special
Event Redemption has previously occurred, Holders of Treasury Units shall not
be permitted to effect Collateral Substitutions in accordance with the
provisions of this Section 3.14 during the period commencing on and
including the Business Day prior to the first of the three sequential


 


30

















 


Remarketing Dates
comprising a Three-Day Remarketing Period and ending on and including the Reset
Effective Date relating to a Successful Remarketing during such Three-Day
Remarketing Period or, if none of the Remarketings during such Three-Day Remarketing
Period is successful, the Business Day following the last of the three
sequential Remarketing Dates occurring during such Three-Day Remarketing
Period.


 


Holders of Treasury Units may make Collateral
Substitutions and establish Corporate Units (i) only in integral multiples
of 20 Treasury Units if Treasury Securities are being replaced by Applicable
Ownership Interest in Debentures, or (ii) only in integral multiples of
                        
Treasury Units (or such other number of Treasury Units as may be determined by
the Remarketing Agent following a Successful Remarketing if the Reset Effective
Date is not a Payment Date) if any Treasury Security is being replaced by the
Applicable Ownership Interest in the Treasury Portfolio.  To create 20 Corporate Units (if a Mandatory
Redemption or a Special Event Redemption has not occurred and the Applicable
Ownership Interests in Debentures remain components of Corporate Units), or
                        
Corporate Units (if a Mandatory Redemption or a Special Event Redemption has
occurred or the Treasury Portfolio has replaced the Debentures as a result of a
Successful Remarketing) or such other number of Corporate Units as may be
determined by the Remarketing Agent following a Successful Remarketing if the
Reset Effective Date is not a Payment Date, the Treasury Unit Holder shall


 


(a)           if the Treasury
Portfolio has not replaced the Applicable Ownership Interest in Debentures as a
component of Corporate Units as a result of a Successful Remarketing or a Mandatory
Redemption or a Special Event Redemption, deposit with the Collateral Agent
$1,000 in aggregate principal amount of Debentures, which Debentures must have been purchased in the open market at the Treasury
Unit Holder’s expense, unless otherwise
owned by the Treasury Unit Holder; or


 


(b)           if the Treasury
Portfolio has replaced the Applicable Ownership Interest in Debentures as a
component of Corporate Units as a result of a Successful Remarketing or a
Mandatory Redemption or a Special Event Redemption, deposit with the Collateral
Agent the Applicable Ownership Interest in the Treasury Portfolio for each
                        
Corporate Units being created by the Holder, and having an aggregate principal
amount of $1,000,000, which Applicable
Ownership Interest in the Treasury Portfolio must have been purchased in the open market at the Treasury Unit
Holder’s expense, unless otherwise
owned by the Treasury Unit Holder; and


 


(c)           in each case, Transfer
and surrender the related 20 Treasury Units, or in the event the Treasury
Portfolio is a component of Corporate Units,
                        
Treasury Units (or such other number of Treasury Units as may be determined by
the Remarketing Agent following a Successful Remarketing if the Reset Effective
Date is not a Payment Date), to the Purchase Contract Agent accompanied by an
instruction to the Purchase Contract Agent, substantially in the form of Exhibit B to the Pledge Agreement,
stating that the Holder has Transferred the relevant amount of Debentures underlying
the Applicable Ownership Interest in Debentures or the Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, to the Collateral Agent
and requesting that the Purchase Contract Agent instruct the Collateral Agent
to release the Treasury Securities underlying such Treasury Units, whereupon
the Purchase Contract Agent


 


31





















 


shall promptly give such instruction to the Collateral
Agent, substantially in the form of Exhibit A to the Pledge
Agreement.


 


Upon receipt of the Applicable Ownership Interest in
Debentures or the Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, described in clause (a) or (b) above and the
instructions described in clause (c) above, in accordance with the terms
of the Pledge Agreement, the Collateral Agent will release the Treasury
Securities having a corresponding aggregate principal amount from the Pledge to
the Purchase Contract Agent, on behalf of the Holder, free and clear of the Company’s
security interest therein, and upon receipt thereof the Purchase Contract Agent
shall promptly:


 


(i)            cancel
the related Treasury Units surrendered and Transferred;


 


(ii)           Transfer
the Treasury Securities that had been components of such Treasury Units to the
Holder; and


 


(iii)          authenticate, execute on behalf of such
Holder and deliver a Corporate Unit Certificate executed by the Company in
accordance with Section 3.3
evidencing the same number of Purchase Contracts as were evidenced by the
cancelled Treasury Units.


 


Holders who elect to separate Treasury Securities from
the related Purchase Contracts and to substitute Applicable Ownership Interest
in Debentures or Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, for such Treasury Securities shall be responsible for any fees
or expenses payable to the Collateral Agent for its services as Collateral
Agent in respect of the substitution, and the Company shall not be responsible
for any such fees or expenses.


 


In the event a Holder making a Collateral Substitution
pursuant to this Section 3.14 fails to effect a book-entry transfer of the
Treasury Units or fails to deliver a Treasury Unit Certificate to the Purchase
Contract Agent after depositing the Applicable Ownership Interest in Debentures
or Applicable Ownership Interest in the Treasury Portfolio with the Collateral
Agent, the Treasury Securities constituting a part of such Treasury Unit
Certificate, and any interest on such Treasury Securities, shall be held in the
name of the Purchase Contract Agent or its nominee in trust for the benefit of
such Holder, until such Treasury Unit Certificate is so Transferred or the
Treasury Unit is so delivered, or until such Holder provides evidence
satisfactory to the Company and the Purchase Contract Agent that such Treasury
Unit Certificate has been destroyed, mutilated, lost or stolen, together with
any indemnity that may be required by the Purchase Contract Agent and the
Company.


 


Except as provided in this Section 3.14, for so
long as the Purchase Contract underlying a Treasury Unit remains in effect,
such Treasury Unit shall not be separable into its constituent parts and the
rights and obligations of the Holder of such Treasury Unit in respect of the
Treasury Security and Purchase Contract comprising such Treasury Unit may be
acquired, and may be Transferred and exchanged, only as an entire Treasury
Unit.


 


32

















 


SECTION 3.15.                                                           Transfer
of Collateral upon Occurrence of Termination Event.


 


Upon the occurrence of a Termination Event and the
Transfer to the Purchase Contract Agent of the Applicable Ownership Interest in
Debentures, the Applicable Ownership Interest in the Treasury Portfolio or the
Treasury Securities, as the case may be, underlying the Corporate Units and the
Treasury Units pursuant to the terms of the Pledge Agreement, the Purchase
Contract Agent shall request transfer instructions with respect to the
Applicable Ownership Interest in Debentures, the Applicable Ownership Interest in
the Treasury Portfolio or Treasury Securities, as the case may be, from each
Holder by written request mailed to such Holder at its address as it appears in
the Security Register.  Upon book-entry
transfer of the Corporate Units or Treasury Units or delivery of a Corporate
Unit Certificate or Treasury Unit Certificate to the Purchase Contract Agent
with such transfer instructions, the Purchase Contract Agent shall transfer the
Applicable Ownership Interest in Debentures, the Applicable Ownership Interest
in the Treasury Portfolio or Treasury Securities, as the case may be,
underlying such Corporate Units or Treasury Units, as the case may be, to such
Holder by book-entry transfer, or other appropriate procedures, in accordance
with such instructions.  In the event a
Holder of Corporate Units or Treasury Units fails to effect such Transfer or
delivery, the Applicable Ownership Interest in Debentures, the Applicable
Ownership Interest in the Treasury Portfolio or Treasury Securities, as the
case may be, underlying such Corporate Units or Treasury Units, as the case may
be, and any interest thereon, shall be held in the name of the Purchase
Contract Agent or its nominee in trust for the benefit of such Holder, until
such Corporate Units or Treasury Units are transferred or the Corporate Unit
Certificate or Treasury Unit Certificate is surrendered or such Holder provides
satisfactory evidence that such Corporate Unit Certificate or Treasury Unit
Certificate has been destroyed, mutilated, lost or stolen, together with any
indemnity that may be required by the Purchase Contract Agent and the
Company.  In the case of the Treasury
Portfolio or any Treasury Securities, the Purchase Contract Agent may dispose
of the subject securities for cash and pay the applicable portion of such cash
to the Holders in lieu of such Holders’ Applicable Ownership Interest in such
Treasury Portfolio, or any Treasury Securities, where such Holder would
otherwise have been entitled to receive less than $1,000 of any such security.


 


SECTION 3.16.                                                           No
Consent to Assumption.


 


Each Holder of a Unit, by its acceptance thereof, will
be deemed expressly to have withheld any consent to the assumption under Section 365
of the Bankruptcy Code or otherwise, of the Purchase Contract by the Company,
its trustee in bankruptcy, receiver, liquidator or a person or entity
performing similar functions, in the event that the Company becomes a debtor
under the Bankruptcy Code or subject to other similar Federal or State law
providing for reorganization or liquidation.


 


ARTICLE IV


 


The Debentures


 


SECTION 4.1.                                                                  Payment
of Interest; Rights to Interest Preserved; Interest Rate Reset; Notice.


 


A payment of interest on the Debentures underlying the
Applicable Ownership Interest in Debentures or distribution with respect to the
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
which is paid on any Payment Date shall, subject to receipt thereof


 


33

















 


by the Purchase Contract
Agent from the Collateral Agent as provided by the terms of the Pledge
Agreement, be paid to the Person in whose name the Corporate Unit Certificate
(or one or more Predecessor Corporate Unit Certificates) of which such
Applicable Ownership Interest in Debentures or such Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, is a part is registered
at the close of business on the Record Date relating to such Payment Date.


 


Each Corporate Unit Certificate evidencing an
Applicable Ownership Interest in Debentures delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of any other
Corporate Unit Certificate shall carry the rights to payment of interest
accrued and unpaid, and to accrue interest, which is carried by the Applicable
Ownership Interest in Debentures underlying such other Corporate Unit
Certificate.


 


In the case of any Corporate Unit with respect to
which Cash Settlement of the underlying Purchase Contract is effected on the
Business Day immediately preceding the Purchase Contract Settlement Date
pursuant to prior notice, or with respect to which Early Settlement or
Fundamental Change Early Settlement of the underlying Purchase Contract is
effected on an Early Settlement Date or a Fundamental Change Early Settlement
Date, as the case may be, or with respect to which a Collateral Substitution is
effected, in each case on a date that is after any Record Date and on or prior
to the next succeeding Payment Date, interest on the Applicable Ownership
Interest in Debentures or distributions with respect to the Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, underlying
such Corporate Units otherwise payable on such Payment Date shall be payable on
such Payment Date notwithstanding such Cash Settlement or Early Settlement or
Fundamental Change Early Settlement or Collateral Substitution, and such
interest or distributions shall, subject to receipt thereof by the Purchase
Contract Agent, be payable to the Person in whose name the Corporate Unit Certificate
(or one or more Predecessor Corporate Unit Certificates) was registered at the
close of business on the Record Date. 
Except as otherwise expressly provided in the immediately preceding
sentence, in the case of any Corporate Unit with respect to which Cash
Settlement, Early Settlement or Fundamental Change Early Settlement of the
underlying Purchase Contract is effected, payments attributable to the
Debentures underlying Applicable Ownership Interests in Debentures or
distributions on Applicable Ownership Interests in the Treasury Portfolio, as
the case may be, that would otherwise be payable or made after the Purchase
Contract Settlement Date, Early Settlement Date, or Fundamental Change Early
Settlement Date, as the case may be, shall not be payable hereunder to the
Holder of such Corporate Units; provided, however, that to the extent that such
Holder continues to hold Separate Debentures or Applicable Ownership Interests
in the Treasury Portfolio that formerly comprised a part of such Holder’s Corporate
Units, such Holder shall be entitled to receive interest on such Separate
Debentures or distributions on such Applicable Ownership Interests in the
Treasury Portfolio.


 


The Coupon Rate on the Debentures to be in effect on
and after the Reset Effective Date will be determined on the Successful
Remarketing Date with respect thereto, and reset to the Reset Rate.  If there is no Successful Remarketing during
the Period for Early Remarketing or the Final Three-Day Remarketing Period, the
Coupon Rate on the Debentures will not be reset but will continue at the
initial Coupon Rate.


 


34






 










 


SECTION 4.2.                                                                  Notice
and Voting.


 


Under and subject to the terms of the Pledge Agreement
and this Agreement, the Purchase Contract Agent will be entitled to exercise
the voting and any other consensual rights pertaining to the Pledged Applicable
Ownership Interests in Debentures but only to the extent instructed by the
Holders as described below.  Upon receipt
of notice of any meeting at which holders of Debentures are entitled to vote or
upon any solicitation of consents, waivers or proxies of holders of Debentures,
the Purchase Contract Agent shall, as soon as practicable thereafter, mail to
the Holders of Corporate Units a notice (a) containing such information as
is contained in the notice or solicitation, (b) stating that each
Corporate Unit Holder on the record date set by the Purchase Contract Agent
therefor (which, to the extent possible, shall be the same date as the record
date for determining the holders of Debentures entitled to vote) shall be
entitled to instruct the Purchase Contract Agent as to the exercise of the
voting rights pertaining to the Applicable Ownership Interest in Debentures
constituting a part of such Holder’s Corporate Units and (c) stating the
manner in which such instructions may be given. 
Upon the written request of the Holders of Corporate Units on such
record date, the Purchase Contract Agent shall endeavor insofar as practicable
to vote or cause to be voted, in accordance with the instructions set forth in
such requests, the maximum number of Debentures underlying the Applicable
Ownership Interests in Debentures as to which any particular voting
instructions are received.  In the
absence of specific instructions from the Holder of Corporate Units, the
Purchase Contract Agent shall abstain from voting the Debentures underlying the
Applicable Ownership Interests in Debentures constituting a part of such Holder’s
Corporate Units.  The Company hereby
agrees, if applicable, to solicit Holders of Corporate Units to timely instruct
the Purchase Contract Agent in order to enable the Purchase Contract Agent to
vote such Debentures.


 


SECTION 4.3.                                                                  Substitution
of the Treasury Portfolio for the Debentures.


 


(a)           Upon the occurrence of (i) a
Mandatory Redemption where the related Purchase Contracts have not been
previously or concurrently terminated in accordance with Section 5.8
or (ii) a Special Event Redemption, in each case, prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Mandatory
Redemption Date or the Special Event Redemption Date, as the case may be, with
respect to the Applicable Principal Amount of Debentures shall be delivered to
the Collateral Agent in exchange for the Pledged Applicable Ownership Interests
in Debentures.  Pursuant to the terms of
the Pledge Agreement, the Collateral Agent will apply an amount equal to the
Redemption Amount to purchase on behalf of the Holders of Corporate Units the
Treasury Portfolio and promptly remit the remaining portion of such Redemption
Price, if any, to the Purchase Contract Agent for payment to the Holders of
such Corporate Units.  The Treasury
Portfolio will be substituted for the outstanding Pledged Applicable Ownership
Interests in Debentures, and will be held by the Collateral Agent in accordance
with the terms of the Pledge Agreement to secure the obligation of each Holder
of a Corporate Unit to purchase the Common Stock on the Purchase Contract
Settlement Date under the Purchase Contract constituting a part of such
Corporate Unit.  Following the occurrence
of a Mandatory Redemption or a Special Event Redemption prior to the Purchase
Contract Settlement Date, the Holders of Corporate Units and the Collateral
Agent shall have such security interests, rights and obligations with respect
to the Treasury Portfolio as the Holder of Corporate Units and the Collateral
Agent had in respect of the Debentures underlying the Applicable Ownership
Interests in Debentures subject to the Pledge thereof as provided in Articles
II, III, IV, V or VI of the Pledge Agreement, and any reference herein to
the Debentures shall be deemed to be a


 


35





















 


reference to such Treasury Portfolio.  The Company may cause to be made in any
Corporate Unit Certificates thereafter to be issued such change in phraseology
and form (but not in substance) as may be appropriate to reflect the
substitution of the Applicable Ownership in the Treasury Portfolio for the
Applicable Ownership in Debentures as collateral.


 


(b)           Upon a Successful
Remarketing during the Period for Early Remarketing, the proceeds of such
Remarketing (after deducting any Remarketing Fee) shall be delivered to the
Collateral Agent in exchange for the Pledged Applicable Ownership Interests in
Debentures.  Pursuant to the terms of the
Pledge Agreement, the Collateral Agent will apply an amount equal to the
Treasury Portfolio Purchase Price to purchase on behalf of the Holders of
Corporate Units the Treasury Portfolio and promptly remit the remaining portion
of such proceeds to the Purchase Contract Agent for payment to the Holders of
such Corporate Units.  The Treasury
Portfolio will be substituted for the Pledged Applicable Ownership Interests in
Debentures, and will be held by the Collateral Agent in accordance with the
terms of the Pledge Agreement to secure the obligation of each Holder of a
Corporate Unit to purchase the Common Stock on the Purchase Contract Settlement
Date under the Purchase Contract constituting a part of such Corporate
Unit.  Following a Successful Remarketing
during the Period for Early Remarketing, the Holders of Corporate Units and the
Collateral Agent shall have such security interests, rights and obligations
with respect to the Treasury Portfolio as the Holders of Corporate Units and
the Collateral Agent had in respect of the Debentures underlying the Applicable
Ownership Interests in Debentures subject to the Pledge thereof as provided in
Articles II, III, IV, V or VI of the Pledge Agreement, and any reference
herein to the Debentures shall be deemed to be reference to such Treasury
Portfolio.  The Company may cause to be
made in any Corporate Unit Certificates thereafter to be issued such change in
phraseology and form (but not in substance) as may be appropriate to reflect
the substitution of the Applicable Ownership Interest in the Treasury Portfolio
for Applicable Ownership Interest in Debentures as collateral.


 


SECTION 4.4.                                                                  Consent
to Treatment for Tax Purposes.


 


Each Holder of a Corporate Unit or a Treasury Unit, by
its acceptance thereof, covenants and agrees to treat itself as the owner, for
Federal, State and local income and franchise tax purposes, of (i) the
related Applicable Ownership Interest in Debentures or the related Applicable
Ownership Interest in the Treasury Portfolio, in the case of the Corporate
Units, or (ii) the Treasury Securities, in the case of the Treasury
Units.  Each Holder of a Corporate Unit,
by its acceptance thereof, further covenants and agrees to treat the Applicable
Ownership Interest in Debentures as indebtedness of FPL Group Capital for
Federal, State and local income and franchise tax purposes.


 


ARTICLE V


 


The Purchase Contracts


 


SECTION 5.1.                                                                  Purchase
of Shares of Common Stock.


 


Each Purchase Contract shall, unless a Termination
Event or an Early Settlement in accordance with Section 5.9
hereof or a Fundamental Change Early Settlement in accordance
with Section 5.6(b)(ii) hereof
has occurred with respect to the Units of which such Purchase Contract is a
part, obligate the Holder of the related Unit to purchase, and the Company to
sell,


 


36

















 


on the Purchase Contract
Settlement Date, for $50 in cash (the “Purchase Price”),
a number of newly-issued shares of Common Stock equal to the applicable
Settlement Rate.  The “Settlement Rate” is equal to


 


(a) if the Applicable Market Value (as defined
below) is equal to or greater than
$             (the “Threshold Appreciation Price”),
             shares
of Common Stock per Purchase Contract (the “Minimum
Settlement Rate”);


 


(b) if the Applicable Market Value is less than
the Threshold Appreciation Price, but is greater than
$             (the “Reference Price”), the number of shares of Common Stock per
Purchase Contract having a value equal to $50.00 divided by the Applicable
Market Value; and


 


(c) if the Applicable Market Value is less than
or equal to the Reference Price,
             shares
of Common Stock per Purchase Contract (the “Maximum
Settlement Rate”),


 


in each case subject to adjustment as provided in Section 5.6 (and in each case
rounded upward or downward to the nearest 1/10,000th of a share).  As provided in Section 5.10,
no fractional shares of Common Stock will be issued upon settlement of Purchase
Contracts.


 


The “Applicable Market Value”
means the average of the Closing Price per share of Common Stock on each
Trading Day during the Observation Period; provided, however, that if the
Company enters into a Reorganization Event, the Applicable Market Value will
mean the value of an Exchange Property Unit. 
Following the occurrence of any such Reorganization Event, references
herein to the purchase or issuance of shares of Common Stock shall be construed
to be references to settlement into Exchange Property Units.  For purposes of calculating the value of an
Exchange Property Unit, (x) the value of any common stock included in the
Exchange Property Unit shall be determined using the average of the Closing
Price per share of such common stock on each Trading Day during the Observation
Period (adjusted as set forth under Section 5.6)
and (y) the value of any other property, including securities other than
common stock, included in the Exchange Property Unit, shall be the value of
such property on the first Trading Day of the Observation Period (as determined
in good faith by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution). 
The “Closing Price” of the Common Stock
on any date of determination means the closing sale price (or, if no closing
price is reported, the last reported sale price) of the Common Stock on the New
York Stock Exchange (the “NYSE”) on such
date or, if the Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
securities exchange on which the Common Stock is so listed, or if the Common
Stock is not so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the Pink OTC Markets Inc. or similar
organization, or, if such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally recognized independent
investment banking firm retained by the Company for this purpose.  A “Trading Day”
means a day on which the Common Stock (A) is not suspended from trading on
any national or regional securities exchange or over-the-counter market at the
close of business and (B) has traded at least once on the national or
regional securities exchange or over-the-counter market that is the primary
market for the trading of the Common Stock at the close of business.  If the Common Stock is not traded on a
securities exchange or quoted in the over-the-counter market, then “Trading Day” shall mean Business Day.


 


37

















 


Each Holder of a Corporate Unit or a Treasury Unit, by
its acceptance thereof, irrevocably authorizes the Purchase Contract Agent to
enter into and perform the related Purchase Contract on its behalf as its
attorney-in-fact (including the execution of Certificates on behalf of such
Holder), agrees to be bound by the terms and provisions thereof, covenants and
agrees to perform its obligations under such Purchase Contracts, consents to
the provisions hereof, irrevocably authorizes the Purchase Contract Agent to
enter into and perform the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to and agrees to be bound by the Pledge of the
Applicable Ownership Interest in Debentures, the Applicable Ownership Interest
in the Treasury Portfolio or the Treasury Securities, as the case may be, pursuant
to the Pledge Agreement.  Each Holder of
a Corporate Unit or a Treasury Unit, by its acceptance thereof, further
covenants and agrees, that, to the extent and in the manner provided in Section 5.4 and the Pledge
Agreement, but subject to the terms thereof, payments in respect of the
principal and interest on the Debentures underlying the Applicable Ownership
Interest in Debentures or the Proceeds of the Treasury Securities or the
Applicable Ownership Interest in the Treasury Portfolio on the Purchase Contract
Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder’s obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such payments.


 


Upon registration of transfer of a Certificate, the
transferee shall be bound (without the necessity of any other action on the
part of such transferee, except as may be required by the Purchase Contract
Agent pursuant hereto), under the terms of this Agreement, the Purchase Contracts
underlying such Certificate and the Pledge Agreement and the transferor shall
be released from the obligations under this Agreement, the Purchase Contracts
underlying the Certificates so transferred and the Pledge Agreement.  The Company covenants and agrees, and each
Holder of a Certificate, by its acceptance thereof, likewise covenants and
agrees, to be bound by the provisions of this paragraph.


 


SECTION 5.2.                                                                  Contract
Adjustment Payments.


 


(a)           Subject to Section 5.2(d) and Section 5.3
herein, the Company shall pay, on each Payment Date, the
Contract Adjustment Payments payable in respect of each Purchase Contract to
the Person in whose name a Certificate (or one or more Predecessor
Certificates) is registered on the Security Register at the close of business
on the Record Date relating to such Payment Date.  The Contract Adjustment Payments will be
payable at the Corporate Trust Office or, at the option of the Company, by
check mailed to the address of the Person entitled thereto at such Person’s
address as it appears on the Security Register or by wire transfer to an
account appropriately designated in writing by the Person entitled to
payment.  The Contract Adjustment
Payments will accrue from                         .


 


(b)           Upon the occurrence of
a Termination Event, the Company’s obligation to pay Contract Adjustment
Payments (including any accrued or Deferred Contract Adjustment Payments) shall
cease.


 


(c)           Each Certificate
delivered under this Agreement upon registration of transfer of or in exchange
for or in lieu of any other Certificate (including as a result of a Collateral
Substitution or the recreation of a Corporate Unit) shall carry the rights to
Contract Adjustment Payments accrued and unpaid, and to accrue Contract
Adjustment Payments, which were carried by the Purchase Contracts which were
represented by such other Certificates.


 


38





















 


(d)           Subject to Section 5.9 and 5.6(b), in the
case of any Unit with respect to which Early Settlement or Fundamental Change
Early Settlement of the underlying Purchase Contract is effected on an Early
Settlement Date or a Fundamental Change Early Settlement Date, as applicable,
that is after any Record Date and on or prior to the next succeeding Payment
Date, Contract Adjustment Payments, if any, otherwise payable on such Payment
Date shall be payable on such Payment Date notwithstanding such Early
Settlement or Fundamental Change Early Settlement, and such Contract Adjustment
Payments shall, subject to receipt thereof by the Purchase Contract Agent, be
payable to the Person in whose name the Certificate evidencing such Unit (or
one or more Predecessor Certificates) was registered at the close of business
on such Record Date.  Except as otherwise
expressly provided in the immediately preceding sentence, in the case of any
Unit with respect to which Early Settlement or Fundamental Change Early
Settlement of the underlying Purchase Contract is effected on an Early
Settlement Date or Fundamental Change Early Settlement Date, as applicable,
Contract Adjustment Payments (but not, for the avoidance of doubt, Deferred
Contract Adjustment Payments) that would otherwise be payable after the Early
Settlement Date or Fundamental Change Early Settlement Date with respect to
such Purchase Contract shall not be payable.


 


The Company’s obligations with respect to Contract
Adjustment Payments (including any accrued or Deferred Contract Adjustment
Payments), will be subordinate and junior in right of payment to the Company’s
obligations under any Senior Indebtedness.


 


SECTION 5.3.                                                                  Deferral
of Payment Dates for Contract Adjustment Payments.


 


The Company shall have the right, at any time prior to
the Purchase Contract Settlement Date, to defer the payment of any or all of
the Contract Adjustment Payments otherwise payable on any Payment Date to any
subsequent Payment Date (a “Deferral Period”),
but only if the Company shall give the Holders and the Purchase Contract Agent
written notice of its election to defer such payment (specifying the amount to
be deferred and the expected Deferral Period) at least ten Business Days prior
to the earlier of (i) the next succeeding Payment Date or (ii) the
date the Company is required to give notice of the Record Date or Payment Date
with respect to payment of such Contract Adjustment Payments to the NYSE or
other applicable self-regulatory organization or to Holders of the Units, but
in any event not less than one Business Day prior to such Record Date.  Prior to the expiration of any Deferral
Period, the Company may further extend such Deferral Period to any subsequent
Payment Date, but not beyond the Purchase Contract Settlement Date (or any
applicable Early Settlement Date or Fundamental Change Early Settlement Date).


 


In connection with any Contract Adjustment Payments so
deferred, additional Contract Adjustment Payments on the amounts so deferred
will accrue at the rate of
            % per
annum (computed on the basis of a 360-day year consisting of twelve 30-day
months), compounding on each succeeding Payment Date, until paid in full (such
deferred installments of Contract Adjustment Payments, if any, together with
the accrued additional Contract Adjustment Payments accrued thereon, being
referred to herein as the “Deferred Contract
Adjustment Payments”). 
Deferred Contract Adjustment Payments, if any, shall be due on the next
succeeding Payment Date except to the extent that payment is deferred pursuant
to this Section 5.3.


 


39

















 


At the end of each Deferral Period, including as the
same may be extended pursuant to this Section 5.3,
or, in the event of an Early Settlement or Fundamental Change Early Settlement,
on the Early Settlement Date or Fundamental Change Early Settlement Date, as
the case may be, the Company shall pay all Deferred Contract Adjustment
Payments then due in the manner set forth in Section 5.2(a) (in
the case of the end of a Deferral Period), in the manner set forth in Section 5.9 (in the case of an
Early Settlement) or in the manner set forth in Section 5.6(b) (in
the case of a Fundamental Change Early Settlement) to the extent such amounts
are not deducted from the amount otherwise payable by the Holder in the case of
a Cash Settlement, any Early Settlement or any Fundamental Change Early Settlement.  In the event of an Early Settlement, the
Company shall pay all Deferred Contract Adjustment Payments due on the Purchase
Contracts being settled early through the Payment Date immediately preceding
the applicable Early Settlement Date, to the extent such amounts are not
deducted as described above.  In the
event of a Fundamental Change Early Settlement, the Company shall pay all
Deferred Contract Adjustment Payments due on the Purchase Contracts being settled
on the Fundamental Change Early Settlement Date to but excluding such
Fundamental Change Early Settlement Date, to the extent such amounts are not
deducted as described above.


 


At the end of the Deferral Period and the payment of
all Deferred Contract Adjustment Payments and all accrued and unpaid Contract
Adjustment Payments then due, the Company may commence a new Deferral Period,
provided that such Deferral Period, together with all extensions thereof, may
not extend beyond the Purchase Contract Settlement Date (or any applicable
Early Settlement Date or Fundamental Change Early Settlement Date).  Except in the case of an Early Settlement or
Fundamental Change Early Settlement, no Contract Adjustment Payments shall be
due and payable during an Deferral Period except at the end thereof, except
that prior to the end of such Deferral Period, the Company, at its option, may
prepay on any Payment Date all or any portion of the Deferred Contract
Adjustment Payments accrued during the then elapsed portion of such Deferral
Period.


 


No Contract Adjustment Payments may be deferred to a
date that is after the Purchase Contract Settlement Date (or, with respect to
Purchase Contracts for which Early Settlement or Fundamental Change Early
Settlement has occurred, the Early Settlement Date or the Fundamental Change
Early Settlement Date, as the case may be). 
If the Purchase Contracts are terminated upon the occurrence of a
Termination Event, the Holder’s right to receive Contract Adjustment Payments
and Deferred Contract Adjustment Payments  will
terminate.


 


In the event the Company exercises its option to defer
the payment of Contract Adjustment Payments, then, until the Deferred Contract
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital
stock or make guarantee payments with respect to the foregoing other than:


 


(i) purchases, redemptions or acquisitions of
shares of capital stock of the Company in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
employees, officers, directors or agents or a stock purchase or dividend
reinvestment plan, or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date that payment of
Contract Adjustment Payments are deferred requiring the Company to purchase,
redeem or acquire its capital stock,


 


40

















 


(ii) as a result of a reclassification of the
Company’s capital stock or the exchange or conversion of all or a portion of
one class or series of the Company’s capital stock for another class or series
of the Company’s capital stock,


 


(iii) the purchase of fractional interests in
shares of the Company’s capital stock pursuant to the conversion or exchange
provisions of the Company’s capital stock or the security being converted or
exchanged, or in connection with the settlement of stock purchase contracts,


 


(iv) dividends or distributions paid or made in
capital stock of the Company (or rights to acquire capital stock), or
repurchases, redemptions or acquisitions of capital stock in connection with
the issuance or exchange of capital stock (or securities convertible into or
exchangeable for shares of the Company’s capital stock and distributions in
connection with the settlement of stock purchase contracts) or


 


(v) redemptions, exchanges or repurchases of, or
with respect to, any rights outstanding under a shareholder rights plan or the
declaration or payment thereunder of a dividend or distribution of or with
respect to rights in the future.


 


SECTION 5.4.                                                                  Payment
of Purchase Price.


 


(a)           (i)            Unless the Treasury
Portfolio has replaced the Applicable Ownership Interest in Debentures as a
component of the Corporate Units or a Holder settles the underlying Purchase
Contract through the early delivery of cash to the Purchase Contract Agent in
the manner described in Section 5.9 or 5.6(b),
each Holder of a Corporate Unit must notify the Purchase Contract Agent of its
intention to pay in cash (“Cash Settlement”)
the Purchase Price for the shares of Common Stock to be purchased pursuant to
the Purchase Contract on the Purchase Contract Settlement Date by presenting
and surrendering to the Purchase Contract Agent the Corporate Unit Certificate
with a notice in substantially the form of Exhibit C hereto
on the reverse side of such Certificate completed and executed.  Such presentation, surrender and notice must
be made at or prior to 5:00 p.m., New York City time, on the seventh
Business Day immediately preceding the Purchase Contract Settlement Date.  The Purchase Contract Agent shall promptly
notify the Collateral Agent of the receipt of such a notice from a Holder
intending to make a Cash Settlement.


 


(ii)           A Holder
of a Corporate Unit who has so notified the Purchase Contract Agent of its
intention to make a Cash Settlement is required to pay the Purchase Price to
the Collateral Agent prior to 11:00 a.m., New York City time, on the sixth
Business Day immediately preceding the Purchase Contract Settlement Date in
lawful money of the United States by certified or cashiers’ check or wire
transfer, in each case in immediately available funds payable to or upon the
order of the Company.  Any cash received
by the Collateral Agent will be invested promptly by the Collateral Agent in
Permitted Investments and paid to the Company on the Purchase Contract
Settlement Date in settlement of the Purchase Contract in accordance with the
terms of this Agreement and the Pledge Agreement.  Any funds received by the Collateral Agent in
respect of the investment earnings from the investment in such Permitted
Investments, will be


 


41

















 


distributed to the Purchase Contract Agent when
received for payment to the Holder.


 


(iii)          If
a Holder of a Corporate Unit fails to notify the Purchase Contract Agent of its
intention to effect a Cash Settlement in accordance with paragraph
(a)(i) above, such failure shall constitute a default under
the related Purchase Contract and the Holder shall be deemed to have consented
to the disposition of the Pledged Applicable Ownership Interests in Debentures
pursuant to the Remarketing as described below. 
If a Holder of a Corporate Unit does notify the Purchase Contract Agent
of its intention to effect a Cash Settlement in accordance with paragraph (a)(i) above, but
fails to deliver cash as required by paragraph (a)(ii) above,
such failure shall also constitute a default
under the Purchase Contract; however, the Debentures underlying the
Applicable Ownership Interest in Debentures of such a Holder will not be
remarketed but instead the Collateral Agent, for the benefit of the Company,
will exercise its rights as a secured party with respect to such Applicable
Ownership Interest in Debentures, including those rights specified in paragraph (c) below.


 


In order to dispose of the Applicable Ownership
Interest in Debentures of Corporate Unit Holders who have not notified the
Purchase Contract Agent of their intention to effect a Cash Settlement with
respect to the Purchase Contract Settlement Date as provided in paragraph (a)(i) above,
the Company shall engage a nationally recognized investment banking firm (the “Remarketing Agent”) pursuant to the Remarketing Agreement
to sell the Debentures.  In order to
facilitate the Remarketing, the Purchase Contract Agent shall notify the
Remarketing Agent, by 10:00 a.m., New York City time, on the Business Day
immediately preceding the Final Three-Day Remarketing Period, of the aggregate
amount of Debentures to be remarketed. 
Concurrently, the Collateral Agent, pursuant to the terms of the Pledge
Agreement, will present for Remarketing such aggregate amount of Debentures to
the Remarketing Agent.  Upon receipt of
such notice from the Purchase Contract Agent and the Debentures from the
Collateral Agent, the Remarketing Agent will, during the Final Three-Day
Remarketing Period, use its commercially reasonable efforts to remarket the
Debentures at a price equal to or greater than 100% of the aggregate principal
amount of the Debentures remarketed plus the applicable Remarketing Fee.  Upon a Successful Remarketing, and after
deducting any Remarketing Fee, the Remarketing Agent will remit the remaining portion
of the proceeds from such Remarketing to the Collateral Agent.  Such portion of the proceeds, equal to the
aggregate principal amount of such Debentures, will automatically be applied by
the Collateral Agent, in accordance with the Pledge Agreement, to satisfy in
full such Corporate Unit Holders’ obligations to pay the Purchase Price for the
Common Stock under the related Purchase Contracts on the Purchase Contract
Settlement Date.  Any proceeds in excess
of those required to pay the Purchase Price and the Remarketing Fee will be
remitted to the Purchase Contract Agent for payment to the Holders of the
related Corporate Units.  Corporate Unit
Holders whose Debentures are so remarketed will not otherwise be responsible
for the payment of any Remarketing Fee in connection therewith.  If there is no Successful Remarketing during
the Period for Early Remarketing and if all the Remarketings during the Final
Three-Day Remarketing Period result in Failed Remarketings in accordance with
the terms of the Pledge Agreement, the Failed Remarketing on the last
Remarketing Date during the Final Three-Day Remarketing Period shall constitute
a default under the related Purchase Contracts by such Holders and the
Collateral


 


42

















 


Agent, for the benefit of
the Company, will exercise its rights as a secured party with respect to such
Debentures underlying the Applicable Ownership Interests in Debentures to
satisfy the Holders’ obligations under such Purchase Contract to purchase
Common Stock at the Purchase Price, including those actions specified in paragraph (c) below.


 


(b)           With respect to any
Debentures beneficially owned by Holders who have elected Cash Settlement but
failed to deliver cash as required in (a)(ii) above, or with respect to
Debentures which are subject to a Failed Remarketing, the Collateral Agent for
the benefit of the Company reserves all of its rights as a secured party with
respect thereto and, subject to applicable law and paragraph
(g) below, may, among other things, (i) retain the
Debentures in full satisfaction of the Holders’ obligations under the Purchase
Contracts or (ii) sell the Debentures in one or more public or private
sales and apply the proceeds of such sale in full satisfaction of the Holders’
obligations under the Purchase Contract.


 


(c)           (i)            Unless a Holder of
Treasury Units or Corporate Units (if the Treasury Portfolio has replaced the
Debentures as a component of the Corporate Units) settles the underlying
Purchase Contract through the early delivery of cash to the Purchase Contract
Agent in the manner described in Section 5.9,
each Holder of a Treasury Unit or a Corporate Unit (if the Treasury Portfolio
has replaced the Debentures as a component of the Corporate Units) must notify
the Purchase Contract Agent of its intention to pay in cash the Purchase Price
for the shares of Common Stock to be purchased pursuant to the Purchase
Contract on the Purchase Contract Settlement Date by presenting and
surrendering to the Purchase Contract Agent the Treasury Unit Certificate or
Corporate Unit Certificate, as the case may be, with a notice in substantially
the form of Exhibit C hereto on the
reverse side of such Certificate completed and executed.  Such presentation, surrender and notice must
be made at or prior to 5:00 p.m., New York City time, on the seventh
Business Day immediately preceding the Purchase Contract Settlement Date.  The Purchase Contract Agent shall promptly
notify the Collateral Agent of the receipt of such a notice from a Holder intending
to make a Cash Settlement.


 


(ii)           A Holder
of a Treasury Unit or Corporate Unit (if the Treasury Portfolio has replaced
the Debentures, as a component of the Corporate Units) who has so notified the
Purchase Contract Agent of its intention to make a Cash Settlement in
accordance with paragraph (c)(i) above
is required to pay the Purchase Price to the Collateral Agent prior to 11:00 a.m.,
New York City time, on the sixth Business Day immediately preceding the
Purchase Contract Settlement Date in lawful money of the United States by
certified or cashiers’ check or wire transfer, in each case in immediately
available funds payable to or upon the order of the Company.  Any cash received by the Collateral Agent
will be invested promptly by the Collateral Agent in Permitted Investments and
paid to the Company on the Purchase Contract Settlement Date in settlement of
the Purchase Contract in accordance with the terms of this Agreement and the
Pledge Agreement.  Any funds received by
the Collateral Agent in respect of the investment earnings from the investment
in such Permitted Investments will be


 


43

















 


distributed to the Purchase Contract Agent when
received for payment to the Holder.


 


(iii)          If
a Holder of a Treasury Unit or a Corporate Unit (if the Treasury Portfolio has
replaced the Debentures as a component of Corporate Units,) fails to notify the
Purchase Contract Agent of its intention to effect a Cash Settlement in
accordance with paragraph (c)(i) above,
or if such Holder does notify the Purchase Contract Agent as provided in paragraph (c)(i) above of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by paragraph (c)(ii) above,
then such failure shall constitute a default under the Purchase Contract and
upon the maturity of the Pledged Treasury Securities or the Pledged Applicable
Ownership Interests in the Treasury Portfolio, as the case may be, held by the
Collateral Agent on the Business Day immediately prior to the Purchase Contract
Settlement Date, the principal amount of the Pledged Treasury Securities or the
portion of the Pledged Applicable Ownership Interest in the Treasury Portfolio
corresponding to such Purchase Contracts, as the case may be, received by the Collateral
Agent will, upon the written direction of FPL Group, be invested promptly in
overnight Permitted Investments.  On the
Purchase Contract Settlement Date an amount equal to the Purchase Price will be
remitted to the Company in settlement of the Purchase Contract in accordance
with the terms of this Agreement and the Pledge Agreement without receiving any
instructions from the Holder.  In the
event the sum of the proceeds from the related Pledged Treasury Securities or
the Pledged Applicable Ownership Interests in the Treasury Portfolio, as the
case may be, and the investment earnings earned from such investments is in
excess of the aggregate Purchase Price of the Purchase Contracts being settled
thereby, the Collateral Agent will distribute such excess to the Purchase
Contract Agent for the benefit of the Holder of the related Treasury Unit or
Corporate Unit when received.


 


(d)           Any distribution to
Holders of excess funds and interest described above, shall be payable at the
Corporate Trust Office maintained for that purpose or, at the option of the
Holder, by check mailed to the address of the Person entitled thereto at such
address as it appears on the Security Register.


 


(e)           The Company shall not
be obligated to issue any shares of Common Stock in respect of a Purchase
Contract or deliver any certificate therefor to the Holder unless it shall have
received payment in full of the Purchase Price for the shares of Common Stock
to be purchased thereunder in the manner herein set forth.


 


(f)            Upon Cash Settlement
with respect to a Purchase Contract, (i) the Collateral Agent will, in
accordance with the terms of the Pledge Agreement, cause the Pledged Applicable
Ownership Interests in Debentures or the Pledged Applicable Ownership Interests
in the Treasury Portfolio, as the case may be, or the Pledged Treasury
Securities, in each case underlying the relevant Unit, to be released from the
Pledge by the Collateral Agent free and clear of any security interest of the
Company and transferred to the Purchase Contract Agent for delivery to the
Holder thereof or its designee as soon as practicable and (ii) subject to
the receipt thereof from the Collateral Agent, the Purchase Contract Agent
shall, by book-entry transfer, or


 


44





















 


other procedures, in accordance with instructions
provided by the Holder thereof, Transfer the Debentures or the Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, or such
Treasury Securities (or, if no such instructions are given to the Purchase
Contract Agent by the Holder, the Purchase Contract Agent shall hold the
Debentures or the Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, or such Treasury Securities, and any interest or other distribution
thereon, in the name of the Purchase Contract Agent or its nominee in trust for
the benefit of such Holder).


 


(g)           The obligations of the
Holders to pay the Purchase Price are non-recourse obligations and, except to
the extent satisfied by Early Settlement, Fundamental Change Early Settlement
or Cash Settlement or terminated upon a Termination Event, are payable solely
out of any Cash Settlement or the proceeds of any Collateral pledged to secure
the obligations of the Holders with respect to such Purchase Price and in no
event will Holders be liable for any deficiency between the proceeds of
Collateral disposition and the Purchase Price.


 


SECTION 5.5.                                                                  Issuance
of Shares of Common Stock.


 


Unless a Termination Event shall have occurred, and
except with respect to Purchase Contracts with respect to which there has been
an Early Settlement or a Fundamental Change Early Settlement, on the Purchase
Contract Settlement Date, upon the Company’s receipt of payment in full of the
Purchase Price for the shares of Common Stock purchased by the Holders pursuant
to the foregoing provisions of this Article and subject to Section 5.6(b), the Company
shall issue and deposit with the Purchase Contract Agent, for the benefit of
the Holders of the Outstanding Units, one or more certificates representing the
newly-issued shares of Common Stock registered in the name of the Purchase
Contract Agent (or its nominee) as custodian for the Holders (such certificates
for shares of Common Stock, together with any dividends or other distributions
for which both a record date and payment date for such dividend or other
distribution has occurred after the Purchase Contract Settlement Date, being
hereinafter referred to as the “Purchase Contract
Settlement Fund”) to which the Holders are entitled hereunder.  Subject to the foregoing, upon surrender of a
Certificate to the Purchase Contract Agent on or after the Purchase Contract
Settlement Date, together with settlement instructions thereon duly completed
and executed, the Holder of such Certificate shall be entitled to receive in
exchange therefor a certificate representing that number of whole shares of
Common Stock which such Holder is entitled to receive pursuant to the
provisions of this Article V (after taking into account all Units then
held by such Holder) together with cash in lieu of fractional shares as
provided in Section 5.10 and any
dividends or other distributions with respect to such shares comprising part of
the Purchase Contract Settlement Fund, but without any interest thereon, and
any Certificate so surrendered shall forthwith be cancelled.  Such shares shall be registered in the name
of the Holder or the Holder’s designee as specified in the settlement
instructions provided by the Holder to the Purchase Contract Agent.  If any shares of Common Stock issued in
respect of Purchase Contracts are to be registered to a Person other than the
Person in whose name the Certificate evidencing such Purchase Contracts is
registered, no such registration shall be made unless the Person requesting
such registration has paid any transfer and other taxes required by reason of
such registration in a name other than that of the registered Holder of the
Certificate evidencing such Purchase Contracts or has established to the
satisfaction of the Company that such tax either has been paid or is not
payable.


 


45






 










 


SECTION 5.6.                                                                  Adjustment of Fixed Settlement
Rate; Fundamental Change Early Settlement.


 


(a)           Adjustments for Dividends, Distributions, Stock
Splits, Etc.


 


(1)           Stock Dividends.  In case the
Company shall pay or make a dividend or other distribution on the Common Stock
in Common Stock, each Fixed Settlement Rate in effect at the opening of
business on the day following the date fixed for the determination of
shareholders entitled to receive such dividend or other distribution, shall be
increased by dividing such Fixed Settlement Rate by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination and the denominator
shall be the sum of such number of shares and the total number of shares
constituting such dividend or other distribution, such increase to become
effective immediately after the opening of business on the day following the
date fixed for such determination.  For the
purposes of this paragraph (1), the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the Company
but shall include any shares issuable in respect of any scrip certificates
issued in lieu of fractions of shares of Common Stock.  The Company will not pay any dividend or make
any other distribution on shares of Common Stock held in the treasury of the
Company.


 


(2)           Stock Purchase Rights, Options, Etc. 
In case the Company shall issue rights, options, warrants or other
securities to all holders of its Common Stock (that are not available on an
equivalent basis to Holders of the Units upon settlement of the Purchase
Contracts forming a component of such Units) entitling such holders of Common
Stock, for a period expiring within 45 days from the date of issuance of such
rights, options, warrants or other securities, to subscribe for or purchase
shares of Common Stock at a price per share less than the Current Market Price
per share of Common Stock on the date fixed for the determination of shareholders
entitled to receive such rights, options, warrants or securities (other than
pursuant to any dividend reinvestment plan, share purchase plan or similar
plan, including such a plan that provides for purchases of Common Stock by
non-shareholders), each Fixed Settlement Rate in effect at the opening of
business on the day following the date fixed for such determination shall be
increased by dividing such Fixed Settlement Rate by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination plus the number of
shares of Common Stock which the aggregate of the offering price of the total
number of shares of Common Stock so offered for subscription or purchase would
purchase at such Current Market Price and the denominator shall be the number
of shares of Common Stock outstanding at the close of business on the date
fixed for such determination plus the number of shares of Common Stock so
offered for subscription or purchase, such increase to become effective
immediately after the opening of business on the day following the date fixed
for such determination.  For the purposes
of this paragraph (2), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company but
shall include any shares issuable in respect of any scrip certificates issued
in lieu of fractions of shares of Common Stock. 
The Company shall not issue any such rights, options, warrants or securities
in respect of shares of Common Stock held in the treasury of the Company.


 


46

















 


(3)           Stock Splits, Reverse Splits and Combinations. 
In case outstanding shares of Common Stock shall be subdivided, split or
reclassified into a greater number of shares of Common Stock, each Fixed
Settlement Rate in effect at the opening of business on the day following the
day upon which such subdivision, split or reclassification becomes effective
shall be proportionately increased, and, conversely, in case outstanding shares
of Common Stock shall each be combined or reclassified into a smaller number of
shares of Common Stock, each Fixed Settlement Rate in effect at the opening of
business on the day following the day upon which such combination or
reclassification becomes effective shall be proportionately reduced, such
increase or reduction, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such subdivision,
split, reclassification or combination becomes effective.


 


(4)           Debt or Asset Distributions.  (i) In
case the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock evidences of its indebtedness or assets (including securities,
but excluding any rights, options, warrants or other securities referred to in paragraph (2) of this Section,
any dividend or other distribution paid exclusively in cash referred to in paragraph (5) of this Section (including
the Reference Dividend as described therein), any dividend or distribution
referred to in paragraph (1) of this Section and
any dividend, shares of capital stock of any class or series, or similar equity
interests, of or relating to a subsidiary or other business unit in the case of
a Spin-Off referred to in subparagraph (ii) below),
each Fixed Settlement Rate in effect at the opening of business on the day
following the day on which such dividend or other distribution was effected
shall be adjusted so that the same shall equal the rate determined by dividing
such Fixed Settlement Rate in effect immediately prior to the close of business
on the date fixed for the determination of shareholders entitled to receive
such distribution by a fraction of which the numerator shall be the Current
Market Price per share of the Common Stock on the date fixed for such
determination less the then fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) of the portion of the assets or evidences of indebtedness so
distributed applicable to one share of Common Stock and the denominator shall
be such Current Market Price per share of the Common Stock, such adjustment to
become effective immediately prior to the opening of business on the day
following the date fixed for the determination of shareholders entitled to
receive such distribution.  In any case
in which this paragraph (4) is applicable, paragraph
(2) of this Section shall not be applicable and in any
case in which this subparagraph (i) is applicable, subparagraph (ii) is
not applicable.


 


(ii)           In the case of a Spin-Off, each Fixed Settlement Rate
in effect immediately before the close of business on the record date fixed for
determination of shareholders of the Company entitled to receive the
distribution will be increased by dividing such Fixed Settlement Rate by a
fraction, the numerator of which is the Current Market Price per share of
Common Stock and the denominator of which is the Current Market Price per share
of Common Stock plus the Fair Market Value of the portion of those shares of
capital stock or similar equity interests so distributed applicable to one
share of Common Stock.  Any adjustment to
the Fixed Settlement Rate under this subparagraph (ii) will occur on the
date that is the earlier of (A) the tenth Trading Day from, and including,
the effective date of the Spin-Off and (B) in the case of any Spin-Off
that is effected simultaneously with an Initial Public Offering of the
securities being distributed in the Spin-Off, the date on which the initial
public offering price of the securities being offered in such Initial Public
Offering is determined.


 


47

















 


(5)           Cash Distributions.  In case the
Company shall, (I) by dividend or otherwise, distribute to all holders of
its Common Stock cash during any quarterly period (excluding any cash that is
distributed in a Reorganization Event to which Section 5.6(b) applies
or as part of a distribution referred to in paragraph (4) of this
Section) in an amount in excess of
$             per
share of Common Stock per quarter (the “Reference Dividend”),
immediately after the close of business on the date fixed for determination of
the holders of Common Stock entitled to receive such distribution, each Fixed
Settlement Rate shall be increased by dividing such Fixed Settlement Rate in
effect immediately prior to the close of business on the date fixed for
determination of the holders of Common Stock entitled to receive such
distribution by a fraction, the numerator of which shall be equal to the
Current Market Price per share of Common Stock on the date fixed for such
determination less the per share amount of the distribution and the denominator
of which shall be equal to the Current Market Price per share of Common Stock
on the date fixed for such determination minus the Reference Dividend.  The Reference Dividend is subject to
adjustment (without duplication) from time to time in a manner inversely
proportional to any adjustment made to each Fixed Settlement Rate under Section 5.6(a);  provided that no adjustment will be made to the Reference
Dividend for any adjustment made pursuant to this Section 5.6(a)(5).  In the event that such dividend or
distribution is not so paid or made, each Fixed Settlement Rate shall again be
adjusted to be the Fixed Settlement Rate which would then be in effect if such
dividend or distribution had not been declared.


 


(6)           Tender Offers and Exchange Offers. 
In the case that a tender offer or exchange offer made by the Company or
any subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender offer or exchange offer (as amended through the
expiration thereof) shall require the payment to holders of the Common Stock
(based on the acceptance (up to any maximum specified in the terms of the
tender offer or exchange offer) of Reacquired Shares) of an aggregate
consideration having a fair market value (as determined in good faith by the
Board of Directors, whose determination shall be conclusive and described in a
Board Resolution) per share of Common Stock that exceeds the closing price per
share of Common Stock on the Trading Day next succeeding the last date on which
tenders or exchanges may be made pursuant to such tender offer or exchange
offer, then, immediately prior to the opening of business on the Trading Day
after the date of the last time (the “Expiration Time”)
tenders or exchanges could have been made pursuant to such tender offer or
exchange offer (as amended through the Expiration Time), each Fixed Settlement
Rate shall be increased by dividing such Fixed Settlement Rate immediately
prior to the close of business on the date of the Expiration Time by a fraction
(A) the numerator of which shall be equal to (x) the product of (I) the
Current Market Price per share of Common Stock on the date of the Expiration
Time and (II) the number of shares of Common Stock outstanding (including
any tendered or exchanged shares) on the date of the Expiration Time less (y) the
amount of cash plus the fair market value (determined as aforesaid) of the
aggregate consideration, if any, other than cash, payable to holders of Common
Stock pursuant to the tender offer or exchange offer (assuming the acceptance,
up to any maximum specified in the terms of the tender offer or exchange offer,
of Reacquired Shares), and (B) the denominator of which shall be equal to
the product of (x) the Current Market Price per share of Common Stock on
the date of the Expiration Time and (y) the result of (I) the number
of shares of Common Stock outstanding (including any tendered or exchanged
shares) on the date of the Expiration Time less (II) the number of all
shares validly tendered pursuant to the tender offer or exchange offer, not
withdrawn and accepted on the date


 


48

















 


of the Expiration Time (such validly tendered or
exchanged shares, up to any such maximum, being referred to as the “Reacquired Shares”).


 


(7)           The reclassification of Common Stock into securities
including securities other than Common Stock (other than any reclassification
upon a Reorganization Event to which Section 5.6(b) applies)
shall be deemed to involve (a) a distribution of such securities other
than Common Stock to all holders of Common Stock (and the effective date of
such reclassification shall be deemed to be “the date
fixed for the determination of shareholders entitled to receive such
distribution” and the “date fixed for such
determination” within the meaning of paragraph
(4) of this Section), and (b) a subdivision, split or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of
shares of Common Stock outstanding immediately thereafter (and the effective
date of such reclassification shall be deemed to be “the day upon
which such subdivision or split becomes effective” or “the day upon which such combination becomes effective”, as
the case may be, and “the day upon which such
subdivision, split or combination becomes effective” within the
meaning of paragraph (3) of this Section).


 


(8)           The “Current Market Price”
per share of Common Stock or any other security on any day means the average of
the daily Closing Prices for the 20 consecutive Trading Days preceding the
earlier of the day preceding the day in question and the day before the “ex
date” with respect to the issuance or distribution requiring such
computation.  For purposes of this
paragraph, the term “ex date,” when
used with respect to any issuance or distribution, shall mean the first date on
which the Common Stock or other security, as applicable, trades regular way on
the principal U.S. securities exchange or quotation system on which the Common
Stock or such other security, as applicable, is listed or quoted at that time,
without the right to receive the issuance or distribution.


 


(9)           Calculation of Adjustments. 
All adjustments to a Fixed Settlement Rate shall be calculated to the
nearest 1/10,000th of a share of Common Stock. 
No adjustment in a Fixed Settlement Rate shall be required unless such
adjustment would require an increase or decrease of at least one percent
therein; provided, however, that any adjustments which by reason of this
subparagraph are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. 
If an adjustment is made to each Fixed Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or
(10) of this Section 5.6(a), an adjustment shall also
be made to the Applicable Market Value solely to determine which of clauses
(a), (b) or (c) of the definition of Settlement Rate in Section 5.1 will apply on the
Purchase Contract Settlement Date or any Fundamental Change Early Settlement
Date.  Such adjustment shall be made by
multiplying the Applicable Market Value by the Adjustment Factor.  The “Adjustment Factor”
means, initially, a fraction of which the numerator shall be the Maximum
Settlement Rate immediately after the first adjustment to each Fixed Settlement
Rate pursuant to this Section 5.6(a) and the denominator shall be the
Maximum Settlement Rate immediately prior to such adjustment.  Each time an adjustment is required to be
made to each Fixed Settlement Rate pursuant to this Section 5.6(a), the
Adjustment Factor shall be multiplied by a fraction the numerator of which
shall be the Maximum Settlement Rate immediately after such adjustment to each
Fixed Settlement Rate pursuant to this Section 5.6(a) and the
denominator of which shall be the Maximum Settlement Rate immediately prior to
such adjustment.  Notwithstanding the
foregoing, if any adjustment to each Fixed Settlement Rate is required to be
made pursuant to the


 


49

















 


occurrence of any of the events contemplated by this Section 5.6(a) during
the period taken into consideration for determining the Applicable Market
Value, the 20 individual Closing Prices used to determine the Applicable Market
Value shall be adjusted rather than the Applicable Market Value and the
Applicable Market Value shall be determined by (A) multiplying the Closing
Prices for Trading Days prior to such adjustment to each Fixed Settlement Rate
by the Adjustment Factor in effect prior to such adjustment, (B) multiplying
the Closing Prices for Trading Days following such adjustment by the Adjustment
Factor reflecting such adjustment, and (C) dividing the sum of all such
adjusted Closing Prices by 20.


 


(10)         The Company may, but shall not be required to, make
such increases in the Settlement Rate, in addition to those required by this
Section, as it considers to be advisable in order to avoid or diminish the
effect of any income tax to any holders of shares of Common Stock resulting
from any dividend or distribution of stock or issuance of rights or warrants to
purchase or subscribe for stock or from any event treated as such for income
tax purposes or for any other reasons.


 


(11)         If the Company hereafter adopts any shareholder rights
plan involving the issuance of preferred share purchase rights or other similar
rights (the “Rights”) to all holders of the
Common Stock, a Holder shall be entitled to receive upon settlement of any
Purchase Contract, in addition to the shares of Common Stock issuable upon
settlement of such Purchase Contract, the related Rights for the Common Stock,
unless such Rights under the future shareholder rights plan have separated from
the Common Stock prior to the time of settlement of such Purchase Contract, in
which case each Settlement Rate shall be adjusted as provided in Section 5.6(a)(4) on the
date such Rights separate from the Common Stock.


 


(b)           Adjustment for Consolidation, Merger or Other
Reorganization Event; Fundamental Change Early Settlement.  (i) Subject
to the provisions of clause (ii) of this Section 5.6(b), upon a
Reorganization Event, each Unit shall thereafter, in lieu of a variable number
of shares of Common Stock, be settled by delivery of a variable number of
Exchange Property Units.  An “Exchange Property Unit” represents the right to receive the
kind and amount of securities, cash and other property receivable in such
Reorganization Event (without any interest thereon, and without any right to
dividends or distributions thereon that have a record date that is prior to the
applicable settlement date) per share of Common Stock by a holder of Common
Stock that is not a Person which is a party to the Reorganization Event (any
such Person, a “Constituent Person”), or an
Affiliate of a Constituent Person to the extent such Reorganization Event
provides for different treatment of Common Stock held by Affiliates of the
Company and non-Affiliates.  In the event
holders of Common Stock have the opportunity to elect the form of consideration
to be received in such transaction, the Exchange Property Unit that Holders of
the Corporate Units or Treasury Units would have been entitled to receive will
be deemed to be the weighted average of the types and amounts of consideration
received by the holders of Common Stock that affirmatively make an election.  The number of Exchange Property Units to be
delivered upon settlement of a Purchase Contract following the effective date
of a Reorganization Event shall equal the Settlement Rate, subject to
adjustment as provided in this Section 5.6, determined as if the
references to “shares of Common Stock” in Section 5.1(a)(i), (ii) and
(iii) were to “Exchange Property Units.”


 


50





















 


In the event of such a Reorganization Event, the
Person formed by such consolidation or merger or the Person which acquires the
property of the Company as an entirety or substantially as an entirety by sale,
transfer, lease or conveyance or the Person which shall acquire the Company
pursuant to a share exchange business combination shall execute and deliver to
the Purchase Contract Agent an agreement supplemental hereto providing that the
Holder of each Unit that remains Outstanding after the Reorganization Event (if
any) shall have the rights provided by this Section 5.6(b). 
Such supplemental agreement shall provide for adjustments to the amount
of any securities constituting all or a portion of an Exchange Property Unit
which, for events subsequent to the effective date of such Reorganization
Event, shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 5.6. 
The above provisions of this Section 5.6(b) shall similarly
apply to successive Reorganization Events.


 


(ii)           Prior to the Purchase Contract Settlement
Date, if a Fundamental Change occurs, then following such Fundamental Change a
Holder of a Unit will have the right to accelerate and settle (“Fundamental Change Early Settlement”) its Purchase Contract,
upon the conditions set forth below, at the Settlement Rate (determined as if
the Applicable Market Value equaled the Stock Price), plus an additional
make-whole amount of shares (the “Make-Whole Share Amount”);
provided that no Fundamental Change Early Settlement will be permitted pursuant
to this Section 5.6(b)(ii) unless, at the time such Fundamental
Change Early Settlement is effected, there is an effective Registration
Statement with respect to any securities to be issued and delivered in
connection with such Fundamental Change Early Settlement, if such a
Registration Statement is required (in the view of counsel for the Company,
which need not be in the form of a written opinion,) under the Securities
Act.  If such a Registration Statement is
so required, the Company covenants and agrees to use its commercially
reasonable efforts to (x) have in effect a Registration Statement covering
any securities to be delivered in respect of the Purchase Contracts being
settled and (y) provide a Prospectus in connection therewith, in each case
in a form that may be used in connection with such Fundamental Change Early
Settlement.  In the event that a Holder
seeks to exercise its Fundamental Change Early Settlement right and a
Registration Statement is required to be effective in connection with the
exercise of such right but no such Registration Statement is then effective,
the Holder’s exercise of such right shall be void unless and until such a
Registration Statement shall be effective and the Company shall have no further
obligation with respect to any such Registration Statement if, notwithstanding
using its commercially reasonable efforts, no Registration Statement is then
effective.


 


If a Holder elects a Fundamental Change Early
Settlement of some or all of its Purchase Contracts, such Holder shall be
entitled to receive, on the Fundamental Change Early Settlement Date, the
aggregate amount of any accrued and unpaid Contract Adjustment Payments and any
Deferred Contract Adjustment Payments, with respect to such Purchase
Contracts.  The Company shall pay such
amount as a credit against the amount otherwise payable by such Holder to
effect such Fundamental Change Early Settlement.


 


Within five Business Days of the Effective Date of a
Fundamental Change, the Company or, at the request and expense of the Company,
if such request is delivered at least two Business Days prior to the date such
notice is to be given to Holders of Units (unless a shorter period shall be
agreed to by the Purchase Contract Agent), the Purchase Contract Agent, shall
provide written notice to Holders of Units of such completion of a Fundamental
Change, which shall specify


 


51

















 


(1)           the deadline for submitting the notice to
settle early in cash pursuant to this Section 5.6(b)(ii) and how and
where such notice to settle early should be delivered,


 


(2)           the date on which such Fundamental Change
Early Settlement shall occur (which date shall be at least ten days after the
date of the notice but not later than the earlier of 20 days after the date of
such notice or five Business Days prior to the Purchase Contract Settlement
Date) (the “Fundamental Change Early Settlement Date”),


 


(3)           the amount of cash payable in respect of
the exercise of such Fundamental Change Early Settlement (giving effect to the
credit for any accrued and unpaid Contract Adjustment Payments and any Deferred
Contract Adjustment Payments as provided in the preceding paragraph),


 


(4)           the applicable Settlement Rate,


 


(5)           the Make-Whole Share Amount and


 


(6)           the amount (per share of Common Stock) of
cash, securities and other consideration receivable by the Holder, including
any amount of Contract Adjustment Payments receivable upon settlement.


 


The Company shall also deliver a copy of such notice
to the Purchase Contract Agent and the Collateral Agent.


 


Corporate Unit Holders (unless Applicable Ownership
Interests in the Treasury Portfolio have replaced Applicable Ownership
Interests in Debentures as a component of the Corporate Units) and Treasury
Unit Holders may only effect Fundamental Change Early Settlement pursuant to
this Section 5.6(b)(ii) in integral multiples of 20 Corporate Units
or Treasury Units, as the case may be. 
If Applicable Ownership Interests in the Treasury Portfolio have
replaced Applicable Ownership Interests in Debentures as a component of the
Corporate Units, Corporate Unit Holders may only effect Fundamental Change
Early Settlement pursuant to this Section 5.6(b)(ii) in multiples of
                        
Corporate Units (or such other number of Corporate Units as may be determined
by the Remarketing Agent upon a Successful Remarketing if the Reset Effective
Date is not a Payment Date).  Other than
the provisions relating to timing of notice and settlement, which shall be as
set forth above, the provisions of Section 5.1
shall apply with respect to a Fundamental Change Early Settlement pursuant to
this Section 5.6(b)(ii).


 


In order to exercise the right to effect Fundamental
Change Early Settlement with respect to any Purchase Contracts, the Holder of
the Certificate evidencing Units shall deliver to the Purchase Contract Agent
at the Corporate Trust Office, no later than 4:00 p.m., New York City
time, on the third Business Day immediately preceding the Fundamental Change
Early Settlement Date, such Certificate duly endorsed for transfer to the
Company or in blank with the form of Election to Settle Early/Fundamental
Change Early Settlement on the reverse thereof duly completed and accompanied
by payment (payable to the Company in immediately available funds) in an amount
equal to the product of (1) the Stated Amount times (2) the number of
Purchase Contracts with respect to which the Holder has elected to effect
Fundamental Change Early Settlement.


 


52

















 


Upon receipt of any such Certificate and payment of
such funds, the Purchase Contract Agent shall pay the Company from such funds
the related Purchase Price pursuant to the terms of the related Purchase
Contracts, and notify the Collateral Agent that all the conditions necessary
for a Fundamental Change Early Settlement by a Holder of Units have been
satisfied pursuant to which the Purchase Contract Agent has received from such
Holder, and paid to the Company as confirmed in writing by the Company, the
related Purchase Price.


 


If a Holder properly effects a Fundamental Change
Early Settlement in accordance with the provisions of this Section 5.6(b)(ii),
the Company will deliver (or will cause the Collateral Agent to deliver) to the
Holder on the Fundamental Change Early Settlement Date:


 


(A)          the kind and amount of securities, cash
and other property receivable upon such Fundamental Change by a holder of the
number of shares of Common Stock issuable on account of each Purchase Contract
if the Purchase Contract Settlement Date had occurred immediately prior to such
Fundamental Change (based on the Settlement Rate in effect at such time plus
the Make-Whole Share Amount), assuming such holder of Common Stock is not a
Constituent Person or an Affiliate of a Constituent Person to the extent such
Fundamental Change provides for different treatment of Common Stock held by
Affiliates of the Company and non-Affiliates. 
In the event holders of Common Stock have the opportunity to elect the
form of consideration to be received in the Fundamental Change, the kind and
amount of securities, cash and/or other property receivable by Holders of the
Corporate Units or Treasury Units exercising their right to effect a
Fundamental Change Early Settlement will be deemed to be the weighted average
of the types and amounts of consideration received by the holders of Common
Stock that affirmatively make an election. 
For the avoidance of doubt, for the purposes of determining the
Applicable Market Value (in connection with determining the appropriate Settlement
Rate to be applied in the foregoing sentence), the date of the closing of the
Fundamental Change shall be deemed to be the Purchase Contract Settlement Date;


 


(B)           the Applicable Ownership Interest in
Debentures, the Applicable Ownership Interests in the Treasury Portfolio or the
Treasury Securities, as the case may be, related to the Purchase Contracts with
respect to which the Holder is effecting a Fundamental Change Early Settlement;


 


(C)           any accrued and unpaid Contract
Adjustment Payments and any Deferred Contract Adjustment Payments (to the
extent such payments are not applied as a credit to the Purchase Price in
connection with the settlement of the Purchase Contracts); and


 


(D)          if so required under the Securities Act,
a Prospectus as contemplated by this Section 5.6(b)(ii).


 


The Corporate Units or the Treasury Units of the
Holders who do not elect Fundamental Change Early Settlement in accordance with
the foregoing provisions will continue to remain Outstanding and be subject to
settlement on the Purchase Contract Settlement Date in accordance with the
terms hereof.


 


The Make-Whole Share Amounts applicable to a
Fundamental Change Early Settlement will be determined by reference to the
table below, based on the date on which the Fundamental


 


53

















 


Change becomes effective
(the “Effective Date”) and the price (the “Stock Price”) paid per share for Common Stock in such
Fundamental Change, which will be (a) in the case of a Fundamental Change
described in clause (ii) of the definition of such term and the holders of
Common Stock receive only cash in such transaction, the Stock Price paid per
share will be the cash amount paid per share; or (b) otherwise, the Stock
Price paid per share will be the average of the Closing Prices of the Common
Stock on the twenty Trading Days prior to, but not including, the Effective
Date of such Fundamental Change.


 


	
   

  	
   

  	
  Effective Date

  	
   

  
	
  Stock Price

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


The Stock Prices set forth in the first column of the
table will be adjusted upon the occurrence of certain events requiring
adjustments to each Fixed Settlement Rate pursuant to Section 5.6(a).


 


Each of the Make-Whole Share Amounts set forth in the
table will be subject to adjustment in the same manner as the Fixed Settlement
Rates as set forth in Section 5.6(a).


 


If the Stock Price or Effective Date applicable to a
Fundamental Change is not expressly set forth on the table, then the Make-Whole
Share Amount will be determined as follows:


 


(1)           if the Stock Price is between two Stock
Price amounts on the table or the Effective Date is between two dates on the
table, the Make-Whole Share Amount will be determined by straight-line
interpolation between the Make-Whole Share Amounts set forth for the higher and
lower Stock Price amounts and the two dates, as applicable, based on a 365-day
year;


 


(2)           if the Stock Price is in excess of $            
per share (subject to adjustment as set forth in Section 5.6(a)),
then the Make-Whole Share Amount shall be zero; and


 


54






 










 


(3)           if the Stock Price is less than
$             per
share (subject to adjustment as set forth in Section 5.6(a))
(the “Minimum Stock Price”), then the
Make-Whole Share Amount shall be determined as if the Stock Price equaled the
Minimum Stock Price, using straight-line interpolation, as described in clause (1) above,
if the Effective Date is between two dates on the table.


 


(c)           No adjustment to the Settlement Rate need be made if
Holders may participate in the transaction that would otherwise give rise to an
adjustment, so long as the distributed assets or securities the Holders would
receive upon settlement of the Purchase Contracts, if convertible,
exchangeable, or exercisable, are convertible, exchangeable or exercisable, as
applicable, without any loss of rights or privileges for a period of at least
45 days following settlement of the Purchase Contracts.


 


(d)           The Fixed Settlement Rate shall not be adjusted:


 


(i)          upon the issuance of any shares of Common Stock
pursuant to any present or future plan providing for the direct investment in
Common Stock or the reinvestment of dividends or interest payable on the
Company’s securities and the investment of additional optional amounts in
shares of Common Stock under any plan;


 


(ii)         upon the issuance of any shares of Common Stock or
options or rights to purchase shares of Common Stock pursuant to any present or
future employee, director or consultant benefit plan or program of or assumed
by the Company or any of its subsidiaries;


 


(iii)        upon the issuance of any shares of Common Stock
pursuant to any option, warrant, right or exercisable, exchangeable or
convertible security outstanding as of the date the Units were first issued;


 


(iv)        for a change in the par value or a change to no par
value of the Common Stock;


 


(v)         for accumulated and unpaid dividends, other than to
the extent contemplated by Section 5.6(a) hereof;
or


 


(vi)        upon the issuance of shares of Common Stock or
securities convertible into, or exercisable or exchangeable for, Common Stock,
in public or private transactions, for consideration in cash or property, at
any price the Company deems appropriate.


 


(e)           All calculations and determinations pursuant to this Section 5.6
shall be made by the Company or its agent and the Purchase Contract Agent shall
have no responsibility with respect to any such calculation or determination.


 


SECTION 5.7.                      Notice of Adjustments and Certain
Other Events.


 


(a)           Whenever the Fixed Settlement Rates are adjusted as
herein provided, the Company shall:


 


55





















 


(i)            forthwith compute the Settlement Rate in
accordance with Section 5.6
and prepare and transmit to the Purchase Contract Agent a Company Certificate
setting forth the adjusted Settlement Rate, the method of calculation thereof
in reasonable detail, and the facts requiring such adjustment and upon which
such adjustment is based; and


 


(ii)           within 10 Business Days following the
occurrence of an event that requires an adjustment to the Settlement Rate
pursuant to Section 5.6 (or if the
Company is not aware of such occurrence, as soon as practicable after becoming
so aware), provide a written notice to the Holders of the Units of the
occurrence of such event and a statement in reasonable detail setting forth the
method by which the adjustment to the Settlement Rate was determined and
setting forth the adjusted Settlement Rate.


 


(b)           The Purchase Contract Agent shall not at any time be
under any duty or responsibility to any Holder of Units to determine whether
any facts exist which may require any adjustment of the Settlement Rate, or
with respect to the nature or extent or calculation of any such adjustment when
made, or with respect to the method employed in making the same.  The Purchase Contract Agent shall not be
accountable with respect to the validity or value (or the kind or amount) of
any shares of Common Stock, or of any securities or property, which may at the
time be issued or delivered with respect to any Purchase Contract, and the
Purchase Contract Agent makes no representation with respect thereto.  The Purchase Contract Agent shall not be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock or other securities or property pursuant to a Purchase
Contract or to comply with any of the duties, responsibilities or covenants of
the Company contained in this Article.


 


SECTION 5.8.                      Termination Event; Notice.


 


The Purchase Contracts and all obligations and rights
of the Company and the Holders thereunder, including, without limitation, the
rights of the Holders to receive and the obligation of the Company to pay any
Contract Adjustment Payments or any Deferred Contract Adjustment Payments, and
the rights and obligations of the Holders to purchase shares of Common Stock,
will immediately and automatically terminate, without the necessity of any
notice or action by any Holder, the Purchase Contract Agent or the Company, if,
on or prior to the Purchase Contract Settlement Date, a Termination Event shall
have occurred.  Upon the occurrence of a
Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice thereof to the Purchase Contract
Agent, the Collateral Agent, and to the Holders at their addresses as they
appear in the Security Register.  Upon
and after the occurrence of a Termination Event, the Units shall thereafter
represent the right to receive the Debentures underlying the Applicable
Ownership Interest in Debentures or the Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, forming a part of such Units in the
case of Corporate Units, or Treasury Securities in the case of Treasury Units,
in accordance with the provisions of Section 4.3 of the
Pledge Agreement.


 


SECTION 5.9.                      Early Settlement.


 


(a)           A holder of Corporate Units may settle the related
Purchase Contracts in their entirety at any time on or prior to the seventh
Business Day immediately preceding the Purchase


 


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Contract Settlement Date in the manner described
herein, but only in integral multiples of 20 Corporate Units; provided,
however, if the Treasury Portfolio has become a component of the Corporate
Units, Holders of Corporate Units may settle early only in integral multiples
of                         
Corporate Units at any time on or prior to the second Business Day immediately preceding
the Purchase Contract Settlement Date (or such other number of Corporate Units
as may be determined by the Remarketing Agent upon a Successful Remarketing of
the Debentures if the Reset Effective Date is not a regular quarterly interest
payment date).  A holder of Treasury
Units may settle the related Purchase Contracts in their entirety at any time
on or prior to the second Business Day immediately preceding the Purchase
Contract Settlement Date in the manner described herein (an “Early Settlement”) but only in integral multiples of
20 Treasury Units.  The right to
Early Settlement is subject to there being in effect a Registration Statement
covering the shares of Common Stock to be issued and delivered in respect of
the Purchase Contracts being settled, if such a Registration Statement is
required (in the view of counsel for the Company, which need not be in the form
of a written opinion) under the Securities Act. 
If such a Registration Statement is so required, the Company covenants
and agrees to use its commercially reasonable efforts to (x) have in
effect a Registration Statement covering any securities to be delivered in
respect of the Purchase Contracts being settled and (y) provide a
Prospectus in connection therewith, in each case in a form that may be used in
connection with such Early Settlement. 
In the event that a Holder seeks to exercise its Early Settlement right
and a Registration Statement is required to be effective in connection with the
exercise of such right but no such Registration Statement is then effective,
the Holder’s exercise of such right shall be void unless and until such a
Registration Statement shall be effective and the Company shall have no further
obligation with respect to any such Registration Statement if, notwithstanding
using its commercially reasonable efforts, no Registration Statement is then
effective.  Upon Early Settlement, (i) the
Holder’s right to receive additional Contract Adjustment Payments in respect of
such Purchase Contracts will terminate and (ii) no adjustment will be made
to or for the Holder on account of Deferred Contract Adjustment Payments, or
any amount accrued in respect of Contract Adjustment Payments.  In order to exercise the right to effect any
Early Settlement with respect to any Purchase Contracts, the Holder of the
Certificate evidencing Units shall deliver such Certificate to the Purchase
Contract Agent at the Corporate Trust Office duly endorsed for transfer to the
Company or in blank with the form of Election to Settle Early/Fundamental
Change Early Settlement on the reverse thereof duly completed and executed and
accompanied by payment (payable to the Company in immediately available funds
in an amount (the “Early Settlement Amount”)
equal to the sum of


 


(i)          the product of (A) the Stated Amount times (B) the
number of Purchase Contracts with respect to which the Holder has elected to
effect Early Settlement, plus


 


(ii)         if such delivery is made with respect to any Purchase
Contracts during the period from the close of business on any Record Date
relating to any Payment Date to the opening of business on such Payment Date,
an amount equal to the Contract Adjustment Payments payable, if any, on such
Payment Date with respect to such Purchase Contracts; provided that no payment
is required if the Company has elected to defer the Contract Adjustment
Payments which would otherwise be payable on the Payment Date.


 


Except as provided in the immediately preceding
sentence and subject to Section 5.2(d),
no payment or adjustment shall be made upon Early Settlement of any Purchase
Contract on


 


57

















 


account of any Contract Adjustment Payments accrued on
such Purchase Contract or on account of any dividends on the Common Stock.  In order for any of the foregoing
requirements to be considered satisfied or effective with respect to a Purchase
Contract underlying any Unit on or by a particular Business Day, such
requirement must be met at or prior to 5:00 p.m., New York City time, on
such Business Day; the first Business Day on which all of the foregoing
requirements have been satisfied by 5:00 p.m., New York City time shall be
the “Early Settlement Date” with respect to
such Unit.  Upon Early Settlement of the
Purchase Contracts, the rights of the Holders to receive and the obligation of
the Company to pay any Contract Adjustment Payments (including any accrued and
unpaid Contract Adjustment Payments) with respect to such Purchase Contracts
shall immediately and automatically terminate, except that the Holders will
receive any accrued and unpaid Contract Adjustment Payments if the Early
Settlement Date falls after a Record Date relating to any Payment Date and prior
to the opening of business on such Payment Date.


 


(b)           Upon Early Settlement of Purchase Contracts by a
Holder of the related Units, the Company shall issue, and the Holder shall be
entitled to receive, a number of shares of Common Stock (or in the case of an
Early Settlement following a Reorganization Event, a number of Exchange
Property Units) equal to the Minimum Settlement Rate for each Purchase Contract
as to which Early Settlement is effected.


 


(c)           No later than the third Business Day after the applicable
Early Settlement Date the Company shall cause (i) the shares of Common
Stock issuable upon Early Settlement of Purchase Contracts to be issued and a
certificate or certificates for the full number of such shares of Common Stock
together with payment in lieu of any fraction of a share, as provided in Section 5.10 to be delivered to
the Purchase Contract Agent at the Corporate Trust Office, and (ii) the
related Applicable Ownership Interest in Debentures or the Applicable Ownership
Interest in the Treasury Portfolio, in the case of Corporate Units, or the
related Treasury Securities, in the case of Treasury Units, to be released from
the Pledge by the Collateral Agent and transferred, in each case, to the
Purchase Contract Agent for delivery to the Holder thereof or its designee.


 


(d)           Upon Early Settlement of any Purchase Contracts, and
subject to receipt of shares of Common Stock from the Company and the
Applicable Ownership Interest in Debentures, the Applicable Ownership Interest
in the Treasury Portfolio or Treasury Securities, as the case may be, from the
Collateral Agent, as applicable, the Purchase Contract Agent shall, in
accordance with the instructions provided by the Holder of such Purchase
Contracts on the applicable form of Election to Settle Early/Fundamental Change
Early Settlement on the reverse of the Certificate evidencing the related
Units, (i) transfer to the Holder the Applicable Ownership Interest in
Debentures, the Applicable Ownership Interest in the Treasury Portfolio or the
Treasury Securities, as the case may be, forming a part of the related Units,
and (ii) deliver to the Holder a certificate or certificates for the full
number of shares of Common Stock issuable upon such Early Settlement together
with payment in lieu of any fraction of a share, as provided in Section 5.10.


 


(e)           In the event that Early Settlement is effected with
respect to Purchase Contracts underlying less than all the Units evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Purchase Contract Agent shall authenticate, countersign and


 


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deliver to the Holder thereof, at the expense of the
Company, a Certificate evidencing the Units as to which Early Settlement was
not effected.


 


SECTION 5.10.                    No Fractional Shares.


 


No fractional shares or scrip representing fractional
shares of Common Stock shall be issued or delivered upon settlement on the
Purchase Contract Settlement Date or upon Early Settlement or Fundamental
Change Early Settlement of any Purchase Contracts.  If Certificates evidencing more than one
Purchase Contract shall be surrendered for settlement at one time by the same
Holder, the number of full shares of Common Stock which shall be delivered upon
settlement shall be computed on the basis of the aggregate number of Purchase
Contracts evidenced by the Certificates so surrendered.  Instead of any fractional share of Common
Stock which would otherwise be deliverable upon settlement of any Purchase
Contracts on the Purchase Contract Settlement Date or upon Early Settlement or
Fundamental Change Early Settlement, the Company, through the Purchase Contract
Agent, shall make a cash payment in respect of such fractional interest in an
amount equal to such fractional share times the (i) the Threshold
Appreciation Price, in the case of an Early Settlement or (ii) the
Applicable Market Value calculated as if the date of such settlement were the
Purchase Contract Settlement Date, in all other circumstances.  The Company shall provide the Purchase
Contract Agent from time to time with sufficient funds to permit the Purchase
Contract Agent to make all cash payments required by this Section 5.10 in
a timely manner.


 


SECTION 5.11.                    Charges and Taxes.


 


The Company will pay all stock transfer and similar
taxes attributable to the initial issuance and delivery of the shares of Common
Stock pursuant to the Purchase Contracts; provided, however, that the Company
shall not be required to pay any such tax or taxes which may be payable in respect
of any exchange of or substitution for a Certificate evidencing a Unit or any
issuance of a share of Common Stock in a name other than that of the registered
Holder of a Certificate surrendered in respect of the Units evidenced thereby,
other than in the name of the Purchase Contract Agent, as custodian for such
Holder, and the Company shall not be required to issue or deliver such Common
Stock share certificates or Certificates unless or until the Person or Persons
requesting the transfer or issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid or that no such tax is due.


 


ARTICLE VI


 


Remedies


 


SECTION 6.1.            Unconditional Right of Holders to
Receive Contract Adjustment Payments and to Purchase Shares of Common Stock.


 


The Holder of any Corporate Unit or Treasury Unit
shall have the right, which is absolute and unconditional (subject to the right
of the Company to defer payment thereof pursuant to Section 5.3,
the prepayment of Contract Adjustment Payments pursuant to Section 5.9(a),
the forfeiture of any Contract Adjustment Payments upon Early Settlement
pursuant to Section 5.9(b), and the
forfeiture of any Contract Adjustment Payments or Deferred Contract Adjustment
Payments upon the occurrence of a Termination Event), to receive payment of
each


 


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installment of the
Contract Adjustment Payments with respect to the Purchase Contract constituting
a part of such Unit on the respective Payment Date for such Unit and to
purchase Common Stock pursuant to such Purchase Contract and, in each such
case, to institute suit for the enforcement of any such payment and right to
purchase Common Stock, and such rights shall not be impaired without the
consent of such Holder.


 


SECTION 6.2.                      Restoration of Rights and
Remedies.


 


If any Holder has instituted any proceeding to enforce
any right or remedy under this Agreement and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
such Holder, then and in every such case, subject to any determination in such
proceeding, the Company and such Holder shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of such Holder shall continue as though no such proceeding had been
instituted.


 


SECTION 6.3.                      Rights and Remedies Cumulative.


 


Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Certificates in
the last paragraph of Section 3.10,
no right or remedy herein conferred upon or reserved to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise.  The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.


 


SECTION 6.4.                      Delay or Omission Not Waiver.


 


No delay or omission of any Holder to exercise any
right or remedy upon a Default shall impair any such right or remedy or
constitute a waiver of any such right. 
Every right and remedy given by this Article VI or by law to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.


 


SECTION 6.5.                      Undertaking for Costs.


 


All parties to this Agreement agree, and each Holder
of a Unit, by its acceptance of such Unit shall be deemed to have agreed, that
any court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Agreement, or in any suit against the Purchase
Contract Agent for any action taken, suffered or omitted by it as Purchase
Contract Agent, the filing by any party litigant in such suit of an undertaking
to pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys’ fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; provided that the provisions of
this Section shall not apply to any suit instituted by the Company, to any
suit instituted by the Purchase Contract Agent, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% of the
Outstanding Units, or to any suit instituted by any Holder for the enforcement
of any Contract Adjustment Payments or interest on any Debentures owed pursuant
to such Holder’s Applicable Ownership Interests in Debentures on or after the
respective Payment Date therefor (subject to Section 5.3)
in respect of any Unit held by such Holder, or for enforcement of


 


60

















 


the right to purchase
shares of Common Stock under the Purchase Contracts comprising part of any Unit
held by such Holder.


 


SECTION 6.6.                      Waiver of Stay or Extension Laws.


 


The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Agreement; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Purchase Contract Agent
or the Holders, but will suffer and permit the execution of every such power as
though no such law had been enacted.


 


ARTICLE VII


 


The Purchase Contract Agent


 


SECTION 7.1.                      Certain Duties and
Responsibilities.


 


(a)           Prior to a Default and after the curing or waiving of
all such Defaults that may have occurred, the Purchase Contract Agent:


 


(1)           undertakes to perform, with respect to
the Units, such duties and only such duties as are specifically set forth in
this Agreement and no implied covenants or obligations shall be read into this
Agreement against the Purchase Contract Agent; and


 


(2)           may, with respect to the Units,
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, in the absence of bad faith on the part of the
Purchase Contract Agent, upon certificates or opinions furnished to the
Purchase Contract Agent and conforming to the requirements of this Agreement,
but in the case of any certificates or opinions which by any provision hereof
are specifically required to be furnished to the Purchase Contract Agent, the
Purchase Contract Agent shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Agreement.


 


(b)           No provision of this Agreement shall be construed to
relieve the Purchase Contract Agent from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:


 


(1)           this Section 7.1(b) shall not
be construed to limit the effect of Section 7.1(a);


 


(2)           the Purchase Contract Agent shall not be
liable for any error of judgment made in good faith by a Responsible Officer,
unless it shall be proved that the Purchase Contract Agent was negligent in
ascertaining the pertinent facts; and


 


(3)           no provision of this Agreement shall
require the Purchase Contract Agent to expend or risk its own funds or
otherwise incur any financial liability in the


 


61

















 


performance of any of its
duties hereunder, or in the exercise of any of its rights or powers.


 


(c)           Whether or not therein expressly so provided, every
provision of this Agreement relating to the conduct or affecting the liability
of or affording protection to the Purchase Contract Agent shall be subject to
the provisions of this Section.


 


(d)           The Purchase Contract Agent is authorized to execute,
deliver and perform the Pledge Agreement in its capacity as Purchase Contract
Agent and to grant the Pledge.  The
Purchase Contract Agent shall be entitled to all of the rights, privileges,
immunities and indemnities contained in this Agreement with respect to any
duties of the Purchase Contract Agent under, or actions taken by the Purchase
Contract Agent pursuant to, such Pledge Agreement and any Remarketing Agreement
entered into by the Purchase Contract Agent to effectuate Section 5.4
hereof or Section 6.3 of the
Pledge Agreement.


 


(e)           In case a Default has occurred (that has not been
cured or waived), and is actually known by a Responsible Officer of the
Purchase Contract Agent, the Purchase Contract Agent shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in its exercise thereof, as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.


 


(f)            At the request of the Company, the Purchase Contract
Agent is authorized to execute, deliver and perform one or more Remarketing
Agreements to, among other things, effectuate Section 5.4.


 


SECTION 7.2.                      Notice of Default.


 


Within 90 days after the occurrence of any Default
hereunder of which a Responsible Officer of the Purchase Contract Agent has
actual knowledge, the Purchase Contract Agent shall transmit by mail to the
Company, and to the Holders of Units as their names and addresses appear in the
Security Register, notice of such Default hereunder, unless such Default shall
have been cured or waived; provided that, except for a Default in any payment
obligation hereunder, the Purchase Contract Agent shall be protected in
withholding such notice if and so long as a Responsible Officer of the Purchase
Contract Agent in good faith determines that the withholding of such notice is
in the interests of the Holders of the Units.


 


SECTION 7.3.                      Certain Rights of Purchase
Contract Agent.


 


Subject to the provisions of Section 7.1:


 


(a)           the Purchase Contract Agent may conclusively rely and
shall be protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;


 


(b)           any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Certificate, Issuer Order
or Issuer Request, and any resolution of the Board of Directors of the Company
may be sufficiently evidenced by a Board Resolution;


 


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(c)           whenever in the administration of this Agreement the
Purchase Contract Agent shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting to take any action
hereunder, the Purchase Contract Agent (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely
upon a Company Certificate;


 


(d)           the Purchase Contract Agent may consult with counsel
of its selection and the advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance thereon;


 


(e)           the Purchase Contract Agent shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Purchase Contract Agent, in
its discretion, may make reasonable further inquiry or investigation into such
facts or matters related to the execution, delivery and performance of the
Purchase Contracts as it may see fit, and, if the Purchase Contract Agent shall
determine to make such further inquiry or investigation, it shall be given a
reasonable opportunity to examine the books, records and premises of the
Company personally or by an agent or attorney;


 


(f)            the Purchase Contract Agent may execute any of the
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or an Affiliate and the Purchase Contract Agent
shall not be responsible for any misconduct or negligence on the part of any
agent or attorney or an Affiliate appointed with due care by it hereunder;


 


(g)           the rights, privileges, protections, immunities and
benefits given to the Purchase Contract Agent, including, without limitation,
its right to be indemnified, are extended to, and shall be enforceable by, the
Purchase Contract Agent in each of its capacities hereunder;


 


(h)           the Purchase Contract Agent shall be under no
obligation to exercise any of the rights or powers vested in it by this Agreement
at the request or direction of any of the Holders pursuant to this Agreement,
unless such Holders shall have offered to the Purchase Contract Agent security
or indemnity satisfactory to the Purchase Contract Agent against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;


 


(i)            the Purchase Contract Agent shall not be liable for
any action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Agreement;


 


(j)            the Purchase Contract Agent shall not be deemed to
have notice of any adjustment to the Fixed Settlement Rate, the occurrence of a
Termination Event or any Default hereunder unless written notice of any such
adjustment, occurrence or event which is in fact such a Default is received by
the Purchase Contract Agent at the Corporate Trust Office of the Purchase
Contract Agent;


 


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(k)           the Purchase Contract Agent may request that the
Company deliver a certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions pursuant
to this Agreement; and


 


(l)            in no event shall the Purchase Contract Agent be
responsible or liable for special or consequential loss or damage of any kind
whatsoever (including, but not limited to, loss of profit) irrespective of
whether the Purchase Contract Agent has been advised of the likelihood of such
loss or damage and regardless of the form of action.


 


SECTION 7.4.                      Not Responsible for Recitals or
Issuance of Units.


 


The recitals contained herein and in the Certificates
shall be taken as the statements of the Company and the Purchase Contract Agent
assumes no responsibility for their accuracy. 
The Purchase Contract Agent makes no representations as to the validity
or sufficiency of either this Agreement or of the Units, or of the Pledge
Agreement or the Pledge.  The Purchase
Contract Agent shall not be accountable for the use or application by the
Company of the proceeds in respect of the Purchase Contracts.


 


SECTION 7.5.                      May Hold Units.


 


Any Security Registrar or any other agent of the
Company, or the Purchase Contract Agent and its Affiliates, in their individual
or any other capacity, may become the owner or pledgee of Units and may
otherwise deal with the Company, the Collateral Agent or any other Person with
the same rights it would have if it were not Security Registrar or such other agent,
or the Purchase Contract Agent.  The
Company or FPL Group Capital may become the owner or pledgee of Units.


 


SECTION 7.6.                      Money Held in Custody.


 


Money held by the Purchase Contract Agent in custody
hereunder need not be segregated from the Purchase Contract Agent’s other funds
except to the extent required by law or provided herein.  The Purchase Contract Agent shall be under no
obligation to invest or pay interest on any money received by it hereunder
except as otherwise provided herein or agreed in writing with the Company.


 


SECTION 7.7.                      Compensation and Reimbursement.


 


The Company agrees:


 


(a)           to pay to the Purchase Contract Agent
from time to time such compensation for all services rendered by it hereunder
as the parties shall agree from time to time in writing (which compensation
shall not be limited by any provisions of law in regards to the compensation of
a trustee of an express trust);


 


(b)           except as otherwise expressly provided
herein, to reimburse the Purchase Contract Agent upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Purchase Contract Agent in accordance with any provision of this Agreement
(including the reasonable compensation and the expenses and disbursements of
its agents and counsel), except any such expense, disbursement or advance as
may be attributable to its negligence or bad faith; and


 


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(c)           to indemnify the Purchase Contract Agent
and any predecessor Purchase Contract Agent and each of its directors,
officers, agents and employees (collectively, with the Purchase Contract Agent,
the “Indemnitees”) for, and to hold each
Indemnitee harmless against, any loss, liability or expense incurred without
negligence, willful misconduct or bad faith on its part, arising out of or in
connection with the acceptance or administration or the performance of its
duties hereunder, including the costs and expenses of defending itself against
any claim (whether asserted by the Company, or any Holder or any other Person)
or liability in connection with the exercise or performance of any of its
powers or duties hereunder.


 


“Purchase Contract Agent”
for purposes of this Section 7.7 shall include any predecessor Purchase
Contract Agent; provided, however, that the negligence or bad faith of any
Purchase Contract Agent hereunder shall not affect the rights of any other
Purchase Contract Agent hereunder.


 


When the Purchase Contract Agent incurs expenses or
renders services in an action or proceeding commenced pursuant to Section 4.3 of the Pledge Agreement
upon the occurrence of a Termination Event, the expenses (including the
reasonable charges and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration under any
applicable Federal or State bankruptcy, insolvency or other similar law.


 


The provisions of this Section 7.7 shall survive
the resignation and removal of the Purchase Contract Agent, the satisfaction or
discharge of the Units and the Purchase Contracts and the termination of this
Agreement and the Pledge Agreement.


 


SECTION 7.8.                      Corporate Purchase Contract Agent
Required; Eligibility.


 


There shall at all times be a Purchase Contract Agent
hereunder which shall be (i) not an Affiliate of the Company and (ii) a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having (or being a member of a bank
holding company having) a combined capital and surplus of at least $50,000,000
and subject to supervision or examination by Federal or State authority.  If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.  If at any time
the Purchase Contract Agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.


 


SECTION 7.9.                      Resignation and Removal;
Appointment of Successor.


 


(a)           No resignation or removal of the Purchase Contract
Agent and no appointment of a successor Purchase Contract Agent pursuant to
this Article shall become effective until the acceptance of appointment by
the successor Purchase Contract Agent in accordance with the applicable
requirements of Section 7.10.


 


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(b)           The Purchase Contract Agent may resign at any time by
giving written notice thereof to the Company 60 days prior to the effective
date of such resignation.  If the
instrument of acceptance by a successor Purchase Contract Agent required by Section 7.10 shall not have been
delivered to the Purchase Contract Agent within 30 days after the giving of
such notice of resignation, the resigning Purchase Contract Agent may petition
any court of competent jurisdiction for the appointment of a successor Purchase
Contract Agent.


 


(c)           The Purchase Contract Agent may be removed at any time
by Act of the Holders of a majority in number of the Outstanding Units
delivered to the Purchase Contract Agent and the Company.


 


(d)           If at any time


 


(1)           the Purchase Contract Agent fails to comply with Section 310(b) of
the TIA, after written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Unit for at least six months,


 


(2)           the Purchase Contract Agent shall cease to be eligible
under Section 7.8 and shall fail to
resign after written request therefor by the Company or by any such Holder, or


 


(3)           the Purchase Contract Agent shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or a receiver of the
Purchase Contract Agent or of its property shall be appointed or any public
officer shall take charge or control of the Purchase Contract Agent or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation,


 


then, in any such case, (i) the Company by a
Board Resolution may remove the Purchase Contract Agent, or (ii) any
Holder who has been a bona fide Holder of a Unit for at least six months may,
on behalf of itself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Purchase Contract Agent and the
appointment of a successor Purchase Contract Agent.


 


(e)           If the Purchase Contract Agent shall resign, be
removed or become incapable of acting, or if a vacancy shall occur in the
Corporate Trust Office of the Purchase Contract Agent for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Purchase
Contract Agent and shall comply with the applicable requirements of Section 7.10.  If no successor Purchase Contract Agent shall
have been so appointed by the Company and accepted appointment in the manner
required by Section 7.10, the
Purchase Contract Agent or any Holder who has been a bona fide Holder of a Unit
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Purchase Contract Agent.


 


(f)            The Company shall give, or shall cause such successor
Purchase Contract Agent to give, notice of each resignation and each removal of
the Purchase Contract Agent and each appointment of a successor Purchase
Contract Agent by mailing written notice of such event by first-class mail,
postage prepaid, to all Holders as their names and addresses appear in the
Security Register.  Each notice shall
include the name of the successor Purchase Contract Agent and the address of
its Corporate Trust Office.


 


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(g)           If the Purchase Contract Agent has or shall acquire
any “conflicting interest” within the meaning of Section 310(b) of
the TIA, the Purchase Contract Agent and the Company shall in all respects
comply with the provisions of Section 310(b) of the TIA.


 


SECTION 7.10.                    Acceptance of Appointment by
Successor.


 


(a)           In case of the appointment hereunder of a successor
Purchase Contract Agent, every such successor Purchase Contract Agent so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Purchase Contract Agent an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Purchase Contract Agent
shall become effective and such successor Purchase Contract Agent, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Purchase Contract Agent; but, on the
request of the Company or the successor Purchase Contract Agent, such retiring
Purchase Contract Agent shall, upon payment of its charges, execute and deliver
an instrument transferring to such successor Purchase Contract Agent all the
rights, powers and trusts of the retiring Purchase Contract Agent and shall
duly assign, transfer and deliver to such successor Purchase Contract Agent all
property and money held by such retiring Purchase Contract Agent hereunder.


 


(b)           Upon request of any such successor Purchase Contract
Agent, the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Purchase Contract Agent
all such rights, powers and trusts referred to in paragraph
(a) of this Section.


 


(c)           No successor Purchase Contract Agent shall accept its
appointment unless at the time of such acceptance such successor Purchase
Contract Agent shall be qualified and eligible under this Article.


 


SECTION 7.11.                    Merger, Conversion, Consolidation
or Succession to Business.


 


Any Person into which the Purchase Contract Agent may
be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Purchase
Contract Agent shall be a party, or any Person succeeding to all or
substantially all the corporate trust business of the Purchase Contract Agent,
shall be the successor of the Purchase Contract Agent hereunder, provided such
Person shall be otherwise qualified and eligible under this Article, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto.  In case any
Certificates shall have been authenticated and executed on behalf of the
Holders, but not delivered, by the Purchase Contract Agent then in office, any
successor by merger, conversion or consolidation to such Purchase Contract
Agent may adopt such authentication and execution and deliver the Certificates
so authenticated and executed with the same effect as if such successor
Purchase Contract Agent had itself authenticated and executed such Securities.
The Purchase Contract Agent will give prompt written notice to the Company of
such merger, conversion or consolidation.


 


SECTION 7.12.                    Preservation of Information; Communications
to Holders.


 


(a)           The Purchase Contract Agent shall preserve, in as
current a form as is reasonably practicable, the names and addresses of Holders
received by the Purchase Contract Agent in its capacity as Security Registrar.


 


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(b)           If three or more Holders (herein referred to as “Applicants”) apply in writing to the Purchase Contract
Agent, and furnish to the Purchase Contract Agent reasonable proof that each
such Applicant has owned a Unit for a period of at least six months preceding
the date of such application, and such application states that the Applicants
desire to communicate with other Holders with respect to their rights under
this Agreement or under the Units and is accompanied by a copy of the form of
proxy or other communication which such Applicants propose to transmit, then
the Purchase Contract Agent shall mail to all the Holders copies of the form of
proxy or other communication which is specified in such request, with reasonable
promptness after a tender to the Purchase Contract Agent of the materials to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of such mailing.


 


SECTION 7.13.                    No Obligations of Purchase
Contract Agent.


 


Except to the extent otherwise provided in this
Agreement or the Pledge Agreement, the Purchase Contract Agent assumes no
obligations and shall not be subject to any liability under this Agreement, the
Pledge Agreement or any Purchase Contract in respect of the obligations of the
Holder of any Unit thereunder.  The
Company agrees, and each Holder of a Certificate, by its acceptance thereof,
shall be deemed to have agreed, that the Purchase Contract Agent’s execution of
the Certificates on behalf of the Holders shall be solely as agent and
attorney-in-fact for the Holders, and that the Purchase Contract Agent shall
have no obligation to perform such Purchase Contracts on behalf of the Holders,
except to the extent expressly provided in Article V hereof.


 


SECTION 7.14.                    Tax Compliance.


 


(a)           The Purchase Contract Agent, on its own behalf and on
behalf of the Company, will comply with all applicable certification,
information reporting and withholding (including “backup” withholding)
requirements imposed by applicable tax laws, regulations or administrative
practice with respect to (i) any payments made with respect to the Units
or (ii) the issuance, delivery, holding, transfer, redemption or exercise
of rights under the Units.  Such
compliance shall include, without limitation, the preparation and timely filing
of required returns and the timely payment of all amounts required to be
withheld to the appropriate taxing authority or its designated agent.


 


(b)           The Purchase Contract Agent shall comply with any
written direction received from the Company with respect to the execution or
certification of any required documentation and the application of such
requirements to particular payments or Holders or in other particular
circumstances, and may for purposes of this Agreement conclusively rely on any
such direction in accordance with the provisions of Section 7.1(a)(2) hereof.


 


(c)           The Purchase Contract Agent shall maintain all
appropriate records documenting compliance with such requirements, and shall
make such records available, on written request, to the Company or its
authorized representative within a reasonable period of time after receipt of
such request.


 


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ARTICLE VIII


 


Supplemental Agreements


 


SECTION 8.1.                      Supplemental Agreements Without
Consent of Holders.


 


Without the consent of any Holders, the Company and
the Purchase Contract Agent, at any time and from time to time, may enter into
one or more agreements supplemental hereto, in form satisfactory to the Company
and the Purchase Contract Agent, for any of the following purposes:


 


(i)            to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of the
Company herein and in the Certificates;


 


(ii)           to add to the covenants of the Company for the benefit
of the Holders or to surrender any right or power herein conferred upon the
Company;


 


(iii)          to evidence and provide for the acceptance of
appointment hereunder by a successor Purchase Contract Agent;


 


(iv)          to make provision with respect to the rights of
Holders pursuant to the requirements of Section 5.6(b);
or


 


(v)           to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions herein,
or to make any other provisions with respect to such matters or questions
arising under this Agreement, provided such action shall not adversely affect
the interests of the Holders in any material respect, provided further that any
amendment made solely to conform the provisions of this Agreement to the
description of the Units, the Purchase Contracts and the other components of
the Units contained in the prospectus supplement, dated
                        ,
relating to the Units will not be deemed to adversely affect the interests of
the Holders.


 


SECTION 8.2.                      Supplemental Agreements with
Consent of Holders.


 


With the consent of the Holders of not less than a
majority of the outstanding Purchase Contracts voting together as one class, by
Act of said Holders delivered to the Company and the Purchase Contract Agent,
the Company, when authorized by a Board Resolution, and the Purchase Contract
Agent may enter into an agreement or agreements supplemental hereto for the
purpose of modifying in any manner the terms of the Purchase Contracts, or the
provisions of this Agreement or the rights of the Holders in respect of the
Units; provided, however, that, except as contemplated herein, no such
supplemental agreement shall, without the consent of the Holder of each
Outstanding Unit affected thereby,


 


(a)           change any Payment Date;


 


(b)           change the amount or the type of Collateral required
to be Pledged to secure a Holder’s obligations under a Purchase Contract;


 


69





















 


(c)           impair the right of the Holder of any Equity Unit to
receive distributions on the related Collateral (except for the rights of
Holders of Corporate Units to substitute the Treasury Securities for the
Pledged Applicable Ownership Interests in Debentures or the Pledged Applicable
Ownership Interests in the Treasury Portfolio or the rights of holders of
Treasury Units to substitute Applicable
Ownership Interest in Debentures or the Applicable Ownership Interest in
the Treasury Portfolio for the Pledged Treasury Securities), or otherwise
adversely affect the Holder’s rights in or to such Collateral;


 


(d)           reduce any Contract Adjustment Payments or any
Deferred Contract Adjustment Payment, or change any place where, or the coin or
currency in which, any Contract Adjustment Payment is payable;


 


(e)           impair the right to institute suit for the enforcement
of any Purchase Contract, including any Contract Adjustment Payments or
Deferred Contract Adjustment Payments;


 


(f)            except as required pursuant to Section 5.6,
reduce the number of shares of Common Stock to be purchased pursuant to any
Purchase Contract or the amount of any other security or other property to be
purchased under a Purchase Contract, increase the price to purchase shares of
Common Stock or any other security or other property upon settlement of any
Purchase Contract, change the Purchase Contract Settlement Date or the right to
Early Settlement or Fundamental Change Early Settlement or otherwise adversely
affect the Holder’s rights under any Purchase Contract in any material respect;
or


 


(g)           reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any modification or
amendment to the provisions of this Agreement or the Purchase Contracts;


 


provided, that if any amendment or proposal referred
to above would adversely affect only the Corporate Units or the Treasury Units,
then only Holders of the affected class of Units as of the record date for the
Holders entitled to vote thereon will be entitled to vote on or consent to such
amendment or proposal, and such amendment or proposal shall not be effective
except with the consent of Holders of not less than a majority of such class;
provided further, however, that no such agreement, whether with or without the
consent of Holders, shall affect Section 3.16 hereof.


 


It shall not be necessary for any Act of the Holders
under this Section to approve the particular form of any proposed
supplemental agreement, but it shall be sufficient if such Act shall approve
the substance thereof.


 


SECTION 8.3.                      Execution of Supplemental
Agreements.


 


In executing, or accepting the additional agencies
created by, any supplemental agreement permitted by this Article or the
modifications thereby of the agencies created by this Agreement, the Purchase
Contract Agent shall be entitled to receive and (subject to Section 7.1) shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental agreement is authorized or permitted by this Agreement.  The Purchase Contract Agent may, but shall
not be obligated to, enter into any such supplemental agreement which affects
the Purchase Contract Agent’s own rights, duties or immunities under this
Agreement or


 


70

















 


otherwise.  The Collateral Agent shall receive copies of
any supplemental agreements entered into pursuant to this Article.


 


SECTION 8.4.                      Effect of Supplemental Agreements.


 


Upon the execution of any supplemental agreement under
this Article, this Agreement shall be modified in accordance therewith, and
such supplemental agreement shall form a part of this Agreement for all
purposes; and every Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered hereunder shall
be bound thereby.


 


SECTION 8.5.                      Reference to Supplemental
Agreements.


 


Certificates authenticated, executed on behalf of the
Holders and delivered after the execution of any supplemental agreement
pursuant to this Article may, and shall if required by the Purchase
Contract Agent, bear a notation in form approved by the Purchase Contract Agent
as to any matter provided for in such supplemental agreement.  If the Company shall so determine, new
Certificates so modified as to conform, in the opinion of the Purchase Contract
Agent and the Company, to any such supplemental agreement may be prepared and
executed by the Company and authenticated, executed on behalf of the Holders
and delivered by the Purchase Contract Agent in exchange for Outstanding
Certificates.


 


ARTICLE IX


 


Consolidation, Merger, Sale, Conveyance, Transfer or
Lease


 


SECTION 9.1.                      Covenant Not to Consolidate,
Merge, Sell, Convey, Transfer or Lease Property Except Under Certain Conditions.


 


The Company covenants that it will not merge or
consolidate with or into any other Person or sell, assign, transfer, lease or
convey all or substantially all of its properties and assets to any Person or
group of affiliated Persons in one transaction or a series of related
transactions, unless


 


(i) either the Company shall be the continuing
entity or the successor (if other than the Company) shall be a Person, other
than an individual, organized and existing under the laws of the United States
of America or a State thereof or the District of Columbia and such entity shall
expressly assume all the obligations of the Company under the Purchase
Contracts, this Agreement and the Pledge Agreement by one or more supplemental
agreements in form reasonably satisfactory to the Purchase Contract Agent and
the Collateral Agent, executed and delivered to the Purchase Contract Agent and
the Collateral Agent by such Person, and


 


(ii) the Company or such successor entity, as the
case may be, shall not, immediately after such merger or consolidation, or such
sale, assignment, transfer, lease or conveyance, be in default in its payment
obligations or in any material default in the performance of any of its other
obligations hereunder, or under any of the Units.


 


SECTION 9.2.                      Rights and Duties of Successor
Entity.


 


In case of any such consolidation, merger, sale,
assignment, transfer, lease or conveyance and upon any such assumption by a
successor entity in accordance with Section 9.1,
such


 


71

















 


successor entity shall
succeed to and be substituted for the Company with the same effect as if it had
been named herein as the Company.  Such
successor entity thereupon may cause to be signed, and may issue either in its
own name or in the name of FPL Group, Inc. any or all of the Certificates
evidencing Units issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Purchase Contract Agent; and, upon
the order of such successor entity, instead of the Company, and subject to all
the terms, conditions and limitations in this Agreement prescribed, the
Purchase Contract Agent shall authenticate and execute on behalf of the Holders
and deliver any Certificates which previously shall have been signed and
delivered by the officers of the Company to the Purchase Contract Agent for authentication
and execution, and any Certificate evidencing Units which such successor entity
thereafter shall cause to be signed and delivered to the Purchase Contract
Agent for that purpose.  All the
Certificates so issued shall in all respects have the same legal rank and
benefit under this Agreement as the Certificates theretofore or thereafter
issued in accordance with the terms of this Agreement as though all of such
Certificates had been issued at the date of the execution hereof.


 


In case of any such consolidation, merger, sale,
assignment, transfer, lease or conveyance such change in phraseology and form
(but not in substance) may be made in the Certificates evidencing Units
thereafter to be issued as may be appropriate.


 


SECTION 9.3.                      Company Certificate and Opinion
of Counsel Given to Purchase Contract Agent.


 


The Purchase Contract Agent, subject to Sections 7.1 and 7.3, shall receive
a Company Certificate and an Opinion of Counsel as conclusive evidence that any
such consolidation, merger, sale, assignment, transfer, lease or conveyance,
and any such assumption, complies with the provisions of this Article and
that all conditions precedent to the consummation of any such consolidation,
merger, sale, assignment, transfer, lease or conveyance have been met.


 


ARTICLE X


 


Covenants


 


SECTION 10.1.                    Performance Under Purchase
Contracts.


 


The Company covenants and agrees for the benefit of
the Holders from time to time of the Units that it will duly and punctually
perform its obligations under the Purchase Contracts in accordance with the
terms of the Purchase Contracts and this Agreement.


 


SECTION 10.2.                    Maintenance of Office or Agency.


 


The Company will maintain in the Borough of Manhattan,
The City of New York an office or agency where Certificates may be presented or
surrendered for acquisition of shares of Common Stock upon settlement of the
Purchase Contracts on the Purchase Contract Settlement Date or upon Early
Settlement or Fundamental Change Early Settlement and for transfer of
Collateral upon occurrence of a Termination Event, where Certificates may be
surrendered for registration of transfer or exchange, for a Collateral
Substitution or recreation of a Corporate Unit and where notices and demands to
or upon the Company in respect of the Units and this Agreement may be
served.  The Company will give prompt
written notice to the Purchase Contract Agent of the location, and any change
in the location, of such office or agency. 
If at


 


72

















 


any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish
the Purchase Contract Agent with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Company hereby appoints the Purchase Contract Agent as its
agent to receive all such presentations, surrenders, notices and demands.  The Company initially designates the
Corporate Trust Office of the Purchase Contract Agent as such office of the
Company.


 


The Company may also from time to time designate one
or more other offices or agencies where Certificates may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain an office or
agency in the Borough of Manhattan, The City of New York for such
purposes.  The Company will give prompt
written notice to the Purchase Contract Agent of any such designation or
rescission and of any change in the location of any such other office or
agency.  The Company hereby designates as
the place of payment for the Units the Corporate Trust Office and appoints the Purchase
Contract Agent at its Corporate Trust Office as paying agent in such city.


 


SECTION 10.3.                    Company to Reserve Common Stock.


 


The Company shall at all times prior to the Purchase
Contract Settlement Date reserve and keep available, free from preemptive
rights, out of its authorized but unissued Common Stock the full number of
shares of Common Stock issuable against tender of payment in respect of all
Purchase Contracts constituting a part of the Units evidenced by Outstanding
Certificates.


 


SECTION 10.4.                    Covenants as to Common Stock.


 


The Company covenants that all shares of Common Stock
which may be issued against tender of payment in respect of any Purchase
Contract constituting a part of the Outstanding Units will, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable.


 


SECTION 10.5.                    Covenants of Holders as to ERISA.


 


Each Holder from time to time of the Units hereby
represents and warrants that


 


(a)           it is not purchasing the Units with the assets of any
Plan; or


 


(b)           the purchase, holding and disposition of the Units
will not result in a prohibited transaction under ERISA, the Code, or any other
applicable Federal, State or local laws or regulations; or


 


(c)           the purchase, holding and disposition of the Units
will result in a prohibited transaction under ERISA, the Code or any other
applicable Federal, State or local laws or regulations but one or more
exemptions apply and the conditions of such exemption(s) at all relevant
times are satisfied so that the use of such assets will not constitute
a non-exempt prohibited transaction under ERISA or the Code.


 


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ARTICLE XI


 


Trust Indenture Act


 


SECTION 11.1.                    Trust Indenture Act; Application.


 


(a)           This Agreement is subject to the provisions of the TIA
that are required or deemed to be part of this Agreement and shall, to the
extent applicable, be governed by such provisions; and


 


(b)           if and to the extent that any provision of this
Agreement limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the TIA, such imposed duties shall control.


 


SECTION 11.2.                    Lists of Holders of Units.


 


(a)           The Company shall furnish or cause to be furnished to
the Purchase Contract Agent (a) semiannually, not later than
             and
             in
each year, commencing
            ,
            , a
list, in such form as the Purchase Contract Agent may reasonably require, of
the names and addresses of the Holders (“List of Holders”)
as of a date not more than 15 days prior to the delivery thereof, and (b) at
such other times as the Purchase Contract Agent may request in writing, within
30 days after the receipt by the Company of any such request, a List of Holders
as of a date not more than 15 days prior to the time such list is
furnished; provided that, the Company shall not be obligated to provide such
List of Holders at any time the List of Holders does not differ from the most
recent List of Holders given to the Purchase Contract Agent by the
Company.  The Purchase Contract Agent may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.


 


(b)           The Purchase Contract Agent shall comply with its
obligations under Section 311(a) of the TIA, subject to the
provisions of Section 311(b) and Section 312(b) of the TIA.


 


SECTION 11.3.                    Reports by the Purchase Contract
Agent.


 


Not later than July 15 of each year, commencing July 15,
            , the
Purchase Contract Agent shall provide to the Holders such reports, if any, as
are required by Section 313(a) of the TIA in the form and in the manner
provided by Section 313(a) of the TIA.  Such reports shall be as of the preceding April 15.  The Purchase Contract Agent shall also comply
with the requirements of Sections 313(b), (c) and (d) of the TIA.


 


SECTION 11.4.                    Periodic Reports to Purchase Contract
Agent.


 


The Company shall provide to the Purchase Contract
Agent such documents, reports and information as required by Section 314(a) (if
any) and the compliance certificate required by Section 314(a) of the
TIA in the form, in the manner and at the times required by Section 314(a) of
the TIA.


 


74














 


SECTION 11.5.                    Evidence of Compliance with
Conditions Precedent.


 


The Company shall provide to the Purchase Contract
Agent such evidence of compliance with any conditions precedent provided for in
this Agreement as and to the extent required by Section 314(c) of the
TIA.  Any certificate or opinion required
to be given by an officer pursuant to Section 314(c)(1) of the TIA
may be given in the form of a Company Certificate.  Any opinion required to be given pursuant to Section 314(c)(2) of
the TIA may be given in the form of an Opinion of Counsel.


 


SECTION 11.6.                    Defaults; Waiver.


 


The Holders of a majority of the Outstanding Purchase
Contracts voting together as one class may, by vote or consent, on behalf of
all of the Holders, waive any past Default and its consequences, except a
Default


 


(a)           in the payment on any Unit, or


 


(b)           in respect of a provision hereof which under Section 8.2 cannot be modified
or amended without the consent of the Holder of each Outstanding Unit affected.


 


Upon such waiver, any such Default shall cease to
exist, and any Default arising therefrom shall be deemed to have been cured,
for every purpose of this Agreement, but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.


 


SECTION 11.7.                    Conflicting Interests.


 


The Indenture, the Guarantee Agreement, the Indenture
(For Unsecured Subordinated Debt Securities relating to Trust Securities),
dated as of March 1, 2004, among FPL Group Capital (as issuer), the
Company (as guarantor) and The Bank of New York Mellon (as trustee), the
Preferred Trust Securities Guarantee Agreement between FPL Group (as guarantor)
and The Bank of New York Mellon (as guarantee trustee) relating to FPL Group
Capital Trust I, dated as of March 15, 2004, the Amended and Restated
Trust Agreement relating to FPL Group Capital Trust I, dated as of March 15,
2004, among the Company (as depositor), The Bank of New York Mellon (as
property trustee), BNY Mellon Trust of Delaware (as Delaware trustee), the
administrative trustees named therein and the holders of the trust securities
issued pursuant thereto, and the Indenture (For Unsecured Subordinated Debt
Securities), dated as of September 1, 2006, among FPL Group Capital, the
Company (as guarantor) and The Bank of New York Mellon (as trustee), shall be
deemed to be specifically described in this Agreement for the purposes of
clause (i) of the first proviso contained in Section 310(b) of
the TIA.


 


SECTION 11.8.                    Direction of Purchase Contract
Agent.


 


Sections 315(d)(3) and 316(a)(1)(A) of
the TIA are hereby expressly excluded from this Agreement, as permitted by the
TIA.


 


75

















 


IN WITNESS WHEREOF, the parties hereto have caused this Purchase
Contract Agreement to be duly executed as of the day and year first above
written.


 


	
   

  	
  FPL GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: 

  
	
   

  	
   

  	
  Title: 

  
	
   

  	
   

  
	
   

  	
  THE
  BANK OF NEW YORK MELLON,

  
	
   

  	
  as Purchase
  Contract Agent 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: 

  
	
   

  	
   

  	
  Title: 

  



 


76














 


EXHIBIT A


 


FORM OF CORPORATE UNIT CERTIFICATE


 


[FOR INCLUSION IN GLOBAL
CERTIFICATES ONLY—THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED
IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF.  THIS CERTIFICATE MAY NOT BE EXCHANGED IN
WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS
CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.


 


UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.]


 


	
  No.           

  
	
  CUSIP No. 

  
	
  Number of Corporate
  Units
                

  



 


FPL GROUP, INC.


 


(Form of Face of Corporate Unit Certificate)


 


Corporate Units

($50 Stated Amount)


 


This Corporate Unit Certificate certifies that
                      
is the registered Holder of the number of Corporate Units set forth above [for
inclusion in Global Certificates only — or such other number of Corporate Units
reflected in the Schedule of Increases or Decreases in Global Certificate
attached hereto], which number shall not exceed
            .  Each Corporate Unit consists of (i) either
(a) an Applicable Ownership Interest in Debentures, subject to the Pledge
thereof by such Holder pursuant to the Pledge Agreement, or (b) upon the
occurrence of a Special Event Redemption, a Mandatory Redemption or a
Successful Early Remarketing, the Applicable Ownership Interest in the Treasury
Portfolio, subject to the pledge of the Applicable 


 


A-1

















 


Ownership Interest in the
Treasury Portfolio (as specified in clause (i) of the definition of such
term) by such Holder pursuant to the Pledge Agreement, and (ii) the rights
and obligations of the Holder under one Purchase Contract with FPL Group, Inc.,
a Florida corporation (the “Company”).  All capitalized terms used herein without
definition herein shall have the meaning set forth in the Purchase Contract
Agreement referred to below.


 


Pursuant to the Pledge Agreement, the Applicable
Ownership Interest in Debentures and/or the Applicable Ownership Interest in
the Treasury Portfolio (as specified in clause (i) of the definition of
such term), as the case may be, constituting part of each Corporate Unit
evidenced hereby have been pledged to the Collateral Agent, for the benefit of
the Company, to secure the obligations of the Holder under the Purchase
Contract comprising a part of such Corporate Units.


 


The Pledge Agreement provides that all payments of the
principal amount of Debentures or the Stated Amount of the Applicable Ownership
Interest in the Treasury Portfolio (as specified in clause (i) of the
definition of such term), as the case may be, or payments of interest on any
Pledged Applicable Ownership Interests in Debentures or the Pledged Applicable
Ownership Interests in the Treasury Portfolio, as the case may be, constituting
part of the Corporate Units received by the Collateral Agent shall be paid by
the Collateral Agent by wire transfer in same day funds (i) in the case of
(A) payments of interest with respect to Pledged Applicable Ownership
Interests in Debentures or cash distributions on the Pledged Applicable
Ownership Interests in the Treasury Portfolio (as specified in clause (ii) of
the definition of such term), as the case may be, and (B) any payments of
the principal amount of Debentures or the Stated Amount of the Applicable
Ownership Interest in the Treasury Portfolio (as specified in clause (i) of
the definition of such term), as the case may be, with respect to any
Debentures or the Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, that have been released from the Pledge pursuant to the Pledge
Agreement, to the Purchase Contract Agent to the account designated by the
Purchase Contract Agent, no later than 2:00 p.m., New York City time, on
the Business Day such payment is received by the Collateral Agent (provided
that in the event such payment is received by the Collateral Agent on a day
that is not a Business Day or after 12:30 p.m., New York City time, on a
Business Day, then such payment shall be made no later than 10:30 a.m.,
New York City time, on the next succeeding Business Day) and (ii) in the
case of payments of the principal amount of Debentures or the Stated Amount of
the Applicable Ownership Interest in the Treasury Portfolio (as specified in
clause (i) of the definition of such term), as the case may be, of
any Debentures or the Applicable Ownership Interest in the Treasury Portfolio
(as specified in clause (i) of the definition of such term), as the
case may be, to the Company on the Purchase Contract Settlement Date (as
defined herein) in accordance with the terms of the Pledge Agreement, in full
satisfaction of the respective obligations of the Holders of the Corporate
Units of which such Pledged Applicable Ownership Interests in Debentures or the
Treasury Portfolio, as the case may be, are a part under the Purchase Contracts
forming a part of such Corporate Units. 
Payment of interest on any Pledged Applicable Ownership Interests in
Debentures or cash distributions on the Pledged Applicable Ownership Interests
in the Treasury Portfolio (as specified in clause (ii) of the definition
of such term), as the case may be, forming part of a Corporate Unit evidenced
hereby which are payable quarterly in arrears on
            ,
            ,
             and
             each
year, commencing             ,
             (each,
a “Payment Date”), shall, subject to
receipt thereof by the Purchase Contract Agent from the Collateral Agent, be
paid to the Person in whose name this Corporate Unit Certificate (or a 


 


A-2

















 


Predecessor Corporate
Unit Certificate) is registered at the close of business on the Record Date for
such Payment Date.


 


Each Purchase Contract evidenced hereby obligates the
Holder of this Corporate Unit Certificate to purchase, and the Company to sell,
not later than
                        
(the “Purchase Contract Settlement Date”), at
a price of $50 in cash (the “Purchase Price”),
a number of newly-issued shares of Common Stock, par value $0.01 per share, of
the Company (“Common Stock”) equal to the
applicable Settlement Rate (as defined below), unless on or prior to the
Purchase Contract Settlement Date there shall have occurred a Termination
Event, an Early Settlement or a Fundamental Change Early Settlement with
respect to the Corporate Units of which such Purchase Contract is a part, all
as provided in the Purchase Contract Agreement and more fully described on the
reverse hereof.


 


The “Settlement Rate”
is equal to (a) if the Applicable Market Value (as defined below) is equal
to or greater than
$             (the “Threshold Appreciation Price”),
             shares
of Common Stock per Purchase Contract (the “Minimum
Settlement Rate”), (b) if the Applicable Market Value is less
than the Threshold Appreciation Price, but is greater than
$             (the “Reference Price”), the number of shares of Common Stock per
Purchase Contract having a value equal to $50.00 divided by the Applicable
Market Value, and (c) if the Applicable Market Value is less than or equal
to the Reference Price,
             shares
of Common Stock per Purchase Contract (the “Maximum
Settlement Rate”), in each case subject to adjustment as provided in
the Purchase Contract Agreement.  No
fractional shares of Common Stock will be issued upon settlement of Purchase
Contracts, as provided in the Purchase Contract Agreement.


 


The Company shall pay on each Payment Date in respect
of each Purchase Contract forming part of a Corporate Unit evidenced hereby, an
amount (the “Contract Adjustment Payments”)
equal to
            % per
annum of the Stated Amount; computed on the basis of a 360-day year consisting
of twelve 30-day months, subject to deferral at the option of the Company as
provided in the Purchase Contract Agreement and more fully described on the
reverse hereof.  Such Contract Adjustment
Payments shall be payable to the Person in whose name this Corporate Unit
Certificate (or a Predecessor Corporate Unit Certificate) is registered on the
Security Register at the close of business on the Record Date relating to such
Payment Date.


 


Contract Adjustment Payments will be payable at the
Corporate Trust Office or, at the option of the Company, by check mailed to the
address of the Person entitled thereto at such Person’s address as it appears
on the Security Register or by wire transfer to an account appropriately
designated in writing by the Person entitled to payment.


 


Reference is hereby made to the further provisions set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.


 


Unless the certificate of authentication hereon has
been executed by the Purchase Contract Agent by manual signature, this
Corporate Unit Certificate shall not be entitled to any benefit under the
Pledge Agreement or the Purchase Contract Agreement or be valid or obligatory
for any purpose.


 


A-3

















 


IN WITNESS WHEREOF, the Company and the Holder specified above has
caused this instrument to be duly executed.


 


	
   

  	
  FPL GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  HOLDER
  SPECIFIED ABOVE
  (as to obligations of such Holder under the Purchase Contracts evidenced
  hereby)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  THE BANK OF NEW YORK MELLON,

  
	
   

  	
   

  	
  not individually but
  solely as Attorney-in-Fact of such Holder

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  



 


Dated:


 


A-4

















 


PURCHASE CONTRACT AGENT’S CERTIFICATE OF
AUTHENTICATION


 


This is one of the Corporate Unit Certificates
referred to in the within mentioned Purchase Contract Agreement.


 


	
  Dated:  

  	
  THE
  BANK OF NEW YORK MELLON, as Purchase Contract Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  



 


A-5














 


(Form of Reverse of Corporate Unit Certificate)


 


Unless the context otherwise requires, each provision
of this Unit shall be part of the Purchase Contract evidenced hereby.  This Unit and each Purchase Contract
evidenced hereby is governed by a Purchase Contract Agreement, dated as of
                        
(as may be supplemented from time to time, the “Purchase
Contract Agreement”), between the Company and The Bank of New York
Mellon, as purchase contract agent (including any successor thereunder, herein
called the “Purchase Contract Agent”), to
which the Purchase Contract Agreement and supplemental agreements thereto
reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Purchase Contract Agent, the Company, and the Holders and of the terms upon
which the Corporate Unit Certificates are, and are to be, executed and
delivered.


 


Each Purchase Contract evidenced hereby, which is
settled either through Early Settlement or Fundamental Change Early Settlement,
shall obligate the Holder of the related Corporate Units to purchase at the
applicable Purchase Price, and the Company to sell, a number of newly-issued
shares of Common Stock equal to the Early Settlement Rate or the applicable
Settlement Rate, as applicable.


 


The “Applicable Market Value”
means the average of the Closing Price per share of Common Stock on each
Trading Day during the Observation Period; provided, however, that if the
Company enters into a Reorganization Event, the Applicable Market Value will
mean the value of an Exchange Property Unit. 
Following the occurrence of any such Reorganization Event, references
herein to the purchase or issuance of shares of Common Stock shall be construed
to be references to settlement into Exchange Property Units.  For purposes of calculating the value of an
Exchange Property Unit, (x) the value of any common stock included in the
Exchange Property Unit shall be determined using the average of the Closing
Price per share of such common stock on each Trading Day during the Observation
Period (only if such common stock has traded on any Trading Day during the
Observation Period)  (adjusted as
set forth under Section 5.6 of the Purchase Contract Agreement) and (y) the
value of any other property, including securities other than common stock
included in the Exchange Property Unit, shall be the value of such property on
the first Trading Day of the Observation Period (as determined in good faith by
the Board of Directors, whose determination shall be conclusive and described
in a Board Resolution).  The “Closing Price” of the Common Stock on any date of
determination means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Common Stock on the New York
Stock Exchange (the “NYSE”) on such
date or, if the Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
securities exchange on which the Common Stock is so listed, or if the Common
Stock is not so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the Pink OTC Markets Inc. or similar
organization, or, if such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally recognized independent
investment banking firm retained by the Company for this purpose.  A “Trading Day”
means a day on which the Common Stock (A) is not suspended from trading on
any national or regional securities exchange or over-the-counter market at the
close of business and (B) has traded at least once on the national or
regional securities exchange or over-the-counter market that is the primary
market 


 


A-6

















 


for the trading of the
Common Stock at the close of business. 
If the Common Stock is not traded on a securities exchange or quoted in
the over-the-counter market, then “Trading Day”
shall mean Business Day.


 


In accordance with the terms of the Purchase Contract
Agreement, the Holder of the Corporate Units evidenced hereby shall pay, on the
Purchase Contract Settlement Date, the Purchase Price for the shares of Common
Stock purchased pursuant to each Purchase Contract evidenced hereby by
effecting a Cash Settlement.  A Holder of
Corporate Units who does not make such payment in accordance with the Purchase
Contract Agreement or who does not notify the Purchase Contract Agent of such
Holder’s intention, at or prior to 5:00 p.m., New York City time, on the
seventh Business Day immediately preceding the Purchase Contract Settlement
Date, to make an effective Cash Settlement or an Early Settlement, shall have
defaulted in its obligations under the related Purchase Contract.  If a Holder of Corporate Units fails to
notify the Purchase Contract Agent of such Holder’s intention to effect a Cash
Settlement in accordance with the Purchase Contract Agreement, such failure
shall constitute a default under the related Purchase Contracts and such Holder
shall be deemed to have consented to the disposition of the Pledged Applicable
Ownership Interests in Debentures pursuant to the Remarketing during the Final
Three-Day Remarketing Period described in the Purchase Contract Agreement.  If a Holder of Corporate Units does notify
the Purchase Contract Agent of its intention to effect a Cash Settlement but
fails to deliver cash to pay the Purchase Price in accordance with the Purchase
Contract Agreement, such failure shall also constitute a default under the
Purchase Contract; however, the Debentures underlying the Applicable Ownership
Interest in Debentures of such a Holder will not be remarketed but instead the
Collateral Agent, for the benefit of the Company, will exercise its rights as a
secured party with respect to such Applicable Ownership Interest in Debentures
to satisfy the Holder’s obligations under such Purchase Contract to purchase
Common Stock at the Purchase Price.  If
there is no Successful Remarketing during the Period for Early Remarketing and
if all the Remarketings during the Final Three-Day Remarketing Period result in
Failed Remarketings in accordance with the terms of the Pledge Agreement, the
Failed Remarketing on the last Remarketing Date during the Final Three-Day
Remarketing Period shall constitute a default under the related Purchase
Contracts by such Holder and the Collateral Agent, for the benefit of the
Company, will exercise its rights as a secured party with respect to such
Debentures underlying the Applicable Ownership Interests in Debentures to
satisfy the Holder’s obligations under such Purchase Contract to purchase
Common Stock at the Purchase Price.


 


The Company shall not be obligated to issue any shares
of Common Stock in respect of a Purchase Contract or deliver any certificates
therefor to the Holder unless it shall have received payment in full of the
Purchase Price for the shares of Common Stock to be purchased thereunder in the
manner set forth in the Purchase Contract Agreement.


 


Under and subject to the terms of the Pledge Agreement
and the Purchase Contract Agreement, the Purchase Contract Agent will be
entitled to exercise the voting and any other consensual rights pertaining to
the Pledged Applicable Ownership Interests in Debentures but only to the extent
instructed by the Holders as described below in this paragraph.  Upon receipt of notice of any meeting at
which holders of Debentures are entitled to vote or upon the solicitation of
consents, waivers or proxies of holders of Debentures, the Purchase Contract Agent
shall, as soon as practicable thereafter, mail to the Holders of Corporate
Units a notice 


 


A-7

















 


(a) containing such
information as is contained in the notice or solicitation, (b) stating
that each Corporate Unit Holder on the record date set by the Purchase Contract
Agent therefor (which, to the extent possible, shall be the same date as the
record date for determining the holders of Debentures entitled to vote) shall
be entitled to instruct the Purchase Contract Agent as to the exercise of the
voting rights pertaining to the Applicable Ownership Interest in Debentures
constituting a part of such Holder’s Corporate Units and (c) stating the
manner in which such instructions may be given. 
Upon the written request of the Holders of Corporate Units on such
record date, the Purchase Contract Agent shall endeavor insofar as practicable
to vote or cause to be voted, in accordance with the instructions set forth in
such requests, the maximum number of Debentures as to which any particular
voting instructions are received.  In the
absence of specific instructions from the Holder of Corporate Units, the
Purchase Contract Agent shall abstain from voting the Applicable Ownership
Interest in Debentures constituting a part of such Corporate Units.


 


Upon the occurrence of (i) a Mandatory Redemption
where the related Purchase Contracts have not been previously or concurrently
terminated in accordance with Section 5.8 of the Purchase Contract
Agreement or (ii) a Special Event Redemption, in each case, prior to the
Purchase Contract Settlement Date, the Redemption Price equal to the Redemption
Amount together with any accrued and unpaid interest payable on the Mandatory
Redemption Date or the Special Event Redemption Date, as the case may be, with
respect to the Applicable Ownership Interests in Debentures shall be delivered
to the Collateral Agent in exchange for the Pledged Applicable Ownership
Interests in Debentures.  Pursuant to the
terms of the Pledge Agreement, the Collateral Agent will apply an amount equal
to the Redemption Amount to purchase, on behalf of the Holders of Corporate
Units the Treasury Portfolio and promptly remit the remaining portion of such
Redemption Price, if any, to the Purchase Contract Agent for payment to the
Holders of such Corporate Units.  The
Treasury Portfolio will be substituted for the Pledged Applicable Ownership in
Debentures, and will be held by the Collateral Agent in accordance with the
terms of the Pledge Agreement to secure the obligation of each Holder of a
Corporate Unit to purchase the Common Stock on the Purchase Contract Settlement
Date under the Purchase Contract constituting a part of such Corporate
Unit.  Following the occurrence of a Mandatory
Redemption or a Special Event Redemption prior to the Purchase Contract
Settlement Date the Holders of Corporate Units and the Collateral Agent shall
have such security interests, rights and obligations with respect to the
Treasury Portfolio as the Holder of Corporate Units and the Collateral Agent
had in respect of the Debentures underlying the Applicable Ownership Interest
in Debentures, subject to the Pledge thereof as provided in Articles II, III,
IV, V, and VI, of the Pledge Agreement and any reference herein to the
Debentures shall be deemed to be reference to such Treasury Portfolio.  The Company may cause to be made in any
Corporate Unit Certificate therewith to be issued such change in phraseology
and form (but not in substance) as may be appropriate to reflect the
substitution of the Applicable Ownership Interest in the Treasury Portfolio for
the Applicable Ownership Interest in Debentures as Collateral.


 


The Corporate Unit Certificates are issuable only in
registered form and only in denominations of a single Corporate Unit and any
integral multiple thereof.  The transfer
of any Corporate Unit Certificate will be registered and Corporate Unit
Certificates may be exchanged as provided in the Purchase Contract Agreement.  The Security Registrar may require a Holder,
among other things, to furnish endorsements and transfer documents permitted by
the Purchase Contract Agreement.  No
service charge shall be made for any such registration of transfer or 


 


A-8

















 


exchange, but the Company
and the Purchase Contract Agent may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection
therewith.  A Holder who elects to
substitute Treasury Securities for the Applicable Ownership Interest in
Debentures or the Applicable Ownership Interest in the Treasury Portfolio,
thereby creating Treasury Units, shall be responsible for any fees or expenses
payable in connection therewith.  Except
as provided in the Purchase Contract Agreement, for so long as the Purchase
Contract underlying a Corporate Unit remains in effect, such Corporate Unit
shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Corporate Unit in respect of the Applicable
Ownership Interest in Debentures or the Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, and the Purchase Contract comprising
such Corporate Unit may be acquired, and may be transferred and exchanged only
as an entire Corporate Unit.  The holder
of any Corporate Units may substitute for the Pledged Applicable Ownership
Interest in Debentures or the Pledged Applicable Ownership Interests in the
Treasury Portfolio (as specified in clause (i) of the definition of
such term) securing its obligation under the related Purchase Contract,
Treasury Securities in an aggregate principal amount equal to the aggregate
principal amount of the Pledged Applicable Ownership Interests in Debentures or
Stated Amount of the Pledged Applicable Ownership Interests in the Treasury Portfolio
in accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.  From and after such
Collateral Substitution, the Unit for which such Pledged Security secures the
Holder’s obligation under the Purchase Contract shall be referred to as a “Treasury Unit.” 
A Holder may make such Collateral Substitution only in integral
multiples of 20 Corporate Units for 20 Treasury Units; provided, however, that
if a Special Event Redemption or a Mandatory Redemption or a Successful Early Remarketing
has occurred and the Treasury Portfolio has become a component of the Corporate
Units, a Holder may make such Collateral Substitutions only in integral
multiples of
                        
Corporate Units for
                        
Treasury Units (or such other number of Treasury Units as may be determined by
the Remarketing Agent in connection with a Successful Remarketing of the
Debentures if the Reset Effective Date is not a Payment Date).


 


A Holder of Treasury Units may create or recreate
Corporate Units by depositing with the Collateral Agent the Applicable
Ownership Interest in Debentures or the Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, with a Stated Amount, in the case of
such Debentures, or with the Applicable Ownership Interest in the Treasury
Portfolio (as specified in clause (i) of the definition of such
term), in the case of such Applicable Ownership Interest in the Treasury
Portfolio, equal to the aggregate principal amount of the Pledged Treasury
Securities in exchange for the release of such Pledged Treasury Units in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.


 


Subject to the next succeeding paragraph, the Company
shall pay, on each Payment Date  the Contract
Adjustment Payments payable in respect of each Purchase Contract to the Person
in whose name the Corporate Unit Certificate evidencing such Purchase Contract
is registered on the Security Register at the close of business on the Record
Date relating to such Payment Date.  The
Contract Adjustment Payments will be payable at the Corporate Trust Office or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Security Register or by
wire transfer to an account appropriately designated in writing by such person.


 


A-9

















 


The Company shall have the right, at any time prior to
the Purchase Contract Settlement Date, to defer the payment of any or all of
the Contract Adjustment Payments otherwise payable on any Payment Date to any
subsequent Payment Date, but only if the Company shall give the Holders and the
Purchase Contract Agent written notice of its election to defer such payment
(specifying the amount to be deferred and the expected Deferral Period) as
provided in the Purchase Contract Agreement. 
Any Contract Adjustment Payments so deferred shall bear additional
Contract Adjustment Payments thereon at the rate of
            % per
annum (computed on the basis of a 360-day year consisting of twelve 30-day
months), compounding on each succeeding Payment Date, until paid in full (such
deferred installments of Contract Adjustment Payments, if any, together with
the additional Contract Adjustment Payments accrued thereon, are referred to
herein as the “Deferred Contract Adjustment Payments”).  Deferred Contract Adjustment Payments, if
any, shall be due on the next succeeding Payment Date except to the extent that
payment is deferred pursuant to the Purchase Contract Agreement.  No Contract Adjustment Payments may be
deferred to a date that is after the Purchase Contract Settlement Date.


 


In the event the Company exercises its option to defer
the payment of Contract Adjustment Payments, then, until the Deferred Contract
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital
stock or make guarantee payments with respect to the foregoing other than:


 


(i) purchases, redemptions or acquisitions of
shares of capital stock of the Company in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
employees, officers, directors or agents or a stock purchase or dividend
reinvestment plan, or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date that payment of
Contract Adjustment Payments are deferred requiring the Company to purchase,
redeem or acquire its capital stock,


 


(ii) as a result of a reclassification of the
Company’s capital stock or the exchange or conversion of all or a portion of
one class or series of the Company’s capital stock for another class or series
of the Company’s capital stock,


 


(iii) the purchase of fractional interests in
shares of the Company’s capital stock pursuant to the conversion or exchange
provisions of the Company’s capital stock or the security being converted or
exchanged, or in connection with the settlement of stock purchase contracts,


 


(iv) dividends or distributions paid or made in
capital stock of the Company (or rights to acquire capital stock), or
repurchases, redemptions or acquisitions of capital stock in connection with
the issuance or exchange of capital stock (or securities convertible into or
exchangeable for shares of the Company’s capital stock and distributions in
connection with the settlement of stock purchase contracts) or


 


(v) redemptions, exchanges or repurchases of any
rights outstanding under a shareholder rights plan or the declaration or
payment thereunder of a dividend or distribution of or with respect to rights
in the future.


 


A-10

















 


The Purchase Contracts and all obligations and rights
of the Company and the Holders thereunder, including, without limitation, the
rights of the Holders to receive and the obligation of the Company to pay any
Contract Adjustment Payments or any Deferred Contract Adjustment Payments, and
the rights and obligations of the Holders to purchase shares of Common Stock
will immediately and automatically terminate, without the necessity of any
notice or action by any Holder, the Purchase Contract Agent or the Company, if,
on or prior to the Purchase Contract Settlement Date, a Termination Event shall
have occurred.  Upon the occurrence of a
Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Purchase Contract Agent,
the Collateral Agent and to the Holders at their addresses as they appear in
the Security Register.  Upon and after
the occurrence of a Termination Event, the Collateral Agent shall release the
Debentures underlying the Applicable Ownership Interest in Debentures or the
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
forming a part of the Corporate Units evidenced hereby from the Pledge in
accordance with the provisions of the Pledge Agreement.


 


Subject to and upon compliance with the provisions of
the Purchase Contract Agreement, a Holder of Corporate Units may settle the
related Purchase Contracts in their entirety at any time on or prior to the
second Business Day immediately preceding the first day of the Final Three-Day
Remarketing Period in the manner described herein, but only in integral
multiples of 20 Corporate Units; provided, however, if the Treasury Portfolio
has become a component of the Corporate Units, Holders of Corporate Units may
settle early only in integral multiples of
                        
Corporate Units at any time on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date.  In order to exercise the right to effect any
such early settlement (“Early Settlement”)
with respect to any Purchase Contracts evidenced by this Corporate Unit
Certificate, the Holder of this Corporate Unit Certificate shall deliver this
Corporate Unit Certificate to the Purchase Contract Agent at the Corporate Trust
Office duly endorsed for transfer to the Company or in blank with the form of
Election to Settle Early/Fundamental Change Early Settlement set forth below
duly completed and executed and accompanied by payment (payable to the Company
in immediately available funds in an amount (the “Early
Settlement Amount”) equal to the sum of (i) $50 times the
number of Purchase Contracts being settled, plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period from the close of
business on any Record Date relating to any Payment Date to the opening of
business on such Payment Date, an amount equal to the Contract Adjustment
Payments payable, if any, on such Payment Date with respect to such Purchase
Contracts; provided that no payment is required if the Company has elected to
defer the Contract Adjustment Payments which would otherwise be payable on the
Payment Date.  Upon Early Settlement of
Purchase Contracts by a Holder of the related Corporate Units, the Pledged
Applicable Ownership Interests in Debentures or the Pledged Applicable
Ownership Interests in the Treasury Portfolio underlying such Corporate Units
shall be released from the Pledge as provided in the Pledge Agreement and the
Holder shall be entitled to receive a number of shares of Common Stock on
account of each Purchase Contract forming part of a Corporate Unit as to which
Early Settlement is effected equal to the Minimum Settlement Rate; provided
however, that upon the Early Settlement of the Purchase Contracts, (i) the
Holder’s right to receive additional Contract Adjustment Payments in respect of
such Purchase Contracts will terminate, and (ii) no adjustment will be
made to or for the Holder on account of Deferred Contract Adjustment Payments,
or any amount accrued in respect of Contract Adjustment Payments.  The 


 


A-11

















 


Early Settlement Rate
shall be adjusted in the same manner and at the same time as the Settlement
Rate is adjusted as provided in the Purchase Contract Agreement.


 


Upon registration of transfer of this Corporate Unit
Certificate, the transferee shall be bound (without the necessity of any other
action on the part of such transferee, except as may be required by the
Purchase Contract Agent pursuant to the Purchase Contract Agreement), under the
terms of the Purchase Contract Agreement, the Purchase Contracts evidenced
hereby and the Pledge Agreement and the transferor shall be released from the
obligations under the Purchase Contracts evidenced by this Corporate Unit
Certificate.  The Company covenants and
agrees, and the Holder, by its acceptance hereof, likewise covenants and
agrees, to be bound by the provisions of this paragraph.


 


The Holder of this Corporate Unit Certificate, by its
acceptance hereof, irrevocably authorizes the Purchase Contract Agent to enter
into and perform the related Purchase Contracts forming part of the Corporate
Units evidenced hereby on its behalf as its attorney-in-fact (including the
execution of this Corporate Unit Certificate on behalf of such Holder),
expressly withholds any consent to the assumption of the Purchase Contracts by
the Company, its trustee in bankruptcy, receiver, liquidator or a person or
entity performing similar functions, in the event that the Company becomes a
debtor under the Bankruptcy Code or subject to other similar Federal or State
law providing for reorganization or liquidation, agrees to be bound by the
terms and provisions thereof, covenants and agrees to perform its obligations
under such Purchase Contracts, consents to the provisions of the Purchase
Contract Agreement, irrevocably authorizes the Purchase Contract Agent to enter
into and perform the Pledge Agreement on its behalf as its attorney-in-fact,
and consents to and agrees to be bound by the Pledge of the Applicable
Ownership Interest in Debentures, or the Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, underlying this Corporate Unit
Certificate pursuant to the Pledge Agreement. 
The Holder, by its acceptance hereof, further covenants and agrees,
that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, payments
in respect of the principal and interest of the Debentures underlying the Applicable
Ownership Interest in Debentures, or the Applicable Ownership Interest in the
Treasury Portfolio (as specified in clause (i) of the definition of
such term), on the Purchase Contract Settlement Date shall be paid by the
Collateral Agent to the Company in satisfaction of such Holder’s obligations
under such Purchase Contract and such Holder shall acquire no right, title or
interest in such payments.


 


The Holder of this Corporate Unit Certificate, by its
acceptance hereof, covenants and agrees to treat itself as the owner, for
Federal, State and local income and franchise tax purposes, of the related
Applicable Ownership Interest in Debentures or the Applicable Ownership
Interest in the Treasury Portfolio forming part of the Corporate Units evidenced
hereby.  The Holder of this Corporate
Unit Certificate, by its acceptance hereof, further covenants and agrees to
treat the Applicable Ownership Interest in Debentures forming a component of
the Corporate Units evidenced hereby as indebtedness of FPL Group Capital for
Federal, State and local income and franchise tax purposes.


 


Subject to certain exceptions, the provisions of the
Purchase Contract Agreement may be amended with the consent of the Holders of a
majority of the Purchase Contracts.  In
addition, 


 


A-12

















 


certain amendments to the
Purchase Contract Agreement may be made without any consent of the Holders as
provided in the Purchase Contract Agreement.


 


THE PURCHASE CONTRACTS SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES THEREUNDER, EXCEPT TO THE EXTENT THAT THE LAWS
OF ANY OTHER JURISDICTION SHALL BE MANDATORILY APPLICABLE.


 


Prior to due presentment of a Certificate for
registration of transfer, the Company, FPL Group Capital and the Purchase
Contract Agent, and any agent of the Company, FPL Group Capital or the Purchase
Contract Agent, may treat the Person in whose name this Corporate Unit
Certificate is registered on the Security Register as the owner of the
Corporate Units evidenced hereby for the purpose of (subject to any applicable
record date) any payment or distribution with respect to the Applicable
Ownership Interests in Debentures or the Applicable Ownership Interests in the
Treasury Portfolio (as specified in clause (ii) of the
definition of Applicable Ownership Interest in the Treasury Portfolio), as
applicable, payment of Contract Adjustment Payments and performance of the
Purchase Contracts and for all other purposes whatsoever, in connection with
such Corporate Units, whether or not payment, distribution or performance shall
be overdue and notwithstanding any notice to the contrary, and neither the
Company, FPL Group Capital nor the Purchase Contract Agent, nor any agent of
the Company, FPL Group Capital or the Purchase Contract Agent, shall be
affected by notice to the contrary.


 


The Purchase Contracts shall not, prior to the
settlement thereof, in accordance with the Purchase Contract Agreement, entitle
the Holder to any of the rights of a holder of shares of Common Stock.


 


A copy of the Purchase Contract Agreement is available
for inspection at the offices of the Purchase Contract Agent.


 


A-13














 


ABBREVIATIONS


 


The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed as though they
were written out in full according to applicable laws or regulations:


 


	
  TEN COM —

  	
   

  	
  as tenants in common

  
	
  UNIF GIFT MIN ACT — 

  	
   

  	
                     Custodian                   (Minor)

  under Uniform Gifts to Minors Act                   (State)
  

  
	
  TEN ENT —

  	
   

  	
  as tenants by the
  entireties

  
	
  JT TEN —

  	
   

  	
  as joint tenants with
  right of survivorship and not as tenants in common

  



 


Additional abbreviations
may also be used though not in the above list.


 


ASSIGNMENT


 


FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto


 


	
   

  
	
   

  



(Please insert Social Security or Taxpayer
Identification or other Identifying Number of Assignee)


 


	
   

  
	
   

  



(Please Print or Type Name and Address Including Postal Zip Code
of Assignee)


 


the within Corporate Unit Certificates and all rights
thereunder, hereby irrevocably constituting and appointing


 


attorney to transfer said Corporate Unit Certificates
on the books of FPL Group, Inc. with full power of substitution in the
premises.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE: The signature
  to this assignment must correspond with the name as it appears upon the face
  of the within Corporate Unit Certificates in every particular, without
  alteration or enlargement or any change whatsoever.

  
	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  	
   

  
					



 


Signatures 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-14

















 


SETTLEMENT INSTRUCTIONS


 


The undersigned Holder directs that a certificate for
shares of Common Stock deliverable upon settlement on or after the Purchase
Contract Settlement Date of the Purchase Contracts underlying the number of
Corporate Units evidenced by this Corporate Unit Certificate (after taking into
account all Units then held by such Holder) be registered in the name of, and
delivered, together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name and address
have been indicated below.  If shares are
to be registered in the name of a Person other than the undersigned, the
undersigned will pay any transfer tax payable incident thereto.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  	
   

  
					



 


Signatures 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.


 


	
  If shares are to be
  registered in the name of and delivered to a Person other than the Holder,
  please (i) print such Person’s name and address and (ii) provide a
  guarantee of your signature:

  	
   

  	
  REGISTERED
  HOLDER

  



 


Please print name and address of Registered Holder:


 


	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
  Address

  
	
   

  



Social Security or other Taxpayer Identification
Number, if any


 


A-15

















 


ELECTION TO SETTLE EARLY/FUNDAMENTAL CHANGE EARLY
SETTLEMENT


 


The undersigned Holder of this Corporate Unit
Certificate hereby irrevocably exercises the option to effect [Early
Settlement] [Fundamental Change Early Settlement] in accordance with the terms
of the Purchase Contract Agreement with respect to the Purchase Contracts
underlying the number of Corporate Units evidenced by this Corporate Unit
Certificate specified below.  The
undersigned Holder directs that a certificate for shares of Common Stock or
other securities deliverable upon such [Early Settlement] [Fundamental Change
Early Settlement] (after taking into account all Units of such Holder submitted
by such Holder for [Early Settlement] [Fundamental Change Early Settlement]) be
registered in the name of, and delivered, together with a check in payment for
any fractional share and any Corporate Unit Certificate representing any
Corporate Units evidenced hereby as to which [Early Settlement] [Fundamental
Change Early Settlement] of the related Purchase Contracts is not effected, to
the undersigned at the address indicated below unless a different name and
address have been indicated below.  The
Pledged Applicable Ownership Interests in Debentures or the Pledged Applicable
Ownership Interests in the Treasury Portfolio, as the case may be, deliverable
upon such [Early Settlement] [Fundamental Change Early Settlement] will be
transferred in accordance with the transfer instructions set forth below.  If shares or other securities are to be registered
in the name of a Person other than the undersigned, the undersigned will pay
any transfer tax payable incident thereto. 
In completing this form, you should cross out “[Early Settlement]” or “[Fundamental
Change Early Settlement]”, as appropriate, if not applicable.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
  Signature Guarantee:

  	
   

  	
   

  	
   

  
					



 


Signatures 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.


 


Number of Units evidenced hereby as to which [Early
Settlement] [Fundamental Change Early Settlement] of the related Purchase
Contracts is being elected:


 


	
  If shares of Common
  Stock or other securities or Corporate Unit Certificates are to be registered
  in the name of and delivered to and Debentures underlying Pledged Applicable
  Ownership Interests in Debentures, or the Pledged Applicable Ownership
  Interests in the Treasury Portfolio, as the case may be, are to be
  transferred to a Person other than the Holder, please print such Person’s name
  and address:

  	
   

  	
  REGISTERED
  HOLDER

  



 


Please print name and address of Registered Holder:


 


	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


A-16

















 


	
   

  



Social Security or other Taxpayer Identification
Number, if any


 


Transfer
Instructions for Debentures underlying Pledged Applicable Ownership Interests
in Debentures or the Pledged Applicable Ownership Interests in the Treasury
Portfolio, as the case may be, transferable upon [Early Settlement]
[Fundamental Change Early Settlement]:


	
   

  
	
   

  
	
   

  



 


A-17

















 


[TO BE ATTACHED TO GLOBAL CERTIFICATES]


 


SCHEDULE OF INCREASES OR DECREASES IN GLOBAL
CERTIFICATE


 


The initial number of Corporate Units evidenced by
this Global Certificate is                 .  The following increases or decreases in this
Global Certificate have been made:


 


	
  Date

  	
   

  	
  Amount of 

  decrease in the 

  number of 

  Corporate Units 

  evidenced by this 

  Global Certificate

  	
   

  	
  Amount of 

  increase in the 

  number of 

  Corporate Units 

  evidenced by this 

  Global Certificate

  	
   

  	
  Number of 

  Corporate Units 

  evidenced by this 

  Global Certificate 

  following such 

  decrease or 

  increase

  	
   

  	
  Signature of 

  authorized officer 

  of Purchase 

  Contract Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


A-18














 


EXHIBIT B


 


FORM OF TREASURY UNIT CERTIFICATE


 


[FOR INCLUSION IN GLOBAL
CERTIFICATES ONLY - THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED
IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF.  THIS CERTIFICATE MAY NOT BE EXCHANGED IN
WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS
CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.


 


UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.]


 


	
  No.           

  
	
  CUSIP No. 

  
	
  Number of Treasury
  Units
                

  



 


FPL GROUP, INC.


 


Form of Face of Treasury Unit Certificate


 


Treasury Units

($50 Stated Amount)


 


This Treasury Unit Certificate certifies that
                      
is the registered Holder of the number of Treasury Units set forth above [for
inclusion in Global Certificates only – or such other number of Treasury Units
reflected in the Schedule of Increases or Decreases in Global Certificate
attached hereto], which number shall not
exceed                .  Each Treasury Unit represents (a) the
ownership by the Holder thereof of a 1/20, or 5%, undivided beneficial interest
in a Treasury Security, subject to the Pledge of such interest by such Holder
pursuant to the Pledge Agreement, and (b) the rights and obligations of
the Holder thereof and of FPL Group, Inc., a Florida corporation (the “Company”)
under one Purchase Contract.  All
capitalized terms 


 


B-1

















 


used herein without
definition herein shall have the meaning set forth in the Purchase Contract
Agreement referred to below.


 


Pursuant to the Pledge Agreement, the ownership
interest in a Treasury Security constituting part of each Treasury Unit
evidenced hereby has been pledged to the Collateral Agent, for the benefit of
the Company, to secure the obligations of the Holder under the Purchase
Contract comprising a part of such Treasury Unit.


 


The Pledge Agreement provides that all payments of the
principal of any Treasury Securities received by the Collateral Agent shall be
paid by the Collateral Agent by wire transfer in same day funds (i) in the
case of any principal payments with respect to any Pledged Treasury Securities
that have been released from the Pledge pursuant to the Pledge Agreement, to
the Holders of the applicable Treasury Units, to the accounts designated by
them in writing for such purpose no later than 2:00 p.m., New York City
time, on the Business Day such payment is received by the Collateral Agent
(provided that in the event such payment is received by the Collateral Agent on
a day that is not a Business Day or after 12:30 p.m., New York City time,
on a Business Day, then such payment shall be made no later than 10:30 a.m.,
New York City time, on the next succeeding Business Day) and (ii) in the
case of payments of the principal of any Pledged Treasury Securities, to the
Company on the Purchase Contract Settlement Date (as defined herein) in
accordance with the terms of the Pledge Agreement, in full satisfaction of the
respective obligations of the Holders of the Treasury Units under the related Purchase
Contracts.


 


Each Purchase Contract evidenced hereby obligates the
Holder of this Treasury Unit Certificate to purchase, and the Company to sell,
not later than
                        
(the “Purchase Contract Settlement Date”), at a price of $50 in cash (the “Purchase
Price”), a number of newly issued shares of Common Stock, par value $0.01 per
share, of the Company (“Common Stock”) equal to the applicable Settlement Rate
(as defined below), unless on or prior to the Purchase Contract Settlement Date
there shall have occurred a Termination Event, an Early Settlement or a
Fundamental Change Early Settlement with respect to the Treasury Units of which
such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof.


 


The “Settlement Rate” is equal to (a) if the
Applicable Market Value (as defined below) is equal to or greater than
$             (the “Threshold
Appreciation Price”),
             shares
of Common Stock per Purchase Contract (the “Minimum Settlement Rate”),
(b) if the Applicable Market Value is less than the Threshold Appreciation
Price, but is greater than
$             (the “Reference Price”), the number of shares of Common Stock per
Purchase Contract having a value equal to $50.00 divided by the Applicable
Market Value, and (c) if the Applicable Market Value is less than or equal
to the Reference Price,
             shares
of Common Stock per Purchase Contract (the “Maximum Settlement Rate”),
in each case subject to adjustment as provided in the Purchase Contract
Agreement.  No fractional shares of
Common Stock will be issued upon settlement of Purchase Contracts, as provided
in the Purchase Contract Agreement.


 


The Company shall pay on each Payment Date in respect
of each Purchase Contract forming part of a Treasury Unit evidenced hereby, an
amount (the “Contract Adjustment Payments”) equal to
            % per
annum of the Stated Amount; computed on the basis of a 360-day year consisting
of twelve 30-day months, subject to deferral at the option of the Company as 


 


B-2

















 


provided in the Purchase
Contract Agreement and more fully described on the reverse hereof.  Such Contract Adjustment Payments shall be
payable to the Person in whose name this Treasury Unit Certificate (or a
Predecessor Treasury Unit Certificate or a Predecessor Corporate Unit
Certificate) is registered on the Security Register at the close of business on
the Record Date relating to such Payment Date.


 


Contract Adjustment Payments will be payable at the
Corporate Trust Office or, at the option of the Company, by check mailed to the
address of the Person entitled thereto at such Person’s address as it appears
on the Security Register or by wire transfer to an account appropriately
designated in writing by the Person entitled to payment.


 


Reference is hereby made to the further provisions set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.


 


Unless the certificate of authentication hereon has
been executed by the Purchase Contract Agent by manual signature, this Treasury
Unit Certificate shall not be entitled to any benefit under the Pledge
Agreement or the Purchase Contract Agreement or be valid or obligatory for any
purpose.


 


B-3

















 


IN WITNESS WHEREOF, the Company and the Holder specified above have
caused this instrument to be duly executed.


 


	
   

  	
  FPL GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
             Name:

  
	
   

  	
             Title:

  
	
   

  	
   

  
	
   

  	
  HOLDER SPECIFIED ABOVE
  (as to obligations of such Holder under the Purchase Contracts evidenced
  hereby)

  
	
   

  	
   

  
	
   

  	
  By:

  	
  THE BANK OF NEW YORK
  MELLON,

  
	
   

  	
   

  	
  not individually but
  solely as Attorney-in-Fact of such Holder

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
               Name:

  
	
   

  	
               Title:

  
					



 


Dated:


 


B-4

















 


PURCHASE CONTRACT AGENT’S CERTIFICATE OF
AUTHENTICATION


 


This is one of the Treasury Unit Certificates referred
to in the within mentioned Purchase Contract Agreement.


 


 


	
  Dated:

  	
  THE BANK OF NEW YORK
  MELLON, as Purchase Contract Agent 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Authorized
  Signatory

  



 


B-5

















 


(Form of Reverse of Treasury Unit Certificate)


 


Unless the context otherwise requires, each provision
of this Unit shall be part of the Purchase Contract evidenced hereby.  This Unit and each Purchase Contract
evidenced hereby is governed by a Purchase Contract Agreement, dated as of
                        
(as may be supplemented from time to time, the “Purchase Contract Agreement”),
between the Company and The Bank of New York Mellon, as purchase contract agent
(including any successor thereunder, herein called the “Purchase Contract Agent”),
to which the Purchase Contract Agreement and supplemental agreements thereto
reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Purchase Contract Agent, the Company, and the Holders and of the terms upon
which the Treasury Unit Certificates are, and are to be, executed and
delivered.


 


Each Purchase Contract evidenced hereby, which is
settled either through Early Settlement or Fundamental Change Early Settlement,
shall obligate the Holder of the related Treasury Units to purchase at the
applicable Purchase Price, and the Company to sell, a number of newly-issued
shares of Common Stock equal to the Early Settlement Rate or the applicable
Settlement Rate, as applicable.


 


The “Applicable Market Value”
means the average of the Closing Price per share of Common Stock on each
Trading Day during the Observation Period; provided, however, that if the
Company enters into a Reorganization Event, the Applicable Market Value will
mean the value of an Exchange Property Unit. 
Following the occurrence of any such Reorganization Event, references
herein to the purchase or issuance of shares of Common Stock shall be construed
to be references to settlement into Exchange Property Units.  For purposes of calculating the value of an
Exchange Property Unit, (x) the value of any common stock included in the
Exchange Property Unit shall be determined using the average of the Closing
Price per share of such common stock on each Trading Day during the Observation
Period (only if such common stock has traded on any Trading Day during the
Observation Period)  (adjusted as
set forth under Section 5.6 of the Purchase Contract Agreement) and (y) the
value of any other property, including securities other than common stock
included in the Exchange Property Unit, shall be the value of such property on
the first Trading Day of the Observation Period (as determined in good faith by
the Board of Directors, whose determination shall be conclusive and described
in a Board Resolution).  The “Closing Price” of the Common Stock on any date of
determination means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Common Stock on the New York
Stock Exchange (the “NYSE”) on such
date or, if the Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
securities exchange on which the Common Stock is so listed, or if the Common
Stock is not so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the Pink OTC Markets Inc. or similar
organization, or, if such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally recognized independent
investment banking firm retained by the Company for this purpose.  A “Trading Day”
means a day on which the Common Stock (A) is not suspended from trading on
any national or regional securities exchange or over-the-counter market at the
close of business and (B) has traded at least once on the national or
regional securities exchange or over-the-counter market that is the primary
market for the trading of the Common Stock at the close of business.  If the Common Stock is not traded 


 


B-6

















 


on a securities exchange
or quoted in the over-the-counter market, then “Trading Day”
shall mean Business Day.


 


In accordance with the terms of the Purchase Contract
Agreement, the Holder of the Treasury Units evidenced hereby shall pay, on the
Purchase Contract Settlement Date, the Purchase Price for the shares of Common
Stock purchased pursuant to each Purchase Contract evidenced hereby by
effecting a Cash Settlement.  A Holder of
Treasury Units who does not make such payment in accordance with the Purchase
Contract Agreement or who does not notify the Purchase Contract Agent of such
Holder’s intention at or prior to 5:00 p.m., New York City time, on the
seventh Business Day immediately preceding the Purchase Contract Settlement
Date, to make an effective Cash Settlement or an Early Settlement, shall have
defaulted in its obligations under the related Purchase Contract. If a Holder
of Treasury Units fails to notify the Purchase Contract Agent of such Holder’s
intention to effect a Cash Settlement in accordance with the Purchase Contract
Agreement such failure shall constitute a default under the related Purchase
Contract.  If a Holder of Treasury Units
does notify the Purchase Contract Agent of its intention to effect a Cash Settlement
but fails to deliver cash to pay the Purchase Price in accordance with the
Purchase Contract Agreement, such failure shall also constitute a default under
the Purchase Contract.  If any such
default occurs, upon the maturity of the Pledged Treasury Securities held by
the Collateral Agent on the Business Day immediately prior to the Purchase
Contract Settlement Date, the principal amount of the Treasury Securities
received by the Collateral Agent will be invested promptly in overnight
Permitted Investments.  On the Purchase
Contract Settlement Date an amount equal to the Purchase Price will be remitted
to the Company in settlement of the Purchase Contract in accordance with the
terms of the Purchase Contract Agreement and the Pledge Agreement without receiving
any instructions from the Holder.


 


The Company shall not be obligated to issue any shares
of Common Stock in respect of a Purchase Contract or deliver any certificates
therefor to the Holder unless it shall have received payment in full of the Purchase
Price for the shares of Common Stock to be purchased thereunder in the manner
set forth in the Purchase Contract Agreement.


 


The Treasury Unit Certificates are issuable only in
registered form and only in denominations of a single Treasury Unit and any
integral multiple thereof.  The transfer
of any Treasury Unit Certificate will be registered and Treasury Unit
Certificates may be exchanged as provided in the Purchase Contract Agreement.  The Security Registrar may require a Holder,
among other things, to furnish endorsements and transfer documents permitted by
the Purchase Contract Agreement.  No
service charge shall be made for any such registration of transfer or exchange,
but the Company and the Purchase Contract Agent may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection
therewith.  A Holder who elects to
substitute the Applicable Ownership Interest in Debentures or the Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, for Treasury
Securities, thereby creating Corporate Units, shall be responsible for any fees
or expenses payable in connection therewith. 
Except as provided in the Purchase Contract Agreement, for so long as
the Purchase Contract underlying a Treasury Unit remains in effect, such
Treasury Unit shall not be separable into its constituent parts, and the rights
and obligations of the Holder of such Treasury Unit in respect of the Treasury
Security and the Purchase Contract comprising such Treasury Unit may be
acquired, and may be transferred and exchanged, only as an entire 


 


B-7

















 


Treasury Unit. The holder
of any Treasury Units may substitute for the Treasury Securities securing its
obligation under the related Purchase Contract, the appropriate Pledged
Applicable Ownership Interest in Debentures or the appropriate Pledged
Applicable Ownership Interest in the Treasury Portfolio (as specified in
clause (i) of the definition of such term) in an aggregate principal amount
equal to the aggregate principal amount of the Pledged Treasury Securities in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.  From and after such
Collateral Substitution, the Unit for which such appropriate Pledged Applicable
Ownership Interest in Debentures or the appropriate Pledged Applicable
Ownership Interest in the Treasury Portfolio (as specified in clause (i) of
the definition of such term) secures the Holder’s obligation under the Purchase
Contract shall be referred to as a “Corporate Unit.”  A Holder may make such Collateral
Substitution only in integral multiples of 20 Treasury Units for 20 Corporate
Units; provided, however, that if a Special Event Redemption or a Mandatory
Redemption or a Successful Remarketing has occurred and the Treasury Portfolio
has become a component of the Corporate Units, a Holder may make such
Collateral Substitutions only in integral multiples of
                        
Treasury Units for
                        
Corporate Units (or such other number of Corporate Units as may be determined
by the Remarketing Agent in connection with a Successful Remarketing of the
Debentures if the Reset Effective Date is not a Payment Date).


 


A Holder of a Corporate Unit may, at any time, on or
prior to the seventh Business Day immediately preceding the Purchase Contract
Settlement Date, create or recreate a Treasury Unit by substituting Treasury
Securities for the Applicable Ownership Interest in Debentures or the
Applicable Ownership Interest in the Treasury Portfolio (as specified in
clause (i) of the definition of such term) that form a part of such
Corporate Unit, as the case may be, in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement.


 


Subject to the next succeeding paragraph, the Company
shall pay, on each Payment Date, the Contract Adjustment Payments payable in
respect of each Purchase Contract to the Person in whose name the Treasury Unit
Certificate evidencing such Purchase Contract is registered on the Security
Register at the close of business on the Record Date relating to such Payment
Date.  The Contract Adjustment Payments
will be payable at the Corporate Trust Office or, at the option of the Company,
by check mailed to the address of the Person entitled thereto at such address
as it appears on the Security Register or by wire transfer to an account
appropriately designated in writing by such person.


 


The Company shall have the right, at any time prior to
the Purchase Contract Settlement Date, to defer the payment of any or all of
the Contract Adjustment Payments otherwise payable on any Payment Date to any
subsequent Payment Date, but only if the Company shall give the Holders and the
Purchase Contract Agent written notice of its election to defer such payment
(specifying the amount to be deferred and the expected Deferral Period) as
provided in the Purchase Contract Agreement. 
Any Contract Adjustment Payments so deferred shall bear additional
Contract Adjustment Payments thereon at the rate of
            % per
annum (computed on the basis of a 360-day year consisting of twelve 30-day
months), compounding on each succeeding Payment Date, until paid in full (such
deferred installments of Contract Adjustment Payments, if any, together with
the additional Contract Adjustment Payments accrued thereon, are referred to
herein as the “Deferred Contract Adjustment Payments”).  Deferred Contract Adjustment Payments, if
any, shall be due on the next succeeding Payment Date except to the 


 


B-8

















 


extent that payment is
deferred pursuant to the Purchase Contract Agreement.  No Contract Adjustment Payments may be
deferred to a date that is after the Purchase Contract Settlement Date.


 


In the event the Company exercises its option to defer
the payment of Contract Adjustment Payments, then, until the Deferred Contract
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or acquire,
or make a liquidation payment with respect to, any of its capital stock or make
guarantee payments with respect to the foregoing other than:


 


(i) purchases, redemptions or acquisitions of
shares of capital stock of the Company in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
employees, officers, directors or agents or a stock purchase or dividend
reinvestment plan, or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date that payment of
Contract Adjustment Payments are deferred requiring the Company to purchase,
redeem or acquire its capital stock,


 


(ii) as a result of a reclassification of the
Company’s capital stock or the exchange or conversion of all or a portion of
one class or series of the Company’s capital stock for another class or series
of the Company’s capital stock,


 


(iii) the purchase of fractional interests in
shares of the Company’s capital stock pursuant to the conversion or exchange
provisions of the Company’s capital stock or the security being converted or
exchanged, or in connection with the settlement of stock purchase contracts,


 


(iv) dividends or distributions paid or made in
capital stock of the Company (or rights to acquire capital stock), or
repurchases, redemptions or acquisitions of capital stock in connection with
the issuance or exchange of capital stock (or securities convertible into or
exchangeable for shares of the Company’s capital stock and distributions in
connection with the settlement of stock purchase contracts) or


 


(v) redemptions, exchanges or repurchases of any
rights outstanding under a shareholder rights plan or the declaration or
payment thereunder of a dividend or distribution of or with respect to rights
in the future.


 


The Purchase Contracts and all obligations and rights
of the Company and the Holders thereunder, including, without limitation, the
rights of the Holders to receive and the obligation of the Company to pay any
Contract Adjustment Payments or any Deferred Contract Adjustment Payments, and
the rights and obligations of the Holders to purchase shares of Common Stock
will immediately and automatically terminate, without the necessity of any
notice or action by any Holder, the Purchase Contract Agent or the Company, if,
on or prior to the Purchase Contract Settlement Date, a Termination Event shall
have occurred.  Upon the occurrence of a
Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Purchase Contract Agent,
the Collateral Agent and to the Holders, at their addresses as they appear in
the Security Register.  Upon and after
the occurrence of a Termination Event, the Collateral Agent shall release the Treasury
Securities from the Pledge in accordance with the provisions of the Pledge
Agreement.


 


B-9

















 


Subject to and upon compliance with the provisions of
the Purchase Contract Agreement, a Holder of Treasury Units may settle the
related Purchase Contracts in their entirety at any time on or prior to the
second Business Day immediately preceding the first day of the Final Three-Day
Remarketing Period in the manner prescribed herein, but only in integral multiples
of 20 Treasury Units.  In order to
exercise the right to effect any such early settlement (“Early Settlement”)
with respect to any Purchase Contracts evidenced by this Treasury Unit
Certificate, the Holder of this Treasury Unit Certificate shall deliver this
Treasury Unit Certificate to the Purchase Contract Agent at the Corporate Trust
Office duly endorsed for transfer to the Company or in blank with the form of
Election to Settle Early/ Fundamental Change Early Settlement set forth below
duly completed and executed and accompanied by payment (payable to the Company
in immediately available funds in an amount (the “Early Settlement Amount”)
equal to the sum of (i) $50 times the number of Purchase Contracts being
settled, plus (ii) if such delivery is made with respect to any Purchase
Contracts during the period from the close of business on any Record Date
relating to any Payment Date to the opening of business on such Payment Date,
an amount equal to the Contract Adjustment Payments payable, if any, on such
Payment Date with respect to such Purchase Contracts; provided that no payment
is required if the Company has elected to defer the Contract Adjustment
Payments which would otherwise be payable on the Payment Date.  Upon Early Settlement of Purchase Contracts
by a Holder of the related Treasury Units, the Pledged Treasury Securities
underlying such Treasury Units shall be released from the Pledge as provided in
the Pledge Agreement and the Holder shall be entitled to receive a number of
shares of Common Stock on account of each Purchase Contract forming part of a
Treasury Unit as to which Early Settlement is effected equal to the Minimum
Settlement Rate; provided however, that upon the Early Settlement of the
Purchase Contracts, (i) the Holder’s right to receive additional Contract
Adjustment Payments in respect of such Purchase Contracts will terminate, and (ii) no
adjustment will be made to or for the Holder on account of Deferred Contract
Adjustment Payments, or any amount accrued in respect of Contract Adjustment
Payments.  The Early Settlement Rate
shall be adjusted in the same manner and at the same time as the Settlement
Rate is adjusted as provided in the Purchase Contract Agreement.


 


Upon registration of transfer of this Treasury Unit
Certificate, the transferee shall be bound (without the necessity of any other
action on the part of such transferee, except as may be required by the
Purchase Contract Agent pursuant to the Purchase Contract Agreement), under the
terms of the Purchase Contract Agreement, the Purchase Contracts evidenced
hereby and the Pledge Agreement and the transferor shall be released from the
obligations under the Purchase Contracts evidenced by this Treasury Unit
Certificate.  The Company covenants and
agrees, and the Holder, by its acceptance hereof, likewise covenants and
agrees, to be bound by the provisions of this paragraph.


 


The Holder of this Treasury Unit Certificate, by its
acceptance hereof, irrevocably authorizes the Purchase Contract Agent to enter
into and perform the related Purchase Contracts forming part of the Treasury
Units evidenced hereby on its behalf as its attorney-in-fact, (including the
execution of this Treasury Unit Certificate on behalf of such Holder),
expressly withholds any consent to the assumption of the Purchase Contracts by
the Company, its trustee in bankruptcy, receiver, liquidator or a person or
entity performing similar functions, in the event that the Company becomes a
debtor under the Bankruptcy Code or subject to other similar Federal or State
law providing for reorganization or liquidation, agrees to be bound by the
terms 


 


B-10

















 


and provisions thereof,
covenants and agrees to perform its obligations under such Purchase Contracts,
consents to the provisions of the Purchase Contract Agreement, irrevocably
authorizes the Purchase Contract Agent to enter into and perform the Pledge
Agreement on its behalf as its attorney-in-fact, and consents and agrees to be
bound by the Pledge of the Treasury Securities underlying this Treasury Unit
Certificate pursuant to the Pledge Agreement. 
The Holder, by its acceptance hereof, further covenants and agrees,
that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, payments
in respect of the Pledged Treasury Securities on the Purchase Contract
Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder’s obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such payments.


 


Subject to certain exceptions, the provisions of the
Purchase Contract Agreement may be amended with the consent of the Holders of a
majority of the Purchase Contracts.  In addition,
certain amendments to the Purchase Contract Agreement may be made without any
consent of the Holders as provided in the Purchase Contract Agreement.


 


THE PURCHASE CONTRACTS SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES THEREUNDER, EXCEPT TO THE EXTENT THAT THE LAWS
OF ANY OTHER JURISDICTION SHALL BE MANDATORILY APPLICABLE.


 


Prior to due presentment of a Certificate for
registration of transfer, the Company, FPL Group Capital and the Purchase
Contract Agent, and any agent of the Company, FPL Group Capital or the Purchase
Contract Agent, may treat the Person in whose name this Treasury Unit
Certificate is registered on the Security Register as the owner of the Treasury
Units evidenced hereby for the purpose of receiving payments on the Treasury
Securities, receiving payments of Contract Adjustment Payments and any Deferred
Contract Adjustment Payments, performance of the Purchase Contracts and for all
other purposes whatsoever, whether or not any payments, distributions or
performance in respect thereof shall be overdue and notwithstanding any notice
to the contrary, and neither the Company, FPL Group Capital nor the Purchase
Contract Agent nor any agent of the Company, FPL Group Capital or the Purchase
Contract Agent shall be affected by notice to the contrary.


 


The Purchase Contracts shall not, prior to the
settlement thereof, in accordance with the Purchase Contract Agreement, entitle
the Holder to any of the rights of a holder of shares of Common Stock.


 


A copy of the Purchase Contract Agreement is available
for inspection at the offices of the Purchase Contract Agent.


 


B-11














 


ABBREVIATIONS


 


The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed as though they
were written out in full according to applicable laws or regulations:


 


	
  TEN COM —

  	
   

  	
  as tenants in common

  
	
  UNIF GIFT MIN ACT — 

  	
   

  	
                                Custodian                              (Minor)                              

  under Uniform Gifts to Minors Act                              (State)
  

  
	
  TEN ENT —

  	
   

  	
  as tenants by the
  entireties

  
	
  JT TEN —

  	
   

  	
  as joint tenants with
  right of survivorship and not as tenants in common

  



 


Additional abbreviations may also be used though not
in the above list.


 


ASSIGNMENT


 


FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto


 


	
   

  
	
   

  



(Please insert Social Security or Taxpayer
Identification or other Identifying Number of Assignee)


 


	
   

  
	
   

  



(Please Print or Type Name and Address Including
Postal Zip Code of Assignee)


 


the within Treasury Unit Certificates and all rights
thereunder, hereby irrevocably constituting and appointing


 


attorney to transfer said Treasury Unit Certificates
on the books of FPL Group, Inc. with full power of substitution in the
premises.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE: The signature
  to this assignment must correspond with the name as it appears upon the face
  of the within Treasury Unit Certificates in every particular, without
  alteration or enlargement or any change whatsoever.

  



 


	
  Signature
  Guarantee:

  	
   

  	
   

  	
   

  



 


Signatures 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-12

















 


SETTLEMENT INSTRUCTIONS


 


The undersigned Holder directs that a certificate for
shares of Common Stock deliverable upon settlement on or after the Purchase
Contract Settlement Date of the Purchase Contracts underlying the number of
Treasury Units evidenced by this Treasury Unit Certificate (after taking into
account all Units then held by such Holder) be registered in the name of, and
delivered, together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name and address
have been indicated below.  If shares are
to be registered in the name of a Person other than the undersigned, the
undersigned will pay any transfer tax payable incident thereto.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  	
   

  
					



 


Signatures 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.


 


	
  If shares are to be
  registered in the name of and delivered to a Person other than the Holder,
  please (i) print such Person’s name and address and (ii) provide a
  guarantee of your signature:

  	
   

  	
  REGISTERED
  HOLDER

  



 


Please print name and address of Registered Holder:


 


 


	
  Name

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  
	
  Social Security
  or other Taxpayer Identification Number, if any

  



 


B-13

















 


ELECTION TO SETTLE EARLY/FUNDAMENTAL CHANGE EARLY
SETTLEMENT


 


The undersigned Holder of this Treasury Unit
Certificate hereby irrevocably exercises the option to effect [Early
Settlement] [Fundamental Change Early Settlement] in accordance with the terms
of the Purchase Contract Agreement with respect to the Purchase Contracts
underlying the number of Treasury Units evidenced by this Treasury Unit
Certificate specified below.  The
undersigned Holder directs that a certificate for shares of Common Stock or
other securities deliverable upon such [Early Settlement] [Fundamental Change
Early Settlement] (after taking into account all Units of such Holder submitted
by such Holder for [Early Settlement] [Fundamental Change Early Settlement]) be
registered in the name of, and delivered, together with a check in payment for
any fractional share and any Treasury Unit Certificate representing any
Treasury Units evidenced hereby as to which [Early Settlement] [Fundamental
Change Early Settlement] of the related Purchase Contracts is not effected, to
the undersigned at the address indicated below unless a different name and
address have been indicated below.  The
Pledged Treasury Securities deliverable upon such [Early
Settlement][Fundamental Change Early Settlement] will be transferred in
accordance with the transfer instructions set forth below.  If shares or other securities are to be
registered in the name of a Person other than the undersigned, the undersigned
will pay any transfer tax payable incident thereto.  In completing this form, you should cross out
“[Early Settlement]” or “[Fundamental Change Early Settlement]”, as
appropriate, if not applicable.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  	
   

  
					



 


Signatures 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.


 


Number of Units evidenced hereby as to which [Early
Settlement] [Fundamental Change Early Settlement] of the related Purchase
Contracts is being elected:


 


	
  If shares of Common
  Stock or other securities or Treasury Unit Certificates are to be registered
  in the name of and delivered to and Pledged Treasury Securities are to be
  transferred to a Person other than the Holder, please print such Person’s
  name and address:

  	
   

  	
  REGISTERED
  HOLDER

  



 


Please print name and address of Registered Holder:


 


	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



Social Security or other Taxpayer Identification
Number, if any


 


B-14

















 


Transfer
Instructions for Pledged Treasury Securities transferable upon [Early
Settlement] [Fundamental Change Early Settlement]:


 


	
   

  
	
   

  



 


B-15

















 


[TO BE ATTACHED TO GLOBAL CERTIFICATES]


 


SCHEDULE OF INCREASES OR DECREASES IN GLOBAL
CERTIFICATE


 


The initial number of Treasury Units evidenced by this
Global Certificate is
                .


 


The following increases or decreases in this Global
Certificate have been made:


 


	
  Date

  	
   

  	
  Amount of 

  decrease in the 

  number of 

  Treasury Units 

  evidenced by this 

  Global Certificate

  	
   

  	
  Amount of 

  increase in the 

  number of 

  Treasury Units 

  evidenced by this 

  Global Certificate

  	
   

  	
  Number of 

  Treasury Units 

  evidenced by this 

  Global Certificate 

  following such 

  decrease or 

  increase

  	
   

  	
  Signature of 

  authorized officer 

  of Purchase 

  Contract Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


B-16

















 


EXHIBIT C


 


NOTICE TO SETTLE BY SEPARATE CASH


 


The Bank of New York
Mellon


 


Attention:


Telecopy:


 



                 Re:          Equity Units of FPL Group, Inc. (the “Company”)


 


The undersigned Holder hereby irrevocably notifies you
in accordance with Section 5.4 of the Purchase Contract Agreement, dated
as of
                        ,
among the Company, yourselves, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts, that such Holder
has elected to pay to the Collateral Agent, on or prior to 11:00 a.m. New
York City time, on the sixth Business Day immediately preceding the Purchase
Contract Settlement Date, (in lawful money of the United States by certified or
cashiers check or wire transfer, in each case in immediately available funds),
$                  
as the Purchase Price for the shares of Common Stock issuable to such Holder by
the Company under the related Purchase Contracts on the Purchase Contract
Settlement Date.  The undersigned Holder
hereby instructs you to notify promptly the Collateral Agent of the undersigned
Holder’s election to make such Cash Settlement with respect to the Purchase
Contracts related to such Holder’s [Corporate Units] [Treasury Units].  In completing this form, you should cross out
“[Corporate Units]” or “[Treasury Units]”, as appropriate, if not applicable.


 


	
  Date:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  	
   

  	
   

  
							



 


Signatures must be guaranteed by an “eligible
guarantor institution” meeting the requirements of the 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 Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.


 


Please print name and
address of Registered Holder:


 


	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  	
  Social Security or
  other Taxpayer Identification Number, if any

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					



 


C-1