As filed with the Securities and Exchange Commission on , 1998
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Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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TEXAS UTILITIES COMPANY
(Exact name of registrant as specified in its charter)
Texas 75-2669310
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1601 Bryan Street
Dallas, Texas 75201
(214) 812-4600
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
ROBERT A. WOOLDRIDGE, Esq. PETER B. TINKHAM ROBERT J. REGER, JR., Esq.
Worsham, Forsythe Texas Utilities Company Reid & Priest LLP
& Wooldridge, L.L.P. Secretary and Assistant 40 West 57th Street
1601 Bryan Street Treasurer New York, New York 10019
Dallas, Texas 75201 1601 Bryan Street (212) 603-2000
(214) 979-3000 Dallas, Texas 75201
(214) 812-4600
(Names and addresses, including zip codes, and telephone numbers,
including area codes, of agents for service)
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It is respectfully requested that the Commission send copies
of all notices, orders and communications to:
STEPHEN K. WAITE, Esq.
Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, New York 10004-1490
(212) 858-1000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM
TIME TO TIME AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE WHEN
WARRANTED BY MARKET CONDITIONS AND OTHER FACTORS.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE
FOLLOWING BOX. [ ]
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED
ON A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES
ACT OF 1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND
OR INTEREST REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. [X]
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(b) UNDER THE SECURITIES ACT, PLEASE CHECK THE
FOLLOWING BOX AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF
THE EARLIER EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ]
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(c)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES
ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION
STATEMENT FOR THE SAME OFFERING. [ ]
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE
434, PLEASE CHECK THE FOLLOWING BOX. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
TITLE OF EACH MAXIMUM MAXIMUM AMOUNT OF
CLASS OFSECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
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Common Stock,
without
par value . . . . (1) (2) (1)(2) N/A
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Stock Purchase
Contracts(3). . . (1) (2) (1)(2) N/A
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Stock Purchase
Units(3) . . . . (1) (2) (1)(2) N/A
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Debt
Securities . . . (1)(5) (2) (1)(2)(4)(5) N/A
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Total . . . . . $900,000,000 (2) $900,000,000(4) $265,500
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(1) In no event will the aggregate initial offering price of all Common
Stock, Stock Purchase Contracts, Stock Purchase Units and Debt
Securities issued from time to time pursuant to this Registration
Statement exceed $900,000,000. If any such securities are issued at
an original issue discount, then the aggregate initial offering price
as so discounted shall not exceed $900,000,000, notwithstanding that
the stated principal amount of such securities may exceed such amount.
(2) The proposed maximum initial offering price per unit will be
determined, from time to time, by the registrant in connection with
the issuance of the Securities registered hereunder.
(3) Subject to footnote (1), there are being registered hereunder an
indeterminate number of shares of Common Stock issuable by the Company
upon settlement of the Stock Purchase Contracts or Stock Purchase
Units.
(4) Exclusive of accrued interest or distributions, if any.
(5) Subject to footnote (1), there are being registered hereunder an
indeterminate principal amount of Debt Securities which may be sold,
from time to time, by the Company.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 4, 1998
PROSPECTUS
$900,000,000
TEXAS UTILITIES COMPANY
DEBT SECURITIES, COMMON STOCK,
STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
Texas Utilities Company (Company), directly or through such
agents, dealers or underwriters as may be designated from time to
time, may offer, issue and sell, together or separately, (i) its
debt securities (Debt Securities), (ii) shares of its common
stock, without par value (Common Stock), (iii) contracts to
purchase shares of Common Stock (Stock Purchase Contracts) and
(iv) units, each representing ownership of a Stock Purchase
Contract and Debt Securities or debt obligations of third
parties, including U.S. Treasury securities, pledged to secure
the holder's obligation to purchase Common Stock under the Stock
Purchase Contracts (Stock Purchase Units).
The Debt Securities, Common Stock, Stock Purchase Contracts
and Stock Purchase Units are herein collectively referred to as
the "Securities", and Securities having an aggregate public
offering price of up to $900,000,000 (or its equivalent in
foreign currencies or foreign currency units based on the
applicable exchange rate at the time of offering) will be issued
in amounts, at prices and on terms to be determined at the time
of sale.
The form in which the Securities are to be issued, their
specific designation, aggregate principal amount or aggregate
initial offering price, maturity, if any, rate and times of
payment of interest or dividends, if any, redemption, conversion,
and sinking fund terms or other rights, if any, exercise price
and detachability, if any, and other specific terms may also be
set forth in a Prospectus Supplement, together with the terms of
an offering of such Securities. Any such Prospectus Supplement
will also contain information, as applicable, about certain
material United States Federal income tax considerations relating
to the particular Securities offered thereby.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The Securities may be sold directly by the Company, through
agents designated from time to time or to or through underwriters
or dealers. The Company reserves the sole right to accept, and
together with its agents, from time to time, to reject in whole
or in part any proposed purchase of Securities to be made
directly or through agents. If any agents or underwriters are
involved in the sale of any Securities, the names of such agents
or underwriters and any applicable fees, commissions or discounts
will be set forth in Prospectus Supplement with respect to such
Securities (Prospectus Supplement). See PLAN OF DISTRIBUTION.
This Prospectus may not be used to consummate any sale of
Securities unless accompanied by a Prospectus Supplement.
The Common Stock is listed on the New York, Chicago and
Pacific stock exchanges under the symbol "TXU". Any Prospectus
Supplement will also contain information, where applicable, as to
any other listing on a securities exchange of the Securities
covered by such Prospectus Supplement.
The date of this Prospectus is , 1998
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE
ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY
SALE OF THESE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.
<PAGE>
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED
TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN
THOSE CONTAINED IN THIS PROSPECTUS OR INCORPORATED HEREIN BY
REFERENCE IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY
UNDERWRITER, DEALER OR AGENT INVOLVED IN THE OFFERING DESCRIBED
HEREIN. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THOSE
SPECIFICALLY OFFERED HEREBY OR OF ANY SECURITIES OFFERED HEREBY
IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO ITS DATE.
AVAILABLE INFORMATION
On August 5, 1997, the Company became a holding company
which owns all of the outstanding common stock of Texas Energy
Industries, Inc. (formerly Texas Utilities Company) (TEI)
(Commission File No. 1-3591) and ENSERCH Corporation (ENSERCH)
(Commission File No. 1-3183). The Company is, and TEI and
ENSERCH have been, subject to the informational requirements of
the Securities and Exchange Act of 1934, as amended (Exchange
Act), and in accordance therewith the Company files, and its
predecessors have filed, reports, proxy statements and other
information with the Commission. Such reports, proxy statements
and other information filed by the Company and its predecessors
can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following Regional
Offices of the Commission: Chicago Regional Office, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661; and New York
Regional Office, 7 World Trade Center, Suite 1300, New York, New
York 10048. Copies of such material can also be obtained from
the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. In
addition, the Commission maintains a World Wide Web site
(http://www.sec.gov) that contains reports and other information
filed by the Company, TEI and ENSERCH. The Common Stock of the
Company is listed on the New York, Chicago and Pacific stock
exchanges, where reports, proxy statements and other information
concerning the Company and TEI may be inspected. Reports, proxy
statements and other information concerning ENSERCH may be
inspected at the New York and Chicago stock exchanges.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents, previously filed with the Commission
(Commission File No. 1-12833), pursuant to the Exchange Act, are
incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the year
ended December 31, 1997 (1997 10-K).
2. The Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998.
3. The Company's Current Reports on Form 8-K dated February
26, 1998, March 13, 1998, April 8, 1998, April 9, 1998, April 17,
1998 and May 27, 1998.
All documents filed by the Company pursuant to the Exchange
Act after the date of filing of the Registration Statement in
which this Prospectus is included and prior to effectiveness of
such Registration Statement shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the
date of filing of such documents. All documents filed by the
Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this Prospectus and prior to the
termination of the offering hereunder shall be deemed to be
incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents; provided,
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<PAGE>
however, that the documents enumerated above or subsequently
filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act prior to the filing with the Commission
of the Company's most recent Annual Report on Form 10-K shall not
be incorporated by reference in this Prospectus or be a part
hereof from and after the filing of such Annual Report on Form
10-K. The documents which are incorporated by reference in this
Prospectus are sometimes hereinafter referred to as the
"Incorporated Documents."
Any statement contained in an Incorporated Document shall be
deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in
any other subsequently filed document which is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute
a part of this Prospectus.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH
PERSON, INCLUDING ANY BENEFICIAL OWNER OF SECURITIES, TO WHOM A
COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR
ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY AND ALL OF THE
INCORPORATED DOCUMENTS, OTHER THAN EXHIBITS TO SUCH DOCUMENTS
(UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE
INTO SUCH DOCUMENTS) AND ANY APPLICABLE INDENTURE AND OFFICER'S
CERTIFICATE, EACH AS DESCRIBED HEREIN. REQUESTS FOR SUCH COPIES
SHOULD BE DIRECTED TO: SECRETARY, TEXAS UTILITIES COMPANY,
ENERGY PLAZA, 1601 BRYAN STREET, DALLAS, TEXAS 75201; TELEPHONE
NUMBER (214) 812-4600.
THE COMPANY
The Company is a Texas corporation organized in 1996 for the
purpose of becoming the holding company for TEI, formerly Texas
Utilities Company, and ENSERCH upon the mergers of TEI and
ENSERCH with wholly owned subsidiaries of the Company.
TEI, a Texas corporation, is a holding company whose principal
subsidiary, Texas Utilities Electric Company (TU Electric), is an
operating public utility company engaged in the generation,
purchase, transmission, distribution and sale of electric energy
in the north central, eastern and western portions of Texas, an
area with a population estimated at 6,020,000. TU Electric's
operating revenues and consolidated net income available for
common stock for the twelve months ended December 31, 1997 were
$6,135,417,000 and $745,024,000, respectively. TU Electric's
total capitalization at December 31, 1997 was $12,798,832,000.
Two other subsidiaries of TEI are engaged directly or indirectly
in electric utility operations: (i) Southwestern Electric Service
Company (SESCO), which is engaged in the purchase, transmission,
distribution and sale of electric energy in ten counties in the
eastern and central parts of Texas, with a population estimated
at 126,900 and (ii) Texas Utilities Australia Pty. Ltd. (TU
Australia), which in 1995 acquired the common stock of Eastern
Energy Limited, a company engaged in the purchase, distribution,
marketing and sale of electric energy to approximately 489,000
customers in the Melbourne area of Australia. Neither SESCO nor
Eastern Energy Limited generates any electricity. In November
1997, the Company consummated the acquisition of Lufkin Conroe
Communications Co. (LCC), a privately held, independent local
exchange telephone company, which subsequently became a
subsidiary of TEI. LCC has sixteen exchanges that serve
approximately 100,000 access lines in the Alto, Conroe and Lufkin
areas of southeast Texas and also provides access services to a
number of interexchange carriers who provide long distance
services. TEI also has other wholly owned subsidiaries which
perform specialized functions within the Texas Utilities Company
system.
ENSERCH, a Texas corporation, is an integrated company focused
on natural gas. ENSERCH operates primarily in the north central
and eastern parts of Texas. Its major business operations are
natural gas pipeline, processing, marketing and distribution.
Through these business operations, ENSERCH is engaged in owning
and operating interconnected natural gas transmission lines,
underground storage reservoirs, compressor stations and related
properties in Texas; gathering and processing natural gas to
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<PAGE>
remove impurities and extract liquid hydrocarbons for sale, and
the wholesale and retail marketing of natural gas in several
areas of the United States, and owning and operating
approximately 550 local gas utility distribution systems in
Texas.
In March 1998, the Company announced an offer by its wholly
owned subsidiary, TU Acquisitions PLC (TU Acquisitions), to
acquire 100% of the ordinary shares of The Energy Group PLC
(TEG), including the ordinary shares evidenced by American
Depository Receipts, for L8.40 per share. Under the Company's
offer, up to 20% of the TEG shares may be exchanged for Company
Common Stock with a value of approximately L8.65 per TEG share.
TEG is the holding company for The Eastern Group PLC, which is
one of the largest regional electric companies in the United
Kingdom (U.K.), one of the largest U.K. generators of electricity
and one of the largest U.K. suppliers of natural gas. On May 19,
1998, the Company declared its offer unconditional. At June 2,
1998 the Company had acquired over 70% of TEG's issued share
capital and is in the process of acquiring the remaining shares.
The TEG businesses acquired by the Company (which exclude
TEG's Peabody Coal and Citizens Power businesses, which were sold
by TEG to an unaffiliated party in connection with the Company's
offer) had assets of approximately $10.3 billion at September 30,
1997 and $5.2 billion of revenues for the twelve months ended on
that date. Such businesses had debt outstanding at September 30,
1997 of approximately $3.8 billion. The estimated purchase price
for the TEG shares is approximately $7.3 billion. The Company
and TU Acquisitions and other intermediate U.K. holding companies
have entered into credit facilities with banking institutions in
the United States (U.S.) and the U.K., respectively, which will
provide committed financing sufficient to purchase the
outstanding TEG shares and pay related expenses.
In February 1998, the Company announced an offer through its
wholly-owned subsidiary, TU Australia, to acquire Allgas Energy
Limited (Allgas), a publicly held gas distribution company in
Queensland, Australia. The original offer, a combined cash and
option offer of approximately $138 million, which was increased
to approximately $145 million in April 1998, is subject to
acceptance by holders of at least 51% of Allgas outstanding
shares and the waiver by the Queensland government of the current
12.5% limit on individual share holdings in Allgas. The
Queensland government has announced that this limitation will be
lifted on July 1, 1998. TU Australia has acquired 12.49% of the
outstanding shares of Allgas. The Company's bid has already
received all necessary Australian and U.S. regulatory approvals.
A competing, although lower, bid, is still outstanding.
Shareholders of Allgas now have through July 10, 1998 to accept
the Company's offer. The offer will be funded by TU Australia's
cash flows and bank lines.
The principal executive offices of the Company are located at
1601 Bryan Street, Dallas, Texas 75201-3411; the telephone number
is (214) 812-4600.
USE OF PROCEEDS
Unless otherwise set forth in a Prospectus Supplement, the net
proceeds from the offering of the Securities will be used for
general corporate purposes, including the repayment of short-term
indebtedness incurred in connection with the purchase of TEG
shares.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of the years
ended December 31, 1993 through 1997 and the twelve months ended
March 31, 1998 was 1.89, 2.29, 0.84, 2.39, 2.25 and 2.24,
respectively. The twelve-month period ended December 31, 1993
was affected by the recording of regulatory disallowances of
approximately $265 million after tax in TU Electric's Docket
11735. The twelve-month period ended December 31, 1995 was
affected by the impairment of several nonperforming assets,
including TU Electric's partially completed Twin Oak and Forest
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<PAGE>
Grove lignite-fueled facilities and the New Mexico coal reserves
of a subsidiary, as well as several minor assets. Such
impairment, on an after-tax basis, amounted to $802 million. The
twelve-month period ended December 31, 1997 include a one time
base revenue refund of $80 million as a result of a settlement
with the Public Utility Commission of Texas.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued in one or more series under
an indenture or indentures (each an Indenture) between the
Company and The Bank of New York or other financial institutions
to be named, as Trustee (each an Indenture Trustee), a form of
which is filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. The following description of
the terms of the Debt Securities does not purport to be complete
and is qualified in its entirety by reference to (i) the
respective Indenture and (ii) one or more officer's certificates
establishing the Debt Securities to which a form of Debt Security
will be attached. Whenever particular provisions or defined
terms in an Indenture are referred to under this DESCRIPTION OF
DEBT SECURITIES, such provisions or defined terms are
incorporated by reference herein.
General. Each Indenture will provide for the issuance of Debt
Securities in an unlimited amount from time to time. All Debt
Securities will be unsecured obligations of the Company. All
Debt Securities issued under an Indenture will rank equally and
ratably with all other Debt Securities issued under such
Indenture. An Indenture will not limit other unsecured debt.
The Company's financial statements included in the Incorporated
Documents show the amount of such other debt at the date of such
statements. See the Prospectus Supplement applicable to each
series of offered Debt Securities.
The applicable Prospectus Supplement or Prospectus Supplements
will describe the following terms of the Debt Securities: (1) the
title of the Debt Securities; (2) any limit upon the aggregate
principal amount of the Debt Securities; (3) the date or dates on
which the principal of the Debt Securities is payable or the
method of determination thereof; (4) the rate or rates, if any,
or the method by which such rate will be determined, at which the
Debt Securities will bear interest, if any, the date or dates
from which any such interest will accrue, the Interest Payment
Dates on which any such interest will be payable, the Regular
Record Date for any interest payable on any Interest Payment Date
and the Person or Persons to whom interest on such Debt
Securities will be payable on any Interest Payment Date, if other
than the Persons in whose names such Debt Securities are
registered at the close of business on the Regular Record Date
for such interest; (5) any right under the Indenture to extend
the interest payment period from time to time on the Debt
Securities; (6) the place or places where, subject to the terms
of the respective Indenture as described below under "Payment and
Paying Agents," the principal of and premium, if any, and
interest on the Debt Securities will be payable and where,
subject to the terms of such Indenture as described below under
"Registration and Transfer," the Debt Securities may be presented
for registration of transfer or exchange and the place or places
where notices and demands to or upon the Company in respect of
the Debt Securities and such Indenture may be served; the
Security Registrar for such Debt Securities; and, if such is the
case, that the principal of such Debt Securities will be payable
without presentment or surrender thereof; (7) the period or
periods within, or date or dates on, which, the price or prices
at which and the terms and conditions upon which Debt Securities
may be redeemed, in whole or in part, at the option of the
Company; (8) the obligation or obligations, if any, of the
Company to redeem or purchase any of the Debt Securities pursuant
to any sinking fund or other mandatory redemption provisions or
at the option of the Holder thereof, and the period or periods
within which, or the date or dates on which, the price or prices
at which and the terms and conditions upon which the Debt
Securities will be redeemed or purchased, in whole or in part,
pursuant to such obligation, and applicable exceptions to the
requirements of a notice of redemption in the case of mandatory
redemption or redemption at the option of the Holder; (9) the
denominations in which any Debt Securities will be issuable, if
other than denominations of $1,000 and any integral multiple
thereof; (10) the currency or currencies, including composite
currencies in which the principal of or any premium or interest
on the Debt Securities will be payable (if other than in
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<PAGE>
Dollars); (11) if the principal of or any premium or interest on
the Debt Securities is to be payable, at the election of the
Company or the Holder thereof, in a coin or currency other than
that in which the Debt Securities are stated to be payable, the
period or periods within which and the terms and conditions upon
which, such election is to be made; (12) if the principal of or
premium or interest on the Debt Securities is to be payable, or
is to be payable at the election of the Company or a Holder
thereof, in securities or other property, the type and amount of
such securities or other property, or the method or other means
by which such amount will be determined, and the period or
periods within which, and the terms and conditions upon which,
any such election may be made; (13) if the amount payable in
respect of principal of or any premium or interest on the Debt
Securities may be determined with reference to an index or other
fact or event ascertainable outside of the respective Indenture,
the manner in which such amounts will be determined; (14) if
other than the principal amount thereof, the portion of the
principal amount of the Debt Securities which will be payable
upon declaration of acceleration of the Maturity thereof; (15)
any Events of Default, in addition to those specified in the
respective Indenture, with respect to the Debt Securities and any
covenants of the Company for the benefit of the Holders of the
Debt Securities, in addition to those specified in such
Indenture; (16) the terms, if any, pursuant to which the Debt
Securities may be converted into or exchanged for shares of
capital stock or other securities of the Company or any other
Person; (17) the obligations or instruments, if any, which will
be considered to be Eligible Obligations in respect of such Debt
Securities denominated in a currency other than Dollars or in a
composite currency, and any additional or alternative provisions
for the reinstatement of the Company's indebtedness in respect of
such Debt Securities after the satisfaction and discharge
thereof; (18) if the Debt Securities are to be issued in global
form, (i) any limitations on the rights of the Holder or Holders
of such Debt Securities to transfer or exchange the same or to
obtain the registration of transfer thereof, (ii) any limitations
on the rights of the Holder or Holders thereof to obtain
certificates therefor in definitive form in lieu of temporary
form and (iii) any and all other matters incidental to such Debt
Securities; (19) if the Debt Securities are to be issuable as
bearer securities, any and all matters incidental thereto; (20)
to the extent not addressed in item (18) above, any limitations
on the rights of the Holders of the Debt Securities to transfer
or exchange the Debt Securities or to obtain the registration of
transfer thereof, and if a service charge will be made for the
registration of transfer or exchange of the Debt Securities, the
amount or terms thereof; (21) any exceptions to the provisions
governing payments due on legal holidays or any variations in the
definition of Business Day with respect to such Debt Securities;
(22) any collateral security, assurance or guarantee for the Debt
Securities; (23) the non-applicability of the limitation on liens
provisions to the Debt Securities; (24) any rights or duties of
another Person to assume the obligations of the Company with
respect to the Debt Securities and any rights or duties to
discharge and release any obligor with respect to such Debt
Securities or the Indenture to the extent related to such Debt
Securities; and (25) any other terms of the Debt Securities, not
inconsistent with the provisions of the respective Indenture
(Indenture, Section 301).
Debt Securities may be sold at a discount below their
principal amount. Certain special United States federal income
tax considerations, if any, applicable to Debt Securities sold at
an original issue discount may be described in the applicable
Prospectus Supplement. In addition, certain special United States
federal income tax or other considerations, if any, applicable to
any Debt Securities which are denominated in a currency or
currency unit other than Dollars may be described in the
applicable Prospectus Supplement.
Except as may otherwise be described in the applicable
Prospectus Supplement, the covenants contained in an Indenture
will not afford Holders of Debt Securities protection in the
event of a highly-leveraged transaction involving the Company.
Payment and Paying Agents. Except as may be provided in the
applicable Prospectus Supplement, interest, if any, on each Debt
Security payable on each Interest Payment Date will be paid to
the Person in whose name such Debt Security is registered as of
the close of business on the Regular Record Date relating to such
Interest Payment Date; provided, however, that interest payable
at maturity (whether at stated maturity, upon redemption or
otherwise, herein a Maturity) will be paid to the Person to whom
principal is paid. However, if there has been a default in the
payment of interest on any Debt Security, such defaulted interest
may be payable to the Holder of such Debt Security as of the
close of business on a date selected by the respective Indenture
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Trustee which is not more than 15 days and not less than 10 days
prior to the date proposed by the Company for payment on such
defaulted interest or in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such
Debt Security may be listed, if such Indenture Trustee deems such
manner of payment practicable (Indenture, Section 307).
Unless otherwise specified in the applicable Prospectus
Supplement, the principal of and premium, if any, and interest
on, the Debt Securities at Maturity will be payable upon
presentation of the Debt Securities at the corporate trust office
of The Bank of New York, in The City of New York, as Paying Agent
for the Company. The Company may change the Place of Payment on
the Debt Securities, may appoint one or more additional Paying
Agents (including the Company) and may remove any Paying Agent,
all at its discretion (Indenture, Section 602).
Registration and Transfer. Unless otherwise specified in the
applicable Prospectus Supplement, the transfer of Debt Securities
may be registered, and Debt Securities may be exchanged for other
Debt Securities of the same series or tranche, of authorized
denominations and of like tenor and aggregate principal amount,
at the corporate trust office of The Bank of New York in The City
of New York, as Security Registrar for the Debt Securities. The
Company may change the place for registration of transfer and
exchange of the Debt Securities and may designate one or more
additional places for such registration and exchange, all at its
discretion. Except as otherwise provided in the applicable
Prospectus Supplement, no service charge will be made for any
transfer or exchange of the Debt Securities, but the Company may
require payment 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 the Debt Securities. The
Company will not be required to execute or to provide for the
registration of transfer of, or the exchange of, (a) any Debt
Security during a period of 15 days prior to giving any notice of
redemption or (b) any Debt Security selected for redemption in
whole or in part, except the unredeemed portion of any Debt
Security being redeemed in part (Indenture, Section 305).
Defeasance. The principal amount of any series of Debt
Securities issued under an Indenture will be deemed to have been
paid for purposes of such Indenture and the entire indebtedness
of the Company in respect thereof will be deemed to have been
satisfied and discharged if there shall have been irrevocably
deposited with the respective Indenture Trustee or any paying
agent, in trust: (a) money in an amount which will be
sufficient, or (b) in the case of a deposit made prior to the
maturity of the Debt Securities, Eligible Obligations (as defined
below), the principal of and the interest on which when due,
without any regard to reinvestment thereof, will provide moneys
which, together with the money, if any, deposited with or held by
such Indenture Trustee, will be sufficient, or (c) a combination
of (a) and (b) which will be sufficient, to pay when due the
principal of and premium, if any, and interest, if any, due and
to become due on the Debt Securities of such series that are
Outstanding. For this purpose, Eligible Obligations include
direct obligations of, or obligations unconditionally guaranteed
by, the United States of America entitled to the benefit of the
full faith and credit thereof and certificates, depositary
receipts or other instruments which evidence a direct ownership
interest in such obligations or in any specific interest or
principal payments due in respect thereof and which do not
contain provisions permitting the redemption or other prepayment
thereof at the option of the issuer thereof (Indenture, Section
701).
Limitation on Liens. The Indenture provides that, except as
otherwise specified with respect to a particular series of Debt
Securities, so long as any Debt Securities of any series are
Outstanding, the Company will not pledge, mortgage, hypothecate
or grant a security interest in, or permit any mortgage, pledge,
security interest or other lien upon, any capital stock of any
Subsidiary (hereinafter defined) now or hereafter owned by the
Company to secure any Indebtedness (hereinafter defined), without
making effective provision whereby the Outstanding Debt
Securities shall (so long as such other Indebtedness shall be so
secured) be equally and ratably secured with any and all such
other Indebtedness and any other indebtedness similarly entitled
to be equally and ratably secured. This restriction does not
apply to, or prevent the creation or existence of, (i) any
mortgage, pledge, security interest, lien or encumbrance upon any
such capital stock created at the time of the acquisition of such
capital stock by the Company or within one year after such time
to secure all or a portion of the purchase price for such capital
stock; (ii) any mortgage, pledge, security interest, lien or
encumbrance upon any such capital stock existing thereon at the
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time of the acquisition thereof by the Company (whether or not
the obligations secured thereby are assumed by the Company); or
(iii) any extension, renewal or refunding of any mortgage,
pledge, security interest, lien or encumbrance described in (i)
or (ii) above on capital stock of any Subsidiary theretofore
subject thereto (or substantially the same capital stock) or any
portion thereof. In addition, this restriction will not apply
to, and there will be excluded in computing secured Indebtedness
for the purpose of such restriction, Indebtedness secured by any
judgment, levy, execution, attachment or other similar lien
arising in connection with court proceedings, provided that
either (i) the execution or enforcement of each such lien is
effectively stayed within 30 days after entry of the
corresponding judgment (or the corresponding judgment has been
discharged within such 30 day period) and the claims secured
thereby are being contested in good faith by appropriate
proceedings timely commenced and diligently prosecuted; (ii) the
payment of each such lien is covered in full by insurance and the
insurance company has not denied or contested coverage thereof;
or (iii) so long as each such lien is adequately bonded, any
appropriate legal proceedings that may have been duly initiated
for the review of the corresponding judgment, decree or order
shall not have been fully terminated or the period within which
such proceedings may be initiated shall not have expired
(Indenture, Section 608).
For purposes of the restriction described in the preceding
paragraph, "Indebtedness" means (i) all indebtedness, whether or
not represented by bonds, debentures, notes or other securities,
created or assumed by the Company for the repayment of money
borrowed; (ii) all indebtedness for money borrowed secured by a
lien upon property owned by the Company and upon which
indebtedness for money borrowed the Company customarily pays
interest, although the Company has not assumed or become liable
for the payment of such indebtedness for money borrowed; and
(iii) all indebtedness of others for money borrowed which is
guaranteed as to payment of principal by the Company or in effect
guaranteed by the Company through a contingent agreement to
purchase such indebtedness for money borrowed, but excluding from
this definition any other contingent obligation of the Company in
respect of indebtedness for money borrowed or other obligations
incurred by others (Indenture, Section 608). "Subsidiary" means
a corporation more than 50% of the outstanding voting stock of
which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting
stock" means stock that ordinarily has voting power for the
election of directors, whether at all times or only so long as no
senior class of stock has such voting power by reason of any
contingency (Indenture, Section 101).
Notwithstanding the foregoing, except as otherwise specified
in the Officer's Certificate with respect to a particular series
of Debt Securities, the Company may, without securing the Debt
Securities, pledge, mortgage, hypothecate or grant a security
interest in, or permit any mortgage, pledge, security interest or
other lien (in addition to liens expressly permitted as described
in the second preceding paragraph) upon, capital stock of any
Subsidiary now or hereafter owned by the Company to secure any
Indebtedness (which would otherwise be subject to the foregoing
restriction) in an aggregate amount which, together with all
other such Indebtedness, does not exceed 5% of Consolidated
Capitalization. For this purpose, "Consolidated Capitalization"
means the sum obtained by adding (i) Consolidated Shareholders'
Equity, (ii) Consolidated Indebtedness for money borrowed
(exclusive of any thereof which is due and payable within one
year of the date such sum is determined) and, without
duplication, (iii) any preference or preferred stock of the
Company or any Consolidated Subsidiary which is subject to
mandatory redemption or sinking fund provisions (Indenture,
Section 608).
The term "Consolidated Shareholders' Equity" (as used above)
means the total Assets of the Company and its Consolidated
Subsidiaries less all liabilities of the Company and its
Consolidated Subsidiaries. As used in the foregoing definition,
"liabilities" means all obligations which would, in accordance
with generally accepted accounting principles in the United
States, be classified on a balance sheet as liabilities,
including without limitation, (i) indebtedness secured by
property of the Company or any of its Consolidated Subsidiaries
whether or not the Company or such Consolidated Subsidiary is
liable for the payment thereof unless, in the case that the
Company or such Consolidated Subsidiary is not so liable, such
property has not been included among the Assets of the Company or
such Consolidated Subsidiary on such balance sheet, (ii) deferred
liabilities and (iii) indebtedness of the Company or any of its
Consolidated Subsidiaries that is expressly subordinated in right
and priority of payment to other liabilities of the Company or
such Consolidated Subsidiary. As used in this definition,
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"liabilities" includes preference or preferred stock of the
Company or any Consolidated Subsidiary only to the extent of any
such preference or preferred stock that is subject to mandatory
redemption or sinking fund provisions (Indenture, Section 608).
The term "Consolidated Subsidiary" (as used above) means at
any date any Subsidiary the financial statements of which under
generally accepted accounting principles would be consolidated
with those of the Company in its consolidated financial
statements as of such date. The "Assets" of any Person means the
whole or any part of its business, property, assets, cash and
receivables. The term "Consolidated Indebtedness" means total
indebtedness as shown on the consolidated balance sheet of the
Company and its Consolidated Subsidiaries (Indenture, Section
608).
As of December 31, 1997, the Consolidated Capitalization of
the Company was $16,802,381,000.
Assignment of Obligations. The Company may assign its
obligations under any series of the Debt Securities to a directly
or indirectly wholly-owned subsidiary of the Company pursuant to
a written assumption of such obligations by such subsidiary,
provided that no Event of Default, or event which with the
passage of time or the giving of required notice, or both, would
become an Event of Default, has occurred and is continuing. As
conditions to such assumption, the subsidiary assuming such
obligations will be required to deliver to the Trustee and to the
Company an assumption agreement and a supplemental indenture
satisfactory in form and substance to the Trustee pursuant to
which such subsidiary (i) assumes, on a full recourse basis, the
Company's obligations on the Debt Securities and the obligations
under the Indenture relating to the Debt Securities, and
(ii) agrees that any covenants made by the Company with respect
to such Debt Securities will become solely covenants of, and
shall relate to, such subsidiary.
At the time of such assumption the Company will
unconditionally guarantee payment of such series of Debt
Securities and will execute a guarantee in form and substance
satisfactory to the Trustee. Pursuant to such guarantee, the
Company will fully and unconditionally guarantee the payment of
the obligations of the assuming subsidiary under the Debt
Securities and under the Indenture relating to the Debt
Securities, including, without limitation, payment, as and when
due, of the principal of, premium, if any, and interest on, the
Debt Securities. The Company will be released and discharged
from all its other obligations under the Indenture.
Consolidation, Merger, and Sale of Assets. Under the terms of
an Indenture, the Company may not consolidate with or merge into
any other entity or convey, transfer or lease its properties and
assets substantially as an entirety to any entity, unless (i) the
entity formed by such consolidation or into which the Company is
merged or the entity which acquires by conveyance or transfer, or
which leases, the property and assets of the Company
substantially as an entirety shall be a entity organized and
validly existing under the laws of any domestic jurisdiction and
such entity expressly assumes the Company's obligations on all
Debt Securities and under such Indenture, (ii) immediately after
giving effect to the transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be continuing, and
(iii) the Company shall have delivered to the respective
Indenture Trustee an Officer's Certificate and an Opinion of
Counsel as provided in such Indenture (Indenture, Section 1101).
The terms of an Indenture will not restrict the Company in a
merger in which the Company is the surviving entity.
Events of Default. Each of the following will constitute an
Event of Default under the Indenture with respect to the Debt
Securities of any series: (a) failure to pay any interest on the
Debt Securities of such series within 30 days after the same
becomes due and payable; (b) failure to pay principal or premium,
if any, on the Debt Securities of such series when due and
payable; (c) failure to perform, or breach of, any other covenant
or warranty of the Company in such Indenture (other than a
covenant or warranty of the Company in such Indenture solely for
the benefit of one or more series of Debt Securities other than
such series) for 90 days after written notice to the Company by
the respective Indenture Trustee, or to the Company and such
Indenture Trustee by the Holders of at least 33% in principal
amount of the Debt Securities of such series Outstanding under
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such Indenture as provided in such Indenture; (d) the entry by a
court having jurisdiction in the premises of (1) a decree or
order for relief in respect of the Company in an involuntary case
or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or (2) a decree
or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition by one or more Persons
other than the Company seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under
any applicable federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other
similar official for the Company or for any substantial part of
its property, or ordering the winding up or liquidation of its
affairs, and any such decree or order for relief or any such
other decree or order shall have remained unstayed and in effect
for a period of 90 consecutive days; and (e) the commencement by
the Company of a voluntary case or proceeding under any
applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree or order for relief in
respect of the Company in a case or other similar proceeding or
to the commencement of any bankruptcy or insolvency case or
proceeding against it under any applicable federal or state law
or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable federal or state
law, or the consent by it to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official
of the Company of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or
the admission by it in writing of its inability to pay its debts
generally as they become due, or the authorization of such action
by the Board of Directors (Indenture, Section 801).
An Event of Default with respect to the Debt Securities of a
particular series may not necessarily constitute an Event of
Default with respect to Debt Securities of any other series
issued under the same Indenture or Debt Securities issued under
any other Indenture.
Remedies. If an Event of Default due to the default in
payment of principal of or interest on any series of Debt
Securities or due to the default in the performance or breach of
any other covenant or warranty of the Company applicable to the
Debt Securities of such series but not applicable to all series
of Debt Securities issued under the same Indenture occurs and is
continuing, then either the respective Indenture Trustee or the
Holders of not less than 33% in principal amount of the
outstanding Debt Securities of such series may declare the
principal of all of the Debt Securities of such series and
interest accrued thereon to be due and payable immediately. If
an Event of Default due to the default in the performance of any
other covenants or agreements in an Indenture applicable to all
Outstanding Debt Securities under such Indenture or due to
certain events of bankruptcy, insolvency or reorganization of the
Company has occurred and is continuing, either the respective
Indenture Trustee or the Holders of not less than 33% in
principal amount of all such Outstanding Debt Securities,
considered as one class, and not the Holders of the Debt
Securities of any one of such series, may make such declaration
of acceleration.
At any time after the declaration of acceleration with respect
to the Debt Securities of any series has been made and before a
judgment or decree for payment of the money due has been
obtained, the Event or Events of Default giving rise to such
declaration of acceleration will, without further act, be deemed
to have been waived, and such declaration and its consequences
will, without further act, be deemed to have been rescinded and
annulled, if:
(a) the Company has paid or deposited with the respective
Indenture Trustee a sum sufficient to pay
(1) all overdue interest on all Debt Securities of such
series;
(2) the principal of and premium, if any, on any Debt
Securities of such series which have become due otherwise than
by such declaration of acceleration and interest thereon at
the rate or rates prescribed therefor in such Debt Securities;
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(3) interest upon overdue interest at the rate or rates
prescribed therefor in such Debt Securities, to the extent
that payment of such interest is lawful; and
(4) all amounts due to such Indenture Trustee under the
respective Indenture; and
(b) any other Event or Events of Default with respect to Debt
Securities of such series, other than the nonpayment of the
principal of the Debt Securities of such series which has become
due solely by such declaration of acceleration, have been cured
or waived as provided in such Indenture (Indenture, Section 802).
There is no automatic acceleration, even in the event of
bankruptcy, insolvency or reorganization of the Company.
Subject to the provisions of an Indenture relating to the
duties of the Indenture Trustee in case an Event of Default shall
occur and be continuing, the respective Indenture Trustee will be
under no obligation to exercise any of its rights or powers under
such Indenture at the request or direction of any of the Holders,
unless such Holders shall have offered to such Indenture Trustee
reasonable security or indemnity (Indenture, Section 903). If an
Event of Default has occurred and is continuing in respect of a
series of Debt Securities, subject to such provisions for the
indemnification of such Indenture Trustee, the Holders of a
majority in principal amount of the Outstanding Debt Securities
of such series will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to
such Indenture Trustee, or exercising any trust or power
conferred on such Indenture Trustee, with respect to the Debt
Securities of such series; provided, however, that if an Event of
Default occurs and is continuing with respect to more than one
series of Debt Securities under an Indenture, the Holders of a
majority in aggregate principal amount of the Outstanding Debt
Securities of all such series, considered as one class, will have
the right to make such direction, and not the Holders of the Debt
Securities of any one of such series; and provided, further, that
such direction will not be in conflict with any rule of law or
with such Indenture (Indenture, Section 812).
No Holder of Debt Securities of any series will have any right
to institute any proceeding with respect to the respective
Indenture, or for the appointment of a receiver or a trustee, or
for any other remedy thereunder, unless (i) such Holder has
previously given to the respective Indenture Trustee written
notice of a continuing Event of Default with respect to the Debt
Securities of such series, (ii) the Holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of
all series under such Indenture in respect of which an Event of
Default shall have occurred and be continuing, considered as one
class, have made written request to such Indenture Trustee, and
such Holder or Holders have offered reasonable indemnity to such
Indenture Trustee to institute such proceeding in respect of such
Event of Default in its own name as trustee and (iii) such
Indenture Trustee has failed to institute any proceeding, and has
not received from the Holders of a majority in aggregate
principal amount of the Outstanding Debt Securities of such
series a direction inconsistent with such request, within 60 days
after such notice, request and offer (Indenture, Section 807).
However, such limitations do not apply to a suit instituted by a
Holder of a Debt Security for the enforcement of payment of the
principal of or any premium or interest on such Debt Security on
or after the applicable due date specified in such Debt Security
(Indenture, Section 808).
The Company will be required to furnish to each Indenture
Trustee annually a statement by an appropriate officer as to such
officer's knowledge of the Company's compliance with all
conditions and covenants under the respective Indenture, such
compliance to be determined without regard to any period of grace
or requirement of notice under such Indenture (Indenture, Section
606).
Modification and Waiver. Without the consent of any Holder of
Debt Securities, the Company and the Indenture Trustee under an
Indenture may enter into one or more supplemental indentures for
any of the following purposes: (a) to evidence the assumption by
any permitted successor to the Company of the covenants of the
Company in the such Indenture and in any of the Debt Securities
Outstanding under such Indenture; or (b) to add one or more
covenants of the Company or other provisions for the benefit of
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all Holders or for the benefit of the Holders of, or to remain in
effect only so long as there shall be Outstanding, Debt
Securities of one or more specified series, or one or more
specified Tranches thereof, or to surrender any right or power
conferred upon the Company by such Indenture; or (c) to add any
additional Events of Default with respect to Outstanding Debt
Securities; or (d) to change or eliminate any provision of such
Indenture or to add any new provision to such Indenture, provided
that if such change, elimination or addition will adversely
affect the interests of the Holders of Debt Securities of any
series or Tranche in any material respect, such change,
elimination or addition will become effective with respect to
such series or Tranche only (1) when the consent of the Holders
of Debt Securities of such series or Tranche has been obtained in
accordance with such Indenture, or (2) when no Debt Securities of
such series or Tranche remain Outstanding under such Indenture;
or (e) to provide collateral security for all but not part of the
Debt Securities issued under such Indenture; or (f) to establish
the form or terms of Debt Securities of any other series or
Tranche as permitted by such Indenture; or (g) to provide for the
authentication and delivery of bearer securities and coupons
appertaining thereto representing interest, if any, thereon and
for the procedures for the registration, exchange and replacement
thereof and for the giving of notice to, and the solicitation of
the vote or consent of, the Holders thereof, and for any and all
other matters incidental thereto; or (h) to evidence and provide
for the acceptance of appointment of a successor Indenture
Trustee or co-trustee with respect to the Debt Securities of one
or more series and to add to or change any of the provisions of
such Indenture as shall be necessary to provide for or to
facilitate the administration of the trusts under such Indenture
by more than one trustee; or (i) to provide for the procedures
required to permit the utilization of a noncertificated system of
registration for the Debt Securities of all or any series or
Tranche; or (j) to change any place where (1) the principal of
and premium, if any, and interest, if any, on all or any series
or Tranche of Debt Securities shall be payable, (2) all or any
series or Tranche of Debt Securities may be surrendered for
registration of transfer or exchange and (3) notices and demands
to or upon the Company in respect of Debt Securities and such
Indenture may be served; or (k) to cure any ambiguity or
inconsistency or to add or change any other provisions with
respect to matters and questions arising under an Indenture,
provided such changes or additions shall not adversely affect the
interests of the Holders of Debt Securities of any series or
Tranche Outstanding under such Indenture in any material respect
(Indenture, Section 1201).
The Holders of a majority in aggregate principal amount of the
Debt Securities of all series then Outstanding under an Indenture
may waive compliance by the Company with certain restrictive
provisions of such Indenture (Indenture, Section 607). The
Holders of a majority in principal amount of the Outstanding Debt
Securities of any series may waive any past default under an
Indenture with respect to such series, except a default in the
payment of principal, premium, or interest and certain covenants
and provisions of such Indenture that cannot be modified or be
amended without the consent of the Holder of each Outstanding
Debt Security of such series affected (Indenture, Section 813).
Without limiting the generality of the foregoing, if the Trust
Indenture Act is amended after the date of an Indenture in such a
way as to require changes to such Indenture or the incorporation
therein of additional provisions or so as to permit changes to,
or the elimination of, provisions which, at the date of such
Indenture or at any time thereafter, were required by the Trust
Indenture Act to be contained in such Indenture, such Indenture
will be deemed to have been amended so as to conform to such
amendment of the Trust Indenture Act or to effect such changes,
additions or elimination, and the Company and the Indenture
Trustee may, without the consent of any Holders, enter into one
or more supplemental indentures to evidence or effect such
amendment (Indenture, Section 1201).
Except as provided above, the consent of the Holders of a
majority in aggregate principal amount of the Debt Securities of
all series then Outstanding under an Indenture, considered as one
class, is required for the purpose of adding any provisions to,
or changing in any manner, or eliminating any of the provisions
of, such Indenture or modifying in any manner the rights of the
Holders of such Debt Securities under such Indenture pursuant to
one or more supplemental indentures; provided, however, that if
less than all of the series of Debt Securities Outstanding under
an Indenture are directly affected by a proposed supplemental
indenture, then the consent only of the Holders of a majority in
aggregate principal amount of Outstanding Debt Securities of all
series under such Indenture so directly affected, considered as
one class, shall be required; and provided, further, that if the
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Debt Securities of any series shall have been issued in more than
one Tranche and if the proposed supplemental indenture shall
directly affect the rights of the Holders of Debt Securities of
one or more, but less than all, of such Tranches, then the
consent only of the Holders of a majority in aggregate principal
amount of the Outstanding Debt Securities of all Tranches of such
series so directly affected, considered as one class, will be
required; and provided further, that no such amendment or
modification may (a) change the Stated Maturity of the principal
of, or any installment of principal of or interest on, any Debt
Security, or reduce the principal amount thereof or the rate of
interest thereon (or the amount of any installment of interest
thereon) or change the method of calculating such rate or reduce
any premium payable upon the redemption thereof, or reduce the
amount of the principal of a discount Debt Security that would
be due and payable upon a declaration of acceleration of the
maturity thereof, or change the coin or currency (or other
property) in which any Debt Security or any premium or the
interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the
Stated Maturity of any Debt Security (or, in the case of
redemption, on or after the redemption date) without, in any
such case, the consent of the Holder of such Debt Security,
(b) reduce the percentage in principal amount of the Outstanding
Debt Securities of any series, or any Tranche thereof, the
consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with any provision of such
Indenture or any default thereunder and its consequences, or
reduce the requirements for quorum or voting, without, in any
such case, the consent of the Holder of each outstanding Debt
Security of such series or Tranche, or (c) modify certain of the
provisions of such Indenture relating to supplemental indentures,
waivers of certain covenants and waivers of past defaults with
respect to the Debt Securities of any series or Tranche, without
the consent of the Holder of each Outstanding Debt Security under
such Indenture affected thereby. A supplemental indenture which
changes or eliminates any covenant or other provision of an
Indenture which has expressly been included solely for the
benefit of one or more particular series of Debt Securities or
one or more Tranches thereof, or modifies the rights of the
Holders of Debt Securities of such series with respect to such
covenant or other provision, will be deemed not to affect the
rights under such Indenture of the Holders of the Debt Securities
of any other series or Tranche (Indenture, Section 1202).
Each Indenture provides that in determining whether the
Holders of the requisite principal amount of the Outstanding Debt
Securities have given any request, demand, authorization,
direction, notice, consent or waiver under such Indenture, or
whether a quorum is present at the meeting of the Holders of Debt
Securities, Debt Securities owned by the Company or any other
obligor upon the Debt Securities or any affiliate of the Company
or of such other obligor (unless the Company, such affiliate or
such obligor owns all Debt Securities Outstanding under such
Indenture, determined without regard to this provision) shall be
disregarded and deemed not to be Outstanding.
If the Company shall solicit from Holders any request, demand,
authorization, direction, notice, consent, election, waiver or
other Act, the Company may, at its option, fix in advance a
record date for the determination of Holders entitled to give
such request, demand, authorization, direction, notice, consent,
waiver or other such Act, but the Company shall have no
obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record
date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for the purposes
of determining whether Holders of the requisite proportion of the
Outstanding Debt Securities have authorized or agreed or
consented to such request, demand, authorization, direction,
notice, consent, waiver or other Act, and for that purpose the
Outstanding Debt Securities shall be computed as of the record
date. Any request, demand, authorization, direction, notice,
consent, election, waiver or other Act of a Holder shall bind
every future Holder of the same Debt Security and the Holder of
every Debt Security 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 an Indenture
Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Debt Security
(Indenture, Section 104).
Resignation of an Indenture Trustee. An Indenture Trustee may
resign at any time by giving written notice thereof to the
Company or may be removed at any time with respect to the
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<PAGE>
respective Indenture by Act of the Holders of a majority in
principal amount of all series of Debt Securities then
Outstanding under such Indenture delivered to such Indenture
Trustee and the Company. No resignation or removal of an
Indenture Trustee and no appointment of a successor trustee will
become effective until the acceptance of appointment by a
successor trustee in accordance with the requirements of the
respective Indenture. So long as no Event of Default or event
which, after notice or lapse of time, or both, would become an
Event of Default has occurred and is continuing and except with
respect to an Indenture Trustee appointed by Act of the Holders,
if the Company has delivered to the Indenture Trustee a
resolution of its Board of Directors appointing a successor
trustee and such successor has accepted such appointment in
accordance with the terms of the respective Indenture, such
Indenture Trustee will be deemed to have resigned and the
successor will be deemed to have been appointed as trustee in
accordance with such Indenture (Indenture, Section 910).
Notices. Notices to Holders of Debt Securities will be given
by mail to the addresses of such Holders as they may appear in
the security register therefor (Indenture, Section 106).
Title. The Company, the respective Indenture Trustee, and any
agent of the Company or such Indenture Trustee, may treat the
Person in whose name Debt Securities are registered as the
absolute owner thereof (whether or not such Debt Securities may
be overdue) for the purpose of making payments and for all other
purposes irrespective of notice to the contrary (Indenture,
Section 308).
Governing Law. Each Indenture and the Debt Securities will be
governed by, and construed in accordance with, the laws of the
State of New York (Indenture, Section 112).
Regarding the Indenture Trustee. The Indenture Trustee under
the first Indenture will be The Bank of New York. In addition to
acting as Indenture Trustee, The Bank of New York acts, and may
act, as trustee under various indentures and trusts of the
Company and its affiliates. The Company and its affiliates also
maintain various banking and trust relationships with The Bank of
New York.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of Common
Stock, without par value, of which 245,315,522 shares were
outstanding at April 30, 1998, and serial preference stock, par
value $25 per share, none of which has been issued. Outstanding
shares of Common Stock on May 31, 1998 did not include shares
issuable in exchange for TEG shares. The following statements
with respect to such capital stock of the Company are a summary
of certain rights and privileges attaching to the stock under the
laws of the State of Texas and the Restated Articles of
Incorporation and the Bylaws of the Company, as amended. This
summary does not purport to be complete and is qualified in its
entirety by reference to such laws, the Restated Articles of
Incorporation and the Bylaws of the Company, as amended, for
complete statements.
Each holder of shares of the Common Stock is entitled to one
vote for each share of Common Stock held on all questions
submitted to holders of shares and to cumulative voting at all
elections of directors. The Common Stock has no preemptive or
conversion rights. Upon issuance and sale of the shares offered
hereby, such shares will be fully paid and nonassessable.
The holders of the shares of the preference stock are not
accorded voting rights, except that, when dividends thereon are
in default in an amount equivalent to four full quarterly
dividends, the holders of shares of the preference stock are
entitled to vote for the election of one-third of the Board of
Directors or two directors, whichever is greater, and, when
dividends are in default in an amount equivalent to eight full
quarterly dividends, for the election of the smallest number of
directors necessary so that a majority of the full Board of
Directors shall have been elected by the holders of the shares of
the preference stock. The Company must also secure the approval
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<PAGE>
of the holders of two-thirds of the outstanding shares of the
preference stock prior to effecting various changes in its
capital structure.
After the payment of full preferential dividends on the shares
of any outstanding preference stock, holders of shares of the
Common Stock are entitled to dividends when and as declared by
the Board of Directors. After payment to the holders of shares
of any outstanding preference stock of the preferential amounts
to which they are entitled, the remaining assets to be
distributed, if any, upon any dissolution or liquidation will be
distributed to the holders of shares of the Common Stock. Each
share of the Common Stock is equal to every other share of the
Common Stock with respect to dividends and also with respect to
distributions upon any dissolution or liquidation. (Reference is
made to Note 4 to Consolidated Financial Statements contained in
the 1997 10-K.)
The Common Stock of the Company is listed on the New York,
Chicago and Pacific stock exchanges. Application will be made
for the listing on such exchanges of any additional shares
offered hereby.
The transfer agent for the Common Stock is Texas Utilities
Services Inc., Dallas, Texas.
DESCRIPTION OF STOCK PURCHASE
CONTRACTS AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, including
contracts that obligate holders to purchase from the Company, and
the Company to sell to such holders, a specified number of shares
of Common Stock at a future date or dates. The consideration per
share of Common Stock may be fixed at the time the Stock Purchase
Contracts are issued or may be determined by reference to a
specific formula set forth in the Stock Purchase Contracts. The
Stock Purchase Contracts may be issued separately or as a part of
Stock Purchase Units consisting of a Stock Purchase Contract and
either Debt Securities or debt obligations of third parties,
including U.S. Treasury securities that are pledged to secure the
holders' obligations to purchase the Common Stock under the Stock
Purchase Contracts. The Stock Purchase Contracts may require the
Company to make periodic payments to the holders of the Stock
Purchase Units or vice versa, and such payments may be unsecured
or prefunded on some basis. The Stock Purchase Contracts may
require holders to secure their obligations thereunder in a
specified manner.
PLAN OF DISTRIBUTION
Any of the Securities being offered hereby may be sold in any
one or more of the following ways from time to time: (i) through
agents; (ii) to or through underwriters; (iii) through dealers;
and (iv) directly by the Company to purchasers.
The distribution of the Securities may be effected from time
to time in one or more transactions at a fixed price or prices,
which may be changed, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at
negotiated prices.
Offers to purchase Securities may be solicited by agents
designated by the Company from time to time. Any such agent
involved in the offer or sale of the Securities in respect of
which this Prospectus is delivered will be named, and any
commissions payable by the Company to such agent will be set
forth, in the applicable Prospectus Supplement. Unless otherwise
indicated in such Prospectus Supplement, any such agent will be
acting on a reasonable best efforts basis for the period of its
appointment. Any such agent may be deemed to be an underwriter,
as that term is defined in the Securities Act, of the Securities
so offered and sold.
If Securities are sold by means of an underwritten offering,
the Company will execute an underwriting agreement with an
underwriter or underwriters at the time an agreement for such
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<PAGE>
sale is reached, and the names of the specific managing
underwriter or underwriters, as well as any other underwriters,
the respective amounts underwritten and the terms of the
transaction, including commissions, discounts and any other
compensation of the underwriters and dealers, if any, will be set
forth in the applicable Prospectus Supplement which will be used
by the underwriters to make resales of the Securities in respect
of which this Prospectus is being delivered to the public. If
underwriters are utilized in the sale of any Securities in
respect of which this Prospectus is being delivered, such
Securities will be acquired by the underwriters for their own
account and may be resold from time to time in one or more
transactions, including negotiated transactions, at fixed public
offering prices or at varying prices determined by the
underwriters at the time of the sale. Securities may be offered
to the public either through underwriting syndicates represented
by managing underwriters or directly by one or more underwriters.
If any underwriter or underwriters are utilized in the sale of
Securities, unless otherwise indicated in the applicable
Prospectus Supplement, the underwriting agreement will provide
that the obligations of the underwriters are subject to certain
conditions precedent and that the underwriters with respect to a
sale of such Securities will be obligated to purchase all such
Securities if any are purchased.
The Company may grant to the underwriters options to purchase
additional Securities, to cover over-allotments, if any, at the
initial public offering price (with additional underwriting
commissions or discounts), as may be set forth in the Prospectus
Supplement relating thereto. If the Company grants any
over-allotment option, the terms of such over-allotment option
will be set forth in the Prospectus Supplement for such
Securities.
If a dealer is utilized in the sale of Securities in respect
of which this Prospectus is delivered, the Company will sell such
Securities to the dealer as principal. The dealer may then resell
such Securities to the public at varying prices to be determined
by such dealer at the time of resale. Any such dealer may be
deemed to be an underwriter, as such item is defined in
Securities Act, of the Securities so offered and sold. The name
of the dealer and the terms of the transaction will be set forth
in the Prospectus Supplement relating thereto.
Offers to purchase Securities may be solicited directly by the
Company and the sale thereof may be made by the Company directly
to institutional investors or others, who may be deemed to be
underwriters within the meaning of the Securities Act with
respect to any resale thereof. The terms of any such sales will
be described in the Prospectus Supplement relating thereto.
Securities may also be offered and sold, if so indicated in
the applicable Prospectus Supplement, in connection with a
remarketing upon their purchase, in accordance with a redemption
or repayment pursuant to their terms, or otherwise, by one or
more firms ("remarketing firms"), acting as principals for their
own accounts or as agents for the Company. Any remarketing firm
will be identified and the terms of its agreement, if any, with
the Company and its compensation will be described in the
applicable Prospectus Supplement. Remarketing firms may be deemed
to be underwriters, as that term is defined in the Securities
Act, in connection with the Securities remarketed thereby.
If so indicated in the applicable Prospectus Supplement, the
Company may authorize agents and underwriters to solicit offers
by certain institutions to purchase Securities from the Company
at the public offering price set forth in the applicable
Prospectus Supplement pursuant to delayed delivery contracts
providing for payment and delivery on the date or dates stated in
the applicable Prospectus Supplement. Such delayed delivery
contracts will be subject to only those conditions set forth in
the applicable Prospectus Supplement. A commission indicated in
the applicable Prospectus Supplement will be paid to underwriters
and agents soliciting purchase of Securities pursuant to delayed
delivery contracts accepted by the Company, as applicable.
Agents, underwriters, dealers and remarketing firms may be
entitled under relevant agreements with the Company, to
indemnification by the Company against certain liabilities,
including liabilities under the Securities Act, or to
contribution with respect to payments which such agents,
underwriters, dealers and remarketing firms may be required to
make in respect thereof.
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<PAGE>
Each series of Securities will be a new issue and, other than
the Common Stock, which is listed on the New York, Chicago and
Pacific stock exchanges, will have no established trading market.
The Company may elect to list any series of Securities on an
exchange, or in the case of the Common Stock, on any additional
exchange, but, unless otherwise specified in the applicable
Prospectus Supplement, the Company shall not be obligated to do
so. No assurance can be given as to the liquidity of the trading
market for any of the Securities.
Agents, underwriters, dealers and remarketing firms may be
customers of, engage in transactions with, or perform services
for, the Company and its subsidiaries in the ordinary course of
business.
EXPERTS AND LEGALITY
The consolidated financial statements included in the latest
Annual Report of the Company on Form 10-K, incorporated herein by
reference, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report included in said
latest Annual Report of the Company on Form 10-K, and have been
incorporated by reference herein in reliance upon such report
given upon authority of the firm as experts in accounting and
auditing.
With respect to any unaudited condensed consolidated interim
financial information included in the Company's Quarterly Reports
on Form 10-Q which are or will be incorporated herein by
reference, Deloitte & Touche LLP has applied limited procedures
in accordance with professional standards for reviews of such
information. As stated in any of their reports included in the
Company's Quarterly Reports on Form 10-Q, which are or will be
incorporated herein by reference, Deloitte & Touche LLP did not
audit and did not express an opinion on such interim financial
information. Deloitte & Touche LLP is not subject to the
liability provisions of Section 11 of the 1933 Act for any of
their reports on such unaudited condensed consolidated interim
financial information because such reports are not "reports" or a
"part" of the Registration Statement filed under the 1933 Act
with respect to the Securities prepared or certified by an
accountant within the meaning of Sections 7 and 11 of the 1933
Act.
The legality of the other securities offered hereby will be
passed upon for the Company by Worsham, Forsythe & Wooldridge,
L.L.P. and by Reid & Priest LLP, and for the Underwriters by
Winthrop, Stimson, Putnam & Roberts, New York, New York.
However, all matters pertaining to incorporation of the Company
and all other matters of Texas law will be passed upon only by
Worsham, Forsythe & Wooldridge, L.L.P. At March 31, 1998,
members of the firm of Worsham, Forsythe & Wooldridge, L.L.P.
owned approximately 41,200 shares of the common stock of the
Company.
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<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses payable by the
Company in connection with the issuance and distribution of the
securities to be registered.
Filing fee - Securities and Exchange
Commission . . . . . . . . . . . . . . . . . . . $265,500
Fees of the Trustee . . . . . . . . . . . . . . . 80,000*
Fees of Company's counsel
Worsham, Forsythe & Wooldridge, L.L.P. . . . . 200,000*
Reid & Priest LLP . . . . . . . . . . . . . . 200,000*
Auditors' fees . . . . . . . . . . . . . . . . . . 25,000*
Rating agencies' fees . . . . . . . . . . . . . . 65,000*
Printing, including Registration Statement,
prospectuses, exhibits, etc. . . . . . . . . . 10,000*
Miscellaneous . . . . . . . . . . . . . . . . . . 24,500*
-------
Total expenses . . . . . . . . . . . . . . . . . . $870,000*
========
--------------------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article IX of the Restated Articles of Incorporation of the
Company provides as follows:
"The Corporation shall reimburse or indemnify any former,
present or future director, officer or employee of the
Corporation, or any person who may have served at its request
as a director, officer or employee of another corporation, or
any former, present or future director, officer or employee of
the Corporation who shall have served or shall be serving as
an administrator, agent or fiduciary for the Corporation or
for another corporation at the request of the Corporation (and
his heirs, executors and administrators) from and against all
expenses and liabilities incurred by him or them, or imposed
on him or them, including, but not limited to, judgments,
settlements, court costs and attorneys' fees, in connection
with, or arising out of, the defense of any action, suit or
proceeding in which he may be involved by reason of his being
or having been such director, officer or employee, except with
respect to matters as to which he shall be adjudged in such
action, suit or proceeding to be liable because he did not act
in good faith, or because of dishonesty or conflict of
interest in the performance of his duty.
"No former, present or future director, officer or employee
of the Corporation (or his heirs, executors and
administrators) shall be liable for any act, omission, step or
conduct taken or had in good faith, which is required,
authorized or approved by any order or orders issued pursuant
to the Public Utility Holding Company Act of 1935, the Federal
II-1
<PAGE>
Power Act, or any other federal or state statute regulating
the Corporation or its subsidiaries, or any amendments to any
thereof. In any action, suit or proceeding based on any act,
omission, step or conduct, as in this paragraph described, the
provisions hereof shall be brought to the attention of the
court. In the event that the foregoing provisions of this
paragraph are found by the court not to constitute a valid
defense, each such director, officer or employee (and his
heirs, executors and administrators) shall be reimbursed for,
or indemnified against, all expenses and liabilities incurred
by him or them, or imposed on him or them, including, but not
limited to, judgments, settlements, court costs and attorneys'
fees, in connection with, or arising out of, any such action,
suit or proceeding based on any act, omission, step or conduct
taken or had in good faith as in this paragraph described.
"The foregoing rights shall not be exclusive of other rights
to which any such director, officer or employee (or his heirs,
executors and administrators) may otherwise be entitled under
any bylaw, agreement, vote of shareholders or otherwise, and
shall be available whether or not the director, officer or
employee continues to be a director, officer or employee at
the time of incurring such expenses and liabilities. In
furtherance, and not in limitation of the foregoing provisions
of this Article IX, the Corporation may indemnify and insure
any such persons to the fullest extent permitted by the Texas
Business Corporation Act, as amended from time to time, or the
laws of the State of Texas, as in effect from time to time."
Article 2.02-1 of the Texas Business Corporation Act permits
the Company, in certain circumstances, to indemnify any present
or former director, officer, employee or agent of the Company
against judgments, penalties, fines, settlements and reasonable
expenses incurred in connection with a proceeding in which any
such person was, is or is threatened to be, made a party by
reason of holding such office or position, but only to a limited
extent for obligations resulting from a proceeding in which the
person is found liable on the basis that a personal benefit was
improperly received or in circumstances in which the person is
found liable in a derivative suit brought on behalf of the
Company.
Article X of the Articles of Incorporation of the Company
provides as follows:
"A director of the Corporation shall not be liable to the
Corporation or its shareholders for monetary damages for any
act or omission in the director's capacity as a director,
except that this provision does not eliminate or limit the
liability of a director to the extent the director is found
liable for:
(a) a breach of a director's duty of loyalty to the
Corporation or its shareholders;
(b) an act or omission not in good faith that constitutes a
breach of duty of a director to the Corporation or an act or
omission that involved intentional misconduct or a knowing
violation of the law;
(c) a transaction from which a director received an improper
benefit, whether or not the benefit resulted from an action
taken within the scope of the director's office; or
(d) an act or omission for which the liability of a director
is expressly provided for by statute.
If the laws of the State of Texas are amended to authorize
action further eliminating or limiting the personal liability
of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest
extent permitted by such laws as so amended. Any repeal or
II-2
<PAGE>
modification of this Article X shall not adversely affect any
right of protection of a director of the Corporation existing
at the time of such repeal or modification."
Section 22 of the Company's bylaws provides as follows:
"Section 22. Insurance, Indemnification and Other
Arrangements. Without further specific approval of the
shareholders of the Corporation, the Corporation may purchase,
enter into, maintain or provide insurance, indemnification or
other arrangements for the benefit of any person who is or was
a director, officer, employee or agent of the Corporation or
is or was serving another entity at the request of the
Corporation as a director, officer, employee, agent or
otherwise, to the fullest extent permitted by the laws of the
State of Texas, including without limitation Art. 2.02-1 of
the Texas Business Corporation Act or any successor provision,
against any liability asserted against or incurred by any such
person in any such capacity or arising out of such person's
service in such capacity whether or not the Corporation would
otherwise have the power to indemnify against any such
liability under the Texas Business Corporation Act. If the
laws of the State of Texas are amended to authorize the
purchase, entering into, maintaining or providing of
insurance, indemnification or other arrangements in the nature
of those permitted hereby to a greater extent than presently
permitted, then the Corporation shall have the power and
authority to purchase, enter into, maintain and provide any
additional arrangements in such regard as shall be permitted
from time to time by the laws of the State of Texas without
further approval of the shareholders of the Corporation. No
repeal or modification of such laws or this Section 22 shall
adversely affect any such arrangement or right to
indemnification existing at the time of such repeal or
modification."
The Registrant has entered into agreements with its directors
which provide, among other things, for their indemnification by
the Registrant to the fullest extent permitted by Texas law,
unless a final adjudication establishes that the indemnitee's
acts were committed in bad faith, were the result of active and
deliberate dishonesty or that the indemnitee personally gained a
financial profit to which the indemnitee was not legally
entitled. These agreements further provide, under certain
circumstances, for the advancement of expenses and the
implementation of other arrangements for the benefit of the
indemnitee.
The Registrant has insurance covering its expenditures which
might arise in connection with its lawful indemnification of its
directors and officers for their liabilities and expenses.
Directors and officers of the Company also have insurance which
insures them against certain other liabilities and expenses.
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<PAGE>
ITEM 16. EXHIBITS.
Previously Filed*
----------------
With
File As
Exhibit Number Exhibit
------- ------ -------
1(a) -- Form of Underwriting Agreement
with respect to Common Stock.
1(b) -- Form of Underwriting Agreement
with respect to Stock Purchase
Units.
1(c) -- Form of Underwriting Agreement
with respect to Unsecured Senior
Notes.
4(a) 333-12391 3(a) -- Restated Articles of
Incorporation of the Company
4(b) 333-45657 4(b) -- Bylaws of the Company, as
amended.
4(c) -- Indenture relating to the Debt
Securities.
4(d) -- Form of Officers' Certificate
establishing a series of the Debt
Securities, including Form of the
Debt Securities.
4(e) -- Form of Purchase Contract
Agreement.
4(f) -- Form of Pledge Agreement.
4(g) -- Form of Remarketing Agreement.
5(a) -- Opinion of Worsham, Forsythe &
Wooldridge, L.L.P., General
Counsel for the Company.
5(b) -- Opinion of Reid & Priest LLP, of
counsel to the Company.
12 -- Computation of Ratio of Earnings
to Fixed Charges of the Company.
15 -- Letter of Deloitte & Touche LLP
regarding unaudited condensed
interim financial information.
23(a) -- Independent Auditors' Consent.
23(b) -- Consents of Worsham, Forsythe &
Wooldridge, L.L.P. and Reid &
Priest LLP are contained in
Exhibits 5(a) and 5(b),
respectively.
24 -- Power of Attorney (see Page II-
7).
25(a) -- Statement on Form T-1 of the Bank
of New York relating to Indenture
for the Debt Securities.
--------------------
* Incorporated herein by reference.
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<PAGE>
ITEM 17. UNDERTAKINGS.
a. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) under the Securities Act of 1933 if, in the aggregate,
the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3, Form
S-8 or Form F-3, and the information required to be included
in a post-effective amendment by those paragraphs is contained
in periodic reports filed with or furnished to the Commission
by the registrant pursuant to Section 13 or 15(d) of the
Exchange Act that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's Annual
Report pursuant to Section 13(a) or Section 15(d) of the Exchange
Act that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
b. That, insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the provisions described under Item 20 above, or otherwise, the
registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
c. (i) To respond to requests for information that is
incorporated by reference into the prospectus pursuant to Items
4, 10(b), 11, or 13 of this Form, within one business day of
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<PAGE>
receipt of such request, and to send the incorporated documents
by first class mail or other equally prompt means; and (ii) to
arrange to provide for a facility in the U.S. for the purpose of
responding to such requests. The undertaking in subparagraph (i)
above includes information contained in documents filed
subsequent to the effective date of the registration statement
through the date of responding to the request.
d. To supply by means of a post-effective amendment all
information concerning a transaction and the company being
acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
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<PAGE>
POWER OF ATTORNEY
EACH DIRECTOR AND/OR OFFICER OF TEXAS UTILITIES COMPANY
WHOSE SIGNATURE APPEARS BELOW HEREBY APPOINTS THE AGENTS FOR
SERVICE NAMED IN THIS REGISTRATION STATEMENT, AND EACH OF THEM
SEVERALLY, AS HIS ATTORNEY-IN-FACT TO SIGN IN HIS NAME AND
BEHALF, IN ANY AND ALL CAPACITIES STATED BELOW, AND TO FILE WITH
THE SECURITIES AND EXCHANGE COMMISSION, ANY AND ALL AMENDMENTS,
INCLUDING POST-EFFECTIVE AMENDMENTS, TO THIS REGISTRATION
STATEMENT, AND THE REGISTRANT HEREBY ALSO APPOINTS EACH SUCH
AGENT FOR SERVICE AS ITS ATTORNEY-IN-FACT WITH LIKE AUTHORITY TO
SIGN AND FILE ANY SUCH AMENDMENTS IN ITS NAME AND ON ITS BEHALF.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO
BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM
S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN
THE CITY OF DALLAS, AND STATE OF TEXAS, ON THE 3RD OF JUNE, 1998.
TEXAS UTILITIES COMPANY
By /s/ Erle Nye
------------------------------
(Erle Nye, Chairman of the
Board and Chief Executive)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Erle Nye
-------------------------------- Principal Executive
(Erle Nye, Chairman of the Board Officer and Director
and Chief Executive)
/s/ Michael J. McNally
-------------------------------- Principal Financial
(Michael J. McNally, Executive Officer
Vice President and
Chief Financial Officer)
/s/ Jerry W. Pinkerton
-------------------------------- Principal Accounting
(Jerry W. Pinkerton, Controller) Officer
/s/ J. S. Farrington
-------------------------------- Director
(J. S. Farrington)
/s/ Bayard H. Friedman
-------------------------------- Director
(Bayard H. Friedman)
/s/ William M. Griffin
-------------------------------- Director June 3, 1998
(William M. Griffin)
/s/ Kerney Laday
-------------------------------- Director
(Kerney Laday)
/s/ Margaret N. Maxey
-------------------------------- Director
(Margaret N. Maxey)
/s/ James A. Middleton
-------------------------------- Director
(James A. Middleton)
/s/ J. E. Oesterreicher
-------------------------------- Director
(J. E. Oesterreicher)
/s/ Charles R. Perry
-------------------------------- Director
(Charles R. Perry)
/s/ Herbert H. Richardson
-------------------------------- Director
(Herbert H. Richardson)
II-7
<PAGE>
EXHIBIT INDEX
Previously Filed*
----------------
With
File As
Exhibit Number Exhibit
------- ------ -------
1(a) -- Form of Underwriting Agreement
with respect to Common Stock.
1(b) -- Form of Underwriting Agreement
with respect to Stock Purchase
Units.
1(c) -- Form of Underwriting Agreement
with respect to Unsecured Senior
Notes.
4(a) 333-12391 3(a) -- Restated Articles of
Incorporation of the Company
4(b) 333-45657 4(b) -- Bylaws of the Company, as
amended.
4(c) -- Indenture relating to the Debt
Securities.
4(d) -- Form of Officers' Certificate
establishing a series of the Debt
Securities, including Form of the
Debt Securities.
4(e) -- Form of Purchase Contract
Agreement.
4(f) -- Form of Pledge Agreement.
4(g) -- Form of Remarketing Agreement.
5(a) -- Opinion of Worsham, Forsythe &
Wooldridge, L.L.P., General
Counsel for the Company.
5(b) -- Opinion of Reid & Priest LLP, of
counsel to the Company.
12 -- Computation of Ratio of Earnings
to Fixed Charges of the Company.
15 -- Letter of Deloitte & Touche LLP
regarding unaudited condensed
interim financial information.
23(a) -- Independent Auditors' Consent.
23(b) -- Consents of Worsham, Forsythe &
Wooldridge, L.L.P. and Reid &
Priest LLP are contained in
Exhibits 5(a) and 5(b),
respectively.
24 -- Power of Attorney (see Page II-
7).
25(a) -- Statement on Form T-1 of the Bank
of New York relating to Indenture
for the Debt Securities.
--------------------
* Incorporated herein by reference.
Texas Utilities Company
Common Stock
(without par value)
UNDERWRITING AGREEMENT
----------------------
, 1998
---------
as Representatives of the Underwriters
named in Schedule I hereto
c/o
Ladies and Gentlemen:
1. Introduction. Texas Utilities Company, a Texas
------------
corporation (the "Company"), proposes to issue and sell severally
to you and the other Underwriters named in Schedule I hereto (the
"Underwriters") for whom you are acting as Representatives, an
aggregate of shares of Common Stock, without par value
------
(the "Shares").
2. Representations and Warranties of the Company.
---------------------------------------------
The Company represents and warrants to the several Underwriters
that:
(a) It has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on
Form S-3, including a prospectus, on , 1998
------------
(Registration No. 333- ) for the registration of
-------
$900,000,000 aggregate amount of the Company's (i) Debt
Securities, (ii) Common Stock, (iii) contracts to purchase
shares of Common Stock ("Stock Purchase Contracts") and (iv)
Stock Purchase Units, each representing ownership of a Stock
Purchase Contract and Debt Securities or obligations of
third parties, under the Securities Act of 1933, as amended
(the "Securities Act"). Such registration statement was
declared effective by the Commission on , 1998.
-------------
References herein to the term "Registration Statement" as of
any date shall be deemed to refer to Registration Statement
No. 333- , as amended or supplemented to date,
--------
including all documents incorporated by reference therein as
of such date pursuant to Item 12 of Form S-3 ("Incorporated
Documents"); provided that if the Company files a
registration statement with the Commission pursuant to
Section 462(b) of the 1933 Act Regulations (the "Rule 462(b)
Registration Statement"), then after such filing, all
references to "Registration Statement" shall be deemed to
include the Rule 462(b) Registration Statement. References
herein to the term "Prospectus" as of any given date shall
be deemed to refer to the prospectus, including any
preliminary prospectus, forming a part of Registration
Statement No. 333- , as amended or supplemented as of
-------
such date, including all Incorporated Documents as of such
date and including any prospectus supplement relating to the
Securities. References herein to the term "Effective Date"
shall be deemed to refer to the later of the time and date
Registration Statement No. 333- was declared
--------
effective or the time and date of the filing thereafter of
the Company's most recent Annual Report on Form 10-K if such
filing is made prior to the Closing Date, as hereinafter
defined. The Company will not file any amendment to the
Registration Statement or supplement to the Prospectus on or
after the date of this Agreement and prior to the Closing
Date, as hereinafter defined, without prior notice to the
Underwriters, or to which Counsel for the Underwriters shall
reasonably object in writing. For the purposes of this
Agreement, any Incorporated Document filed with the
Commission on or after the date of this Agreement and prior
to the Closing Date, as hereinafter defined, shall be deemed
an amendment or supplement to the Registration Statement and
the Prospectus.
(b) On the Effective Date, the Registration Statement
and the prospectus included as part of the Registration
Statement fully complied and at the Closing Date, as
hereinafter defined, the Registration Statement, the
Prospectus will fully comply in all material respects with
the applicable provisions of the Securities Act, and the
applicable rules and regulations of the Commission
thereunder; on the Effective Date the Registration Statement
did not, and at the Closing Date, as hereinafter defined,
the Registration Statement will not, contain an untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading; on the Effective Date the
Prospectus did not, and at the Closing Date, as hereinafter
defined, and on the date it is filed with the Commission
pursuant to Rule 424 of the General Rules and Regulations of
the Securities Act ("Rule 424"), the Prospectus will not,
contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; and on said dates the
Incorporated Documents, taken together as a whole, fully
complied or will comply in all material respects with the
applicable provisions of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the applicable
rules and regulations of the Commission thereunder, and,
when read together with the Prospectus on said dates did not
and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading; provided that the foregoing representations and
warranties in this paragraph (b) shall not apply to
statements or omissions made in reliance upon information
furnished in writing to the Company by, or on behalf of, any
Underwriter for use in connection with the preparation of
the Registration Statement or the Prospectus or to any
statements in or omissions from the Statements of
Eligibility and Qualification under the Trust Indenture Act
of 1939, as amended ("Trust Indenture Act"), or amendments
thereto, filed as exhibits to the Registration Statement.
3. Public Offering. On the basis of the
---------------
representations and warranties herein contained, and subject to
the terms and conditions herein set forth, the Company shall sell
to each of the Underwriters, and each Underwriter shall purchase
from the Company, at the time and place herein specified,
severally and not jointly, the number of Shares set forth oppo-
site the name of such Underwriter in Schedule I attached hereto.
The Underwriters agree to make a public offering of such shares.
The Underwriters have advised the Company that the Shares will be
offered to the public at $ per share and to certain
--------
dealers selected by you at a price of which represents a
concession not in excess of cents a share under the public
----
offering price, and that any Underwriter may allow, and such
dealers may reallow, a concession, not in excess of cents a
----
share, to other Underwriters or certain other dealers.
4. Time and Place of Closing. Delivery of the Shares
-------------------------
against payment therefor by wire transfer in federal funds shall
be made at the office of Reid & Priest LLP, 40 West 57th Street,
New York, New York, at 10:00 A.M., New York Time, on ,
---------
1998, or at such other place, time and date as shall be agreed
upon in writing by the Company and you or established in
accordance with the following paragraph. The hour and date of
such delivery and payment are herein called the "Closing Date".
The Shares shall be delivered to you registered in such names and
in such denominations as you shall reasonably request in writing
not later than the close of business on the third business day
prior to the Closing Date, or, to the extent not so requested,
registered in your name.
If any Underwriter shall fail or refuse (otherwise than for
some reason sufficient to justify, in accordance with the terms
hereof, the cancellation or termination of its obligations
hereunder) to purchase and pay for the Shares that such
Underwriter has agreed to purchase and pay for hereunder, the
Company shall immediately give notice to the other Underwriters
of the default of such Underwriter, and the other Underwriters
shall have the right within 24 hours after the receipt of such
notice to determine to purchase, or to procure one or more
others, who are members of the National Association of Shares
Dealers, Inc. ("NASD") (or, if not members of the NASD, who are
not eligible for membership in the NASD and who agree (i) to make
no sales within the United States, its territories or its
possessions or to persons who are citizens thereof or residents
therein and (ii) in making sales to comply with the NASD's
Conduct Rules and satisfactory to the Company, to purchase, upon
the terms herein set forth, the Shares that the defaulting
Underwriter had agreed to purchase. If any non-defaulting
Underwriter or Underwriters shall give written notice to the
Company of the determination in that regard within 24 hours after
receipt of notice of any such default, and thereupon the Closing
Date shall be postponed for such period, not exceeding three
business days, as the Company shall determine. If in the event
of such a default no non-defaulting Underwriter shall give such
notice, then this Agreement may be terminated by the Company,
upon like notice given to the non-defaulting Underwriters, within
a further period of 24 hours. If in such case the Company shall
not elect to terminate this Agreement, it shall have the right,
irrespective of such default:
(a) to require each non-defaulting Underwriter to
purchase and pay for the Shares that it had agreed to
purchase hereunder as hereinafter provided and, in addition,
the Shares that the defaulting Underwriter shall have so
failed to purchase; provided, however, that no non-
defaulting Underwriter shall be required to purchase such
additional Shares in an amount exceeding one-ninth (1/9) of
the number of Shares that such non-defaulting Underwriter
has otherwise agreed to purchase hereunder, and/or
(b) to procure one or more persons, reasonably
acceptable to the Representatives, who are members of the
NASD (or, if not members of the NASD, who are not eligible
for membership in the NASD and who agree (i) to make no
sales within the United States, its territories or its
possessions or to persons who are citizens thereof or
residents therein and (ii) in making sales to comply with
the NASD's Rules of Fair Practice), to purchase, upon the
terms herein set forth, either all or a part of the Shares
that such defaulting Underwriter had agreed to purchase or
that portion thereof that the remaining Underwriters shall
not be obligated to purchase pursuant to the foregoing
clause (a).
In the event the Company shall exercise its rights under (a)
and/or (b) above, the Company shall give written notice thereof
to the non-defaulting Underwriters within such further period of
24 hours, and thereupon the Closing Date shall be postponed for
such period, not exceeding three business days, as the Company
shall determine.
In the computation of any period of 24 hours referred to in
this Section 4, there shall be excluded a period of 24 hours in
respect of each Saturday, Sunday or legal holiday that would
otherwise be included in such period of time.
Any action taken by the Company under this Section 4 shall
not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
Termination by the Company under this Section 4 shall be without
liability on the part of the Company or any non-defaulting
Underwriter, except as otherwise provided in Sections 5(g) and 8
hereof.
5. Covenants of the Company. The Company agrees
------------------------
that:
(a) It will promptly deliver to you a signed copy of
the Registration Statement as originally filed or, to the
extent a signed copy is not available, a conformed copy,
certified by an officer of the Company to be in the form as
originally filed, including all Incorporated Documents and
exhibits and of all amendments thereto.
(b) It will deliver to you, as soon as practicable
after the date hereof, as many copies of the Prospectus as
of such date as you may reasonably request.
(c) It will cause the Prospectus to be filed with the
Commission pursuant to Rule 424 as soon as practicable and
advise you of the issuance of any stop order under the
Securities Act with respect to the Registration Statement or
the institution of any proceedings therefor of which the
Company shall have received notice. The Company will use
its best efforts to prevent the issuance of any such stop
order and to secure the prompt removal thereof if issued.
(d) If, during such period of time (not exceeding nine
months) after the Prospectus has been filed with the
Commission pursuant to Rule 424 as in the opinion of Counsel
for the Underwriters a prospectus covering the Shares is
required by law to be delivered in connection with sales by
an Underwriter or a dealer, any event relating to or
affecting the Company or of which the Company shall be
advised in writing by you shall occur that in the Company's
reasonable opinion after consultation with Counsel for the
Underwriters should be set forth in a supplement to, or an
amendment of, the Prospectus in order to make the Prospectus
not misleading in the light of the circumstances when it is
delivered to a purchaser, the Company will, at its expense,
amend or supplement the Prospectus by either (i) preparing
and furnishing to you at the Company's expense a reasonable
number of copies of a supplement or supplements or an
amendment or amendments to the Prospectus or (ii) making an
appropriate filing pursuant to Section 13 of the Exchange
Act, which will supplement or amend the Prospectus so that,
as supplemented or amended, it will not contain any untrue
statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in
the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading; provided that
should such event relate solely to the activities of any of
the Underwriters, then the Underwriters shall assume the
expense of preparing and furnishing any such amendment or
supplement. In case any Underwriter is required to deliver
a prospectus after the expiration of nine months from the
date the Prospectus is filed with the Commission pursuant to
Rule 424, the Company, upon your request, will furnish to
you, at your expense, a reasonable quantity of a
supplemental prospectus or supplements to the Prospectus
complying with Section 10(a) of the Securities Act.
(e) It will make generally available to its security
holders, as soon as practicable, an earnings statement
(which need not be audited) covering a period of at least
twelve months beginning not earlier than the first day of
the month next succeeding the month in which occurred the
effective date of the Registration Statement as defined in
Rule 158 under the Securities Act.
(f) It will furnish such proper information as may be
lawfully required and otherwise cooperate in qualifying the
Shares for offer and sale under the blue-sky laws of such
jurisdictions as you may designate, provided that the
Company shall not be required to qualify as a foreign
corporation or dealer in securities, to file any consents to
service of process under the laws of any jurisdiction, or to
meet any other requirements deemed by the Company to be
unduly burdensome.
(g) It will, except as herein provided, pay all
expenses and taxes (except transfer taxes) in connection
with (i) the preparation and filing by it of the
Registration Statement, (ii) the issuance and delivery of
the Shares as provided in Section 4 hereof, (iii) the
qualification of the Shares under blue-sky laws (including
counsel fees not to exceed $7,500), and (iv) the printing
and delivery to the Underwriters of reasonable quantities of
the Registration Statement and, except as provided in
Section 5(d) hereof, of the Prospectus. The Company shall
not, however, be required to pay any amount for any expenses
of yours, except that, if this Agreement shall be terminated
in accordance with the provisions of Section 5, 6 or 9
hereof, the Company will reimburse you for the fees and
disbursements of Counsel for the Underwriters, whose fees
and disbursements the Underwriters agrees to pay in any
other event, and will reimburse the Underwriters for their
reasonable out-of-pocket expenses, in an aggregate amount
not exceeding $5,000, incurred in contemplation of the
performance of this Agreement. The Company shall not in any
event be liable to any of the several Underwriters for
damages on account of loss of anticipated profits.
6. Conditions of Underwriters' Obligations. The
---------------------------------------
obligations of the Underwriters to purchase and pay for the
Shares shall be subject to the accuracy of the representations
and warranties made herein on the part of the Company, to the
performance by the Company of its obligations to be performed
hereunder prior to the Closing Date, and to the following
conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424 prior to 5:30 P.M., New York
Time, on the second business day after the date of this
Agreement, or such other time and date as may be approved by
you.
(b) No stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no
proceedings for that purpose shall be pending before, or
threatened by, the Commission on the Closing Date; and you
shall have received a certificate, dated the Closing Date
and signed by an officer of the Company, to the effect that
no such stop order is in effect and that no proceedings for
such purpose are pending before, or to the knowledge of the
Company threatened by, the Commission.
(c) On the Closing Date, you shall have received from
Worsham, Forsythe & Wooldridge, L.L.P., General Counsel for
the Company, Reid & Priest LLP, of counsel for the Company,
and Winthrop, Stimson, Putnam & Roberts, Counsel for the
Underwriters, opinions in substantially the form and
substance prescribed in Schedules II, III and IV hereto (i)
with such changes therein as may be agreed upon by the
Company and you, with the approval of Counsel for the
Underwriters, and (ii) if the Prospectus relating to the
Shares shall be supplemented or amended after the Prospectus
shall have been filed with the Commission pursuant to Rule
424, with any changes therein necessary to reflect such
supplementation or amendment.
(d) On and as of the date hereof you shall have
received from Deloitte & Touche LLP a letter to the effect
that (i) they are independent certified public accountants
with respect to the Company, within the meaning of the
Securities Act and the applicable published rules and
regulations thereunder, (ii) in their opinion, the financial
statements audited by them and included or incorporated by
reference in the Prospectus comply as to form in all
material respects with the applicable accounting
requirements of the Exchange Act and the published rules and
regulations thereunder, (iii) on the basis of a reading of
the unaudited amounts of operating revenues and net income
included or incorporated by reference in the Prospectus and
the related financial statements from which these amounts
were derived, the latest available unaudited financial
statements of the Company and the minute books of the
Company and inquiries of officers of the Company who have
responsibility for financial and accounting matters (it
being understood that the foregoing procedures do not
constitute an audit made in accordance with generally
accepted auditing standards and would not necessarily reveal
matters of significance with respect to the comments made in
such letter, and accordingly that Deloitte & Touche LLP
makes no representation as to the sufficiency of such
procedures for the several Underwriters' purposes), nothing
has come to their attention that caused them to believe that
(A) the unaudited financial statements incorporated by
reference in the Prospectus were not determined in accor-
dance with generally accepted accounting principles applied
on a basis substantially consistent with that of the
corresponding amounts in the latest available audited
financial statements, (B) the unaudited amounts of operating
revenues and net income of the Company included or
incorporated by reference in the Prospectus were not
determined on a basis substantially consistent with that of
the corresponding amounts in the audited statements of
income incorporated by reference in the Prospectus, (C) for
the months ended as of the date of the latest available
-----
financial statements of the Company, there were any
decreases in operating revenues or net income as compared
with the comparable period of the preceding year, and (D) at
a specified date not more than seven days prior to the date
of such letter, there was any change in the capital stock of
the Company, short-term bank loans, commercial paper, notes
payable or long-term debt of the Company or decrease in its
net assets, in each case as compared with amounts shown in
the most recent balance sheet incorporated by reference in
the Prospectus, except in all instances for changes or
decreases that the Prospectus discloses have occurred or may
occur or which are occasioned by the declaration of a
regular quarterly dividend or the acquisition of long-term
debt for sinking fund purposes, or that are described in
such letter, and (iv) they have compared the dollar amounts
(or percentages or ratios derived from such dollar amounts)
and other financial information included or incorporated by
reference in the Registration Statement and the Prospectus
as reasonably requested by you (in each case to the extent
that such dollar amounts, percentages and other financial
information are derived from the general accounting records
of the Company subject to the internal controls of the
Company's accounting system or are derived indirectly from
such records by analysis or computation) with the results
obtained from inquiries, a reading of such general
accounting records and other procedures specified in such
letter, and have found such dollar amounts, percentages and
other financial information to be in agreement with such
results, except as otherwise specified in such letter.
(e) Since the most recent dates as of which in-
formation is given in the Registration Statement or the
Prospectus, there shall not have been any material adverse
change in the business, property or financial condition of
the Company and its subsidiaries, considered as a whole,
whether or not in the ordinary course of business, and,
since such dates, there shall not have been any material
transaction entered into by the Company, other than transac-
tions in the ordinary course of business and transactions
contemplated by the Registration Statement or Prospectus,
and at the Closing Date you shall have received a
certificate to such effect dated the Closing Date and signed
by an officer of the Company.
(f) All legal proceedings to be taken in connection
with the issuance and sale of the Shares shall have been
satisfactory in form and substance to Counsel for the
Underwriters.
In case any of the conditions specified above in this
Section 6 shall not have been fulfilled, this Agreement may be
terminated by the Representatives upon notice thereof to the
Company. Any such termination shall be without liability of any
party to any other party except as otherwise provided in Sections
5(g) and 8 hereof.
7. Conditions of Company's Obligations. The
-----------------------------------
obligation of the Company to deliver the Shares shall be subject
to the conditions that the Prospectus shall have been filed with
the Commission pursuant to Rule 424 prior to 5:30 P.M., New York
Time, on the second business day after the date of this Agreement
or such other time and date as may be approved by the Company,
and no stop order suspending the effectiveness of the
Registration Statement shall be in effect at the Closing Date and
no proceedings for that purpose shall be pending before, or
threatened by, the Commission at the Closing Date. In case these
conditions shall not have been fulfilled, this Agreement may be
terminated by the Company upon notice thereof to you. Any such
termination shall be without liability of any party to any other
party except as otherwise provided in Sections 5(g) and 8 hereof.
8. Indemnification.
---------------
(a) The Company shall indemnify, defend and hold
harmless each Underwriter and each person who controls each
Underwriter within the meaning of Section 15 of the
Securities Act from and against any and all losses, claims,
damages or liabilities, joint or several, to which they or
any of them may become subject under the Securities Act or
any other statute or common law and shall reimburse each
such Underwriter and controlling person for any legal or
other expenses (including, to the extent hereinafter
provided, reasonable counsel fees) incurred by them in
connection with investigating any such losses, claims,
damages or liabilities or in connection with defending any
actions, insofar as such losses, claims, damages,
liabilities, expenses or actions arise out of or are based
upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the
Prospectus, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading;
provided, however, that the indemnity agreement contained in
this Section 8 shall not apply to any such losses, claims,
damages, liabilities, expenses or actions arising out of, or
based upon, any such untrue statement or alleged untrue
statement, or any such omission or alleged omission, if such
statement or omission was made in reliance upon information
furnished in writing to the Company by any Underwriter, or
Counsel for the Underwriters, for use in connection with the
preparation of the Registration Statement or the Prospectus
or any amendment or supplement to either thereof, or arising
out of, or based upon, statements in or omissions from that
part of the Registration Statement that shall constitute the
Statements of Eligibility and Qualification under the Trust
Indenture Act of any Trustee with respect to any indenture
qualified pursuant to the Registration Statement; and
provided further, that the indemnity agreement contained in
this Section 8 shall not inure to the benefit of any
Underwriter (or of any person controlling such Underwriter)
on account of any such losses, claims, damages, liabilities,
expenses or actions arising from the sale of the Shares to
any person if a copy of the Prospectus (exclusive of the
Incorporated Documents) shall not have been given or sent to
such person by or on behalf of such Underwriter with or
prior to the written confirmation of the sale involved
unless the alleged omission or alleged untrue statement was
not corrected in the Prospectus at the time of such written
confirmation. The indemnity agreement of the Company
contained in this Section 8 and the representations and
warranties of the Company contained in Section 2 hereof
shall remain operative and in full force and effect
regardless of any termination of this Agreement or of any
investigation made by or on behalf of any Underwriter or any
such controlling person, and shall survive the delivery of
the Shares.
(b) Each Underwriter shall indemnify, defend and hold
harmless the Company, its officers and directors, and each
person who controls the Company within the meaning of
Section 15 of the Securities Act, from and against any and
all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject
under the Securities Act or any other statute or common law
and shall reimburse each of them for any legal or other
expenses (including, to the extent hereinafter provided,
reasonable counsel fees) incurred by them in connection with
investigating any such losses, claims, damages or
liabilities or in connection with defending any actions,
insofar as such losses, claims, damages, liabilities,
expenses or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the
Prospectus, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if
such statement or omission was made in reliance upon
information furnished in writing to the Company by the
Underwriter, through you or Counsel for the Underwriters,
for use in connection with the preparation of the
Registration Statement or the Prospectus or any amendment or
supplement to either thereof. Each Underwriter hereby
furnishes to the Company in writing expressly for use in the
Prospectus (i) the statements relating to offerings by the
Underwriters on the cover page, (ii) the statements in the
first paragraph on page concerning overallotments and
----
other transactions by the Underwriters, and (iii) under
"Underwriting," the statements in the , , and
------- -------
paragraphs. The indemnity agreement of the
-------
respective Underwriters contained in this Section 8 shall
remain operative and in full force and effect regardless of
any termination of this Agreement or of any investigation
made by or on behalf of the Company, its directors or its
officers, any such Underwriter, or any such controlling
person, and shall survive the delivery of the Shares.
(c) The Company and the several Underwriters each
shall, upon the receipt of notice of the commencement of any
action against it or any person controlling it as aforesaid,
in respect of which indemnity may be sought on account of
any indemnity agreement contained herein, promptly give
written notice of the commencement thereof to the party or
parties against whom indemnity shall be sought hereunder,
but the failure so to notify such indemnifying party or
parties of any such action shall not relieve such
indemnifying party or parties from any liability hereunder
to the extent it is not materially prejudiced as a result of
such failure to notify and in any event shall not relieve it
from any liability that it or they may have to the
indemnified party otherwise than on account of such
indemnity agreement. In case such notice of any such action
shall be so given, such indemnifying party shall be entitled
to participate at its own expense in the defense, or, if it
so elects, to assume (in conjunction with any other
indemnifying parties) the defense of such action, in which
event such defense shall be conducted by counsel chosen by
such indemnifying party or parties and satisfactory to the
indemnified party or parties who shall be defendant or
defendants in such action, and such defendant or defendants
shall bear the fees and expenses of any additional counsel
retained by them; but if the indemnifying party shall elect
not to assume the defense of such action, such indemnifying
party will reimburse such indemnified party or parties for
the reasonable fees and expenses of any counsel retained by
them; provided, however, if the defendants in any such
action (including impleaded parties) include both the
indemnified party and the indemnifying party and counsel for
the indemnifying party shall have reasonably concluded that
there may be a conflict of interest involved in the
representation by a single counsel of both the indemnifying
party and the indemnified party, the indemnified party or
parties shall have the right to select separate counsel,
satisfactory to the indemnifying party (it being understood,
however, that the indemnifying party shall not be liable for
the expenses of more than one separate counsel (in addition
to local counsel) representing the indemnified parties who
are parties to such action). Each of the Company and the
Underwriters agrees that without the other party's prior
written consent, which consent shall not be unreasonably
withheld, it will not settle, compromise or consent to the
entry of any judgment in any claim in respect of which
indemnification may be sought under the indemnification
provision of this Agreement, unless such settlement,
compromise or consent (i) includes an unconditional release
of such other party from all liability arising out of such
claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on
behalf of such other party.
(d) If the indemnification provided for in sub-
paragraph (a) or (b) above shall be unenforceable under
applicable law by an indemnified party, each indemnifying
party agrees to contribute to such indemnified party with
respect to any and all losses, claims, damages, liabilities
and expenses for which each such indemnification provided
for in subparagraph (a) or (b) above shall be unenforceable,
in such proportion as shall be appropriate to reflect (i)
the relative fault of each indemnifying party on the one
hand and the indemnified party on the other in connection
with the statements or omissions that have resulted in such
losses, claims, damages, liabilities and expenses, (ii) the
relative benefits received by the Company on the one hand
and the Underwriters on the other hand from the offering of
the Shares pursuant to this Agreement, and (iii) any other
relevant equitable considerations; provided, however, that
no indemnified party guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any indemnifying
party not guilty of such fraudulent misrepresentation.
Relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by
such indemnifying party or the indemnified party and each
such party's relative intent, knowledge, access to
information and opportunity to correct or prevent such
untrue statement or omission. The Company and each of the
Underwriters agree that it would not be just and equitable
if contributions pursuant to this subparagraph (d) were to
be determined by pro rata allocation or by any other method
of allocation that does not take account of the equitable
considerations referred to above. Notwithstanding the
provisions of this Section 8, no Underwriter shall be
required to contribute in excess of the amount equal to the
excess of (i) the total price at which the Shares
underwritten by it were offered to the public, over (ii) the
amount of any damages which the Underwriter has otherwise
been required to pay by reason of any such untrue or alleged
untrue statement or omission or alleged omission. The
obligations of each Underwriter to contribute pursuant to
this Section 8 are several and not joint and shall be in the
same proportion of all contributions of Underwriters
required hereunder as such Underwriter's obligation to
underwrite Shares is of the total amount of Shares set forth
in Schedule I hereto.
9. Termination. This Agreement may be terminated, at
-----------
any time prior to the Closing Date, by the Representatives if
(a) after the date hereof and at or prior to the Closing Date
there shall have occurred any suspension or material limitation
of trading of any of the Company's securities on the New York
Stock Exchange, Inc. ("NYSE") or any general suspension of
trading in securities on the NYSE, the American Stock Exchange,
Inc. ("AMEX") or the NASDAQ Stock Market, Inc. ("NASDAQ") or
there shall have been established by the NYSE, AMEX or NASDAQ or
by the Commission or by any federal or state agency or by the
decision of any court, any general limitation on prices for such
trading or any general restrictions on the distribution of
securities, or a general banking moratorium declared by New York
or federal authorities, or (b) there shall have occurred any (i)
new material outbreak of hostilities or (ii) new material other
national or international calamity or crisis, including, but not
limited to, an escalation of hostilities that existed prior to
the date of this Agreement or (iii) material adverse change in
the financial markets in the United States, and the effect of any
such event specified in clause (a) or (b) above on the financial
markets of the United States shall be such as to make it
impracticable, in the reasonable judgment of the Underwriters,
for the Underwriters to enforce contracts for the sale of the
Shares. This Agreement may also be terminated at any time prior
to the Closing Date by the Representatives if, in your reasonable
judgment, the subject matter of any amendment or supplement to
the Registration Statement or the Prospectus (other than an
amendment or supplement relating solely to the activity of any
Underwriter or Underwriters) prepared and issued by the Company
after the effectiveness of this Agreement shall have disclosed a
material adverse change in the business, property or financial
condition of the Company and its subsidiaries, considered as a
whole, that has materially impaired the marketability of the
Shares. Any termination hereof pursuant to this Section 9 shall
be without liability of any party to any other party except as
otherwise provided in Sections 5(g) and 8 hereof.
10. Miscellaneous. THE VALIDITY AND INTERPRETATION OF
-------------
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK. This Agreement shall inure to the benefit of the Company,
the several Underwriters and, with respect to the provisions of
Section 8 hereof, each director, officer and controlling person
referred to in said Section 8, and their respective successors.
Nothing herein is intended or shall be construed to give to any
other person, firm or corporation any legal or equitable right,
remedy or claim under or in respect of any provision in this
Agreement. The term "successor" as used herein shall not include
any purchaser, as such purchaser, of any of the Shares from the
Underwriter.
11. Notices. All communications hereunder shall be in
-------
writing, and, if to the Underwriters, shall be mailed or
delivered to you at the address set forth above, or, if to the
Company, shall be mailed or delivered to it at 1601 Bryan Street,
Dallas, Texas 75201, Attention: Treasurer.
<PAGE>
If the foregoing is in accordance with your
understanding of our agreement, please indicate your acceptance
thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding
agreement between the Company and the several Underwriters in
accordance with its terms.
Very truly yours,
TEXAS UTILITIES COMPANY
By
------------------------------
Accepted and delivered as of
the date first above written
BY
By
-----------------------
<PAGE>
SCHEDULE I
----------
Texas Utilities Company
Common Stock
Name of Underwriter Number of Shares
------------------- ----------------
<PAGE>
SCHEDULE II
[Letterhead of Worsham, Forsythe & Wooldridge, L.L.P.]
, 1998
---------
as Representatives of the Underwriters named in the
Underwriting Agreement, dated , 1998,
---------
between Texas Utilities Company and the Underwriters
Ladies and Gentlemen:
With reference to the issuance and sale by Texas
Utilities Company (the "Company") of shares of its common stock,
without par value ("Stock"), pursuant to the Underwriting
Agreement referred to above (the "Underwriting Agreement"), we
advise that we have acted as counsel to the Company in connection
with such issuance and sale, and have participated in the
preparation of the Registration Statement and Prospectus (such
terms having the same meaning herein as in the Underwriting
Agreement) filed by the Company under the Securities Act of 1933,
as amended (the "Securities Act"). We have not examined the
certificates for the Stock, except a specimen thereof, and have
relied upon a certificate of the transfer agent and registrar as
to the execution thereof.
Upon the basis of our familiarity with these
transactions and with the affairs and properties of the Company
generally, we are of the opinion that:
1. The Company is a corporation duly authorized,
validly existing and in good standing under the laws of the State
of Texas, and has the corporate power and authority: (a) to
execute, deliver and perform its obligations under the
Underwriting Agreement, (b) to issue the Stock and (c) to own its
property and assets and to conduct the business which it is now
conducting;
2. The Underwriting Agreement has been duly
authorized, executed and delivered by the Company;
3. The Stock has been legally issued is fully paid
and non-assessable and conforms as to legal matters with the
statements concerning it made in the Prospectus;
4. The Registration Statement, as of the Effective
Date, and the Prospectus, at the time it was filed with the
Commission pursuant to Rule 424 under the Securities Act, (except
for financial statements and schedules and financial and
statistical data as to which we do not express any belief and
except for those parts of the Registration Statement that
constitute the Form T-1) complied as to form in all material
respects with the applicable requirements of the Securities Act
and the applicable instructions, rules and regulations of the
Commission thereunder; the Incorporated Documents (except as to
the financial statements and schedules and other financial and
statistical data contained therein, as to which we do not express
any belief), at the time they were filed with the Commission,
complied as to form in all material respects with the
requirements of the Exchange Act and the applicable instructions,
rules and regulations of the Commission thereunder; and the
Registration Statement has become and is effective under the
Securities Act and, to our best knowledge, no proceedings for a
stop order with respect thereto are pending or threatened under
Section 8 of the Securities Act;
5. No other approval, authorization, consent or order
of any public board or body (other than in connection or in
compliance with the provisions of the blue-sky laws of any
jurisdiction) is legally required for the authorization of the
issue and sale by the Company of the Stock; and
6. The Stock has been listed, on official notice of
issuance, on the New York, Chicago and Pacific stock exchanges.
In the course of the preparation of the
information relating to the Company contained in the Registration
Statement and the Prospectus (including the documents
incorporated therein by reference), we had discussions with
certain of its officers and representatives, with other counsel
for the Company, with Deloitte & Touche LLP, the independent
certified public accountants who audited certain of the financial
statements contained in the Registration Statement and the
Prospectus, and with certain of your officers and employees and
your counsel, but we made no independent verification of the
accuracy or completeness of the representations and statements
made to us by the Company or the information included by the
Company in the Registration Statement and the Prospectus and take
no responsibility therefor except as set forth in paragraph 3
above. However, our examination of the information relating to
the Company contained in the Registration Statement and the
Prospectus and our discussions did not disclose to us anything
which gives us reason to believe that (except for financial
statements and schedules and financial and statistical data as to
which we do not express any belief and except for those parts of
the Registration Statement that constitute the Form T-1) (i) the
Registration Statement, as of the Effective Date, included an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading or (ii) the Prospectus, at
the time it was filed with the Commission pursuant to Rule 424
under the Securities Act, included, or on the date hereof
includes, an untrue statement of a material fact or on such dates
omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading.
The Registration Statement, as of the Effective Date,
and the Prospectus, at the time it was filed with the Commission
pursuant to Rule 424 under the Securities Act, (except as to the
financial statements and schedules and other financial and
statistical data contained therein as to which we do not express
any belief and except for those parts of the Registration
Statement that constitute the Forms T-1) complied as to form in
all material respects with the applicable requirements of the
Securities Act and the applicable instructions, rules and
regulations of the Commission thereunder; the Incorporated
Documents (except as to the financial statements and schedules
and other financial and statistical data contained therein, as to
which we do not express any belief), at the time they were filed
with the Commission, complied as to form in all material respects
with the requirements of the Exchange Act and the applicable
under the Securities Act and, to our best knowledge, no
proceedings for a stop order with respect thereto are pending or
threatened under Section 8 of the Securities Act.
The statements made on our authority as to matters of
law and legal conclusions in the Registration Statement and
Prospectus have been reviewed by us and in our opinion are
correct.
Very truly yours,
WORSHAM, FORSYTHE &
WOOLDRIDGE, L.L.P.
By:
-------------------------
A Partner
<PAGE>
SCHEDULE III
[Letterhead of Reid & Priest LLP]
New York, New York
, 1998
---------
as Representatives of the Underwriters named in the
Underwriting Agreement, dated , 1998,
---------
between Texas Utilities Company and the Underwriters
Ladies and Gentlemen:
We have acted as counsel to Texas Utilities Company
(the "Company") in connection with the issuance by the Company of
shares of its common stock, without par value ("Stock")
-----
pursuant to the Underwriting Agreement dated , 1998
---------
between the Company and the Underwriters (the "Underwriting
Agreement").
Terms not otherwise defined herein are used with the
meanings ascribed to them in the Underwriting Agreement.
In so acting we have participated in the preparation of
the Registration Statement, including the Incorporated Documents,
and the Prospectus. We have examined such execution thereof
documents and satisfied ourselves as to such matters as we have
deemed necessary as a basis for the conclusions of law contained
in the opinions expressed below. We have relied as to various
questions of fact upon the representations and warranties of the
Company contained in the Underwriting Agreement and, where we
deemed appropriate, on certificates of public officials. We have
not examined the certificates for the Stock, except a specimen
thereof, and have relied upon a certificate of the transfer agent
and registrar as to the execution thereof.
Upon the basis of our familiarity with these
transactions and with the affairs and properties of the Company
generally, we are of the opinion that:
1. The Underwriting Agreement has been duly
authorized, executed and delivered by the Company;
2. The Stock has been legally issued is fully paid
and non-assessable and conforms as to legal matters with the
statements concerning it made in the Prospectus;
3. The Registration Statement, as of the Effective
Date, and the Prospectus, at the time it was filed with the
Commission pursuant to Rule 424 under the Securities Act, (except
for financial statements and schedules and financial and
statistical data as to which we do not express any belief and
except for those parts of the Registration Statement that
constitute the Form T-1) complied as to form in all material
respects with the applicable requirements of the Securities Act
and the applicable instructions, rules and regulations of the
Commission thereunder; the Incorporated Documents (except as to
the financial statements and schedules and other financial and
statistical data contained therein, as to which we do not express
any belief), at the time they were filed with the Commission,
complied as to form in all material respects with the
requirements of the Exchange Act and the applicable instructions,
rules and regulations of the Commission thereunder; and the
Registration Statement has become and is effective under the
Securities Act and, to our best knowledge, no proceedings for a
stop order with respect thereto are pending or threatened under
Section 8 of the Securities Act;
4. No other approval, authorization, consent or order
of any public board or body (other than in connection or in
compliance with the provisions of the blue-sky laws of any
jurisdiction) is legally required for the authorization of the
issue and sale by the Company of the Stock; and
5. The Stock has been listed, on official notice of
issuance, on the New York, Chicago and Pacific stock exchanges.
In the course of the preparation of the information
relating to the Company contained in the Registration Statement
and the Prospectus (including the documents incorporated therein
by reference) we had discussions with certain of its officers and
representatives, with other counsel for the Company, with
Deloitte & Touche LLP, the independent certified public
accountants who audited certain of the financial statements
contained in the Registration Statement and the Prospectus, and
with certain of your officers and employees and your counsel, but
we made no independent verification of the accuracy or
completeness of the representations and statements made to us by
the Company or the information included by the Company in the
Registration Statement and the Prospectus and take no
responsibility therefor except as set forth in paragraph 3 above.
However, our examination of the information relating to the
Company contained in the Registration Statement and the
Prospectus and our discussions did not disclose to us anything
which gives us reason to believe that (except as to the financial
statements and schedules and other financial and statistical data
contained therein, as to which we do not express any belief, and
except for those parts of the Registration Statement that
constitute the Forms T-1) (i) the Registration Statement, as of
the Effective Date, included an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading or (ii) the Prospectus, at the time it was filed with
the Commission pursuant to Rule 424 under the Securities Act,
included, or on the date hereof includes, an untrue statement of
a material fact or on such dates omitted or omits to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
We are members of the New York Bar and do not hold
ourselves out as experts in the laws of the State of Texas. As
to all matters of Texas law, we have, with your consent, relied
upon the opinion of Worsham, Forsythe & Wooldridge, L.L.P.,
Dallas, Texas, General Counsel for the Company. We believe that
you and we are justified in relying on such opinion.
Very truly yours,
REID & PRIEST LLP
<PAGE>
SCHEDULE IV
[Letterhead of Winthrop, Stimson, Putnam & Roberts]
, 1998
---------
as Representatives of the Underwriters named in the
Underwriting Agreement, dated , 1998,
---------
between Texas Utilities Company and the Underwriters
Ladies and Gentlemen:
We have acted as counsel to the Underwriters in
connection with your purchase from Texas Utilities Company (the
"Company") of shares of its common stock, without par value
-----
("Stock") pursuant to the Underwriting Agreement, dated
, 1998, between you and the Company (the "Underwriting
----------
Agreement").
We are members of the New York Bar and do not hold
ourselves out as experts on the laws of the State of Texas. We
have, with your consent, relied upon an opinion of even date
herewith addressed to you by Worsham, Forsythe & Wooldridge,
L.L.P., of Dallas, Texas, General Counsel for the Company, as to
the matters covered in such opinion relating to Texas law. We
have reviewed such opinion and believe that it is satisfactory
and that you and we are justified in relying thereon. We have
also reviewed the opinion of Reid & Priest LLP required by
paragraph (c) of Section 6 of the Underwriting Agreement, and we
believe such opinion to be satisfactory.
We have, in addition, examined the documents described
in the list of closing papers as having been delivered to you at
the closing and such other documents and satisfied ourselves as
to such other matters as we have deemed necessary in order to
enable us to express this opinion. We have not examined the
certificate for the Stock, except specimens thereof, and have
relied upon a certificate of the transfer agent and registrar as
to the authentication thereof. As to various questions of fact
material to this opinion, we have relied upon representations of
the Company and statements in the Registration Statement
hereinafter mentioned. In such examination we have assumed the
genuineness of all signatures, the authenticity of all documents
submitted to us and the genuineness and conformity to original
documents of documents submitted to us as certified or
photostatic copies.
Based on the foregoing, we are of the opinion that:
1. The Underwriting Agreement has been duly
authorized, executed and delivered by the Company;
2. The Stock has been legally issued, is fully paid
and non-assessable;
3. The Stock conforms as to legal matters with the
statements concerning it made in the Prospectus.
4. The Registration Statement, as of the Effective
Date, and the Prospectus, at the time it was filed with the
Commission pursuant to Rule 424 under the Securities Act, (except
for financial statements and schedules and financial and
statistical data as to which we do not express any belief and
except for those parts of the Registration Statement that
constitute the Form T-1) complied as to form in all material
respects with the applicable requirements of the Securities Act
and the applicable instructions, rules and regulations of the
Commission thereunder; the Incorporated Documents (except as to
the financial statements and schedules and other financial and
statistical data contained therein, as to which we do not express
any belief), at the time they were filed with the Commission,
complied as to form in all material respects with the
requirements of the Exchange Act and the applicable instructions,
rules and regulations of the Commission thereunder; and the
Registration Statement has become and is effective under the
Securities Act and, to our best knowledge, no proceedings for a
stop order with respect thereto are pending or threatened under
Section 8 of the Securities Act; and
5. No other approval, authorization, consent or order
of any public board or body (other than in connection or in
compliance with the provisions of the blue-sky laws of any
jurisdiction) is legally required for the authorization of the
issue and sale by the Company of the Shares; and
6. The Stock has been listed, on official notice of
issuance, on the New York, Chicago and Pacific stock exchanges.
In passing upon the form of the Registration Statement and the
form of the Prospectus, we necessarily assume the correctness and
completeness of the statements made by the Company and the
information included in the Registration Statement and the
Prospectus and take no responsibility therefor, except insofar as
such statements relate to us and as set forth in paragraph 3
above. In the course of the preparation by the Company of the
Registration Statement and the Prospectus, we have had discus-
sions with certain of its officers and representatives, with
counsel for the Company, with Deloitte & Touche LLP, the
independent public accountants who audited certain of the
financial statements incorporated by reference in the
Registration Statement and the Prospectus, and with certain of
your representatives. Our examination of the Registration
Statement and the Prospectus and our discussions did not disclose
to us any information which gives us reason to believe that at
the Effective Date the Registration Statement contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, at the time it was
filed with the Commission pursuant to Rule 424, or at the date
hereof, included or includes any untrue statement of a material
fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. We do
not express any opinion or belief as to the financial statements
or other financial or statistical data contained or incorporated
by reference in the Registration Statement or the Prospectus or
as to those parts of the Registration Statement that constitute
the Forms T-1.
This opinion is given to you solely for your use in
connection with the Underwriting Agreement and the transactions
contemplated thereunder and may not be relied upon by any other
person or for any other purpose.
Very truly yours,
WINTHROP, STIMSON, PUTNAM
& ROBERTS
Texas Utilities Company
Type A Securities and Type B Securities
UNDERWRITING AGREEMENT
-----------------------
, 1998
---------
as Representatives of the Underwriters
named in Schedule I hereto
c/o
Ladies and Gentlemen:
1. Introduction. Texas Utilities Company, a Texas
------------
corporation (the "Company"), proposes to issue and sell severally
to you (the "Underwriters") the Company's new securities
("Securities"). The Securities will initially consist of (a)
units (referred to as "Type A Securities") with a
------------
stated amount, per Type A Security, of $ (the "Stated Amount")
---
and (b) units (referred to as "Type B Securities") with
---------
a stated amount, per Type B Security, equal to the Stated Amount.
Each Type A Security will initially consist of a unit comprised
of (a) a stock purchase contract (a "Purchase Contract") for the
purchase of shares of the Company's common stock, without par
value ("Common Stock"), and (b) an interest in a % Series D
---
Senior Note due , (each such Senior Note, a "Debt
--------- ----
Security") issued pursuant to an Indenture (For Unsecured Debt
Securities Series D), dated as of , 1998 (the
---------
"Indenture"). Each Type B Security will initially consist of a
unit comprised of (a) a Purchase Contract and (b) a 1/100
undivided beneficial interest in a zero-coupon U.S. Treasury
Security (CUSIP No. ) in a principal amount equal to
-----------
$1,000 payable on , (each such Treasury
----------- -----
Security, a "Treasury Security"). Under each Purchase Contract,
pursuant to the terms of a Purchase Contract Agreement, dated as
of , , between , as Purchase Contract
--------- ---- ---------
Agent, and the Company (the "Purchase Contract Agreement"), (i)
the holder will purchase from the Company on ,
----------- -----
(the "Purchase Contract Settlement Date"), for an amount of cash
equal to the Stated Amount, a number of newly issued shares of
Common Stock of the Company determined as provided in the
Purchase Contract and (ii) with respect to Type B Securities, the
Company will pay the holder unsecured contract adjustment
payments ("Contract Adjustment Payments"), if any, at the rate of
% of the Stated Amount per annum. In accordance with the
---
terms of the Purchase Contract Agreement, the Debt Securities
constituting a part of the Type A Securities, and the Treasury
Securities constituting a part of the Type B Securities, will be
pledged by the Purchase Contract Agent, on behalf of the holders
of the Securities, to , as Collateral Agent, pursuant
-----------
to the Pledge Agreement, to be dated as of , 1998 (the
-----------
"Pledge Agreement"), among the Company, the Purchase Contract
Agent, the Collateral Agent, the Custodial Agent and the
Securities Intermediary, to secure the holders' obligation to
purchase Common Stock under the Purchase Contracts. Under
certain circumstances, the Debt Securities will be subject to
remarketing pursuant to a Remarketing Agreement, dated as of
, 1998, between and the Company (the
--------- ---------
"Remarketing Agreement").
2. Representations and Warranties of the Company.
---------------------------------------------
The Company represents and warrants to the several Underwriters
that:
(a) It has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on
Form S-3, including a prospectus, on , 1998
------------
(Registration No. 333- ) for the registration of
-------
$900,000,000 aggregate amount of the Company's (i) Debt
Securities, (ii) Common Stock, (iii) contracts to purchase
shares of Common Stock ("Stock Purchase Contracts") and (iv)
Stock Purchase Units, each representing ownership of a Stock
Purchase Contract and Debt Securities or obligations of
third parties, under the Securities Act of 1933, as amended
(the "Securities Act"). Such registration statement was
declared effective by the Commission on , 1998.
-------------
References herein to the term "Registration Statement" as
of any date shall be deemed to refer to Registration
Statement No. 333- , as amended or supplemented to
--------
date, including all documents incorporated by reference
therein as of such date pursuant to Item 12 of Form S-3
("Incorporated Documents"); provided that if the Company
files a registration statement with the Commission pursuant
to Section 462(b) of the 1933 Act Regulations (the "Rule
462(b) Registration Statement"), then after such filing, all
references to "Registration Statement" shall be deemed to
include the Rule 462(b) Registration Statement. References
herein to the term "Prospectus" as of any given date shall
be deemed to refer to the prospectus, including any
preliminary prospectus, forming a part of Registration
Statement No. 333- , as amended or supplemented as of
-------
such date, including all Incorporated Documents as of such
date and including any prospectus supplement relating to the
Securities. References herein to the term "Effective Date"
shall be deemed to refer to the later of the time and date
Registration Statement No. 333- was declared
-------
effective or the time and date of the filing thereafter of
the Company's most recent Annual Report on Form 10-K if such
filing is made prior to the Closing Date, as hereinafter
defined. The Company will not file any amendment to the
Registration Statement or supplement to the Prospectus on or
after the date of this Agreement and prior to the Closing
Date, as hereinafter defined, without prior notice to the
Underwriters, or to which Counsel for the Underwriters shall
reasonably object in writing. For the purposes of this
Agreement, any Incorporated Document filed with the
Commission on or after the date of this Agreement and prior
to the Closing Date, as hereinafter defined, shall be deemed
an amendment or supplement to the Registration Statement and
the Prospectus.
(b) On the Effective Date, the Registration Statement
and the prospectus included as part of the Registration
Statement fully complied and at the Closing Date, as
hereinafter defined, the Registration Statement, the
Prospectus and the Indenture will fully comply in all
material respects with the applicable provisions of the
Securities Act, the Trust Indenture Act of 1939, as amended
("Trust Indenture Act"), and the applicable rules and regu-
lations of the Commission thereunder; on the Effective Date
the Registration Statement did not, and at the Closing Date,
as hereinafter defined, the Registration Statement will not,
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading; on
the Effective Date the Prospectus did not, and at the
Closing Date, as hereinafter defined, and on the date it is
filed with the Commission pursuant to Rule 424 of the
General Rules and Regulations of the Securities Act ("Rule
424"), the Prospectus will not, contain an untrue statement
of a material fact or omit to state a material fact neces-
sary in order to make the statements therein, in the light
of the circumstances under which they were made, not
misleading; and on said dates the Incorporated Documents,
taken together as a whole, fully complied or will comply in
all material respects with the applicable provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the applicable rules and regulations of the
Commission thereunder, and, when read together with the
Prospectus on said dates did not and will not contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading; provided that
the foregoing representations and warranties in this
paragraph (b) shall not apply to statements or omissions
made in reliance upon information furnished in writing to
the Company by, or on behalf of, any Underwriter for use in
connection with the preparation of the Registration
Statement or the Prospectus or to any statements in or
omissions from the Statements of Eligibility and
Qualification under the Trust Indenture Act, or amendments
thereto, filed as exhibits to the Registration Statement.
(c) The consummation of the transactions herein
contemplated and the fulfillment of the terms hereof will
not result in a breach of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed
of trust, charter, by-laws or other agreement or instrument
to which the Company is now a party.
3. Purchase and Sale. On the basis of the
-----------------
representations and warranties herein contained, and subject to
the terms and conditions herein set forth, the Company shall sell
to each of the Underwriters, and each Underwriter shall purchase
from the Company, at the time and place herein specified,
severally and not jointly, the principal amount of Securities set
forth opposite the name of such Underwriter in Schedule II
attached hereto, at the purchase price set forth in Schedule I
hereto.
4. Time and Place of Closing. Delivery of the
-------------------------
Securities against payment therefor by wire transfer in federal
funds shall be made at the office of Reid & Priest LLP, 40 West
57th Street, New York, New York, at 10:00 A.M., New York Time, on
, 1998, or at such other place, time and date as shall
---------
be agreed upon in writing by the Company and you or established
in accordance with the following paragraph. The hour and date of
such delivery and payment are herein called the "Closing Date".
The Securities shall be delivered to you in fully registered form
in such denominations of $1,000 or any multiple thereof and
registered in such names as you shall reasonably request in
writing not later than the close of business on the second
business day prior to the Closing Date, or, to the extent not so
requested, registered in your name in such authorized
denominations as the Company shall determine. The Company agrees
to make the Securities available to you for checking purposes not
later than 10:00 A.M., New York Time, on the last business day
preceding the Closing Date at the office of Reid & Priest LLP, 40
West 57th Street, New York, New York, 10019.
If any Underwriter shall fail or refuse (otherwise than for
some reason sufficient to justify, in accordance with the terms
hereof, the cancellation or termination of its obligations
hereunder) to purchase and pay for the Securities that such
Underwriter has agreed to purchase and pay for hereunder, the
Company shall immediately give notice to the other Underwriters
of the default of such Underwriter, and the other Underwriters
shall have the right within 24 hours after the receipt of such
notice to determine to purchase, or to procure one or more
others, who are members of the National Association of Securities
Dealers, Inc. ("NASD") (or, if not members of the NASD, who are
not eligible for membership in the NASD and who agree (i) to make
no sales within the United States, its territories or its
possessions or to persons who are citizens thereof or residents
therein and (ii) in making sales to comply with the NASD's
Conduct Rules and satisfactory to the Company, to purchase, upon
the terms herein set forth, the Securities that the defaulting
Underwriter had agreed to purchase. If any non-defaulting
Underwriter or Underwriters shall give written notice to the
Company of the determination in that regard within 24 hours after
receipt of notice of any such default, and thereupon the Closing
Date shall be postponed for such period, not exceeding three
business days, as the Company shall determine. If in the event
of such a default no non-defaulting Underwriter shall give such
notice, then this Agreement may be terminated by the Company,
upon like notice given to the non-defaulting Underwriters, within
a further period of 24 hours. If in such case the Company shall
not elect to terminate this Agreement, it shall have the right,
irrespective of such default:
(a) to require each non-defaulting Underwriter to
purchase and pay for Securities that it had agreed to
purchase hereunder as hereinafter provided and, in addition,
the Securities of each type that the defaulting Underwriter
shall have so failed to purchase; provided, however, that no
non-defaulting Underwriter shall be required to purchase
such additional Securities of either type in an amount
exceeding one-ninth (1/9) of the principal amount of the
Securities of each type that such non-defaulting Underwriter
has otherwise agreed to purchase hereunder, and/or
(b) to procure one or more persons, reasonably
acceptable to the Representatives, who are members of the
NASD (or, if not members of the NASD, who are not eligible
for membership in the NASD and who agree (i) to make no
sales within the United States, its territories or its
possessions or to persons who are citizens thereof or
residents therein and (ii) in making sales to comply with
the NASD's Rules of Fair Practice), to purchase, upon the
terms herein set forth, either all or a part of the
Securities that such defaulting Underwriter had agreed to
purchase or that portion thereof that the remaining
Underwriters shall not be obligated to purchase pursuant to
the foregoing clause (a).
In the event the Company shall exercise its rights under (a)
and/or (b) above, the Company shall give written notice thereof
to the non-defaulting Underwriters within such further period of
24 hours, and thereupon the Closing Date shall be postponed for
such period, not exceeding three business days, as the Company
shall determine.
In the computation of any period of 24 hours referred to in
this Section 4, there shall be excluded a period of 24 hours in
respect of each Saturday, Sunday or legal holiday that would
otherwise be included in such period of time.
Any action taken by the Company under this Section 4 shall
not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
Termination by the Company under this Section 4 shall be without
liability on the part of the Company or any non-defaulting
Underwriter, except as otherwise provided in Sections 5(g) and 8
hereof.
5. Covenants of the Company. The Company agrees
------------------------
that:
(a) It will promptly deliver to you a signed copy of
the Registration Statement as originally filed or, to the
extent a signed copy is not available, a conformed copy,
certified by an officer of the Company to be in the form as
originally filed, including all Incorporated Documents and
exhibits and of all amendments thereto.
(b) It will deliver to you, as soon as practicable
after the date hereof, as many copies of the Prospectus as
of such date as you may reasonably request.
(c) It will cause the Prospectus to be filed with the
Commission pursuant to Rule 424 as soon as practicable and
advise you of the issuance of any stop order under the
Securities Act with respect to the Registration Statement or
the institution of any proceedings therefor of which the
Company shall have received notice. The Company will use
its best efforts to prevent the issuance of any such stop
order and to secure the prompt removal thereof if issued.
(d) If, during such period of time (not exceeding nine
months) after the Prospectus has been filed with the
Commission pursuant to Rule 424 as in the opinion of Counsel
for the Underwriters a prospectus covering the Securities is
required by law to be delivered in connection with sales by
an Underwriter or a dealer, any event relating to or
affecting the Company or of which the Company shall be
advised in writing by you shall occur that in the Company's
reasonable opinion after consultation with Counsel for the
Underwriters should be set forth in a supplement to, or an
amendment of, the Prospectus in order to make the Prospectus
not misleading in the light of the circumstances when it is
delivered to a purchaser, the Company will, at its expense,
amend or supplement the Prospectus by either (i) preparing
and furnishing to you at the Company's expense a reasonable
number of copies of a supplement or supplements or an
amendment or amendments to the Prospectus or (ii) making an
appropriate filing pursuant to Section 13 of the Exchange
Act, which will supplement or amend the Prospectus so that,
as supplemented or amended, it will not contain any untrue
statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in
the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading; provided that
should such event relate solely to the activities of any of
the Underwriters, then the Underwriters shall assume the
expense of preparing and furnishing any such amendment or
supplement. In case any Underwriter is required to deliver
a prospectus after the expiration of nine months from the
date the Prospectus is filed with the Commission pursuant to
Rule 424, the Company, upon your request, will furnish to
you, at your expense, a reasonable quantity of a
supplemental prospectus or supplements to the Prospectus
complying with Section 10(a) of the Securities Act.
(e) It will make generally available to its security
holders, as soon as practicable, an earnings statement
(which need not be audited) covering a period of at least
twelve months beginning not earlier than the first day of
the month next succeeding the month in which occurred the
effective date of the Registration Statement as defined in
Rule 158 under the Securities Act.
(f) It will furnish such proper information as may be
lawfully required and otherwise cooperate in qualifying the
Securities for offer and sale under the blue-sky laws of
such jurisdictions as you may designate, provided that the
Company shall not be required to qualify as a foreign
corporation or dealer in securities, to file any consents to
service of process under the laws of any jurisdiction, or to
meet any other requirements deemed by the Company to be
unduly burdensome.
(g) It will, except as herein provided, pay all
expenses and taxes (except transfer taxes) in connection
with (i) the preparation and filing by it of the
Registration Statement, (ii) the issuance and delivery of
the Securities as provided in Section 4 hereof, (iii) the
qualification of the Securities under blue-sky laws
(including counsel fees not to exceed $7,500), and (iv) the
printing and delivery to the Underwriters of reasonable
quantities of the Registration Statement and, except as
provided in Section 5(d) hereof, of the Prospectus. The
Company shall not, however, be required to pay any amount
for any expenses of yours, except that, if this Agreement
shall be terminated in accordance with the provisions of
Section 5, 6 or 9 hereof, the Company will reimburse you for
the fees and disbursements of Counsel for the Underwriters,
whose fees and disbursements the Underwriters agrees to pay
in any other event, and will reimburse the Underwriters for
their reasonable out-of-pocket expenses, in an aggregate
amount not exceeding $5,000, incurred in contemplation of
the performance of this Agreement. The Company shall not in
any event be liable to any of the several Underwriters for
damages on account of loss of anticipated profits.
(h) Prior to the Closing Date the Company will not,
without your prior written consent, directly or indirectly,
publicly issue, sell, offer or contract to sell, in the
market in which the Securities are being offered and sold,
any securities of the Company which are of the same class as
the Securities.
6. Conditions of Underwriters' Obligations. The
---------------------------------------
obligations of the Underwriters to purchase and pay for the
Securities shall be subject to the accuracy of the
representations and warranties made herein on the part of the
Company, to the performance by the Company of its obligations to
be performed hereunder prior to the Closing Date, and to the
following conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424 prior to 5:30 P.M., New York
Time, on the second business day after the date of this
Agreement, or such other time and date as may be approved by
you.
(b) No stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no
proceedings for that purpose shall be pending before, or
threatened by, the Commission on the Closing Date; and you
shall have received a certificate, dated the Closing Date
and signed by an officer of the Company, to the effect that
no such stop order is in effect and that no proceedings for
such purpose are pending before, or to the knowledge of the
Company threatened by, the Commission.
(c) On the Closing Date, you shall have received from
Worsham, Forsythe & Wooldridge, L.L.P., General Counsel for
the Company, Reid & Priest LLP, of counsel for the Company,
and Winthrop, Stimson, Putnam & Roberts, Counsel for the
Underwriters, opinions in substantially the form and
substance prescribed in Schedules III, IV and V hereto (i)
with such changes therein as may be agreed upon by the
Company and you, with the approval of Counsel for the
Underwriters, and (ii) if the Prospectus relating to the
Securities shall be supplemented or amended after the
Prospectus shall have been filed with the Commission
pursuant to Rule 424, with any changes therein necessary to
reflect such supplementation or amendment.
(d) On and as of the date hereof you shall have
received from Deloitte & Touche LLP a letter to the effect
that (i) they are independent certified public accountants
with respect to the Company, within the meaning of the
Securities Act and the applicable published rules and
regulations thereunder, (ii) in their opinion, the financial
statements audited by them and included or incorporated by
reference in the Prospectus comply as to form in all
material respects with the applicable accounting
requirements of the Exchange Act and the published rules and
regulations thereunder, (iii) on the basis of a reading of
the unaudited amounts of operating revenues and net income
included or incorporated by reference in the Prospectus and
the related financial statements from which these amounts
were derived, the latest available unaudited financial
statements of the Company and the minute books of the
Company and inquiries of officers of the Company who have
responsibility for financial and accounting matters (it
being understood that the foregoing procedures do not
constitute an audit made in accordance with generally
accepted auditing standards and would not necessarily reveal
matters of significance with respect to the comments made in
such letter, and accordingly that Deloitte & Touche LLP
makes no representation as to the sufficiency of such
procedures for the several Underwriters' purposes), nothing
has come to their attention that caused them to believe that
(A) the unaudited financial statements incorporated by
reference in the Prospectus were not determined in accor-
dance with generally accepted accounting principles applied
on a basis substantially consistent with that of the
corresponding amounts in the latest available audited
financial statements, (B) the unaudited amounts of operating
revenues and net income of the Company included or
incorporated by reference in the Prospectus were not
determined on a basis substantially consistent with that of
the corresponding amounts in the audited statements of
income incorporated by reference in the Prospectus, (C) for
the months ended as of the date of the latest available
-----
financial statements of the Company, there were any
decreases in operating revenues or net income as compared
with the comparable period of the preceding year, and (D) at
a specified date not more than seven days prior to the date
of such letter, there was any change in the capital stock of
the Company, short-term bank loans, commercial paper, notes
payable or long-term debt of the Company or decrease in its
net assets, in each case as compared with amounts shown in
the most recent balance sheet incorporated by reference in
the Prospectus, except in all instances for changes or
decreases that the Prospectus discloses have occurred or may
occur or which are occasioned by the declaration of a
regular quarterly dividend or the acquisition of long-term
debt for sinking fund purposes, or that are described in
such letter, and (iv) they have compared the dollar amounts
(or percentages or ratios derived from such dollar amounts)
and other financial information included or incorporated by
reference in the Registration Statement and the Prospectus
as reasonably requested by you (in each case to the extent
that such dollar amounts, percentages and other financial
information are derived from the general accounting records
of the Company subject to the internal controls of the
Company's accounting system or are derived indirectly from
such records by analysis or computation) with the results
obtained from inquiries, a reading of such general
accounting records and other procedures specified in such
letter, and have found such dollar amounts, percentages and
other financial information to be in agreement with such
results, except as otherwise specified in such letter.
(e) Since the most recent dates as of which in-
formation is given in the Registration Statement or the
Prospectus, there shall not have been any material adverse
change in the business, property or financial condition of
the Company and its subsidiaries, considered as a whole,
whether or not in the ordinary course of business, and,
since such dates, there shall not have been any material
transaction entered into by the Company, other than transac-
tions in the ordinary course of business and transactions
contemplated by the Registration Statement or Prospectus,
and at the Closing Date you shall have received a
certificate to such effect dated the Closing Date and signed
by an officer of the Company.
(f) All legal proceedings to be taken in connection
with the issuance and sale of the Securities shall have been
satisfactory in form and substance to Counsel for the
Underwriters.
In case any of the conditions specified above in this
Section 6 shall not have been fulfilled, this Agreement may be
terminated by the Representatives upon notice thereof to the
Company. Any such termination shall be without liability of any
party to any other party except as otherwise provided in Sections
5(g) and 8 hereof.
7. Conditions of Company's Obligations. The
-----------------------------------
obligation of the Company to deliver the Securities shall be
subject to the conditions that the Prospectus shall have been
filed with the Commission pursuant to Rule 424 prior to 5:30
P.M., New York Time, on the second business day after the date of
this Agreement or such other time and date as may be approved by
the Company, and no stop order suspending the effectiveness of
the Registration Statement shall be in effect at the Closing Date
and no proceedings for that purpose shall be pending before, or
threatened by, the Commission at the Closing Date. In case these
conditions shall not have been fulfilled, this Agreement may be
terminated by the Company upon notice thereof to you. Any such
termination shall be without liability of any party to any other
party except as otherwise provided in Sections 5(g) and 8 hereof.
8. Indemnification.
---------------
(a) The Company shall indemnify, defend and hold
harmless each Underwriter and each person who controls any
Underwriter within the meaning of Section 15 of the
Securities Act from and against any and all losses, claims,
damages or liabilities, joint or several, to which they or
any of them may become subject under the Securities Act or
any other statute or common law and shall reimburse each
such Underwriter and controlling person for any legal or
other expenses (including, to the extent hereinafter
provided, reasonable counsel fees) incurred by them in
connection with investigating any such losses, claims,
damages or liabilities or in connection with defending any
actions, insofar as such losses, claims, damages,
liabilities, expenses or actions arise out of or are based
upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the
Prospectus, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading;
provided, however, that the indemnity agreement contained in
this Section 8 shall not apply to any such losses, claims,
damages, liabilities, expenses or actions arising out of, or
based upon, any such untrue statement or alleged untrue
statement, or any such omission or alleged omission, if such
statement or omission was made in reliance upon information
furnished in writing to the Company by any Underwriter, or
Counsel for the Underwriters, for use in connection with the
preparation of the Registration Statement or the Prospectus
or any amendment or supplement to either thereof, or arising
out of, or based upon, statements in or omissions from that
part of the Registration Statement that shall constitute the
Statements of Eligibility and Qualification under the Trust
Indenture Act of any Trustee with respect to any indenture
qualified pursuant to the Registration Statement; and
provided further, that the indemnity agreement contained in
this Section 8 shall not inure to the benefit of any
Underwriter (or of any person controlling such Underwriter)
on account of any such losses, claims, damages, liabilities,
expenses or actions arising from the sale of the Securities
to any person if a copy of the Prospectus (exclusive of the
Incorporated Documents) shall not have been given or sent to
such person by or on behalf of such Underwriter with or
prior to the written confirmation of the sale involved
unless the alleged omission or alleged untrue statement was
not corrected in the Prospectus at the time of such written
confirmation. The indemnity agreement of the Company
contained in this Section 8 and the representations and
warranties of the Company contained in Section 2 hereof
shall remain operative and in full force and effect
regardless of any termination of this Agreement or of any
investigation made by or on behalf of any Underwriter or any
such controlling person, and shall survive the delivery of
the Securities.
(b) Each Underwriter shall indemnify, defend and hold
harmless the Company, its officers and directors, and each
person who controls the Company within the meaning of
Section 15 of the Securities Act, from and against any and
all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject
under the Securities Act or any other statute or common law
and shall reimburse each of them for any legal or other
expenses (including, to the extent hereinafter provided,
reasonable counsel fees) incurred by them in connection with
investigating any such losses, claims, damages or
liabilities or in connection with defending any actions,
insofar as such losses, claims, damages, liabilities,
expenses or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the
Prospectus, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if
such statement or omission was made in reliance upon
information furnished in writing to the Company by the
Underwriter, through you or Counsel for the Underwriters,
for use in connection with the preparation of the
Registration Statement or the Prospectus or any amendment or
supplement to either thereof. Each Underwriter hereby
furnishes to the Company in writing expressly for use in the
Prospectus (i) the statements relating to offerings by the
Underwriters on the cover page, (ii) the statements in the
first paragraph on page concerning overallotments and
----
other transactions by the Underwriters, and (iii) under
"Underwriting," the statements in the , , and
------- -------
paragraphs. The indemnity agreement of the
-------
respective Underwriters contained in this Section 8 shall
remain operative and in full force and effect regardless of
any termination of this Agreement or of any investigation
made by or on behalf of the Company, its directors or its
officers, any such Underwriter, or any such controlling
person, and shall survive the delivery of the Securities.
(c) The Company and the several Underwriters each
shall, upon the receipt of notice of the commencement of any
action against it or any person controlling it as aforesaid,
in respect of which indemnity may be sought on account of
any indemnity agreement contained herein, promptly give
written notice of the commencement thereof to the party or
parties against whom indemnity shall be sought hereunder,
but the failure so to notify such indemnifying party or
parties of any such action shall not relieve such
indemnifying party or parties from any liability hereunder
to the extent it is not materially prejudiced as a result of
such failure to notify and in any event shall not relieve it
from any liability that it or they may have to the
indemnified party otherwise than on account of such
indemnity agreement. In case such notice of any such action
shall be so given, such indemnifying party shall be entitled
to participate at its own expense in the defense, or, if it
so elects, to assume (in conjunction with any other
indemnifying parties) the defense of such action, in which
event such defense shall be conducted by counsel chosen by
such indemnifying party or parties and satisfactory to the
indemnified party or parties who shall be defendant or
defendants in such action, and such defendant or defendants
shall bear the fees and expenses of any additional counsel
retained by them; but if the indemnifying party shall elect
not to assume the defense of such action, such indemnifying
party will reimburse such indemnified party or parties for
the reasonable fees and expenses of any counsel retained by
them; provided, however, if the defendants in any such
action (including impleaded parties) include both the
indemnified party and the indemnifying party and counsel for
the indemnifying party shall have reasonably concluded that
there may be a conflict of interest involved in the
representation by a single counsel of both the indemnifying
party and the indemnified party, the indemnified party or
parties shall have the right to select separate counsel,
satisfactory to the indemnifying party (it being understood,
however, that the indemnifying party shall not be liable for
the expenses of more than one separate counsel (in addition
to local counsel) representing the indemnified parties who
are parties to such action). Each of the Company and the
Underwriters agrees that without the other party's prior
written consent, which consent shall not be unreasonably
withheld, it will not settle, compromise or consent to the
entry of any judgment in any claim in respect of which
indemnification may be sought under the indemnification
provision of this Agreement, unless such settlement,
compromise or consent (i) includes an unconditional release
of such other party from all liability arising out of such
claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on
behalf of such other party.
(d) If the indemnification provided for in sub-
paragraph (a) or (b) above shall be unenforceable under
applicable law by an indemnified party, each indemnifying
party agrees to contribute to such indemnified party with
respect to any and all losses, claims, damages, liabilities
and expenses for which each such indemnification provided
for in subparagraph (a) or (b) above shall be unenforceable,
in such proportion as shall be appropriate to reflect (i)
the relative fault of each indemnifying party on the one
hand and the indemnified party on the other in connection
with the statements or omissions that have resulted in such
losses, claims, damages, liabilities and expenses, (ii) the
relative benefits received by the Company on the one hand
and the Underwriters on the other hand from the offering of
the Securities pursuant to this Agreement, and (iii) any
other relevant equitable considerations; provided, however,
that no indemnified party guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from
any indemnifying party not guilty of such fraudulent
misrepresentation. Relative fault shall be determined by
reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to
information supplied by such indemnifying party or the
indemnified party and each such party's relative intent,
knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission. The Company
and each of the Underwriters agree that it would not be just
and equitable if contributions pursuant to this subparagraph
(d) were to be determined by pro rata allocation or by any
other method of allocation that does not take account of the
equitable considerations referred to above. Notwithstanding
the provisions of this Section 8, no Underwriter shall be
required to contribute in excess of the amount equal to the
excess of (i) the total price at which the Securities
underwritten by it were offered to the public, over (ii) the
amount of any damages which the Underwriter has otherwise
been required to pay by reason of any such untrue or alleged
untrue statement or omission or alleged omission. The
obligations of each Underwriter to contribute pursuant to
this Section 8 are several and not joint and shall be in the
same proportion of all contributions of Underwriters
required hereunder as such Underwriter's obligation to
underwrite Securities is of the total amount of Securities
set forth in Schedule I hereto.
9. Termination. This Agreement may be terminated, at
-----------
any time prior to the Closing Date, by the Representatives if
(a) after the date hereof and at or prior to the Closing Date
there shall have occurred any suspension or material limitation
of trading of any of the Company's securities on the New York
Stock Exchange, Inc. ("NYSE") or any general suspension of
trading in securities on the NYSE, the American Stock Exchange,
Inc. ("AMEX") or the NASDAQ Stock Market, Inc. ("NASDAQ") or
there shall have been established by the NYSE, AMEX or NASDAQ or
by the Commission or by any federal or state agency or by the
decision of any court, any general limitation on prices for such
trading or any general restrictions on the distribution of
securities, or a general banking moratorium declared by New York
or federal authorities, or (b) there shall have occurred any (i)
new material outbreak of hostilities or (ii) new material other
national or international calamity or crisis, including, but not
limited to, an escalation of hostilities that existed prior to
the date of this Agreement or (iii) material adverse change in
the financial markets in the United States, and the effect of any
such event specified in clause (a) or (b) above on the financial
markets of the United States shall be such as to make it
impracticable, in the reasonable judgment of the Underwriters,
for the Underwriters to enforce contracts for the sale of the
Securities. This Agreement may also be terminated at any time
prior to the Closing Date by the Representatives if, in your
reasonable judgment, the subject matter of any amendment or
supplement to the Registration Statement or the Prospectus (other
than an amendment or supplement relating solely to the activity
of any Underwriter or Underwriters) prepared and issued by the
Company after the effectiveness of this Agreement shall have
disclosed a material adverse change in the business, property or
financial condition of the Company and its subsidiaries,
considered as a whole, that has materially impaired the
marketability of the Securities. Any termination hereof pursuant
to this Section 9 shall be without liability of any party to any
other party except as otherwise provided in Sections 5(g) and 8
hereof.
10. Miscellaneous. THE VALIDITY AND INTERPRETATION OF
-------------
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK. This Agreement shall inure to the benefit of the Company,
the several Underwriters and, with respect to the provisions of
Section 8 hereof, each director, officer and controlling person
referred to in said Section 8, and their respective successors.
Nothing herein is intended or shall be construed to give to any
other person, firm or corporation any legal or equitable right,
remedy or claim under or in respect of any provision in this
Agreement. The term "successor" as used herein shall not include
any purchaser, as such purchaser, of any of the Securities from
any of the several Underwriters.
11. Notices. All communications hereunder shall be in
-------
writing, and, if to the Underwriters, shall be mailed or
delivered to you at the address set forth above, or, if to the
Company, shall be mailed or delivered to it at 1601 Bryan Street,
Dallas, Texas 75201, Attention: Treasurer.
<PAGE>
If the foregoing is in accordance with your
understanding of our agreement, please indicate your acceptance
thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding
agreement between the Company and the several Underwriters in
accordance with its terms.
Very truly yours,
TEXAS UTILITIES COMPANY
By
------------------------------
Accepted and delivered as of
the date first above written
BY
By
------------------------
<PAGE>
SCHEDULE I
----------
Underwriting Agreement dated:
Underwriters:
Type A Securities
Designation:
Aggregate Stated Amount:
Purchase Price:
Public Offering Price:
Type B Securities
Designation:
Aggregate Stated Amount:
Purchase Price:
Public Offering Price:
<PAGE>
SCHEDULE II
-----------
Texas Utilities Company
Type A Securities and Type B Securities
Principal Amount of Principal Amount of
Name Type A Securities Type BSecurities
---- ---------------- ----------------
<PAGE>
SCHEDULE III
[Letterhead of Worsham, Forsythe & Wooldridge, L.L.P.]
, 1998
---------
as Representatives of the Underwriters named in the
Underwriting Agreement, dated , 1998,
---------
between Texas Utilities Company and the Underwriters
Ladies and Gentlemen:
We have acted as General Counsel to Texas Utilities
Company (the "Company") in connection with the issuance and sale
of its Type A Securities and Type B Securities (the "Securities")
pursuant to the Underwriting Agreement dated , 1998
--------
between the Company and the Underwriters (the "Underwriting
Agreement").
Terms not otherwise defined herein are used with the
meanings ascribed to them in the Underwriting Agreement.
In so acting we have participated in or reviewed the
corporate proceedings in connection with the authorization,
execution and delivery of the Underwriting Agreement, the
Remarketing Agreement, the Pledge Agreement, the Purchase
Contract Agreement, the Indenture, the Purchase Contracts, the
Debt Securities and the Securities. We have also examined such
other documents and satisfied ourselves as to such other matters
as we have deemed necessary as a basis for the conclusions of law
contained in the opinions enumerated below. We have relied as to
various questions of fact upon the representations and warranties
of the Company contained in the Underwriting Agreement and, where
we deemed appropriate, on certificates of public officials. We
have relied upon a certificate of the trustee under the Indenture
(the "Trustee") as to the authentication of the Debt Securities
and a certificate of the Agent under the Purchase Contract
Agreement as to the authentication of the Securities. In our
examination we have assumed the genuineness of all signatures and
the authenticity of all documents submitted to us as originals
and the conformity to original documents of all documents
submitted to us as photostatic or certified copies.
Upon the basis of our familiarity with these
transactions and with the affairs and properties of the Company
generally, we are of the opinion that:
1. The Company is a corporation duly authorized,
validly existing and in good standing under the laws of the State
of Texas, and has the corporate power and authority: (a) to
execute, deliver and perform its obligations under the
Underwriting Agreement, Purchase Contract Agreement, Pledge
Agreement, Purchase Contracts, Indenture and the Remarketing
Agreement, (b) to issue the Securities, the Common Stock issuable
pursuant to the Purchase Contracts and the Debt Securities and to
incur the indebtedness to be evidenced thereby, (c) to make the
Contract Adjustment Payments and (d) to own its property and
assets and to conduct the business which it is now conducting;
2. Each of the Underwriting Agreement, the Purchase
Contract Agreement, the Pledge Agreement, the Purchase Contracts,
the Indenture and the Remarketing Agreement has been duly
authorized, executed and delivered by the Company;
3. The Securities and the Debt Securities have been
duly authorized, executed and delivered by the Company; the Debt
Securities are entitled to the benefits of the Indenture; and the
Securities, the Debt Securities, the Purchase Contract Agreement,
the Pledge Agreement, the Purchase Contracts and the Indenture
are legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their
respective terms, subject to the effect of bankruptcy,
insolvency, reorganization, receivership, moratorium and other
laws affecting the rights and remedies of creditors generally and
of general principles of equity and, with respect to the Pledge
Agreement, subject to any principles of public policy limiting
the right to enforce the indemnification provisions contained
therein;
4. The Indenture has been duly qualified under the
Trust Indenture Act of 1939, as amended;
5. The Common Stock issuable pursuant to the Purchase
Contracts has been validly authorized and reserved for issuance
and, when issued and delivered by the Company in accordance with
the provisions of the Purchase Contract Agreement, the Purchase
Contracts and the Pledge Agreement, will be fully paid and non-
assessable; the issuance of such Common Stock will not be subject
to preemptive or other similar rights arising by law or, to the
best of our knowledge, otherwise;
6. The statements made in the Prospectus under the
captions "Description of Debt Securities", "Description of
Capital Stock" and "Description of Stock Purchase Contracts and
Stock Purchase Units", insofar as they purport to constitute
summaries of the terms of the documents referred to therein,
constitute accurate summaries of the terms of such documents in
all material respects;
7. Other than as stated, referred to or incorporated
by reference in the Registration Statement and the Prospectus,
there are no material pending legal proceedings to which the
Company is a party or of which property of the Company is the
subject which depart from the ordinary routine litigation
incident to the kind of business conducted by the Company, and to
our best knowledge no such proceedings are contemplated;
8. The Registration Statement, as of the Effective
Date, and the Prospectus, at the time it was filed with the
Commission pursuant to Rule 424 under the Securities Act, (except
as to financial statements and schedules and other financial and
statistical data contained therein as to which we do not express
any belief and except for those parts of the Registration
Statement that constitute the Form T-1) complied as to form in
all material respects with the applicable requirements of the
Securities Act and the applicable instructions, rules and
regulations of the Commission thereunder; the Incorporated
Documents (except as to the financial statements and schedules
and other financial and statistical data contained therein, as to
which we do not express any belief), at the time they were filed
with the Commission, complied as to form in all material respects
with the requirements of the Exchange Act and the applicable
instructions, rules and regulations of the Commission thereunder;
and the Registration Statement has become and is effective under
the Securities Act and, to our best knowledge, no proceedings for
a stop order with respect thereto are pending or threatened under
Section 8 of the Securities Act; and
9. No other approval, authorization, consent or order
of any public board or body (other than in connection or in
compliance with the provisions of the blue-sky laws of any
jurisdiction) is legally required for the authorization of the
issue and sale by the Company of the Securities, the Debt
Securities or the Common Stock issuable pursuant to the Purchase
Contracts.
In the course of the preparation of the information
relating to the Company contained in the Registration Statement
and the Prospectus (including the documents incorporated therein
by reference), we had discussions with certain of its officers
and representatives, with other counsel for the Company, with
Deloitte & Touche LLP, the independent certified public
accountants who audited certain of the financial statements
contained in the Registration Statement and the Prospectus, and
with certain of your officers and employees and your counsel, but
we made no independent verification of the accuracy or
completeness of the representations and statements made to us by
the Company or the information included by the Company in the
Registration Statement and the Prospectus and take no
responsibility therefor except as set forth in paragraph 5 above.
However, our examination of the information relating to the
Company contained in the Registration Statement and the
Prospectus and our discussions did not disclose to us anything
which gives us reason to believe that (except as to the financial
statements and schedules and other financial and statistical data
contained therein as to which we do not express any belief and
except for those parts of the Registration Statement that
constitute the Form T-1) (i) the Registration Statement, as of
the Effective Date, included an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading or (ii) the Prospectus, at the time it was filed with
the Commission pursuant to Rule 424 under the Securities Act,
included, or on the date hereof includes, an untrue statement of
a material fact or on such dates omitted or omits to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
We are members of the State Bar of Texas and do not
hold ourselves out as experts in the laws of the State of New
York. As to all matters of New York law, we have, with your
consent, relied upon the opinion of Reid & Priest LLP, New York,
New York, of Counsel to the Company.
Very truly yours,
WORSHAM, FORSYTHE &
WOOLDRIDGE, L.L.P.
By:
-------------------------
A Partner
<PAGE>
SCHEDULE IV
[Letterhead of Reid & Priest LLP]
New York, New York
, 1998
---------
as Representatives of the Underwriters named in the
Underwriting Agreement, dated , 1998,
---------
between Texas Utilities Company and the Underwriters
Ladies and Gentlemen:
We have acted as counsel to Texas Utilities Company
(the "Company") in connection with the issuance and sale of its
Type A Securities and Type B Securities (the "Securities")
pursuant to the Underwriting Agreement dated , 1998
---------
between the Company and the Underwriters (the "Underwriting
Agreement").
Terms not otherwise defined herein are used with the
meanings ascribed to them in the Underwriting Agreement.
In so acting we have participated in or reviewed the
corporate proceedings in connection with the authorization,
execution and delivery of the Underwriting Agreement, the
Remarketing Agreement, the Pledge Agreement, the Purchase
Contract Agreement, the Indenture, the Purchase Contracts, the
Debt Securities and the Securities. We have also examined such
other documents and satisfied ourselves as to such other matters
as we have deemed necessary as a basis for the conclusions of law
contained in the opinions enumerated below. We have relied as to
various questions of fact upon the representations and warranties
of the Company contained in the Underwriting Agreement and, where
we deemed appropriate, on certificates of public officials. We
have relied upon a certificate of the trustee under the Indenture
(the "Trustee") as to the authentication of the Debt Securities
and a certificate of the Agent under the Purchase Contract
Agreement as to the authentication of the Securities. In our
examination we have assumed the genuineness of all signatures and
the authenticity of all documents submitted to us as originals
and the conformity to original documents of all documents
submitted to us as photostatic or certified copies.
Upon the basis of our familiarity with these
transactions and with the affairs and properties of the Company
generally, we are of the opinion that:
1. Each of the Underwriting Agreement, the Purchase
Contract Agreement, the Pledge Agreement, the Purchase Contracts,
the Indenture and the Remarketing Agreement has been duly
authorized, executed and delivered by the Company;
2. The Securities and the Debt Securities have been
duly authorized, executed and delivered by the Company; the Debt
Securities are entitled to the benefits of the Indenture; and the
Securities, the Debt Securities, the Purchase Contract Agreement,
the Pledge Agreement, the Purchase Contracts and the Indenture
are legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their
respective terms, subject to the effect of bankruptcy,
insolvency, reorganization, receivership, moratorium and other
laws affecting the rights and remedies of creditors generally and
of general principles of equity and, with respect to the Pledge
Agreement, subject to any principles of public policy limiting
the right to enforce the indemnification provisions contained
therein;
3. The provisions of the Pledge Agreement are
effective to create in favor of the Collateral Agent for the
benefit of the Company, a valid and perfected security interest
under the Uniform Commercial Code as in effect on the date of
such opinion in the State of New York in the pledged Debt
Securities and the pledged Treasury Securities from time to time
credited to the Collateral Account;
4. The Indenture has been duly qualified under the
Trust Indenture Act of 1939, as amended;
5. The Common Stock issuable pursuant to the Purchase
Contracts has been validly authorized and reserved for issuance
and, when issued and delivered by the Company in accordance with
the provisions of the Purchase Contract Agreement, the Purchase
Contracts and the Pledge Agreement, will be fully paid and non-
assessable; the issuance of such Common Stock will not be
subject to preemptive or other similar rights arising by law or,
to the best of our knowledge, otherwise;
6. The statements made in the Prospectus under the
captions "Description of Debt Securities", "Description of
Capital Stock" and "Description of Stock Purchase Contracts and
Stock Purchase Units", insofar as they purport to constitute
summaries of the terms of the documents referred to therein,
constitute accurate summaries of the terms of such documents in
all material respects;
7. The Registration Statement, as of the Effective
Date, and the Prospectus, at the time it was filed with the
Commission pursuant to Rule 424 under the Securities Act, (except
as to the financial statements and schedules and other financial
and statistical data contained therein as to which we do not
express any belief and except for those parts of the Registration
Statement that constitute the Form T-1) complied as to form in
all material respects with the applicable requirements of the
Securities Act and the applicable instructions, rules and
regulations of the Commission thereunder; the Incorporated
Documents (except as to the financial statements and schedules
and other financial and statistical data contained therein, as to
which we do not express any belief), at the time they were filed
with the Commission, complied as to form in all material respects
with the requirements of the Exchange Act and the applicable
instructions, rules and regulations of the Commission thereunder;
and the Registration Statement has become and is effective under
the Securities Act and, to our best knowledge, no proceedings for
a stop order with respect thereto are pending or threatened under
Section 8 of the Securities Act; and
8. No other approval, authorization, consent or order
of any public board or body (other than in connection or in
compliance with the provisions of the blue-sky laws of any
jurisdiction) is legally required for the authorization of the
issue and sale by the Company of the Securities, the Debt
Securities or the Common Stock issuable pursuant to the Purchase
Contracts.
In the course of the preparation of the information
relating to the Company contained in the Registration Statement
and the Prospectus (including the documents incorporated therein
by reference) we had discussions with certain of its officers and
representatives, with other counsel for the Company, with
Deloitte & Touche LLP, the independent certified public
accountants who audited certain of the financial statements
contained in the Registration Statement and the Prospectus and
with certain of your officers and employees and your counsel, but
we made no independent verification of the accuracy or
completeness of the representations and statements made to us by
the Company or the information included by the Company in the
Registration Statement and the Prospectus and take no
responsibility therefor except as set forth in paragraph 4 above.
However, our examination of the information relating to the
Company contained in the Registration Statement and the
Prospectus and our discussions did not disclose to us anything
which gives us reason to believe that (except as to the financial
statements and schedules and other financial and statistical data
contained therein, as to which we do not express any belief and
except for those parts of the Registration Statement that
constitute the Form T-1) (i) the Registration Statement, as of
the Effective Date, included an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading or (ii) the Prospectus, at the time it was filed with
the Commission pursuant to Rule 424 under the Securities Act,
included, or on the date hereof includes, an untrue statement of
a material fact or on such dates omitted or omits to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
We are members of the New York Bar and do not hold
ourselves out as experts in the laws of the State of Texas. As
to all matters of Texas law, we have, with your consent, relied
upon the opinion of Worsham, Forsythe & Wooldridge, L.L.P.,
Dallas, Texas, General Counsel for the Company. We believe that
you and we are justified in relying on such opinion.
Very truly yours,
REID & PRIEST LLP
<PAGE>
SCHEDULE V
[Letterhead of Winthrop, Stimson, Putnam & Roberts]
, 1998
---------
as Representatives of the Underwriters named in the
Underwriting Agreement, dated , 1998,
---------
between Texas Utilities Company and the Underwriters
Ladies and Gentlemen:
We have acted as counsel to the Underwriters in
connection with your purchase from Texas Utilities Company (the
"Company") of the Type A Securities and the Type B Securities
(the "Securities") pursuant to the Underwriting Agreement dated
, 1998 between the Underwriters and the Company (the
-------
"Underwriting Agreement").
We are members of the New York Bar and do not hold
ourselves out as experts on the laws of the State of Texas. We
have, with your consent, relied upon an opinion of even date
herewith addressed to you by Worsham, Forsythe & Wooldridge,
L.L.P., of Dallas, Texas, General Counsel for the Company, as to
the matters covered in such opinion relating to Texas law. We
have reviewed such opinion and believe that it is satisfactory
and that you and we are justified in relying thereon. We have
also reviewed the opinion of Reid & Priest LLP required by
paragraph (c) of Section 6 of the Underwriting Agreement, and we
believe such opinion to be satisfactory.
We have, in addition, examined the documents described
in the list of closing papers as having been delivered to you at
the closing and such other documents and satisfied ourselves as
to such other matters as we have deemed necessary in order to
enable us to express this opinion. We have not examined the
Securities or the Debt Securities, except specimens thereof, and
have relied upon a certificate of the Agent under the Purchase
Contract Agreement as to the authentication of the Securities and
a certificate of the trustee under the Indenture as to the
authentication of the Debt Securities. As to various questions
of fact material to this opinion, we have relied upon
representations of the Company and statements in the Registration
Statement hereinafter mentioned. In such examination we have
assumed the genuineness of all signatures, the authenticity of
all documents submitted to us and the genuineness and conformity
to original documents of documents submitted to us as certified
or photostatic copies.
Based on the foregoing, we are of the opinion that:
1. Each of the Underwriting Agreement, the Purchase
Contract Agreement, the Pledge Agreement, the Purchase
Contracts, the Indenture and the Remarketing Agreement has
been duly authorized, executed and delivered by the Company;
2. The Securities and the Debt Securities have been
duly authorized, executed and delivered by the Company; the
Debt Securities are entitled to the benefits of the
Indenture; and the Securities, the Debt Securities, the
Purchase Contract Agreement, the Pledge Agreement, the
Purchase Contracts and the Indenture are legal, valid and
binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, subject
to the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the rights
and remedies of creditors generally and of general
principles of equity and, with respect to the Pledge
Agreement, subject to any principles of public policy
limiting the right to enforce the indemnification provisions
contained therein;
3. The Indenture has been duly qualified under the
Trust Indenture Act of 1939, as amended;
4. The Common Stock issuable pursuant to the Purchase
Contracts has been validly authorized and reserved for
issuance and, when issued and delivered by the Company in
accordance with the provisions of the Purchase Contract
Agreement, the Purchase Contracts and the Pledge Agreement,
will be fully paid and non-assessable; the issuance of
Common Stock will not be subject to preemptive or other
similar rights arising by law or to the best of our
knowledge, otherwise;
5. The statements made in the Prospectus under the
captions "Description of Debt Securities", "Description of
Capital Stock" and "Description of Stock Purchase Contracts
and Stock Purchase Units", insofar as they purport to
constitute summaries of the documents referred to therein,
constitute accurate summaries of the terms of such documents
in all material respects;
6. No other approval, authorization, consent or order
of any public board or body (other than in connection or in
compliance with the blue-sky laws of any jurisdiction) is
legally required for the authorization of the issue and sale
by the Company of the Securities, the Debt Securities or the
Common Stock issuable pursuant to the Purchase Contracts, as
contemplated in the Underwriting Agreement; and
7. The Registration Statement, at the Effective Date
thereof, and the Prospectus, at the time it was filed with
the Commission pursuant to Rule 424 (except in each case as
to financial statements and schedules and other financial
and statistical data contained or incorporated by reference
therein and except for those parts of the Registration
Statement that constitute the Form T-1, upon which we
express no opinion), complied as to form in all material
respects with the Securities Act.
In passing upon the form of the Registration Statement
and the form of the Prospectus, we necessarily assume the
correctness and completeness of the statements made by the
Company and the information included in the Registration
Statement and the Prospectus and take no responsibility therefor,
except insofar as such statements relate to us and as set forth
in paragraph 4 above. In the course of the preparation by the
Company of the Registration Statement and the Prospectus, we have
had discussions with certain of its officers and representatives,
with counsel for the Company, with Deloitte & Touche LLP, the
independent public accountants who audited certain of the
financial statements incorporated by reference in the
Registration Statement and the Prospectus and with certain of
your representatives. Our examination of the Registration
Statement and the Prospectus and our discussions did not disclose
to us any information which gives us reason to believe that at
the Effective Date the Registration Statement contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, at the time it was
filed with the Commission pursuant to Rule 424, or at the date
hereof, included or includes any untrue statement of a material
fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. We do
not express any opinion or belief as to the financial statements
or other financial or statistical data contained or incorporated
by reference in the Registration Statement or the Prospectus or
as to those parts of the Registration Statement that constitute
the Form T-1.
This opinion is given to you solely for your use in
connection with the Underwriting Agreement and the transactions
contemplated thereunder and may not be relied upon by any other
person or for any other purpose.
Very truly yours,
WINTHROP, STIMSON, PUTNAM
& ROBERTS
TEXAS UTILITIES COMPANY
Unsecured Debt Securities
UNDERWRITING AGREEMENT
----------------------
, 1998
---------
as Representatives of the Underwriters
named in Schedule I hereto
c/o
Ladies and Gentlemen:
1. Introduction. Texas Utilities Company, a Texas
------------
corporation (the "Company"), proposes to issue and sell severally
to you (the "Underwriters") the Company's unsecured debt
securities of the series designation, with the terms and in the
principal amount specified in Schedule I hereto (the "Debt
Securities").
2. Description of Debt Securities. The Company
------------------------------
proposes to issue the Debt Securities under its Indenture (For
Unsecured Debt Securities), dated as of , to
------------------
The Bank of New York, Trustee (the "Indenture Trustee"), said
Indenture, together with any amendments or supplements thereto,
being hereinafter referred to as the "Indenture".
3. Representations and Warranties of the Company.
---------------------------------------------
The Company represents and warrants to the several Underwriters
that:
(a) It has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on
Form S-3, including a prospectus, on , 1998
------------
(Registration No. 333- ) for the registration of
-------
$900,000,000 aggregate amount of the Company's (i) Debt
Securities, (ii) Common Stock, (iii) contracts to purchase
shares of Common Stock ("Stock Purchase Contracts") and (iv)
Stock Purchase Units, each representing ownership of a Stock
Purchase Contract and Senior Debt Securities or obligations
of third parties, under the Securities Act of 1933, as
amended (the "Securities Act"). Such registration statement
was declared effective by the Commission on ,
-------------
1998. References herein to the term "Registration
Statement" as of any date shall be deemed to refer to
Registration Statement No. 333- , as amended or
--------
supplemented to date, including all documents incorporated
by reference therein as of such date pursuant to Item 12 of
Form S-3 ("Incorporated Documents"); provided that if the
Company files a registration statement with the Commission
pursuant to Section 462(b) of the 1933 Act Regulations (the
"Rule 462(b) Registration Statement"), then after such
filing, all references to "Registration Statement" shall be
deemed to include the Rule 462(b) Registration Statement.
References herein to the term "Prospectus" as of any given
date shall be deemed to refer to the prospectus, including
any preliminary prospectus, forming a part of Registration
Statement No. 333- , as amended or supplemented as of
-------
such date, including all Incorporated Documents as of such
date and including any prospectus supplement relating to the
Securities. References herein to the term "Effective Date"
shall be deemed to refer to the later of the time and date
that Registration Statement No. 333- was declared
-------
effective or the time and date of the filing thereafter of
the Company's most recent Annual Report on Form 10-K if such
filing is made prior to the Closing Date, as hereinafter
defined. The Company will not file any amendment to the
Registration Statement or supplement to the Prospectus on or
after the date of this Agreement and prior to the Closing
Date, as hereinafter defined, without prior notice to the
Underwriters, or to which Counsel for the Underwriters shall
reasonably object in writing. For the purposes of this
Agreement, any Incorporated Document filed with the
Commission on or after the date of this Agreement and prior
to the Closing Date, as hereinafter defined, shall be deemed
an amendment or supplement to the Registration Statement and
the Prospectus.
(b) On the Effective Date, the Registration Statement
and the prospectus included as part of the Registration
Statement fully complied and at the Closing Date, as
hereinafter defined, the Registration Statement, the
Prospectus and the Indenture will fully comply in all
material respects with the applicable provisions of the
Securities Act, the Trust Indenture Act of 1939, as amended
("Trust Indenture Act"), and the applicable rules and regu-
lations of the Commission thereunder; on the Effective Date
the Registration Statement did not, and at the Closing Date,
as hereinafter defined, the Registration Statement will not,
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading; on
the Effective Date the Prospectus did not, and at the
Closing Date, as hereinafter defined, and on the date it is
filed with the Commission pursuant to Rule 424 of the
General Rules and Regulations of the Securities Act ("Rule
424"), the Prospectus will not, contain an untrue statement
of a material fact or omit to state a material fact neces-
sary in order to make the statements therein, in the light
of the circumstances under which they were made, not
misleading; and on said dates the Incorporated Documents,
taken together as a whole, fully complied or will comply in
all material respects with the applicable provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the applicable rules and regulations of the
Commission thereunder, and, when read together with the
Prospectus on said dates did not and will not contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading; provided that
the foregoing representations and warranties in this
paragraph (b) shall not apply to statements or omissions
made in reliance upon information furnished in writing to
the Company by, or on behalf of, any Underwriter for use in
connection with the preparation of the Registration
Statement or the Prospectus or to any statements in or
omissions from the Statements of Eligibility and
Qualification under the Trust Indenture Act, or amendments
thereto, filed as exhibits to the Registration Statement.
(c) The consummation of the transactions herein
contemplated and the fulfillment of the terms hereof will
not result in a breach of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed
of trust, charter, by-laws or other agreement or instrument
to which the Company is now a party.
4. Purchase and Sale. On the basis of the
-----------------
representations and warranties herein contained, and subject to
the terms and conditions herein set forth, the Company shall sell
to each of the Underwriters, and each Underwriter shall purchase
from the Company, at the time and place herein specified,
severally and not jointly, the respective principal amount of the
Debt Securities set forth opposite the name of such Underwriter
in Schedule II attached hereto, at the purchase price or prices
set forth in Schedule I hereto.
5. Time and Place of Closing. Delivery of the Debt
-------------------------
Securities against payment therefor by wire transfer in federal
funds shall be made at the office of Reid & Priest LLP, 40 West
57th Street, New York, New York, at 10:00 A.M., New York Time, on
, or at such other place, time and date as
------------------
shall be agreed upon in writing by the Company and you or
established in accordance with the following paragraph. The hour
and date of such delivery and payment are herein called the
"Closing Date". The Debt Securities shall be delivered to you
for the respective accounts of the Underwriters in fully
registered form in such denominations of $1,000 or any multiple
thereof and registered in such names as you shall reasonably
request in writing not later than the close of business on the
second business day prior to the Closing Date, or, to the extent
not so requested, registered in the names of the respective
Underwriters in such authorized denominations as the Company
shall determine. The Company agrees to make the Debt Securities
available to you for checking purposes not later than 10:00 A.M.,
New York Time, on the last business day preceding the Closing
Date at the office of Reid & Priest LLP, 40 West 57th Street, New
York, New York 10019.
If any Underwriter shall fail or refuse (otherwise than
for some reason sufficient to justify, in accordance with the
terms hereof, the cancellation or termination of its obligations
hereunder) to purchase and pay for the principal amount of the
Debt Securities which such Underwriter has agreed to purchase and
pay for hereunder, the Company shall immediately give notice to
the other Underwriters of the default of such Underwriter, and
the other Underwriters shall have the right within 24 hours after
the receipt of such notice to determine to purchase, or to
procure one or more others, who are members of the National
Association of Securities Dealers, Inc. ("NASD") (or, if not
members of the NASD, who are not eligible for membership in the
NASD and who agree (i) to make no sales within the United States,
its territories or its possessions or to persons who are citizens
thereof or residents therein and (ii) in making sales to comply
with the NASD's Conduct Rules) and satisfactory to the Company,
to purchase, upon the terms herein set forth, the principal
amount of the Debt Securities which the defaulting Underwriter
had agreed to purchase. If any non-defaulting Underwriter or
Underwriters shall determine to exercise such right, such
Underwriter or Underwriters shall give written notice to the
Company of the determination in that regard within 24 hours after
receipt of notice of any such default, and thereupon the Closing
Date shall be postponed for such period, not exceeding three
business days, as the Company shall determine. If in the event
of such a default no non-defaulting Underwriter shall give such
notice then this Agreement may be terminated by the Company, upon
like notice given to the non-defaulting Underwriters, within a
further period of 24 hours. If in such case the Company shall
not elect to terminate this Agreement it shall have the right,
irrespective of such default:
(a) to require each non-defaulting Underwriter to
purchase and pay for the respective principal amount of the
Debt Securities that such Underwriter has severally agreed
to purchase hereunder as hereinabove provided and, in
addition, the principal amount of the Debt Securities that
the defaulting Underwriter shall have so failed to purchase
up to a principal amount thereof equal to one-ninth (1/9) of
the principal amount of Debt Securities that such non-
defaulting Underwriter has otherwise agreed to purchase
hereunder, and/or
(b) to procure one or more persons, reasonably
acceptable to the Representatives, who are members of the
NASD (or, if not members of the NASD, who are not eligible
for membership in the NASD and who agree (i) to make no
sales within the United States, its territories or its
possessions or to persons who are citizens thereof or
residents therein and (ii) in making sales to comply with
the NASD's Conduct Rules), to purchase, upon the terms
herein set forth, either all or a part of the principal
amount of the Debt Securities that such defaulting
Underwriter had agreed to purchase or that portion thereof
that the remaining Underwriters shall not be obligated to
purchase pursuant to the foregoing clause (a).
In the event the Company shall exercise its rights under (a)
and/or (b) above, the Company shall give written notice thereof
to the non-defaulting Underwriters within such further period of
24 hours, and thereupon the Closing Date shall be postponed for
such period, not exceeding three business days, as the Company
shall determine.
In the computation of any period of 24 hours referred
to in this Section 5, there shall be excluded a period of 24
hours in respect of each Saturday, Sunday or legal holiday which
would otherwise be included in such period of time.
Any action taken by the Company under this Section 5
shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
Termination by the Company under this Section 5 shall be without
any liability on the part of the Company or any non-defaulting
Underwriter, except as otherwise provided in Sections 6(g) and 9
hereof.
6. Covenants of the Company. The Company agrees
------------------------
that:
(a) It will promptly deliver to each of you a signed
copy of the Registration Statement as originally filed or,
to the extent a signed copy is not available, a conformed
copy, certified by an officer of the Company to be in the
form as originally filed, including all Incorporated
Documents and exhibits and of all amendments thereto.
(b) It will deliver to you, as soon as practicable
after the date hereof, as many copies of the Prospectus as
of such date as you may reasonably request.
(c) It will cause the Prospectus to be filed with the
Commission pursuant to Rule 424 as soon as practicable and
advise you of the issuance of any stop order under the
Securities Act with respect to the Registration Statement or
the institution of any proceedings therefor of which the
Company shall have received notice. The Company will use
its best efforts to prevent the issuance of any such stop
order and to secure the prompt removal thereof if issued.
(d) If, during such period of time (not exceeding nine
months) after the Prospectus has been filed with the
Commission pursuant to Rule 424 as in the opinion of Counsel
for the Underwriters a prospectus covering the Debt
Securities is required by law to be delivered in connection
with sales by an Underwriter or dealer, any event relating
to or affecting the Company or of which the Company shall be
advised in writing by you shall occur which in the Company's
reasonable opinion after consultation with Counsel for the
Underwriters should be set forth in a supplement to, or an
amendment of, the Prospectus in order to make the Prospectus
not misleading in the light of the circumstances when it is
delivered to a purchaser, the Company will, at its expense,
amend or supplement the Prospectus by either (i) preparing
and furnishing to you at the Company's expense a reasonable
number of copies of a supplement or supplements or an
amendment or amendments to the Prospectus or (ii) making an
appropriate filing pursuant to Section 13 of the Exchange
Act, which will supplement or amend the Prospectus so that,
as supplemented or amended, it will not contain any untrue
statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in
the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading; provided that
should such event relate solely to the activities of any of
the Underwriters, then the Underwriters shall assume the
expense of preparing and furnishing any such amendment or
supplement. In case any Underwriter is required to deliver
a prospectus after the expiration of nine months from the
date the Prospectus is filed with the Commission pursuant to
Rule 424, the Company, upon your request, will furnish to
you, at the expense of such Underwriter, a reasonable
quantity of a supplemental prospectus or supplements to the
Prospectus complying with Section 10(a) of the Securities
Act.
(e) It will make generally available to its security
holders, as soon as practicable, an earnings statement
(which need not be audited) covering a period of at least
twelve months beginning not earlier than the first day of
the month next succeeding the month in which occurred the
effective date of the Registration Statement as defined in
Rule 158 under the Securities Act.
(f) It will furnish such proper information as may be
lawfully required and otherwise cooperate in qualifying the
Debt Securities for offer and sale under the blue-sky laws
of such jurisdictions as you may designate, provided that
the Company shall not be required to qualify as a foreign
corporation or dealer in securities, to file any consents to
service of process under the laws of any jurisdiction, or to
meet any other requirements deemed by the Company to be
unduly burdensome.
(g) It will, except as herein provided, pay all
expenses and taxes (except transfer taxes) in connection
with (i) the preparation and filing by it of the
Registration Statement, (ii) the issuance and delivery of
the Debt Securities as provided in Section 5 hereof, (iii)
the qualification of the Debt Securities under blue-sky laws
(including counsel fees not to exceed $7,500), and (iv) the
printing and delivery to the Underwriters of reasonable
quantities of the Registration Statement and, except as
provided in Section 6(d) hereof, of the Prospectus. The
Company shall not, however, be required to pay any amount
for any expenses of yours or any of the Underwriters, except
that, if this Agreement shall be terminated in accordance
with the provisions of Section 7, 8 or 10 hereof, the
Company will reimburse you for the fees and disbursements of
Counsel for the Underwriters, whose fees and disbursements
the Underwriters agree to pay in any other event, and will
reimburse the Underwriters for their reasonable out-of-
pocket expenses, in an aggregate amount not exceeding
$5,000, incurred in contemplation of the performance of this
Agreement. The Company shall not in any event be liable to
any of the several Underwriters for damages on account of
loss of anticipated profits.
(h) Prior to the Closing Date the Company will not,
without the prior written consent of the Representatives,
directly or indirectly, publicly issue, sell, offer or
contract to sell, on the market in which the Debt Securities
are being offered and sold, any securities of the Company
which are of the same class as the Debt Securities.
7. Conditions of Underwriters' Obligations. The
---------------------------------------
obligations of the Underwriters to purchase and pay for the Debt
Securities shall be subject to the accuracy of the rep-
resentations and warranties made herein on the part of the
Company, to the performance by the Company of its obligations to
be performed hereunder prior to the Closing Date, and to the
following conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424 prior to 5:30 P.M., New York
Time, on the second business day after the date of this
Agreement, or such other time and date as may be approved by
you.
(b) No stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no
proceedings for that purpose shall be pending before, or
threatened by, the Commission on the Closing Date; and you
shall have received a certificate, dated the Closing Date
and signed by an officer of the Company, to the effect that
no such stop order is in effect and that no proceedings for
such purpose are pending before, or to the knowledge of the
Company threatened by, the Commission.
(c) On the Closing Date, you shall have received from
Worsham, Forsythe & Wooldridge, L.L.P., General Counsel for
the Company, Reid & Priest LLP, of counsel for the Company,
and Winthrop, Stimson, Putnam & Roberts, Counsel for the
Underwriters, opinions in substantially the form and
substance prescribed in Schedules III, IV and V hereto (i)
with such changes therein as may be agreed upon by the
Company and you, with the approval of Counsel for the
Underwriters, and (ii) if the Prospectus relating to the
Debt Securities shall be supplemented or amended after the
Prospectus shall have been filed with the Commission
pursuant to Rule 424, with any changes therein necessary to
reflect such supplementation or amendment.
(d) On and as of the date hereof you shall have
received from Deloitte & Touche LLP a letter to the effect
that (i) they are independent certified public accountants
with respect to the Company, within the meaning of the
Securities Act and the applicable published rules and
regulations thereunder, (ii) in their opinion, the financial
statements audited by them and included or incorporated by
reference in the Prospectus comply as to form in all
material respects with the applicable accounting
requirements of the Exchange Act and the published rules and
regulations thereunder, (iii) on the basis of a reading of
the unaudited amounts of operating revenues and net income
included or incorporated by reference in the Prospectus and
the related financial statements from which these amounts
were derived, the latest available unaudited financial
statements of the Company and the minute books of the
Company and inquiries of officers of the Company who have
responsibility for financial and accounting matters (it
being understood that the foregoing procedures do not
constitute an audit made in accordance with generally
accepted auditing standards and would not necessarily reveal
matters of significance with respect to the comments made in
such letter, and accordingly that Deloitte & Touche LLP
makes no representation as to the sufficiency of such
procedures for the several Underwriters' purposes), nothing
has come to their attention that caused them to believe that
(A) the unaudited financial statements incorporated by
reference in the Prospectus were not determined in accor-
dance with generally accepted accounting principles applied
on a basis substantially consistent with that of the
corresponding amounts in the latest available audited
financial statements, (B) the unaudited amounts of operating
revenues and net income of the Company included or
incorporated by reference in the Prospectus were not
determined on a basis substantially consistent with that of
the corresponding amounts in the audited statements of
income incorporated by reference in the Prospectus, (C) for
the months ended as of the date of the latest
------
available financial statements of the Company, there were
any decreases in operating revenues or net income as
compared with the comparable period of the preceding year,
and (D) at a specified date not more than seven days prior
to the date of such letter, there was any change in the
capital stock of the Company, short-term bank loans,
commercial paper, notes payable to Texas Utilities Company
or long-term debt of the Company or decrease in its net
assets, in each case as compared with amounts shown in the
most recent balance sheet incorporated by reference in the
Prospectus, except in all instances for changes or decreases
that the Prospectus discloses have occurred or may occur or
which are occasioned by the declaration of a regular
quarterly dividend or the acquisition of long-term debt for
sinking fund purposes, or that are described in such letter,
and (iv) they have compared the dollar amounts (or
percentages or ratios derived from such dollar amounts) and
other financial information included or incorporated by
reference in the Registration Statement and the Prospectus
as reasonably requested by you (in each case to the extent
that such dollar amounts, percentages and other financial
information are derived from the general accounting records
of the Company subject to the internal controls of the
Company's accounting system or are derived indirectly from
such records by analysis or computation) with the results
obtained from inquiries, a reading of such general
accounting records and other procedures specified in such
letter, and have found such dollar amounts, percentages and
other financial information to be in agreement with such
results, except as otherwise specified in such letter.
(e) Since the most recent dates as of which in-
formation is given in the Registration Statement or the
Prospectus there shall not have been any material adverse
change in the business, property or financial condition of
the Company and its subsidiaries, considered as a whole,
whether or not in the ordinary course of business, and,
since such dates, there shall not have been any material
transaction entered into by the Company, other than transac-
tions in the ordinary course of business and transactions
contemplated by the Registration Statement or Prospectus and
at the Closing Date you shall have received a certificate to
such effect dated the Closing Date and signed by an officer
of the Company.
(f) All legal proceedings to be taken in connection
with the issuance and sale of the Debt Securities shall have
been satisfactory in form and substance to Counsel for the
Underwriters.
In case any of the conditions specified above in this
Section 7 shall not have been fulfilled, this Agreement may be
terminated by the Representatives upon notice thereof to the
Company. Any such termination shall be without liability of any
party to any other party except as otherwise provided in Sections
6(g) and 9 hereof.
8. Conditions of Company's Obligations. The
-----------------------------------
obligation of the Company to deliver the Debt Securities shall be
subject to the conditions that the Prospectus shall have been
filed with the Commission pursuant to Rule 424 prior to 5:30
P.M., New York Time, on the second business day after the date of
this Agreement or such other time and date as may be approved by
the Company, and no stop order suspending the effectiveness of
the Registration Statement shall be in effect at the Closing Date
and no proceedings for that purpose shall be pending before, or
threatened by, the Commission at the Closing Date. In case these
conditions shall not have been fulfilled, this Agreement may be
terminated by the Company upon notice thereof to you. Any such
termination shall be without liability of any party to any other
party except as otherwise provided in Sections 6(g) and 9 hereof.
9. Indemnification.
---------------
(a) The Company shall indemnify, defend and hold
harmless each Underwriter and each person who controls any
Underwriter within the meaning of Section 15 of the
Securities Act from and against any and all losses, claims,
damages or liabilities, joint or several, to which they or
any of them may become subject under the Securities Act or
any other statute or common law and shall reimburse each
such Underwriter and controlling person for any legal or
other expenses (including, to the extent hereinafter
provided, reasonable counsel fees) incurred by them in
connection with investigating any such losses, claims,
damages or liabilities or in connection with defending any
actions, insofar as such losses, claims, damages,
liabilities, expenses or actions arise out of or are based
upon any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or
prospectus prior to the Effective Date, or in the
Registration Statement or the Prospectus, or the omission or
alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein in the light of the circumstances under which they
were made not misleading; provided, however, that the
indemnity agreement contained in this Section 9 shall not
apply to any such losses, claims, damages, liabilities,
expenses or actions arising out of, or based upon, any such
untrue statement or alleged untrue statement, or any such
omission or alleged omission, if such statement or omission
was made in reliance upon information furnished in writing
to the Company by any Underwriter, through you or Counsel
for the Underwriters, for use in connection with the
preparation of the Registration Statement or the Prospectus
or any amendment or supplement to either thereof, or arising
out of, or based upon, statements in or omissions from that
part of the Registration Statement which shall constitute
the Statement of Eligibility and Qualification under the
Trust Indenture Act of the Indenture Trustee under the
Indenture; and provided further, that the indemnity
agreement contained in this Section 9 shall not inure to the
benefit of any Underwriter (or of any person controlling
such Underwriter) on account of any such losses, claims,
damages, liabilities, expenses or actions arising from the
sale of the Debt Securities to any person if a copy of the
Prospectus (exclusive of the Incorporated Documents) shall
not have been given or sent to such person by or on behalf
of such Underwriter with or prior to the written
confirmation of the sale involved unless, with respect to
the delivery of any amendment or supplement to the
Prospectus, the alleged omission or alleged untrue statement
was not corrected in such amendment or supplement at the
time of such written confirmation. The indemnity agreement
of the Company contained in this Section 9 and the
representations and warranties of the Company contained in
Section 3 hereof shall remain operative and in full force
and effect regardless of any termination of this Agreement
or of any investigation made by or on behalf of any
Underwriter or any such controlling person, and shall
survive the delivery of the Debt Securities.
(b) Each Underwriter shall indemnify, defend and hold
harmless the Company, its officers and directors, and each
person who controls the Company within the meaning of
Section 15 of the Securities Act, from and against any and
all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject
under the Securities Act or any other statute or common law
and shall reimburse each of them for any legal or other
expenses (including, to the extent hereinafter provided,
reasonable counsel fees) incurred by them in connection with
investigating any such losses, claims, damages or
liabilities or in connection with defending any actions,
insofar as such losses, claims, damages, liabilities,
expenses or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the
Prospectus, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if
such statement or omission was made in reliance upon
information furnished in writing to the Company by or on
behalf of such Underwriter, through you or Counsel for the
Underwriters, for use in connection with the preparation of
the Registration Statement or the Prospectus or any
amendment or supplement to either thereof. Each Underwriter
hereby furnishes to the Company in writing expressly for use
in the Prospectus (i) the statements relating to offerings
by the Underwriters on the cover page, (ii) the statements
in the first paragraph on page concerning stabilization
---
and other transactions by the Underwriters, and, (iii) under
"Underwriting," the list of underwriters and statements in
the , and paragraphs. The indemnity agree-
----- ----- -----
ment of the respective Underwriters contained in this Sec-
tion 9 shall remain operative and in full force and effect
regardless of any termination of this Agreement or of any
investigation made by or on behalf of the Company, its
directors or its officers, any such Underwriter, or any such
controlling person, and shall survive the delivery of the
Debt Securities.
(c) The Company and the several Underwriters each
shall, upon the receipt of notice of the commencement of any
action against it or any person controlling it as aforesaid,
in respect of which indemnity may be sought on account of
any indemnity agreement contained herein, promptly give
written notice of the commencement thereof to the party or
parties against whom indemnity shall be sought hereunder,
but the failure so to notify such indemnifying party or
parties of any such action shall not relieve such
indemnifying party or parties from any liability hereunder
to the extent it is not materially prejudiced as a result of
such failure to notify and in any event shall not relieve it
from any liability that it or they may have to the
indemnified party otherwise than on account of such
indemnity agreement. In case such notice of any such action
shall be so given, such indemnifying party shall be entitled
to participate at its own expense in the defense, or, if it
so elects, to assume (in conjunction with any other
indemnifying parties) the defense of such action, in which
event such defense shall be conducted by counsel chosen by
such indemnifying party or parties and satisfactory to the
indemnified party or parties who shall be defendant or
defendants in such action, and such defendant or defendants
shall bear the fees and expenses of any additional counsel
retained by them; but if the indemnifying party shall elect
not to assume the defense of such action, such indemnifying
party will reimburse such indemnified party or parties for
the reasonable fees and expenses of any counsel retained by
them; provided, however, if the defendants in any such
action (including impleaded parties) include both the
indemnified party and the indemnifying party and counsel for
the indemnifying party shall have reasonably concluded that
there may be a conflict of interest involved in the
representation by such counsel of both the indemnifying
party and the indemnified party, the indemnified party or
parties shall have the right to select separate counsel,
satisfactory to the indemnifying party, to participate in
the defense of such action on behalf of such indemnified
party or parties (it being understood, however, that the
indemnifying party shall not be liable for the expenses of
more than one separate counsel (in addition to local
counsel) representing the indemnified parties who are
parties to such action). Each of the Company and the
Underwriters agree that without the other party's prior
written consent, which consent shall not be unreasonably
withheld, it will not settle, compromise or consent to the
entry of any judgment in any claim in respect of which
indemnification may be sought under the indemnification
provision of this Agreement, unless such settlement,
compromise or consent (i) includes an unconditional release
of such other party from all liability arising out of such
claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on
behalf of such other party.
(d) If the indemnification provided for in sub-
paragraph (a) or (b) above shall be unenforceable under
applicable law by an indemnified party, each indemnifying
party agrees to contribute to such indemnified party with
respect to any and all losses, claims, damages, liabilities
and expenses for which each such indemnification provided
for in subparagraph (a) or (b) above shall be unenforceable,
in such proportion as shall be appropriate (i) to reflect
the relative fault of each indemnifying party on the one
hand and the indemnified party on the other in connection
with the statements or omissions that have resulted in such
losses, claims, damages, liabilities and expenses, (ii) the
relative benefits received by the Company on the one hand
and the Underwriters on the other hand from the offering of
the Debt Securities pursuant to this Agreement, and (iii)
any other relevant equitable considerations; provided,
however, that no indemnified party guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from
any indemnifying party not guilty of such fraudulent
misrepresentation. Relative fault shall be determined by
reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to
information supplied by such indemnifying party or the
indemnified party and each such party's relative intent,
knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission. The Company
and each of the Underwriters agree that it would not be just
and equitable if contributions pursuant to this subparagraph
(d) were to be determined by pro rata allocation (even if
the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to
above. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute in excess of the
amount equal to the excess of (i) the total price at which
the Debt Securities underwritten by it were offered to the
public, over (ii) the amount of any damages which such
Underwriter has otherwise been required to pay by reason of
any such untrue or alleged untrue statement or omission or
alleged omission. The obligations of each Underwriter to
contribute pursuant to this Section 9 are several and not
joint and shall be in proportion to the principal amount of
Debt Securities set forth opposite its name in Schedule II
hereto.
10. Termination. This Agreement may be terminated, at
-----------
any time prior to the Closing Date, by the Representatives if (a)
after the date hereof and at or prior to the Closing Date there
shall have occurred any suspension or material limitation of
trading of any of the Company's securities on the New York Stock
Exchange, Inc. ("NYSE") or any general suspension of trading in
securities on the NYSE, the American Stock Exchange, Inc.
("AMEX") or the NASDAQ Stock Market, Inc. ("NASDAQ") or there
shall have been established by the NYSE, AMEX or NASDAQ or by the
Commission or by any federal or state agency or by the decision
of any court, any general limitation on prices for such trading
or any general restrictions on the distribution of securities, or
a general banking moratorium declared by New York or federal
authorities, or (b) there shall have occurred any (i) new
material outbreak of hostilities or (ii) other national or
international calamity or crisis, including, but not limited to,
an escalation of hostilities that existed prior to the date of
this Agreement or (iii) material adverse change in the financial
markets in the United States, and the effect of any such event
specified in clause (a) or (b) above on the financial markets of
the United States shall be such as to make it impracticable, in
the reasonable judgment of the Underwriters, for the Underwriters
to enforce contracts for the sale of the Debt Securities. This
Agreement may also be terminated at any time prior to the Closing
Date by the Representatives if, in your reasonable judgment, the
subject matter of any amendment or supplement to the Registration
Statement or the Prospectus (other than an amendment or
supplement relating solely to the activity of any Underwriter or
Underwriters) prepared and issued by the Company after the
effectiveness of this Agreement shall have disclosed a material
adverse change in the business, property or financial condition
of the Company and its subsidiaries, considered as a whole, which
has materially impaired the marketability of the Debt Securities.
Any termination hereof pursuant to this Section 10 shall be
without liability of any party to any other party except as
otherwise provided in Sections 6(g) and 9 hereof.
11. Miscellaneous. THE VALIDITY AND INTERPRETATION OF
-------------
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK. This Agreement shall inure to the benefit of the Company,
the several Underwriters and, with respect to the provisions of
Section 9 hereof, each director, officer and controlling person
referred to in said Section 9, and their respective successors.
Nothing herein is intended or shall be construed to give to any
other person, firm or corporation any legal or equitable right,
remedy or claim under or in respect of any provision in this
Agreement. The term "successor" as used herein shall not include
any purchaser, as such purchaser, of any of the Debt Securities
from any of the several Underwriters.
12. Notices. All communications hereunder shall be in
-------
writing, and, if to the Underwriters, shall be mailed or
delivered to you at the address set forth above, or, if to the
Company, shall be mailed or delivered to it at 1601 Bryan Street,
Dallas, Texas 75201, Attention: Treasurer.
If the foregoing is in accordance with your
understanding of our agreement, please indicate your acceptance
thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding
agreement between the Company and the several Underwriters in
accordance with its terms.
Very truly yours,
TEXAS UTILITIES COMPANY
By:
----------------------------------
Name:
Title:
Accepted and delivered as of
the date first above written
By:
-----------------------------
Name:
Title:
<PAGE>
SCHEDULE I
----------
Underwriting Agreement dated:
Underwriters:
Securities
----------
Designation:
Principal Amount:
Indenture dated as of:
Date of Maturity:
Interest Rate:
Purchase Price:
Public Offering Price:
<PAGE>
SCHEDULE II
-----------
TEXAS UTILITIES COMPANY
UNSECURED DEBT SECURITIES
Name Principal Amount
---- ----------------
<PAGE>
SCHEDULE III
[Letterhead of Worsham, Forsythe & Wooldridge, L.L.P.]
, 1998
---------
as Representatives of the Underwriters named in the
Underwriting Agreement, dated , 1998,
---------
between Texas Utilities Company and the Underwriters
Ladies and Gentlemen:
We have acted as General Counsel to Texas Utilities
Company (the "Company") in connection with the issuance and sale
of its % Series D Senior Note due , (the
----- --------- ----
"Securities") pursuant to the Underwriting Agreement dated
, 1998 between the Company and Underwriters (the
---------
"Underwriting Agreement").
Terms not otherwise defined herein are used with the
meanings ascribed to them in the Underwriting Agreement.
In so acting we have participated in or reviewed the
corporate proceedings in connection with the authorization,
execution and delivery of the Underwriting Agreement, the
Indenture and the Securities. We have also examined such other
documents and satisfied ourselves as to such other matters as we
have deemed necessary as a basis for the conclusions of law
contained in the opinions enumerated below. We have relied as to
various questions of fact upon the representations and warranties
of the Company contained in the Underwriting Agreement and, where
deemed appropriate, on certificates of public officials. We have
relied upon a certificate of the trustee under the Indenture
("Trustee") as to the authentication of the Securities. In our
examination we have assumed the genuineness of all signatures and
the authenticity of all documents submitted to us as originals
and the conformity to original documents of all documents
submitted to us as photostatic or certified copies.
Upon the basis of our familiarity with these
transactions and with the affairs and properties of the Company
generally, we are of the opinion that:
1. The Company is a corporation duly authorized,
validly existing and in good standing under the laws of the State
of Texas, and has the corporate power and authority: (a) to
execute, deliver and perform its obligations under the
Underwriting Agreement and the Indenture, (b) to issue the
Securities and to incur the indebtedness to be evidenced thereby
and (c) to own its property and assets and to conduct the
business which it is now conducting;
2. Each of the Underwriting Agreement and the
Indenture has been duly authorized, executed and delivered by the
Company;
3. The Securities have been duly authorized, executed
and delivered by the Company and are entitled to the benefits of
the Indenture; and the Securities and the Indenture are legal,
valid and binding obligations of the Company, enforceable against
the Company in accordance with their respective terms, subject to
the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the rights and
remedies of creditors generally and of general principles of
equity;
4. The Indenture has been duly qualified under the
Trust Indenture Act of 1939, as amended;
5. The statements made in the Prospectus under the
captions "Description of Debt Securities", insofar as they
purport to constitute summaries of the terms of the documents
referred to therein, constitute accurate summaries of the terms
of such documents in all material respects;
6. Other than as stated, referred to or incorporated
by reference in the Registration Statement and the Prospectus,
there are no material pending legal proceedings to which the
Company is a party or of which property of the Company is the
subject which depart from the ordinary routine litigation
incident to the kind of business conducted by the Company, and to
our best knowledge no such proceedings are contemplated;
7. The Registration Statement, as of the Effective
Date, and the Prospectus, at the time it was filed with the
Commission pursuant to Rule 424 under the Securities Act, (except
as to financial statements and schedules and other financial and
statistical data contained therein as to which we do not express
any belief and except for those parts of the Registration
Statement that constitute the Form T-1) complied as to form in
all material respects with the applicable requirements of the
Securities Act and the applicable instructions, rules and
regulations of the Commission thereunder; the Incorporated
Documents (except as to the financial statements and schedules
and other financial and statistical data contained therein, as to
which we do not express any belief), at the time they were filed
with the Commission, complied as to form in all material respects
with the requirements of the Exchange Act and the applicable
instructions, rules and regulations of the Commission thereunder;
and the Registration Statement has become and is effective under
the Securities Act and, to our best knowledge, no proceedings for
a stop order with respect thereto are pending or threatened under
Section 8 of the Securities Act; and
8. No other approval, authorization, consent or order
of any public board or body (other than in connection or in
compliance with the provisions of the blue-sky laws of any
jurisdiction) is legally required for the authorization of the
issue and sale by the Company of the Securities.
In the course of the preparation of the information
relating to the Company contained in the Registration Statement
and the Prospectus (including the documents incorporated therein
by reference), we had discussions with certain of its officers
and representatives, with other counsel for the Company, with
Deloitte & Touche LLP, the independent certified public
accountants who audited certain of the financial statements
contained in the Registration Statement and the Prospectus, and
with certain of your officers and employees and your counsel, but
we made no independent verification of the accuracy or
completeness of the representations and statements made to us by
the Company or the information included by the Company in the
Registration Statement and the Prospectus and take no
responsibility therefor except as set forth in paragraph 5 above.
However, our examination of the information relating to the
Company contained in the Registration Statement and the
Prospectus and our discussions did not disclose to us anything
which gives us reason to believe that (except as to financial
statements and schedules and other financial and statistical data
contained therein as to which we do not express any belief and
except for those parts of the Registration Statement that
constitute the Form T-1) (i) the Registration Statement, as of
the Effective Date, included an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading or (ii) the Prospectus, at the time it was filed with
the Commission pursuant to Rule 424 under the Securities Act,
included, or on the date hereof includes, an untrue statement of
a material fact or on such dates omitted or omits to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
We are members of the State Bar of Texas and do not
hold ourselves out as experts in the laws of the State of New
York. As to all matters of New York law, we have, with your
consent, relied upon the opinion of Reid & Priest LLP, New York,
New York, of Counsel to the Company.
Very truly yours,
WORSHAM, FORSYTHE &
WOOLDRIDGE, L.L.P.
By:
------------------------
A Partner
<PAGE>
SCHEDULE IV
[Letterhead of Reid & Priest LLP]
New York, New York
, 1998
---------
as Representatives of the Underwriters named in the
Underwriting Agreement, dated , 1998,
---------
between Texas Utilities Company and the Underwriters
Ladies and Gentlemen:
We have acted as counsel to Texas Utilities Company
(the "Company") in connection with the issuance and sale of its
% Series D Senior Note due , (the "Securities")
--- --------- ----
pursuant to the Underwriting Agreement dated , 1998
---------
between the Company and the Underwriters (the "Underwriting
Agreement").
Terms not otherwise defined herein are used with the
meanings ascribed to them in the Underwriting Agreement.
In so acting we have participated in or reviewed the
corporate proceedings in connection with the authorization,
execution and delivery of the Underwriting Agreement, the
Indenture and the Securities. We have also examined such other
documents and satisfied ourselves as to such other matters as we
have deemed necessary as a basis for the conclusions of law
contained in the opinions expressed below. We have relied as to
various questions of fact upon the representations and warranties
of the Company contained in the Underwriting Agreement and, where
we deemed appropriate, on certificates of public officials. We
have relied upon a certificate of the trustee under the Indenture
(the "Trustee") as to the authentication of the Securities. In
our examination we have assumed the genuineness of all signatures
and the authenticity of all documents submitted to us as
originals and the conformity to original documents of all
documents submitted to us as photostatic or certified copies.
Upon the basis of our familiarity with these
transactions and with the affairs and properties of the Company
generally, we are of the opinion that:
1. Each of the Underwriting Agreement and the
Indenture has been duly authorized, executed and delivered by the
Company;
2. The Securities have been duly authorized, executed
and delivered by the Company and are entitled to the benefits of
the Indenture; and the Securities and the Indenture are legal,
valid and binding obligations of the Company, enforceable against
the Company in accordance with their respective terms, subject to
the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the rights and
remedies of creditors generally and of general principles of
equity;
3. The Indenture has been duly qualified under the
Trust Indenture Act of 1939, as amended;
4. The statements made in the Prospectus under the
captions "Description of Debt Securities", insofar as they
purport to constitute summaries of the terms of the documents
referred to therein, constitute accurate summaries of the terms
of such documents in all material respects;
5. Other than as stated, referred to or incorporated
by reference in the Registration Statement and the Prospectus,
there are no material pending legal proceedings to which the
Company is a party or of which property of the Company is the
subject which depart from the ordinary routine litigation
incident to the kind of business conducted by the Company, and to
our best knowledge no such proceedings are contemplated;
6. The Registration Statement, as of the Effective
Date, and the Prospectus, at the time it was filed with the
Commission pursuant to Rule 424 under the Securities Act, (except
as to financial statements and schedules and other financial and
statistical data contained therein as to which we do not express
any belief and except for those parts of the Registration
Statement that constitute the Form T-1) complied as to form in
all material respects with the applicable requirements of the
Securities Act and the applicable instructions, rules and
regulations of the Commission thereunder; the Incorporated
Documents (except as to the financial statements and schedules
and other financial and statistical data contained therein, as to
which we do not express any belief), at the time they were filed
with the Commission, complied as to form in all material respects
with the requirements of the Exchange Act and the applicable
instructions, rules and regulations of the Commission thereunder;
and the Registration Statement has become and is effective under
the Securities Act and, to our best knowledge, no proceedings for
a stop order with respect thereto are pending or threatened under
Section 8 of the Securities Act; and
7. No other approval, authorization, consent or order
of any public board or body (other than in connection or in
compliance with the provisions of the blue-sky laws of any
jurisdiction) is legally required for the authorization of the
issue and sale by the Company of the Securities.
In the course of the preparation of the information
relating to the Company contained in the Registration Statement
and the Prospectus (including the documents incorporated therein
by reference) we had discussions with certain of its officers and
representatives, with other counsel for the Company, with
Deloitte & Touche LLP, the independent certified public
accountants who audited certain of the financial statements
contained in the Registration Statement and the Prospectus, and
with certain of your officers and employees and your counsel, but
we made no independent verification of the accuracy or
completeness of the representations and statements made to us by
the Company or the information included by the Company in the
Registration Statement and the Prospectus and take no
responsibility therefor except as set forth in paragraph 4 above.
However, our examination of the information relating to the
Company contained in the Registration Statement and the
Prospectus and our discussions did not disclose to us anything
which gives us reason to believe that (except as to financial
statements and schedules and other financial and statistical data
contained therein, as to which we do not express any belief, and
except for those parts of the Registration Statement that
constitute the Form T-1) (i) the Registration Statement, as of
the Effective Date, included an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading or (ii) the Prospectus, at the time it was filed with
the Commission pursuant to Rule 424 under the Securities Act,
included, or on the date hereof includes, an untrue statement of
a material fact or on such dates omitted or omits to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
We are members of the New York Bar and do not hold
ourselves out as experts in the laws of the State of Texas. As
to all matters of Texas law, we have, with your consent, relied
upon the opinion of Worsham, Forsythe & Wooldridge, L.L.P.,
Dallas, Texas, General Counsel for the Company. We believe that
you and we are justified in relying on such opinion.
Very truly yours,
REID & PRIEST LLP
<PAGE>
SCHEDULE V
[Letterhead of Winthrop, Stimson, Putnam & Roberts]
, 1998
---------
as Representatives of the Underwriters named in the
Underwriting Agreement, dated , 1998,
---------
between Texas Utilities Company and the Underwriters
Ladies and Gentlemen:
We have acted as counsel to the Underwriters in
connection with your purchase from Texas Utilities Company (the
"Company") of its % Series D Senior Note due ,
---- --------- ----
(the "Securities") pursuant to the Underwriting Agreement dated
, 1998 between the Company and the Underwriters (the
---------
"Underwriting Agreement").
We are members of the New York Bar and do not hold
ourselves out as experts on the laws of the State of Texas. We
have, with your consent, relied upon an opinion of even date
herewith addressed to you by Worsham, Forsythe & Wooldridge,
L.L.P., of Dallas, Texas, General Counsel for the Company, as to
the matters covered in such opinion relating to Texas law. We
have reviewed such opinion and believe that it is satisfactory
and that you and we are justified in relying thereon. We have
also reviewed the opinion of Reid & Priest LLP required by
paragraph (c) of Section 6 of the Underwriting Agreement, and we
believe such opinion to be satisfactory.
We have, in addition, examined the documents described
in the list of closing papers as having been delivered to you at
the closing and such other documents and satisfied ourselves as
to such other matters as we have deemed necessary in order to
enable us to express this opinion. We have not examined the
Securities, except specimens thereof, and have relied upon a
certificate of the Trustee as to the authentication thereof. As
to various questions of fact material to this opinion, we have
relied upon representations of the Company and statements in the
Registration Statement hereinafter mentioned. In such
examination we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us and the
genuineness and conformity to original documents of documents
submitted to us as certified or photostatic copies.
Based on the foregoing, we are of the opinion that:
1. Each of the Underwriting Agreement and the
Indenture has been duly authorized, executed and delivered by the
Company;
2. The Securities have been duly authorized, executed
and delivered by the Company and are entitled to the benefits of
the Indenture; and the Securities and the Indenture are legal,
valid and binding obligations of the Company, enforceable against
the Company in accordance with their respective terms, subject to
the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the rights and
remedies of creditors generally and of general principles of
equity;
3. The Indenture has been duly qualified under the
Trust Indenture Act of 1939, as amended;
4. The statements made in the Prospectus under the
captions "Description of Debt Securities", insofar as they
purport to constitute summaries of the terms of the documents
referred to therein, constitute accurate summaries of the terms
of such documents in all material respects;
5. The Registration Statement, at the Effective Date
thereof, and the Prospectus, at the time it was filed with the
Commission pursuant to Rule 424 (except in each case as to
financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein
and except for those parts of the Registration Statement that
constitute the Form T-1, upon which we express no opinion),
complied as to form in all material respects with the Securities
Act; and
6 No other approval, authorization, consent or order
of any public board or body (other than in connection or in
compliance with the provisions of the blue-sky laws of any
jurisdiction) is legally required for the authorization of the
issue and sale by the Company of the Securities.
In passing upon the form of the Registration Statement
and the form of the Prospectus, we necessarily assume the
correctness and completeness of the statements made by the
Company and the information included in the Registration
Statement and the Prospectus and take no responsibility therefor,
except insofar as such statements relate to us and as set forth
in paragraph 4 above. In the course of the preparation by the
Company of the Registration Statement and the Prospectus, we have
had discussions with certain of its officers and representatives,
with counsel for the Company, with Deloitte & Touche LLP, the
independent public accountants who audited certain of the
financial statements incorporated by reference in the
Registration Statement and the Prospectus, and with certain of
your representatives. Our examination of the Registration
Statement and the Prospectus and our discussions did not disclose
to us any information which gives us reason to believe that at
the Effective Date the Registration Statement contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, at the time it was
filed with the Commission pursuant to Rule 424, or at the date
hereof, included or includes any untrue statement of a material
fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. We do
not express any opinion or belief as to the financial statements
or other financial or statistical data contained or incorporated
by reference in the Registration Statement or the Prospectus or
as to those parts of the Registration Statement that constitute
the Form T-1.
This opinion is given to you solely for your use in
connection with the Underwriting Agreement and the transactions
contemplated thereunder and may not be relied upon by any other
person or for any other purpose.
Very truly yours,
WINTHROP, STIMSON, PUTNAM
& ROBERTS
------------------------------------------
TEXAS UTILITIES COMPANY
TO
THE BANK OF NEW YORK
Trustee
---------
INDENTURE
(FOR UNSECURED DEBT SECURITIES SERIES D)
DATED AS OF 1, 1998
--------
------------------------------------------
<PAGE>
TABLE OF CONTENTS
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITAL OF THE COMPANY . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE . . . . . . . . . . . . . . . . . . . . . . . . . 1
Definitions and Other Provisions of General Application . . . 1
SECTION 101. Definitions . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . 2
Authorized Officer . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . 3
Company Request" or "COMPANY ORDER . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . 3
corporation . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . 3
Discount Security . . . . . . . . . . . . . . . . . 3
Dollar" or "$ . . . . . . . . . . . . . . . . . . . 3
Eligible Obligations . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . 3
Governmental Authority . . . . . . . . . . . . . . 3
Government Obligations . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . 4
Interest Payment Date . . . . . . . . . . . . . . . 4
Maturity . . . . . . . . . . . . . . . . . . . . . 4
Officer's Certificate . . . . . . . . . . . . . . . 4
Opinion of Counsel . . . . . . . . . . . . . . . . 4
Outstanding . . . . . . . . . . . . . . . . . . . . 4
Paying Agent . . . . . . . . . . . . . . . . . . . 6
Periodic Offering . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . 6
Place of Payment . . . . . . . . . . . . . . . . . 6
Predecessor Security . . . . . . . . . . . . . . . 6
Redemption Date . . . . . . . . . . . . . . . . . . 6
Redemption Price . . . . . . . . . . . . . . . . . 6
Regular Record Date . . . . . . . . . . . . . . . . 6
Required Currency . . . . . . . . . . . . . . . . . 6
Responsible Officer . . . . . . . . . . . . . . . . 6
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE
DEEMED TO BE PART OF THE INDENTURE.
<PAGE>
Securities . . . . . . . . . . . . . . . . . . . . 6
Security Register" and "SECURITY REGISTRAR . . . . 6
Special Record Date . . . . . . . . . . . . . . . . 7
Stated Interest Rate . . . . . . . . . . . . . . . 7
Stated Maturity . . . . . . . . . . . . . . . . . . 7
Subsidiary . . . . . . . . . . . . . . . . . . . . 7
Tranche . . . . . . . . . . . . . . . . . . . . . . 7
Trust Indenture Act . . . . . . . . . . . . . . . . 7
Trustee . . . . . . . . . . . . . . . . . . . . . . 7
United States . . . . . . . . . . . . . . . . . . . 7
SECTION 102. Compliance Certificates and Opinions . . . 7
SECTION 103. Form of Documents Delivered to Trustee . . 8
SECTION 104. Acts of Holders . . . . . . . . . . . . . 9
SECTION 105. Notices, etc. to Trustee and Company . . . 11
SECTION 106. Notice to Holders of Securities; Waiver . 12
SECTION 107. Conflict with Trust Indenture Act . . . . 12
SECTION 108. Effect of Headings and Table of Contents . 12
SECTION 109. Successors and Assigns . . . . . . . . . . 12
SECTION 110. Separability Clause . . . . . . . . . . . 12
SECTION 111. Benefits of Indenture . . . . . . . . . . 13
SECTION 112. Governing Law . . . . . . . . . . . . . . 13
SECTION 113. Legal Holidays . . . . . . . . . . . . . . 13
ARTICLE TWO . . . . . . . . . . . . . . . . . . . . . . . . . 13
Security Forms . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 201. Forms Generally . . . . . . . . . . . . . 13
SECTION 202. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . 14
ARTICLE THREE . . . . . . . . . . . . . . . . . . . . . . . . 14
The Securities . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 301. Amount Unlimited; Issuable in Series . . . 14
SECTION 302. Denominations . . . . . . . . . . . . . . 18
SECTION 303. Execution, Authentication, Delivery and
Dating . . . . . . . . . . . . . . . . . . 18
SECTION 304. Temporary Securities . . . . . . . . . . . 21
SECTION 305. Registration, Registration of Transfer
and Exchange . . . . . . . . . . . . . . . 22
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . 23
SECTION 307. Payment of Interest; Interest Rights
Preserved . . . . . . . . . . . . . . . . 24
SECTION 308. Persons Deemed Owners . . . . . . . . . . 25
SECTION 309. Cancellation by Security Registrar . . . . 25
SECTION 310. Computation of Interest . . . . . . . . . 26
SECTION 311. Payment to Be in Proper Currency . . . . . 26
SECTION 312. Extension of Interest Payment . . . . . . 26
ARTICLE FOUR . . . . . . . . . . . . . . . . . . . . . . . . 26
Redemption of Securities . . . . . . . . . . . . . . . . . . 26
SECTION 401. Applicability of Article . . . . . . . . . 26
SECTION 402. Election to Redeem; Notice to Trustee . . 27
SECTION 403. Selection of Securities to Be Redeemed . . 27
SECTION 404. Notice of Redemption . . . . . . . . . . . 28
SECTION 405. Securities Payable on Redemption Date . . 29
SECTION 406. Securities Redeemed in Part . . . . . . . 29
ARTICLE FIVE . . . . . . . . . . . . . . . . . . . . . . . . 29
Sinking Funds . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 501. Applicability of Article . . . . . . . . . 30
SECTION 502. Satisfaction of Sinking Fund Payments
with Securities . . . . . . . . . . . . . 30
SECTION 503. Redemption of Securities for Sinking
Fund . . . . . . . . . . . . . . . . . . . 30
ARTICLE SIX . . . . . . . . . . . . . . . . . . . . . . . . . 31
Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 601. Payment of Principal, Premium and
Interest . . . . . . . . . . . . . . . . . 31
SECTION 602. Maintenance of Office or Agency . . . . . 31
SECTION 603. Money for Securities Payments to Be Held
in Trust . . . . . . . . . . . . . . . . . 32
SECTION 604. Corporate Existence . . . . . . . . . . . 33
SECTION 605. Maintenance of Properties . . . . . . . . 34
SECTION 606. Annual Officer's Certificate as to
Compliance. . . . . . . . . . . . . . . . 34
SECTION 607. Waiver of Certain Covenants . . . . . . . 34
SECTION 608. Limitation on Liens . . . . . . . . . . . 35
ARTICLE SEVEN . . . . . . . . . . . . . . . . . . . . . . . . 37
Satisfaction and Discharge . . . . . . . . . . . . . . . . . 37
SECTION 701. Satisfaction and Discharge of Securities . 37
SECTION 702. Satisfaction and Discharge of Indenture . 40
SECTION 703. Application of Trust Money . . . . . . . . 40
ARTICLE EIGHT . . . . . . . . . . . . . . . . . . . . . . . . 41
Events of Default; Remedies . . . . . . . . . . . . . . . . . 41
SECTION 801. Events of Default . . . . . . . . . . . . 41
SECTION 802. Acceleration of Maturity; Rescission and
Annulment . . . . . . . . . . . . . . . . 43
SECTION 803. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . 44
SECTION 804. Trustee May File Proofs of Claim . . . . . 44
SECTION 805. Trustee May Enforce Claims Without
Possession of Securities . . . . . . . . . 45
SECTION 806. Application of Money Collected . . . . . . 45
SECTION 807. Limitation on Suits . . . . . . . . . . . 46
SECTION 808. Unconditional Right of Holders to Receive
Principal, Premium and Interest . . . . . 47
SECTION 809. Restoration of Rights and Remedies . . . . 47
SECTION 810. Rights and Remedies Cumulative . . . . . . 47
SECTION 811. Delay or Omission Not Waiver . . . . . . . 47
SECTION 812. Control by Holders of Securities . . . . . 47
SECTION 813. Waiver of Past Defaults . . . . . . . . . 48
SECTION 814. Undertaking for Costs . . . . . . . . . . 48
SECTION 815. Waiver of Stay or Extension Laws . . . . . 49
ARTICLE NINE . . . . . . . . . . . . . . . . . . . . . . . . 49
The Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 901. Certain Duties and Responsibilities . . . 49
SECTION 902. Notice of Defaults . . . . . . . . . . . . 50
SECTION 903. Certain Rights of Trustee . . . . . . . . 50
SECTION 904. Not Responsible for Recitals or Issuance
of Securities . . . . . . . . . . . . . . 51
SECTION 905. May Hold Securities . . . . . . . . . . . 51
SECTION 906. Money Held in Trust . . . . . . . . . . . 51
SECTION 907. Compensation and Reimbursement . . . . . . 52
SECTION 908. Disqualification; Conflicting Interests. . 52
SECTION 909. Corporate Trustee Required; Eligibility . 53
SECTION 910. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . 53
SECTION 911. Acceptance of Appointment by Successor . . 55
SECTION 912. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . 56
SECTION 913. Preferential Collection of Claims Against
Company . . . . . . . . . . . . . . . . . 57
SECTION 914. Co-trustees and Separate Trustees. . . . . 57
SECTION 915. Appointment of Authenticating Agent . . . 58
ARTICLE TEN . . . . . . . . . . . . . . . . . . . . . . . . . 60
Holders' Lists and Reports by Trustee and Company . . . . . . 60
SECTION 1001. Lists of Holders . . . . . . . . . . . . 60
SECTION 1002. Reports by Trustee and Company . . . . . 61
ARTICLE ELEVEN . . . . . . . . . . . . . . . . . . . . . . . 61
Consolidation, Merger, Conveyance or Other Transfer . . . . 61
SECTION 1101. Company May Consolidate, etc., Only on
Certain Terms . . . . . . . . . . . . . . 61
SECTION 1102. Successor Corporation Substituted . . . . 62
ARTICLE TWELVE . . . . . . . . . . . . . . . . . . . . . . . 62
Supplemental Indentures . . . . . . . . . . . . . . . . . . . 62
SECTION 1201. Supplemental Indentures Without Consent
of Holders . . . . . . . . . . . . . . . 62
SECTION 1202. Supplemental Indentures With Consent of
Holders . . . . . . . . . . . . . . . . . 64
SECTION 1203. Execution of Supplemental Indentures . . 65
SECTION 1204. Effect of Supplemental Indentures . . . . 66
SECTION 1205. Conformity With Trust Indenture Act . . . 66
SECTION 1206. Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . . 66
SECTION 1207. Modification Without Supplemental
Indenture . . . . . . . . . . . . . . . . 66
ARTICLE THIRTEEN . . . . . . . . . . . . . . . . . . . . . . 67
Meetings of Holders; Action Without Meeting . . . . . . . . . 67
SECTION 1301. Purposes for Which Meetings May Be
Called . . . . . . . . . . . . . . . . . 67
SECTION 1302. Call, Notice and Place of Meetings . . . 67
SECTION 1303. Persons Entitled to Vote at Meetings . . 68
SECTION 1304. Quorum; Action . . . . . . . . . . . . . 68
SECTION 1305. Attendance at Meetings; Determination of
Voting Rights; Conduct and Adjournment of
Meetings . . . . . . . . . . . . . . . . 69
SECTION 1306. Counting Votes and Recording Action of
Meetings . . . . . . . . . . . . . . . . 70
SECTION 1307. Action Without Meeting . . . . . . . . . 70
ARTICLE FOURTEEN . . . . . . . . . . . . . . . . . . . . . . 70
Immunity of Incorporators, Shareholders, Officers and
Directors . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 1401. Liability Solely Corporate . . . . . . . 70
ARTICLE FIFTEEN . . . . . . . . . . . . . . . . . . . . . . . 71
Securities of the First Series . . . . . . . . . . . . . . . 71
SECTION 1501. Designation of Securities of the First
Series. . . . . . . . . . . . . . . . . . 71
Testimonium . . . . . . . . . . . . . . . . . . . . . . . . . 72
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . 73
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . 74
<PAGE>
TEXAS UTILITIES COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF 1, 1998
-------
TRUST INDENTURE ACT SECTION INDENTURE SECTION
<section>310 (a)(1) . . . . . . . . . . . . . . . . . . . . 909
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 909
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . 914
(a)(4) . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 908
910
<section>311 (a) . . . . . . . . . . . . . . . . . . . . . 913
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 913
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 913
<section>312 (a) . . . . . . . . . . . . . . . . . . . . 1001
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 1001
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 1001
<section>313 (a) . . . . . . . . . . . . . . . . . . . . 1002
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 1002
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 1002
<section>314 (a) . . . . . . . . . . . . . . . . . . . . 1002
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . 606
(b) . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 102
<section>315 (a) . . . . . . . . . . . . . . . . . . . . . 901
903
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 902
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 901
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 901
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 814
<section>316 (a) . . . . . . . . . . . . . . . . . . . . . 812
813
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . 802
812
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . 813
(a)(2) . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 808
<section>317 (a)(1) . . . . . . . . . . . . . . . . . . . . 803
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 804
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 603
<section>318 (a) . . . . . . . . . . . . . . . . . . . . . 107
<PAGE>
INDENTURE, dated as of 1, 1998, between TEXAS
-------
UTILITIES COMPANY, a corporation duly organized and existing
under the laws of the State of Texas (herein called the
"Company"), having its principal office at Energy Plaza, 1601
Bryan Street, Dallas, Texas 75201, and THE BANK OF NEW YORK, a
banking corporation of the State of New York, having its
principal corporate trust office at 101 Barclay Street, New York,
New York 10286, as Trustee (herein called the "Trustee").
RECITAL OF THE COMPANY
The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time
to time of its unsecured debentures, notes or other evidences of
indebtedness (herein called the "Securities"), in an unlimited
aggregate principal amount to be issued in one or more series as
contemplated herein; and all acts necessary to make this
Indenture a valid agreement of the Company have been performed.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires,
capitalized terms used herein shall have the meanings assigned to
them in Article One of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of
all Holders of the Securities or of any series thereof, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, 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;
(b) all terms used herein without definition which are
defined in the Trust Indenture Act, either directly or by
reference therein, have the meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with
generally accepted accounting principles in the United States,
and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United
States at the date of such computation or, at the election of
the Company from time to time, at the date of the execution
and delivery of this Indenture; provided, however, that in
determining generally accepted accounting principles
applicable to the Company, the Company shall, to the extent
required, conform to any order, rule or regulation of any
administrative agency, regulatory authority or other govern-
mental body having jurisdiction over the Company; and
(d) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other
subdivision.
Certain terms, used principally in Article Nine, are de-
fined in that Article.
"ACT", when used with respect to any Holder of a
Security, has the meaning specified in Section 104.
"AFFILIATE" of any specified Person means any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person. For the purposes of this definition, "CONTROL" when used
with respect to any specified Person means the power to direct
the management and policies of such Person, directly or through
one or more intermediaries, whether through the ownership of
voting securities, by contract or otherwise; and the terms
"CONTROLLING" and "CONTROLLED" have meanings correlative to the
foregoing.
"AUTHENTICATING AGENT" means any Person (other than the
Company or an Affiliate of the Company) authorized by the Trustee
pursuant to Section 915 to act on behalf of the Trustee to
authenticate one or more series of Securities or Tranche thereof.
"AUTHORIZED OFFICER" means the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant
Treasurer, 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 Indenture.
"BOARD OF DIRECTORS" means either the board of directors
of the Company or any committee thereof duly authorized to act in
respect of matters relating to this Indenture.
"BOARD RESOLUTION" means a copy of a resolution 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 Trustee.
"BUSINESS DAY", when used with respect to a Place of
Payment or any other particular location specified in the
Securities or this Indenture, means any day, other than a
Saturday or Sunday, which is not a day on which banking
institutions or trust companies in such Place of Payment or other
location are generally authorized or required by law, regulation
or executive order to remain closed, except as may be otherwise
specified as contemplated by Section 301.
"COMMISSION" means the Securities and Exchange Commis-
sion, as from time to time constituted, created under the
Securities Exchange Act of 1934, as amended, or, if at any time
after the date of execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned
to it under the Trust Indenture Act, then the body, if any, per-
forming such duties at such time.
"COMPANY" means the Person named as the "Company" in the
first paragraph of this Indenture until a successor Person shall
have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Company" shall mean such successor
Person.
"COMPANY REQUEST" or "COMPANY ORDER" means a written re-
quest or order signed in the name of the Company by an Authorized
Officer and delivered to the Trustee.
"CORPORATE TRUST OFFICE" means the office of the Trustee
at which at any particular time its corporate trust business
shall be principally administered, which office at the date of
execution and delivery of this Indenture is located at 101
Barclay Street, New York, New York 10286.
"CORPORATION" means a corporation, association, company,
joint stock company or business trust.
"DEFAULTED INTEREST" has the meaning specified in Section
307.
"DISCOUNT SECURITY" means any Security which provides for
an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 802. "Interest" with respect to a
Discount Security means interest, if any, borne by such Security
at a Stated Interest Rate.
"DOLLAR" or "$" means a dollar or other equivalent unit
in such coin or currency of the United States as at the time
shall be legal tender for the payment of public and private
debts.
"ELIGIBLE OBLIGATIONS" means:
(a) with respect to Securities denominated in Dollars,
Government Obligations; or
(b) with respect to Securities denominated in a currency
other than Dollars or in a composite currency, such other
obligations or instruments as shall be specified with respect
to such Securities, as contemplated by Section 301.
"EVENT OF DEFAULT" has the meaning specified in Section
801.
"GOVERNMENTAL AUTHORITY" means the government of the
United States or of any State or Territory thereof or of the
District of Columbia or of any county, municipality or other
political subdivision of any of the foregoing, or any department,
agency, authority or other instrumentality of any of the
foregoing.
"GOVERNMENT OBLIGATIONS" means:
(a) direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by,
the United States and entitled to the benefit of the full
faith and credit thereof; and
(b) certificates, depositary receipts or other in-
struments which evidence a direct ownership interest in obli-
gations described in clause (a) above or in any specific
interest or principal payments due in respect thereof;
provided, however, that the custodian of such obligations or
specific interest or principal payments shall be a bank or
trust company (which may include the Trustee or any Paying
Agent) subject to Federal or state supervision or examination
with a combined capital and surplus of at least $50,000,000;
and provided, further, that except as may be otherwise
required by law, such custodian shall be obligated to pay to
the holders of such certificates, depositary receipts or other
instruments the full amount received by such custodian in
respect of such obligations or specific payments and shall not
be permitted to make any deduction therefrom.
"HOLDER" means a Person in whose name a Security is registered
in the Security Register.
"INDENTURE" means this instrument as originally executed and
delivered and as it may from time to time be supplemented or
amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall
include the terms of a particular series of Securities
established as contemplated by Section 301.
"INTEREST PAYMENT DATE", when used with respect to any
Security, means the Stated Maturity of an installment of interest
on such Security.
"MATURITY", when used with respect to any Security, means the
date on which the principal of such Security or an installment of
principal becomes due and payable as provided in such Security or
in this Indenture, whether at the Stated Maturity, by declaration
of acceleration, upon call for redemption or otherwise.
"OFFICER'S CERTIFICATE" means a certificate signed by an
Authorized Officer and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who
may be counsel for the Company, or other counsel acceptable to
the Trustee.
"OUTSTANDING", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore
authenticated and delivered under this Indenture, except:
(a) Securities theretofore canceled or delivered to the
Security Registrar for cancellation;
(b) Securities deemed to have been paid in accordance
with Section 701; and
(c) Securities which have been paid pursuant to Section
306 or in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which
there shall have been presented to the Trustee proof
satisfactory to it and the Company that such Securities are
held by a bona fide purchaser or purchasers in whose hands
such Securities are valid obligations of the Company;
provided, however, that in determining whether or not the Holders
of the requisite principal amount of the Securities Outstanding
under this Indenture, or the Outstanding Securities of any series
or Tranche, have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or whether or not
a quorum is present at a meeting of Holders of Securities,
(x) Securities owned by the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such
other obligor (unless the Company, such Affiliate or such
obligor owns all Securities Outstanding under this Indenture,
or (except for the purposes of actions to be taken by Holders
of (i) more than one series voting as a class under Section
812 or (ii) more than one series or more than one Tranche, as
the case may be, voting as a class under Section 1202) all
Outstanding Securities of each such series and each such
Tranche, as the case may be, determined without regard to this
clause (x)) shall be disregarded and deemed not to be Out-
standing, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver or upon
any such determination as to the presence of a quorum, only
Securities which the Trustee knows to be so owned shall be so
disregarded; provided, however, that Securities so owned which
have been pledged in good faith may be regarded as Outstanding
if the pledgee establishes to the satisfaction of the Trustee
the pledgee's right so to act with respect to such Securities
and that the pledgee is not the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such
other obligor; and
(y) the principal amount of a Discount Security that
shall be deemed to be Outstanding for such purposes shall be
the amount of the principal thereof that would be due and
payable as of the date of such determination upon a
declaration of acceleration of the Maturity thereof pursuant
to Section 802;
provided, further, that, in the case of any Security the
principal of which is payable from time to time without
presentment or surrender, the principal amount of such Security
that shall be deemed to be Outstanding at any time for all
purposes of this Indenture shall be the original principal amount
thereof less the aggregate amount of principal thereof
theretofore paid.
"PAYING AGENT" means any Person, including the Company,
authorized by the Company to pay the principal of, and premium,
if any, or interest, if any, on any Securities on behalf of the
Company.
"PERIODIC OFFERING" means an offering of Securities of a
series from time to time any or all of the specific terms of
which Securities, including without limitation the rate or rates
of interest, if any, thereon, the Stated Maturity or Maturities
thereof and the redemption provisions, if any, with respect
thereto, are to be determined by the Company or its agents upon
the issuance of such Securities.
"PERSON" means any individual, corporation, partnership, joint
venture, trust or unincorporated organization or any Governmental
Authority.
"PLACE OF PAYMENT", when used with respect to the Securities
of any series, or any Tranche thereof, means the place or places,
specified as contemplated by Section 301, at which, subject to
Section 602, principal of and premium, if any, and interest, if
any, on the Securities of such series or Tranche are payable.
"PREDECESSOR SECURITY" of any particular Security means every
previous Security evidencing all or a portion of the same debt as
that evidenced by such particular Security; and, for the purposes
of this definition, any Security authenticated and delivered
under Section 306 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Security shall be deemed (to the extent
lawful) to evidence the same debt as the mutilated, destroyed,
lost or stolen Security.
"REDEMPTION DATE", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or
pursuant to this Indenture.
"REDEMPTION PRICE", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed
pursuant to this Indenture.
"REGULAR RECORD DATE" for the interest payable on any Interest
Payment Date on the Securities of any series means the date
specified for that purpose as contemplated by Section 301.
"REQUIRED CURRENCY" has the meaning specified in Section 311.
"RESPONSIBLE OFFICER", when used with respect to the Trustee,
means any officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"SECURITIES" has the meaning stated in the first recital of
this Indenture and more particularly means any securities authen-
ticated and delivered under this Indenture.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the
respective meanings specified in Section 305.
"SPECIAL RECORD DATE" for the payment of any Defaulted
Interest on the Securities of any series means a date fixed by
the Trustee pursuant to Section 307.
"STATED INTEREST RATE" means a rate (whether fixed or
variable) at which an obligation by its terms is stated to bear
simple interest. Any calculation or other determination to be
made under this Indenture by reference to the Stated Interest
Rate on a Security shall be made without regard to the effective
interest cost to the Company of such Security and without regard
to the Stated Interest Rate on, or the effective cost to the
Company of, any other indebtedness in respect of which the
Company's obligations are evidenced or secured in whole or in
part by such Security.
"STATED MATURITY", when used with respect to any obligation or
any installment of principal thereof or interest thereon, means
the date on which the principal of such obligation or such
installment of principal or interest is stated to be due and
payable (without regard to any provisions for redemption,
prepayment, acceleration, purchase or extension).
"SUBSIDIARY" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or
indirectly, by the Company or by one or more other Subsidiaries,
or by the Company and one or more other Subsidiaries. For the
purposes of this definition, "voting stock" means stock that
ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock
has such voting power by reason of any contingency.
"TRANCHE" means a group of Securities which (a) are of the
same series and (b) have identical terms except as to principal
amount and/or date of issuance.
"TRUST INDENTURE ACT" means, as of any time, the Trust
Indenture Act of 1939, or any successor statute, as in effect at
such time.
"TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have
become such with respect to one or more series of Securities
pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean or include each Person who is
then a Trustee hereunder, and if at any time there is more than
one such Person, "Trustee" as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities
of that series.
"UNITED STATES" means the United States of America, its
Territories, its possessions and other areas subject to its
political jurisdiction.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided in this Indenture,
upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the
Company shall, if requested by the Trustee, furnish to the
Trustee an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the
proposed action (including any covenants compliance with which
constitutes a condition precedent) have been complied with and 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 Indenture 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 Indenture shall
include:
(a) a statement that each Person signing such cer-
tificate or opinion has read such covenant or condition and
the definitions herein relating thereto;
(b) 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;
(c) a statement that, in the opinion of each such
Person, such Person has made such examination or investigation
as is necessary to enable such Person to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of each
such Person, such condition or covenant has been complied
with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
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 such Officer's Certificate or
opinion are 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 Indenture,
they may, but need not, be consolidated and form one instrument.
Whenever, subsequent to the receipt by the Trustee of any
Board Resolution, Officer's Certificate, Opinion of Counsel or
other document or instrument, a clerical, typographical or other
inadvertent or unintentional error or omission shall be
discovered therein, a new document or instrument may be
substituted therefor in corrected form with the same force and
effect as if originally filed in the corrected form and,
irrespective of the date or dates of the actual execution and/or
delivery thereof, such substitute document or instrument shall be
deemed to have been executed and/or delivered as of the date or
dates required with respect to the document or instrument for
which it is substituted. Anything in this Indenture to the
contrary notwithstanding, if any such corrective document or
instrument indicates that action has been taken by or at the
request of the Company which could not have been taken had the
original document or instrument not contained such error or
omission, the action so taken shall not be invalidated or
otherwise rendered ineffective but shall be and remain in full
force and effect, except to the extent that such action was a
result of willful misconduct or bad faith. Without limiting the
generality of the foregoing, any Securities issued under the
authority of such defective document or instrument shall
nevertheless be the valid obligations of the Company entitled to
the benefits of this Indenture equally and ratably with all other
Outstanding Securities, except as aforesaid.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction,
notice, consent, election, waiver or other action provided by
this Indenture to be made, 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 or, alternatively,
may be embodied in and evidenced by the record of Holders
voting in favor thereof, either in person or by proxies duly
appointed in writing, at any meeting of Holders duly called
and held in accordance with the provisions of Article
Thirteen, or a combination of such instruments and any such
record. Except as herein otherwise expressly provided, such
action shall become effective when such instrument or
instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company.
Such instrument or instruments and any such record (and the
action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such
instrument or instruments and so voting at any such meeting.
Proof of execution of any such instrument or of a writing
appointing any such agent, or of the holding by any Person of
a Security, shall be sufficient for any purpose of this
Indenture and (subject to Section 901) conclusive in favor of
the Trustee and the Company, if made in the manner provided in
this Section. The record of any meeting of Holders shall be
proved in the manner provided in Section 1306.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved by the affidavit
of a witness of such execution or by a certificate of a notary
public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the
execution thereof or may be proved in any other manner which
the Trustee and the Company deem sufficient. Where such
execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority.
(c) The principal amount (except as otherwise
contemplated in clause (y) of the first proviso to the
definition of Outstanding) and serial numbers of Securities
held by any Person, and the date of holding the same, shall be
proved by the Security Register.
(d) Any request, demand, authorization, direction, no-
tice, consent, election, waiver or other Act of a Holder shall
bind every future Holder of the same Security and the Holder
of every Security 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
Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
(e) Until such time as written instruments shall have
been delivered to the Trustee with respect to the requisite
percentage of principal amount of Securities for the action
contemplated by such instruments, any such instrument executed
and delivered by or on behalf of a Holder may be revoked with
respect to any or all of such Securities by written notice by
such Holder or any subsequent Holder, proven in the manner in
which such instrument was proven.
(f) Securities of any series, or any Tranche thereof,
authenticated and delivered after any Act of Holders may, and
shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any action taken by such Act of
Holders. If the Company shall so determine, new Securities of
any series, or any Tranche thereof, so modified as to conform,
in the opinion of the Trustee and the Company, to such action
may be prepared and executed by the Company and authenticated
and delivered by the Trustee in exchange for Outstanding
Securities of such series or Tranche.
(g) If the Company shall solicit from Holders any
request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, fix in
advance a record date for the determination of Holders
entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or
after such record date, but only the Holders of record at the
close of business on the record date shall be deemed to be
Holders for the purposes of determining whether Holders of the
requisite proportion of the Outstanding Securities have
authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be
computed as of the record date.
SECTION 105. NOTICES, ETC. TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice,
consent, election, waiver or Act of Holders or other document
provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with, the Trustee by any Holder or by the
Company, or the Company by the Trustee or by any Holder, shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and delivered personally to an
officer or other responsible employee of the addressee, or
transmitted by facsimile transmission or other direct written
electronic means to such telephone number or other electronic
communications address as the parties hereto shall from time to
time designate, or transmitted by certified or registered mail,
charges prepaid, to the applicable address set opposite such
party's name below or to such other address as either party
hereto may from time to time designate:
If to the Trustee, to:
The Bank of New York
101 Barclay Street - 21W
New York, New York 10286
Attention: Vice President, Corporate Trust
Administration
Telephone: (212) 815-5375
Telecopy: (212) 815-5915
If to the Company, to:
Texas Utilities Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Attention: Treasurer
Telephone: (214) 812-4646
Telecopy: (214) 812-3366
Any communication contemplated herein shall be deemed to
have been made, given, furnished and filed if personally
delivered, on the date of delivery, if transmitted by facsimile
transmission or other direct written electronic means, on the
date of transmission, and if transmitted by certified or
registered mail, on the date of receipt.
SECTION 106. NOTICE TO HOLDERS OF SECURITIES; WAIVER.
Except as otherwise expressly provided herein, where this
Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given, and shall be deemed given, to
Holders if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at the address of such Holder
as it appears in the Security Register, not later than the latest
date, if any, and not earlier than the earliest date, if any,
prescribed for the giving of such notice.
In case by reason of the suspension of regular mail serv-
ice or by reason of any other cause it shall be impracticable to
give such notice to Holders by mail, then such notification as
shall be made with the approval of the Trustee shall constitute a
sufficient notification for every purpose hereunder. 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.
Any notice required by this Indenture may be waived in
writing by the Person entitled to receive such notice, either
before or after the event otherwise to be specified therein, and
such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Indenture limits, qualifies or
conflicts with another provision hereof which is required or
deemed to be included in this Indenture by, or is otherwise
governed by, any of the provisions of the Trust Indenture Act,
such other provision shall control; and if any provision hereof
otherwise conflicts with the Trust Indenture Act, the Trust
Indenture Act shall control.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings in this Indenture and
the Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the
Company and Trustee shall bind their respective successors and
assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or the Securities
shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or the Securities, express or
implied, shall give to any Person, other than the parties hereto,
their successors hereunder and the Holders, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, EXCEPT TO THE EXTENT THAT THE LAW OF ANY OTHER JURISDICTION
SHALL BE MANDATORILY APPLICABLE.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption
Date or Stated Maturity of any Security shall not be a Business
Day at any Place of Payment, then (notwithstanding any other
provision of this Indenture or of the Securities other than a
provision in Securities of any series, or any Tranche thereof, or
in the Board Resolution or Officer's Certificate which
establishes the terms of the Securities of such series or
Tranche, which specifically states that such provision shall
apply in lieu of this Section) payment of interest or principal
and premium, if any, need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at
such Place of Payment, with the same force and effect, and in the
same amount, as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity, as the case may be,
and, if such payment is made or duly provided for on such
Business Day, no interest shall accrue on the amount so payable
for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be, to such
Business Day.
ARTICLE TWO
SECURITY FORMS
SECTION 201. FORMS GENERALLY.
The definitive Securities of each series shall be in
substantially the form or forms thereof established in the
indenture supplemental hereto establishing such series or in a
Board Resolution establishing such series, or in an Officer's
Certificate pursuant to such supplemental indenture or Board
Resolution, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be
determined by the officers executing such Securities, as
evidenced by their execution of the Securities. If the form or
forms of Securities of any series are established in a Board
Resolution or in an Officer's Certificate pursuant to a Board
Resolution, such Board Resolution and Officer's Certificate, if
any, shall be delivered to the Trustee at or prior to the
delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.
Unless otherwise specified as contemplated by Sections
301 or 1201(g), the Securities of each series shall be issuable
in registered form without coupons. The definitive Securities
shall be produced in such manner as shall be determined by the
officers executing such Securities, as evidenced by their
execution thereof.
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in
substantially the form set forth below:
This is one of the Securities of the series desig-
nated therein referred to in the within-mentioned
Indenture.
Dated:
---------------------------------
as Trustee
By:
-----------------------------
Authorized Signatory
ARTICLE THREE
THE SECURITIES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series.
Subject to the last paragraph of this Section, prior to the
authentication and delivery of Securities of any series there
shall be established by specification in a supplemental indenture
or in a Board Resolution, or in an Officer's Certificate pursuant
to a supplemental indenture or a Board Resolution:
(a) the title of the Securities of such series (which
shall distinguish the Securities of such series from
Securities of all other series);
(b) any limit upon the aggregate principal amount of the
Securities of such series which may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities of such
series pursuant to Section 304, 305, 306, 406 or 1206 and
except for any Securities which, pursuant to Section 303, are
deemed never to have been authenticated and delivered
hereunder);
(c) the Person or Persons (without specific
identification) to whom interest on Securities of such series,
or any Tranche thereof, shall be payable on any Interest
Payment Date, if other than the Persons in whose names such
Securities (or one or more Predecessor Securities) are
registered at the close of business on the Regular Record Date
for such interest;
(d) the date or dates on which the principal of the
Securities of such series, or any Tranche thereof, is payable
or any formulary or other method or other means by which such
date or dates shall be determined, by reference to an index or
other fact or event ascertainable outside of this Indenture or
otherwise (without regard to any provisions for redemption,
prepayment, acceleration, purchase or extension);
(e) the rate or rates at which the Securities of such
series, or any Tranche thereof, shall bear interest, if any
(including the rate or rates at which overdue principal shall
bear interest, if different from the rate or rates at which
such Securities shall bear interest prior to Maturity, and, if
applicable, the rate or rates at which overdue premium or
interest shall bear interest, if any), or any formulary or
other method or other means by which such rate or rates shall
be determined, by reference to an index or other fact or event
ascertainable outside of this Indenture or otherwise; the date
or dates from which such interest shall accrue; the Interest
Payment Dates on which such interest shall be payable and the
Regular Record Date, if any, for the interest payable on such
Securities on any Interest Payment Date; the right of the
Company, if any, to extend the interest payment periods and
the duration of any such extension as contemplated by Section
312; and the basis of computation of interest, if other than
as provided in Section 310;
(f) the place or places at which or methods by which (1)
the principal of and premium, if any, and interest, if any, on
Securities of such series, or any Tranche thereof, shall be
payable, (2) registration of transfer of Securities of such
series, or any Tranche thereof, may be effected, (3) exchanges
of Securities of such series, or any Tranche thereof, may be
effected and (4) notices and demands to or upon the Company in
respect of the Securities of such series, or any Tranche
thereof, and this Indenture may be served; the Security
Registrar for such series or Tranche; and if such is the case,
that the principal of such Securities shall be payable without
presentment or surrender thereof;
(g) the period or periods within which, or the date or
dates on which, the price or prices at which and the terms and
conditions upon which the Securities of such series, or any
Tranche thereof, may be redeemed, in whole or in part, at the
option of the Company and any restrictions on such
redemptions, including but not limited to a restriction on a
partial redemption by the Company of the Securities of any
series, or any Tranche thereof, resulting in delisting of such
Securities from any national exchange;
(h) the obligation or obligations, if any, of the
Company to redeem or purchase the Securities of such series,
or any Tranche thereof, pursuant to any sinking fund or other
mandatory redemption provisions or at the option of a Holder
thereof and the period or periods within which or the date or
dates on which, the price or prices at which and the terms and
conditions upon which such Securities shall be redeemed or
purchased, in whole or in part, pursuant to such obligation,
and applicable exceptions to the requirements of Section 404
in the case of mandatory redemption or redemption at the
option of the Holder;
(i) the denominations in which Securities of such
series, or any Tranche thereof, shall be issuable if other
than denominations of $1,000 and any integral multiple
thereof;
(j) the currency or currencies, including composite
currencies, in which payment of the principal of and premium,
if any, and interest, if any, on the Securities of such
series, or any Tranche thereof, shall be payable (if other
than in Dollars);
(k) if the principal of or premium, if any, or interest,
if any, on the Securities of such series, or any Tranche
thereof, are to be payable, at the election of the Company or
a Holder thereof, in a coin or currency other than that in
which the Securities are stated to be payable, the period or
periods within which and the terms and conditions upon which,
such election may be made;
(l) if the principal of or premium, if any, or interest,
if any, on the Securities of such series, or any Tranche
thereof, are to be payable, or are to be payable at the
election of the Company or a Holder thereof, in securities or
other property, the type and amount of such securities or
other property, or the formulary or other method or other
means by which such amount shall be determined, and the period
or periods within which, and the terms and conditions upon
which, any such election may be made;
(m) if the amount payable in respect of principal of or
premium, if any, or interest, if any, on the Securities of
such series, or any Tranche thereof, may be determined with
reference to an index or other fact or event ascertainable
outside of this Indenture, the manner in which such amounts
shall be determined to the extent not established pursuant to
clause (e) of this paragraph;
(n) if other than the principal amount thereof, the
portion of the principal amount of Securities of such series,
or any Tranche thereof, which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant
to Section 802;
(o) any Events of Default, in addition to those
specified in Section 801, with respect to the Securities of
such series, and any covenants of the Company for the benefit
of the Holders of the Securities of such series, or any
Tranche thereof, in addition to those set forth in Article
Six;
(p) the terms, if any, pursuant to which the Securities
of such series, or any Tranche thereof, may be converted into
or exchanged for shares of capital stock or other securities
of the Company or any other Person;
(q) the obligations or instruments, if any, which shall
be considered to be Eligible Obligations in respect of the
Securities of such series, or any Tranche thereof, denominated
in a currency other than Dollars or in a composite currency,
and any additional or alternative provisions for the
reinstatement of the Company's indebtedness in respect of such
Securities after the satisfaction and discharge thereof as
provided in Section 701;
(r) if the Securities of such series, or any Tranche
thereof, are to be issued in global form, (i) any limitations
on the rights of the Holder or Holders of such Securities to
transfer or exchange the same or to obtain the registration of
transfer thereof, (ii) any limitations on the rights of the
Holder or Holders thereof to obtain certificates therefor in
definitive form in lieu of temporary form and (iii) any and
all other matters incidental to such Securities;
(s) if the Securities of such series, or any Tranche
thereof, are to be issuable as bearer securities, any and all
matters incidental thereto which are not specifically
addressed in a supplemental indenture as contemplated by
clause (g) of Section 1201;
(t) to the extent not established pursuant to clause (r)
of this paragraph, any limitations on the rights of the
Holders of the Securities of such Series, or any Tranche
thereof, to transfer or exchange such Securities or to obtain
the registration of transfer thereof; and if a service charge
will be made for the registration of transfer or exchange of
Securities of such series, or any Tranche thereof, the amount
or terms thereof;
(u) any exceptions to Section 113, or variation in the
definition of Business Day, with respect to the Securities of
such series, or any Tranche thereof;
(v) any collateral security, assurance or guarantee for
the Securities of such series;
(w) the non-applicability of Section 608 to the
Securities of such Series or any exceptions or modifications
of Section 608 with respect to the Securities of such Series;
(x) any rights or duties of another Person to assume the
obligations of the Company with respect to the Securities of
such series (whether as joint obligor, primary obligor,
secondary obligor or substitute obligor) and any rights or
duties to discharge and release any obligor with respect to
the Securities of such series or the Indenture to the extent
related to such series; and
(y) any other terms of the Securities of such series, or
any Tranche thereof, not inconsistent with the provisions of
this Indenture.
With respect to Securities of a series subject to a
Periodic Offering, the indenture supplemental hereto or the Board
Resolution which establishes such series, or the Officer's
Certificate pursuant to such supplemental indenture or Board
Resolution, as the case may be, may provide general terms or
parameters for Securities of such series and provide either that
the specific terms of Securities of such series, or any Tranche
thereof, shall be specified in a Company Order or that such terms
shall be determined by the Company or its agents in accordance
with procedures specified in a Company Order as contemplated by
the clause (b) of Section 303.
SECTION 302. DENOMINATIONS.
Unless otherwise provided as contemplated by Section 301
with respect to any series of Securities, or any Tranche thereof,
the Securities of each series shall be issuable in denominations
of $1,000 and any integral multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Unless otherwise provided as contemplated by Section 301
with respect to any series of Securities, or any Tranche thereof,
the Securities shall be executed on behalf of the Company by an
Authorized Officer and may have the corporate seal of the Company
affixed thereto or reproduced thereon attested by any other
Authorized Officer or by the Secretary or an Assistant Secretary
of the Company. The signature of any or all of these officers on
the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at the time of execution Authorized Officers
or the Secretary or an Assistant Secretary 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 Securities or did not hold such offices at
the date of such Securities.
The Trustee shall authenticate and deliver Securities of
a series, for original issue, at one time or from time to time in
accordance with the Company Order referred to below, upon receipt
by the Trustee of:
(a) the instrument or instruments establishing the form
or forms and terms of such series, as provided in Sections 201
and 301;
(b) a Company Order requesting the authentication and
delivery of such Securities and, to the extent that the terms
of such Securities shall not have been established in an
indenture supplemental hereto or in a Board Resolution, or in
an Officer's Certificate pursuant to a supplemental indenture
or Board Resolution, all as contemplated by Sections 201 and
301, either (i) establishing such terms or (ii) in the case of
Securities of a series subject to a Periodic Offering,
specifying procedures, acceptable to the Trustee, by which
such terms are to be established (which procedures may
provide, to the extent acceptable to the Trustee, for
authentication and delivery pursuant to oral or electronic
instructions from the Company or any agent or agents thereof,
which oral instructions are to be promptly confirmed
electronically or in writing), in either case in accordance
with the instrument or instruments delivered pursuant to
clause (a) above;
(c) the Securities of such series, executed on behalf of
the Company by an Authorized Officer;
(d) an Opinion of Counsel to the effect that:
(i) the form or forms of such Securities have been
duly authorized by the Company and have been established
in conformity with the provisions of this Indenture;
(ii) the terms of such Securities have been duly
authorized by the Company and have been established in
conformity with the provisions of this Indenture; and
(iii) such Securities, when authenticated and
delivered by the Trustee and issued and delivered by the
Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will have been duly
issued under this Indenture and will constitute valid and
legally binding obligations of the Company, entitled to
the benefits provided by this Indenture, and enforceable
in accordance with their terms, subject, as to
enforcement, to laws relating to or affecting generally
the enforcement of creditors' rights, including, without
limitation, bankruptcy and insolvency laws and to general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or
at law);
provided, however, that, with respect to Securities of a series
subject to a Periodic Offering, the Trustee shall be entitled to
receive such Opinion of Counsel only once at or prior to the time
of the first authentication of such Securities (provided that
such Opinion of Counsel addresses the authentication and delivery
of all Securities of such series) and that in lieu of the
opinions described in clauses (ii) and (iii) above Counsel may
opine that:
(x) when the terms of such Securities shall have
been established pursuant to a Company Order or Orders or
pursuant to such procedures (acceptable to the Trustee)
as may be specified from time to time by a Company Order
or Orders, all as contemplated by and in accordance with
the instrument or instruments delivered pursuant to
clause (a) above, such terms will have been duly
authorized by the Company and will have been established
in conformity with the provisions of this Indenture; and
(y) such Securities, when authenticated and
delivered by the Trustee in accordance with this
Indenture and the Company Order or Orders or specified
procedures referred to in paragraph (x) above and issued
and delivered by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will
have been duly issued under this Indenture and will
constitute valid and legally binding obligations of the
Company, entitled to the benefits provided by the
Indenture, and enforceable in accordance with their
terms, subject, as to enforcement, to laws relating to or
affecting generally the enforcement of creditors' rights,
including, without limitation, bankruptcy and insolvency
laws, and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding
in equity or at law).
With respect to Securities of a series subject to a Peri-
odic Offering, the Trustee may conclusively rely, as to the
authorization by the Company of any of such Securities, the form,
terms thereof and the legality, validity, binding effect and en-
forceability thereof, and compliance of the authentication and
delivery thereof with the terms and conditions of this Indenture,
upon the Opinion of Counsel and other documents delivered
pursuant to Sections 201 and 301 and this Section, as applicable,
at or prior to the time of the first authentication of Securities
of such series unless and until such opinion or other documents
have been superseded or revoked or expire by their terms. In
connection with the authentication and delivery of Securities of
a series subject to a Periodic Offering, the Trustee shall be
entitled to assume that the Company's instructions to
authenticate and deliver such Securities do not violate any
applicable law or any applicable rule, regulation or order of any
Governmental Authority having jurisdiction over the Company.
If the form or terms of the Securities of any series have
been established by or pursuant to a Board Resolution or an
Officer's Certificate as permitted by Sections 201 or 301, the
Trustee shall not be required to authenticate such Securities if
the issuance of such Securities pursuant to this Indenture will
materially or adversely affect the Trustee's own rights, duties
or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the
Trustee.
Unless otherwise specified as contemplated by Section 301
with respect to any series of Securities, or any Tranche thereof,
each Security shall be dated the date of its authentication.
Unless otherwise specified as contemplated by Section 301
with respect to any series of Securities, no Security shall be
entitled to any benefit under this Indenture or be valid or
obligatory for any purpose unless there appears on such Security
a certificate of authentication substantially in the form
provided for herein executed by the Trustee or an Authenticating
Agent by manual signature, and such certificate upon any Security
shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and
is entitled to the benefits of this Indenture. Notwithstanding
the foregoing, if any Security shall have been authenticated and
delivered hereunder to the Company, or any Person acting on its
behalf, but shall never have been issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written
statement (which need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel) stating that such Security
has never been issued and sold by the Company, for all purposes
of this Indenture such Security shall be deemed never to have
been authenticated and delivered hereunder and shall never be
entitled to the benefits hereof.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any
series, or any Tranche thereof, the Company may execute, and upon
Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the defi-
nitive Securities in lieu of which they are issued, with such
appropriate insertions, omissions, substitutions and other
variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities;
provided, however, that temporary Securities need not recite
specific redemption, sinking fund, conversion or exchange
provisions.
Unless otherwise specified as contemplated by Section 301
with respect to the Securities of any series, or any Tranche
thereof, after the preparation of definitive Securities of such
series or Tranche, the temporary Securities of such series or
Tranche shall be exchangeable, without charge to the Holder
thereof, for definitive Securities of such series or Tranche upon
surrender of such temporary Securities at the office or agency of
the Company maintained pursuant to Section 602 in a Place of
Payment for such Securities. Upon such surrender of temporary
Securities for such exchange, the Company shall, except as
aforesaid, execute and the Trustee shall authenticate and deliver
in exchange therefor definitive Securities of the same series and
Tranche of authorized denominations and of like tenor and
aggregate principal amount.
Until exchanged in full as hereinabove provided,
temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of
the same series and Tranche and of like tenor authenticated and
delivered hereunder.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND
EXCHANGE.
The Company shall cause to be kept in each office
designated pursuant to Section 602, with respect to the
Securities of each series, a register (all registers kept in
accordance with this Section being collectively referred to as
the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for
the registration of Securities of such series, or any Tranche
thereof, and the registration of transfer thereof. The Company
shall designate one Person to maintain the Security Register for
the Securities of each series on a consolidated basis, and such
Person is referred to herein, with respect to such series, as the
"Security Registrar." Anything herein to the contrary
notwithstanding, the Company may designate one or more of its
offices as an office in which a register with respect to the
Securities of one or more series shall be maintained, and the
Company may designate itself the Security Registrar with respect
to one or more of such series. The Security Register shall be
open for inspection by the Trustee and the Company at all
reasonable times.
Except as otherwise specified as contemplated by Section
301 with respect to the Securities of any series, or any Tranche
thereof, upon surrender for registration of transfer of any
Security of such series or Tranche at the office or agency of the
Company maintained pursuant to Section 602 in a Place of Payment
for such series or Tranche, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities
of the same series and Tranche, of authorized denominations and
of like tenor and aggregate principal amount.
Except as otherwise specified as contemplated by Section
301 with respect to the Securities of any series, or any Tranche
thereof, any Security of such series or Tranche may be exchanged
at the option of the Holder, for one or more new Securities of
the same series and Tranche, of authorized denominations and of
like tenor and aggregate principal amount, upon surrender of the
Securities to be exchanged at any such office or agency.
Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is
entitled to receive.
All Securities delivered upon any registration of
transfer or exchange of Securities shall be valid obligations of
the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Securities surrendered upon
such registration of transfer or exchange.
Every Security presented or surrendered for registration
of transfer or for exchange shall (if so required by the Company,
the Trustee or the Security Registrar) be duly endorsed or shall
be accompanied by a written instrument of transfer in form sat-
isfactory to the Company, the Trustee or the Security Registrar,
as the case may be, duly executed by the Holder thereof or his
attorney duly authorized in writing.
Unless otherwise specified as contemplated by Section 301
with respect to Securities of any series, or any Tranche thereof,
no service charge shall be made for any registration of transfer
or exchange of Securities, but the Company may require payment 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 Securities, other than exchanges pursuant
to Section 304, 406 or 1206 not involving any transfer.
The Company shall not be required to execute or to
provide for the registration of transfer of or the exchange of
(a) Securities of any series, or any Tranche thereof, during a
period of 15 days immediately preceding the date notice is to be
given identifying the serial numbers of the Securities of such
series or Tranche called for redemption or (b) any Security so
selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee,
the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of the same series
and Tranche, and of like tenor and principal amount and bearing a
number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trus-
tee (a) evidence to their satisfaction of the ownership of and
the destruction, loss or theft of any Security and (b) such
security or indemnity as may be reasonably required by them to
save each of them and any agent of either of them harmless, then,
in the absence of notice to the Company or the Trustee that such
Security is held by a Person purporting to be the owner of such
Security, the Company shall execute and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or
stolen Security, a new Security of the same series and Tranche,
and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
Notwithstanding the foregoing, in case any such
mutilated, destroyed, lost or stolen Security has become or is
about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section,
the Company may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the
fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall
constitute an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Security
shall be at any time enforceable by anyone other than the Holder
of such new Security, and any such new Security shall be entitled
to all the benefits of this Indenture equally and proportionately
with any and all other Securities of such series duly issued
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 Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Unless otherwise specified as contemplated by Section 301
with respect to the Securities of any series, or any Tranche
thereof, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or
one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest.
Subject to Section 312, any interest on any Security of
any series which is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the
Holder on the related Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in clause (a)
or (b) below:
(a) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Secu-
rities of such series (or their respective Predecessor
Securities) are registered at the close of business on a date
(herein called a "Special Record Date") for the payment of
such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each
Security of such series and the date of the proposed payment,
and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such
deposit on or prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of
the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior
to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense
of the Company, shall promptly cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each
Holder of Securities of such series at the address of such
Holder as it appears in the Security Register, not less than
10 days prior to such Special Record Date. Notice of the pro-
posed payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Secu-
rities of such series (or their respective Predecessor
Securities) are registered at the close of business on such
Special Record Date.
(b) The Company may make payment of any Defaulted
Interest on the Securities of any series in any other lawful
manner not inconsistent with the requirements of any
securities exchange on which such Securities may be listed,
and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and
Section 305, each Security delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of any
other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration
of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such
Security is registered as the absolute owner of such Security for
the purpose of receiving payment of principal of and premium, if
any, and (subject to Sections 305 and 307) interest, if any, on
such Security and for all other purposes whatsoever, whether or
not such Security be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. CANCELLATION BY SECURITY REGISTRAR.
All Securities surrendered for payment, redemption,
registration of transfer or exchange shall, if surrendered to any
Person other than the Security Registrar, be delivered to the
Security Registrar and, if not theretofore canceled, shall be
promptly canceled by the Security Registrar. The Company may at
any time deliver to the Security Registrar for cancellation any
Securities previously authenticated and delivered hereunder which
the Company may have acquired in any manner whatsoever or which
the Company shall not have issued and sold, and all Securities so
delivered shall be promptly canceled by the Security Registrar.
No Securities shall be authenticated in lieu of or in exchange
for any Securities canceled as provided in this Section, except
as expressly permitted by this Indenture. All canceled
Securities held by the Security Registrar shall be disposed of in
accordance with a Company Order delivered to the Security
Registrar and the Trustee, and the Security Registrar shall
promptly deliver a certificate of disposition to the Trustee and
the Company unless, by a Company Order, similarly delivered, the
Company shall direct that canceled Securities be returned to it.
The Security Registrar shall promptly deliver evidence of any
cancellation of a Security in accordance with this Section 309 to
the Trustee and the Company.
SECTION 310. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section
301 for Securities of any series, or any Tranche thereof,
interest on the Securities of each series shall be computed on
the basis of a 360-day year consisting of twelve 30-day months
and for any period shorter than a full month, on the basis of the
actual number of days elapsed in such period.
SECTION 311. PAYMENT TO BE IN PROPER CURRENCY.
In the case of the Securities of any series, or any
Tranche thereof, denominated in any currency other than Dollars
or in a composite currency (the "Required Currency"), except as
otherwise specified with respect to such Securities as
contemplated by Section 301, the obligation of the Company to
make any payment of the principal thereof, or the premium or
interest thereon, shall not be discharged or satisfied by any
tender by the Company, or recovery by the Trustee, in any
currency other than the Required Currency, except to the extent
that such tender or recovery shall result in the Trustee timely
holding the full amount of the Required Currency then due and
payable. If any such tender or recovery is in a currency other
than the Required Currency, the Trustee may take such actions as
it considers appropriate to exchange such currency for the
Required Currency. The costs and risks of any such exchange,
including without limitation the risks of delay and exchange rate
fluctuation, shall be borne by the Company, the Company shall
remain fully liable for any shortfall or delinquency in the full
amount of Required Currency then due and payable, and in no
circumstances shall the Trustee be liable therefor except in the
case of its negligence or willful misconduct.
SECTION 312. EXTENSION OF INTEREST PAYMENT.
The Company shall have the right at any time, so long as the
Company is not in default in the payment of interest on the
Securities of any series hereunder, to extend interest payment
periods on all Securities of one or more series, if so specified
as contemplated by Section 301 with respect to such Securities
and upon such terms as may be specified as contemplated by
Section 301 with respect to such Securities.
ARTICLE FOUR
REDEMPTION OF SECURITIES
SECTION 401. APPLICABILITY OF ARTICLE.
Securities of any series, or any Tranche thereof, which
are redeemable before their Stated Maturity shall be redeemable
in accordance with their terms and (except as otherwise specified
as contemplated by Section 301 for Securities of such series or
Tranche) in accordance with this Article.
SECTION 402. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities
shall be evidenced by a Board Resolution or an Officer's
Certificate. The Company shall, at least 45 days prior to the
Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee in
writing of such Redemption Date and of the principal amount of
such Securities to be redeemed. In the case of any redemption of
Securities (a) prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere
in this Indenture or (b) pursuant to an election of the Company
which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an Offi-
cer's Certificate evidencing compliance with such restriction or
condition.
SECTION 403. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities of any series, or any
Tranche thereof, are to be redeemed, the particular Securities to
be redeemed shall be selected by the Trustee from the Outstanding
Securities of such series or Tranche not previously called for
redemption, by such method as shall be provided for any
particular series, or, in the absence of any such provision, by
such method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions
(equal to the minimum authorized denomination for Securities of
such series or Tranche or any integral multiple thereof) of the
principal amount of Securities of such series or Tranche of a
denomination larger than the minimum authorized denomination for
Securities of such series or Tranche; provided, however, that if,
as indicated in an Officer's Certificate, the Company shall have
offered to purchase all or any principal amount of the Securities
then Outstanding of any series, or any Tranche thereof, and less
than all of such Securities as to which such offer was made shall
have been tendered to the Company for such purchase, the Trustee,
if so directed by Company Order, shall select for redemption all
or any principal amount of such Securities which have not been so
tendered.
The Trustee shall promptly notify the Company and the
Security Registrar in writing of the Securities selected for
redemption and, in the case of any Securities selected to be
redeemed in part, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of
Securities shall relate, in the case of any Securities redeemed
or to be redeemed only in part, to the portion of the principal
amount of such Securities which has been or is to be redeemed.
SECTION 404. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner pro-
vided in Section 106 to the Holders of the Securities to be
redeemed not less than 30 nor more than 60 days prior to the
Redemption Date.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price (if known),
(c) if less than all the Securities of any series or
Tranche are to be redeemed, the identification of the
particular Securities to be redeemed and the portion of the
principal amount of any Security to be redeemed in part,
(d) that on the Redemption Date the Redemption Price,
together with accrued interest, if any, to the Redemption
Date, will become due and payable upon each such Security to
be redeemed and, if applicable, that interest thereon will
cease to accrue on and after said date,
(e) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued
interest, if any, unless it shall have been specified as
contemplated by Section 301 with respect to such Securities
that such surrender shall not be required,
(f) that the redemption is for a sinking or other fund,
if such is the case, and
(g) such other matters as the Company shall deem
desirable or appropriate.
Unless otherwise specified with respect to any Securities
in accordance with Section 301, with respect to any notice of
redemption of Securities at the election of the Company, unless,
upon the giving of such notice, such Securities shall be deemed
to have been paid in accordance with Section 701, such notice may
state that such redemption shall be conditional upon the receipt
by the Paying Agent or Agents for such Securities, on or prior to
the date fixed for such redemption, of money sufficient to pay
the principal of and premium, if any, and interest, if any, on
such Securities and that if such money shall not have been so
received such notice shall be of no force or effect and the
Company shall not be required to redeem such Securities. In the
event that such notice of redemption contains such a condition
and such money is not so received, the redemption shall not be
made and within a reasonable time thereafter notice shall be
given, in the manner in which the notice of redemption was given,
that such money was not so received and such redemption was not
required to be made, and the Paying Agent or Agents for the
Securities otherwise to have been redeemed shall promptly return
to the Holders thereof any of such Securities which had been
surrendered for payment upon such redemption.
Notice of redemption of Securities to be redeemed at the
election of the Company, and any notice of non-satisfaction of a
condition for redemption as aforesaid, shall be given by the
Company or, at the Company's request, by the Security Registrar
in the name and at the expense of the Company. Notice of
mandatory redemption of Securities shall be given by the Security
Registrar in the name and at the expense of the Company.
SECTION 405. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, and
the conditions, if any, set forth in such notice having been sat-
isfied, the Securities or portions thereof so to be redeemed
shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date
(unless, in the case of an unconditional notice of redemption,
the Company shall default in the payment of the Redemption Price
and accrued interest, if any) such Securities or portions
thereof, if interest-bearing, shall cease to bear interest. Upon
surrender of any such Security for redemption in accordance with
such notice, such Security or portion thereof shall be paid by
the Company at the Redemption Price, together with accrued
interest, if any, to the Redemption Date; provided, however, that
no such surrender shall be a condition to such payment if so
specified as contemplated by Section 301 with respect to such
Security; and provided, further, that except as otherwise
specified as contemplated by Section 301 with respect to such
Security, any installment of interest on any Security the Stated
Maturity of which installment is on or prior to the Redemption
Date shall be payable to the Holder of such Security, or one or
more Predecessor Securities, registered as such at the close of
business on the related Regular Record Date according to the
terms of such Security and subject to the provisions of Section
307.
SECTION 406. SECURITIES REDEEMED IN PART.
Upon the surrender of any Security which is to be
redeemed only in part at a Place of Payment therefor (with, if
the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or
his attorney duly authorized in writing), the Company shall
execute, and the Trustee shall authenticate and deliver to the
Holder of such Security, without service charge, a new Security
or Securities of the same series and Tranche, of any authorized
denomination requested by such Holder and of like tenor and in
aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so
surrendered.
ARTICLE FIVE
SINKING FUNDS
SECTION 501. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of the Securities of any series,
or any Tranche thereof, except as otherwise specified as
contemplated by Section 301 for Securities of such series or
Tranche.
The minimum amount of any sinking fund payment provided
for by the terms of Securities of any series, or any Tranche
thereof, is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount
provided for by the terms of Securities of any series, or any
Tranche thereof, is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any
series, or any Tranche thereof, the cash amount of any sinking
fund payment may be subject to reduction as provided in Section
502. Each sinking fund payment shall be applied to the
redemption of Securities of the series or Tranche in respect of
which it was made as provided for by the terms of such
Securities.
SECTION 502. SATISFACTION OF SINKING FUND PAYMENTS WITH
SECURITIES.
The Company (a) may deliver to the Trustee Outstanding
Securities (other than any previously called for redemption) of a
series or Tranche in respect of which a mandatory sinking fund
payment is to be made and (b) may apply as a credit Securities of
such series or Tranche which have been redeemed either at the
election of the Company pursuant to the terms of such Securities
or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities, in each case
in satisfaction of all or any part of such mandatory sinking fund
payment with respect to the Securities of such series; provided,
however, that no Securities shall be applied in satisfaction of a
mandatory sinking fund payment if such Securities shall have been
previously so applied. Securities so applied shall be received
and credited for such purpose by the Trustee at the Redemption
Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such mandatory
sinking fund payment shall be reduced accordingly.
SECTION 503. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 45 days prior to each sinking fund payment
date for the Securities of any series, or any Tranche thereof,
the Company shall deliver to the Trustee an Officer's Certificate
specifying:
(a) the amount of the next succeeding mandatory sinking
fund payment for such series or Tranche;
(b) the amount, if any, of the optional sinking fund
payment to be made together with such mandatory sinking fund
payment;
(c) the aggregate sinking fund payment;
(d) the portion, if any, of such aggregate sinking fund
payment which is to be satisfied by the payment of cash; and
(e) the portion, if any, of such aggregate sinking fund
payment which is to be satisfied by delivering and crediting
Securities of such series or Tranche pursuant to Section 502
and stating the basis for such credit and that such Securities
have not previously been so credited, and the Company shall
also deliver to the Trustee any Securities to be so delivered.
If the Company shall have not delivered such Officer's
Certificate and, to the extent applicable, all such Securities,
the next succeeding sinking fund payment for such series or
Tranche shall be made entirely in cash in the amount of the man-
datory sinking fund payment. Not less than 30 days before each
such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in
the manner specified in Section 403 and cause notice of the
redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 404. Such
notice having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in Sections
405 and 406.
ARTICLE SIX
COVENANTS
SECTION 601. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company shall pay the principal of and premium, if
any, and interest, if any, on the Securities of each series in
accordance with the terms of such Securities and this Indenture.
SECTION 602. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in each Place of Payment for
the Securities of each series, or any Tranche thereof, an office
or agency where payment of such Securities shall be made, where
the registration of transfer or exchange of such Securities may
be effected and where notices and demands to or upon the Company
in respect of such Securities and this Indenture may be served.
The Company shall give prompt written notice to the Trustee of
the location, and any change in the location, of each such office
or agency and prompt notice to the Holders of any such change in
the manner specified in Section 106. If at any time the Company
shall fail to maintain any such required office or agency in
respect of Securities of any series, or any Tranche thereof, or
shall fail to furnish the Trustee with the address thereof,
payment of such Securities shall be made, registration of
transfer or exchange thereof may be effected and notices and
demands in respect thereof may be served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the
Trustee as its agent for all such purposes in any such event.
The Company may also from time to time designate one or
more other offices or agencies with respect to the Securities of
one or more series, or any Tranche thereof, for any or all of the
foregoing purposes and may from time to time rescind such
designations; provided, however, that, unless otherwise specified
as contemplated by Section 301 with respect to the Securities of
such series or Tranche, no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain
an office or agency for such purposes in each Place of Payment
for such Securities in accordance with the requirements set forth
above. The Company shall give prompt written notice to the
Trustee, and prompt notice to the Holders in the manner specified
in Section 106, of any such designation or rescission and of any
change in the location of any such other office or agency.
Anything herein to the contrary notwithstanding, any
office or agency required by this Section may be maintained at an
office of the Company, in which event the Company shall perform
all functions to be performed at such office or agency.
SECTION 603. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying
Agent with respect to the Securities of any series, or any
Tranche thereof, it shall, on or before each due date of the
principal of and premium, if any, and interest, if any, on any of
such Securities, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the
principal and premium or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided. The Company shall promptly notify the Trustee of any
failure by the Company (or any other obligor on such Securities)
to make any payment of principal of or premium, if any, or
interest, if any, on such Securities.
Whenever the Company shall have one or more Paying Agents
for the Securities of any series, or any Tranche thereof, it
shall, on or before each due date of the principal of and
premium, if any, and interest, if any, on such Securities,
deposit with such Paying Agents sums sufficient (without
duplication) to pay the principal and premium or interest so
becoming due, such sums to be held in trust for the benefit of
the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company shall
promptly notify the Trustee of any failure by it so to act.
The Company shall cause each Paying Agent for the
Securities of any series, or any Tranche thereof, other than the
Company or the Trustee, to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section, that such
Paying Agent shall:
(a) hold all sums held by it for the payment of the
principal of and premium, if any, or interest, if any, on such
Securities in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any failure by the
Company (or any other obligor upon such Securities) to make
any payment of principal of or premium, if any, or interest,
if any, on such Securities; and
(c) at any time during the continuance of any such
failure, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such Paying
Agent and furnish to the Trustee such information as it
possesses regarding the names and addresses of the Persons
entitled to such sums.
The Company may at any time pay, or by Company Order
direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held
by the Trustee upon the same trusts as those upon which such sums
were held by the Company or such Paying Agent and, if so stated
in a Company Order delivered to the Trustee, in accordance with
the provisions of Article Seven; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent,
or then held by the Company, in trust for the payment of the
principal of and premium, if any, or interest, if any, on any
Security and remaining unclaimed for two years after such
principal and premium, if any, or interest has become due and
payable shall be paid to the Company on Company Request, or, if
then held by the Company, shall be discharged from such trust;
and, upon such payment or discharge, the Holder of such Security
shall, as an unsecured general creditor and not as a Holder of an
Outstanding Security, look only to the Company for payment of the
amount so due and payable and remaining unpaid, and all liability
of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such payment to
the Company, may at the expense of the Company cause to be
mailed, on one occasion only, notice to such Holder that such
money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such
mailing, any unclaimed balance of such money then remaining will
be paid to the Company.
SECTION 604. CORPORATE EXISTENCE.
Subject to the rights of the Company under Article
Eleven, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its
corporate existence.
SECTION 605. MAINTENANCE OF PROPERTIES.
The Company shall cause (or, with respect to property
owned in common with others, make reasonable effort to cause) all
its properties used or useful in the conduct of its business to
be maintained and kept in good condition, repair and working
order and shall cause (or, with respect to property owned in
common with others, make reasonable effort to cause) to be made
all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as, in the judgment of the Company, may
be necessary so that the business carried on in connection
therewith may be properly conducted; provided, however, that
nothing in this Section shall prevent the Company from
discontinuing, or causing the discontinuance of, the operation
and maintenance of any of its properties if such discontinuance
is, in the judgment of the Company, desirable in the conduct of
its business.
SECTION 606. ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
Not later than June 1 in each year, commencing June 1,
1999, the Company shall deliver to the Trustee an Officer's
Certificate which need not comply with Section 102, executed by
the principal executive officer, the principal financial officer
or the principal accounting officer of the Company, as to such
officer's knowledge of the Company's compliance with all
conditions and covenants under this Indenture, such compliance to
be determined without regard to any period of grace or
requirement of notice under this Indenture.
SECTION 607. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply
with any term, provision or condition set forth in (a) Section
602 or any additional covenant or restriction specified with
respect to the Securities of any series, or any Tranche thereof,
as contemplated by Section 301, if before the time for such
compliance the Holders of a majority in aggregate principal
amount of the Outstanding Securities of all series and Tranches
with respect to which compliance with Section 602 or such
additional covenant or restriction is to be omitted, considered
as one class, shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with
such term, provision or condition and (b) Section 604, 605 or
Article Eleven if before the time for such compliance the Holders
of a majority in principal amount of Securities Outstanding under
this Indenture shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with
such term, provision or condition; but, in the case of (a) or
(b), no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of
the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and
effect.
SECTION 608. LIMITATION ON LIENS.
(a) Except as otherwise specified as contemplated by
Section 301 for Securities of any series, so long as any
Securities of any series are Outstanding, the Company will not
pledge, mortgage, hypothecate or grant a security interest in, or
permit any mortgage, pledge, security interest or other lien
upon, any capital stock of any Subsidiary now or hereafter owned
by the Company, to secure any Indebtedness (hereinafter defined)
without making effective provision whereby the Outstanding
Securities shall (so long as such other Indebtedness shall be so
secured) be equally and ratably secured with any and all such
other Indebtedness and any other indebtedness similarly entitled
to be equally and ratably secured; provided, however, that this
restriction shall not apply to nor prevent the creation or
existence of:
(1) any mortgage, pledge, security interest, lien or
encumbrance upon any such capital stock created at the time of
the acquisition of such capital stock by the Company or within
one year after such time to secure all or a portion of the
purchase price for such capital stock;
(2) any mortgage, pledge, security interest, lien or
encumbrance upon any such capital stock existing thereon at
the time of the acquisition thereof by the Company (whether or
not the obligations secured thereby are assumed by the
Company); or
(3) any extension, renewal of refunding of any mortgage,
pledge, security interest, lien or encumbrance permitted by
Subsection (1) or (2) above on capital stock of any Subsidiary
theretofore subject thereto (or substantially the same capital
stock) or any portion thereof.
(4) any judgment, levy, execution, attachment or other
similar lien arising in connection with court proceedings,
provided that either
(i) the execution or enforcement of each such lien
is effectively stayed within 30 days after entry of the
corresponding judgment (or the corresponding judgment has
been discharged within such 30 day period) and the claims
secured thereby are being contested in good faith by
appropriate proceedings timely commenced and diligently
prosecuted;
(ii) the payment of each such lien is covered in
full by insurance and the insurance company has not
denied or contested coverage thereof; or
(iii) so long as each such lien is adequately
bonded, any appropriate legal proceedings that may have
been duly initiated for the review of the corresponding
judgment, decree or order shall not have been fully
terminated or the period within which such proceedings
may be initiated shall not have expired.
For purposes of this Section 608, "Indebtedness" means
all indebtedness, whether or not represented by bonds,
debentures, notes or other securities, created or assumed by the
Company for the repayment of money borrowed. All indebtedness
for money borrowed secured by a lien upon property owned by the
Company and upon which indebtedness for money borrowed the
Company customarily pays interest, although the Company has not
assumed or become liable for the payment of such indebtedness for
money borrowed, shall for purposes of this Section 608 be deemed
to be Indebtedness of the Company. All indebtedness of others
for money borrowed which is guaranteed as to payment of principal
by the Company or in effect guaranteed by the Company through a
contingent agreement to purchase such indebtedness for money
borrowed shall for purposes of this Section 608 be deemed to be
Indebtedness of the Company, but no other contingent obligation
of the Company in respect of indebtedness for money borrowed or
other obligations incurred by others shall for purposes of this
Section 608 be deemed to be Indebtedness of the Company.
In case the Company shall propose to pledge, mortgage,
hypothecate or grant a security interest in any capital stock of
any Subsidiary owned by the Company to secure any Indebtedness,
other than as permitted by Subsections (a)(1) to (a)(3),
inclusive, of this Section, the Company will prior thereto give
written notice thereof to the Trustee, and the Company will prior
to or simultaneously with such pledge, mortgage, hypothecation or
grant of security interest, by supplemental indenture executed to
the Trustee (or to the extent legally necessary to another
trustee or an additional or separate trustee), in form
satisfactory to the Trustee, effectively secure (for so long as
such other Indebtedness shall be so secured) all the Securities
equally and ratably with such Indebtedness and with any other
indebtedness for money borrowed similarly entitled to be equally
and ratably secured.
(b) Except as otherwise specified as contemplated by
Section 301 for Securities of any series, the provisions of
Subsection (a) of this Section 608 shall not apply in the event
that the Company or any Subsidiary shall pledge, mortgage,
hypothecate or grant a security interest in or other lien upon
any capital stock of any Subsidiary now or hereafter owned by the
Company to secure any Indebtedness which would otherwise be
subject to the foregoing restriction up to an aggregate amount
which, together with all other Indebtedness (other than
mortgages, pledges, security interests, liens or encumbrances
permitted by Subsection (a) of this Section 608) which would
otherwise be subject to the foregoing restriction, does not at
the time exceed 5% of Consolidated Capitalization.
For purposes of this Section 608:
(1) The term "Consolidated Capitalization" means the sum
obtained by adding (i) Consolidated Shareholders' Equity, (ii)
Consolidated Indebtedness for money borrowed (exclusive of any
thereof which is due and payable within one year of the date
such sum is determined) and, without duplication, (iii) any
preference or preferred stock of the Company or any
Consolidated Subsidiary which is subject to mandatory
redemption or sinking fund provisions.
(2) The term "Consolidated Shareholders' Equity" means
the total Assets of the Company and its Consolidated
Subsidiaries less all liabilities of the Company and its
Consolidated Subsidiaries. As used in this definition,
"liabilities" means all obligations which would, in accordance
with generally accepted accounting principles, be classified
on a balance sheet as liabilities, including without
limitation, (i) indebtedness secured by property of the
Company or any of its Consolidated Subsidiaries whether or not
the Company or such Consolidated Subsidiary is liable for the
payment thereof unless, in the case that the Company or such
Consolidated Subsidiary is not so liable, such property has
not been included among the Assets of the Company or such
Consolidated Subsidiary on such balance sheet, (ii) deferred
liabilities, (iii) indebtedness of the Company or any of its
Consolidated Subsidiaries that is expressly subordinated in
right and priority of payment to other liabilities of the
Company or such Consolidated Subsidiary. As used in this
definition, "liabilities" includes preference or preferred
stock of the Company or any Consolidated Subsidiary only to
the extent of any such preference or preferred stock that is
subject to mandatory redemption or sinking fund provisions.
(3) The term "Consolidated Subsidiary" means at any date
any Subsidiary the financial statements of which under
generally accepted accounting principles would be consolidated
with those of the Company in its consolidated financial
statements as of such date.
(4) The "Assets" of any Person means the whole or any
part of its business, property, assets, cash and receivables.
(5) The term "Consolidated Indebtedness" means total
indebtedness as shown on the consolidated balance sheet of the
Company and its Consolidated Subsidiaries.
ARTICLE SEVEN
SATISFACTION AND DISCHARGE
SECTION 701. SATISFACTION AND DISCHARGE OF SECURITIES.
Any Security or Securities, or any portion of the
principal amount thereof, shall be deemed to have been paid for
all purposes of this Indenture, and the entire indebtedness of
the Company in respect thereof shall be deemed to have been
satisfied and discharged, if there shall have been irrevocably
deposited with the Trustee or any Paying Agent (other than the
Company), in trust:
(a) money in an amount which shall be sufficient, or
(b) in the case of a deposit made prior to the Maturity
of such Securities or portions thereof, Eligible Obligations,
which shall not contain provisions permitting the redemption
or other prepayment thereof at the option of the issuer
thereof, the principal of and the interest on which when due,
without any regard to reinvestment thereof, will provide
moneys which, together with the money, if any, deposited with
or held by the Trustee or such Paying Agent, shall be
sufficient, or
(c) a combination of (a) or (b) which shall be
sufficient,
to pay when due the principal of and premium, if any, and
interest, if any, due and to become due on such Securities or
portions thereof on or prior to Maturity; provided, however, that
in the case of the provision for payment or redemption of less
than all the Securities of any series or Tranche, such Securities
or portions thereof shall have been selected by the Trustee as
provided herein and, in the case of a redemption, the notice
requisite to the validity of such redemption shall have been
given or irrevocable authority shall have been given by the
Company to the Trustee to give such notice, under arrangements
satisfactory to the Trustee; and provided, further, that the
Company shall have delivered to the Trustee and such Paying
Agent:
(x) if such deposit shall have been made prior to
the Maturity of such Securities, a Company Order stating
that the money and Eligible Obligations deposited in
accordance with this Section shall be held in trust, as
provided in Section 703; and
(y) if Eligible Obligations shall have been
deposited, an Opinion of Counsel that the obligations so
deposited constitute Eligible Obligations and do not
contain provisions permitting the redemption or other
prepayment at the option of the issuer thereof, and an
opinion of an independent public accountant of nationally
recognized standing, selected by the Company, to the
effect that the requirements set forth in clause (b)
above have been satisfied; and
(z) if such deposit shall have been made prior to
the Maturity of such Securities, an Officer's Certificate
stating the Company's intention that, upon delivery of
such Officer's Certificate, its indebtedness in respect
of such Securities or portions thereof will have been
satisfied and discharged as contemplated in this Section.
Upon the deposit of money or Eligible Obligations, or
both, in accordance with this Section, together with the
documents required by clauses (x), (y) and (z) above, the Trustee
shall, upon receipt of a Company Request, acknowledge in writing
that the Security or Securities or portions thereof with respect
to which such deposit was made are deemed to have been paid for
all purposes of this Indenture and that the entire indebtedness
of the Company in respect thereof has been satisfied and
discharged as contemplated in this Section. In the event that
all of the conditions set forth in the preceding paragraph shall
have been satisfied in respect of any Securities or portions
thereof except that, for any reason, the Officer's Certificate
specified in clause (z) shall not have been delivered, such
Securities or portions thereof shall nevertheless be deemed to
have been paid for all purposes of this Indenture, and the
Holders of such Securities or portions thereof shall nevertheless
be no longer entitled to the benefits of this Indenture or of any
of the covenants of the Company under Article Six (except the
covenants contained in Sections 602 and 603) or any other
covenants made in respect of such Securities or portions thereof
as contemplated by Section 301, but the indebtedness of the
Company in respect of such Securities or portions thereof shall
not be deemed to have been satisfied and discharged prior to
Maturity for any other purpose, and the Holders of such
Securities or portions thereof shall continue to be entitled to
look to the Company for payment of the indebtedness represented
thereby; and, upon Company Request, the Trustee shall acknowledge
in writing that such Securities or portions thereof are deemed to
have been paid for all purposes of this Indenture.
If payment at Stated Maturity of less than all of the
Securities of any series, or any Tranche thereof, is to be
provided for in the manner and with the effect provided in this
Section, the Security Registrar shall select such Securities, or
portions of principal amount thereof, in the manner specified by
Section 403 for selection for redemption of less than all the
Securities of a series or Tranche.
In the event that Securities which shall be deemed to
have been paid for purposes of this Indenture, and, if such is
the case, in respect of which the Company's indebtedness shall
have been satisfied and discharged, all as provided in this
Section do not mature and are not to be redeemed within the 60
day period commencing with the date of the deposit of moneys or
Eligible Obligations, as aforesaid, the Company shall, as
promptly as practicable, give a notice, in the same manner as a
notice of redemption with respect to such Securities, to the
Holders of such Securities to the effect that such deposit has
been made and the effect thereof.
Notwithstanding that any Securities shall be deemed to
have been paid for purposes of this Indenture, as aforesaid, the
obligations of the Company and the Trustee in respect of such
Securities under Sections 304, 305, 306, 404, 503 (as to notice
of redemption), 602, 603, 907 and 915 and this Article Seven
shall survive.
The Company shall pay, and shall indemnify the Trustee or
any Paying Agent with which Eligible Obligations shall have been
deposited as provided in this Section against, any tax, fee or
other charge imposed on or assessed against such Eligible
Obligations or the principal or interest received in respect of
such Eligible Obligations, including, but not limited to, any
such tax payable by any entity deemed, for tax purposes, to have
been created as a result of such deposit.
Anything herein to the contrary notwithstanding, (a) if,
at any time after a Security would be deemed to have been paid
for purposes of this Indenture, and, if such is the case, the
Company's indebtedness in respect thereof would be deemed to have
been satisfied or discharged, pursuant to this Section (without
regard to the provisions of this paragraph), the Trustee or any
Paying Agent, as the case may be, shall be required to return the
money or Eligible Obligations, or combination thereof, deposited
with it as aforesaid to the Company or its representative under
any applicable Federal or State bankruptcy, insolvency or other
similar law, such Security shall thereupon be deemed
retroactively not to have been paid and any satisfaction and
discharge of the Company's indebtedness in respect thereof shall
retroactively be deemed not to have been effected, and such
Security shall be deemed to remain Outstanding and (b) any
satisfaction and discharge of the Company's indebtedness in
respect of any Security shall be subject to the provisions of the
last paragraph of Section 603.
SECTION 702. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of
further effect (except as hereinafter expressly provided), and
the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this
Indenture, when
(a) no Securities remain Outstanding hereunder; and
(b) the Company has paid or caused to be paid all other
sums payable hereunder by the Company;
provided, however, that if, in accordance with the last paragraph
of Section 701, any Security, previously deemed to have been paid
for purposes of this Indenture, shall be deemed retroactively not
to have been so paid, this Indenture shall thereupon be deemed
retroactively not to have been satisfied and discharged, as
aforesaid, and to remain in full force and effect, and the
Company shall execute and deliver such instruments as the Trustee
shall reasonably request to evidence and acknowledge the same.
Notwithstanding the satisfaction and discharge of this
Indenture as aforesaid, the obligations of the Company and the
Trustee under Sections 304, 305, 306, 404, 503 (as to notice of
redemption), 602, 603, 907 and 915 and this Article Seven shall
survive.
Upon satisfaction and discharge of this Indenture as pro-
vided in this Section, the Trustee shall assign, transfer and
turn over to the Company, subject to the lien provided by Section
907, any and all money, securities and other property then held
by the Trustee for the benefit of the Holders of the Securities
other than money and Eligible Obligations held by the Trustee
pursuant to Section 703.
SECTION 703. APPLICATION OF TRUST MONEY.
Neither the Eligible Obligations nor the money deposited
pursuant to Section 701, nor the principal or interest payments
on any such Eligible Obligations, shall be withdrawn or used for
any purpose other than, and shall be held in trust for, the
payment of the principal of and premium, if any, and interest, if
any, on the Securities or portions of principal amount thereof in
respect of which such deposit was made, all subject, however, to
the provisions of Section 603; provided, however, that, so long
as there shall not have occurred and be continuing an Event of
Default, any cash received from such principal or interest
payments on such Eligible Obligations, if not then needed for
such purpose, shall, to the extent practicable and upon Company
Request, be invested in Eligible Obligations of the type
described in clause (b) in the first paragraph of Section 701
maturing at such times and in such amounts as shall be
sufficient, together with any other moneys and the principal of
and interest on any other Eligible Obligations then held by the
Trustee, to pay when due the principal of and premium, if any,
and interest, if any, due and to become due on such Securities or
portions thereof on and prior to the Maturity thereof, and inter-
est earned from such reinvestment shall be paid over to the
Company as received, free and clear of any trust, lien or pledge
under this Indenture except the lien provided by Section 907; and
provided, further, that, so long as there shall not have occurred
and be continuing an Event of Default, any moneys held in
accordance with this Section on the Maturity of all such
Securities in excess of the amount required to pay the principal
of and premium, if any, and interest, if any, then due on such
Securities shall be paid over to the Company free and clear of
any trust, lien or pledge under this Indenture except the lien
provided by Section 907; and provided, further, that if an Event
of Default shall have occurred and be continuing, moneys to be
paid over to the Company pursuant to this Section shall be held
until such Event of Default shall have been waived or cured.
ARTICLE EIGHT
EVENTS OF DEFAULT; REMEDIES
SECTION 801. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to
Securities of any series, means any one of the following events:
(a) failure to pay interest, if any, on any Security of
such series within 30 days after the same becomes due and pay-
able; provided, however, that a valid extension of the
interest payment period by the Company as contemplated in
Section 312 of this Indenture shall not constitute a failure
to pay interest for this purpose; or
(b) failure to pay the principal of or premium, if any,
on any Security of such series at its Maturity; or
(c) failure to perform or breach of any covenant or
warranty of the Company in this Indenture (other than a
covenant or warranty a default in the performance of which or
breach of which is elsewhere in this Section specifically
dealt with or which has expressly been included in this
Indenture solely for the benefit of one or more series of
Securities other than such series) for a period of 90 days
after there has been given, by registered or certified mail,
to the Company by the Trustee, or to the Company and the
Trustee by the Holders of at least 33% in principal amount of
the Outstanding Securities of such series, a written notice
specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder, unless the Trustee, or the Trustee and the Holders
of a principal amount of Securities of such series not less
than the principal amount of Securities the Holders of which
gave such notice, as the case may be, shall agree in writing
to an extension of such period prior to its expiration;
provided, however, that the Trustee, or the Trustee and the
Holders of such principal amount of Securities of such series,
as the case may be, shall be deemed to have agreed to an
extension of such period if corrective action is initiated by
the Company within such period and is being diligently
pursued; or
(d) the entry by a court having jurisdiction in the
premises of (1) a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any appli-
cable Federal or State bankruptcy, insolvency, reorganization
or other similar law or (2) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly
filed a petition by one or more Persons other than the Company
seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company under any applicable Federal
or State law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official for
the Company or for any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and any
such decree or order for relief or any such other decree or
order shall have remained unstayed and in effect for a period
of 90 consecutive days; or
(e) the commencement by the Company of a voluntary case
or proceeding under any applicable Federal or State bank-
ruptcy, insolvency, reorganization or other similar law or of
any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a decree or
order for relief in respect of the Company in a case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any
applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or of
any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the admission
by it in writing of its inability to pay its debts generally
as they become due, or the authorization of such action by the
Board of Directors; or
(f) any other Event of Default specified with respect to
Securities of such series.
SECTION 802. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default due to the default in payment of
principal of, or interest on, any series of Securities or due to
the default in the performance or breach of any other covenant or
warranty of the Company applicable to the Securities of such
series but not applicable to all Outstanding Securities shall
have occurred and be continuing, either the Trustee or the
Holders of not less than 33% in principal amount of the
Securities of such series may then declare the principal amount
(or, if any of the Securities of such series are Discount
Securities, such portion of the principal amount as may be
specified in the terms thereof as contemplated by Section 301) of
all Securities of such series and interest accrued thereon to be
due and payable immediately. If an Event of Default due to
default in the performance of any other of the covenants or
agreements herein applicable to all Outstanding Securities or an
Event of Default specified in Section 801(d) or (e) shall have
occurred and be continuing, either the Trustee or the Holders of
not less than 33% in principal amount of all Securities then
Outstanding (considered as one class), and not the Holders of the
Securities of any one of such series, may declare the principal
of all Securities and interest accrued thereon to be due and
payable immediately. As a consequence of each such declaration
(herein referred to as a declaration of acceleration) with
respect to Securities of any series, the principal amount (or
portion thereof in the case of Discount Securities) of such
Securities and interest accrued thereon shall become due and
payable immediately.
At any time after such a declaration of acceleration with
respect to Securities of any series shall have been made and
before a judgment or decree for payment of the money due shall
have been obtained by the Trustee as hereinafter in this Article
provided, the Event or Events of Default giving rise to such
declaration of acceleration shall, without further act, be deemed
to have been waived, and such declaration and its consequences
shall, without further act, be deemed to have been rescinded and
annulled, if
(a) the Company shall have paid or deposited with the
Trustee a sum sufficient to pay
(1) all overdue interest on all Securities of such
series;
(2) the principal of and premium, if any, on any
Securities of such series which have become due otherwise
than by such declaration of acceleration and interest
thereon at the rate or rates prescribed therefor in such
Securities;
(3) to the extent that payment of such interest is
lawful, interest upon overdue interest, if any, at the
rate or rates prescribed therefor in such Securities;
(4) all amounts due to the Trustee under Section
907;
and
(b) any other Event or Events of Default with respect to
Securities of such series, other than the nonpayment of the
principal of Securities of such series which shall have become
due solely by such declaration of acceleration, shall have
been cured or waived as provided in Section 813.
No such rescission shall affect any subsequent Event of Default
or impair any right consequent thereon.
SECTION 803. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE.
If an Event of Default described in clause (a) or (b) of
Section 801 shall have occurred and be continuing, the Company
shall, upon demand of the Trustee, pay to it, for the benefit of
the Holders of the Securities of the series with respect to which
such Event of Default shall have occurred, the whole amount then
due and payable on such Securities for principal and premium, if
any, and interest, if any, and, to the extent permitted by law,
interest on any overdue principal and interest, at the rate or
rates prescribed therefor in such Securities, and, in addition
thereto, such further amount as shall be sufficient to cover any
amounts due to the Trustee under Section 907.
If the Company shall fail to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of
an express trust, may institute a judicial proceeding for the
collection of the sums so due and unpaid, may prosecute such
proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and
collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any
other obligor upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any
series shall have occurred and be continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the
rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy.
SECTION 804. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company
or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Securities shall
then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal or
interest) shall be entitled and empowered, by intervention in
such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of
principal, premium, if any, and interest, if any, owing and
unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for
amounts due to the Trustee under Section 907) and of the
Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute
the same;
and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders,
to pay to the Trustee any amounts due it under Section 907.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment
or composition affecting the Securities or the rights of any
Holder thereof or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding.
SECTION 805. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES.
All rights of action and claims under this Indenture or
the Securities may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or the production
thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of
the Holders in respect of which such judgment has been recovered.
SECTION 806. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Arti-
cle shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such
money on account of principal or premium, if any, or interest, if
any, upon presentation of the Securities in respect of which or
for the benefit of which such money shall have been collected and
the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee
under Section 907;
SECOND: To the payment of the amounts then due and un-
paid upon the Securities for principal of and premium, if any,
and interest, if any, in respect of which or for the benefit
of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts
due and payable on such Securities for principal, premium, if
any, and interest, if any, respectively; and
THIRD: To the payment of the remainder, if any, to the
Company or to whomsoever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may direct.
SECTION 807. LIMITATION ON SUITS.
No Holder shall have any right to institute any proceed-
ing, judicial or otherwise, with respect to this Indenture, or
for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(a) such Holder shall have previously given written
notice to the Trustee of a continuing Event of Default with
respect to the Securities of such series;
(b) the Holders of a majority in aggregate principal
amount of the Outstanding Securities of all series in respect
of which an Event of Default shall have occurred and be
continuing, considered as one class, shall have made written
request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders shall have offered to the
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity shall have failed to
institute any such proceeding; and
(e) no direction inconsistent with such written request
shall have been given to the Trustee during such 60-day period
by the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series in respect of which
an Event of Default shall have occurred and be continuing,
considered as one class;
it being understood and intended that no one or more of such
Holders shall have any right in any manner whatever by virtue of,
or by availing of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other of such Holders or
to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal
and ratable benefit of all of such Holders.
SECTION 808. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE
PRINCIPAL, PREMIUM AND INTEREST.
Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right, which is
absolute and unconditional, to receive payment of the principal
of and premium, if any, and (subject to Sections 307 and 312)
interest, if any, on such Security on the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemp-
tion, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be
impaired without the consent of such Holder.
SECTION 809. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture
and such proceeding shall have been discontinued or abandoned for
any reason, or shall have been determined adversely to the
Trustee or to such Holder, then and in every such case, subject
to any determination in such proceeding, the Company, and Trustee
and such Holder shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and
remedies of the Trustee and such Holder shall continue as though
no such proceeding had been instituted.
SECTION 810. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or 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 811. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder to
exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every
right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 812. CONTROL BY HOLDERS OF SECURITIES.
If an Event of Default shall have occurred and be
continuing in respect of a series of Securities, the Holders of a
majority in principal amount of the Outstanding Securities of
such series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the Securities of such series; provided,
however, that if an Event of Default shall have occurred and be
continuing with respect to more than one series of Securities,
the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all such series, considered as one
class, shall have the right to make such direction, and not the
Holders of the Securities of any one of such series; and
provided, further, that such direction shall not be in conflict
with any rule of law or with this Indenture. The Trustee may
take any other action, deemed proper by the Trustee, which is not
inconsistent with any such direction. Before proceeding to
exercise any right or power hereunder at the direction of such
Holders, the Trustee shall be entitled to receive from such
Holders reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in
compliance with any such direction.
SECTION 813. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal
amount of the Outstanding Securities of any series may on behalf
of the Holders of all the Securities of such series waive any
past default hereunder with respect to such series and its
consequences, except a default
(a) in the payment of the principal of or premium, if
any, or interest, if any, on any Security of such series, or
(b) in respect of a covenant or provision hereof which
under Section 1202 cannot be modified or amended without the
consent of the Holder of each Outstanding Security of such
series affected.
Upon any such waiver, such default shall cease to exist,
and any and all Events of Default arising therefrom shall be
deemed to have been cured, for every purpose of this Indenture;
but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 814. UNDERTAKING FOR COSTS.
The Company and the Trustee agree, and each Holder by his
acceptance thereof 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 Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as
Trustee, 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 reason-
able 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; but the provisions of this
Section shall not apply to any suit instituted by the Company, to
any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than
10% in aggregate principal amount of the Outstanding Securities
of all series in respect of which such suit may be brought,
considered as one class, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of or
premium, if any, or interest, if any, on any Security on or after
the Stated Maturity or Maturities expressed in such Security (or,
in the case of redemption, on or after the Redemption Date).
SECTION 815. 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 Indenture; 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 Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE NINE
THE TRUSTEE
SECTION 901. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The Trustee shall have and be subject to all the
duties and responsibilities specified with respect to an
indenture trustee in the Trust Indenture Act and no implied
covenants or obligations shall be read into this Indenture
against the Trustee. For purposes of Sections 315(a) and
315(c) of the Trust Indenture Act, the term "default" is
hereby defined as an Event of Default which has occurred and
is continuing.
(b) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(c) Notwithstanding anything contained in this Indenture
to the contrary, the duties and responsibilities of the
Trustee under this Indenture shall be subject to the
protections, exculpations and limitations on liability
afforded to the Trustee under the provisions of the Trust
Indenture Act.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section.
SECTION 902. NOTICE OF DEFAULTS.
The Trustee shall give notice of any default hereunder
with respect to the Securities of any series to the Holders of
Securities of such series in the manner and to the extent
required to do so by the Trust Indenture Act, unless such default
shall have been cured or waived; provided, however, that in the
case of any default of the character specified in Section 801(c),
no such notice to Holders shall be given until at least 45 days
after the occurrence thereof. For the purpose of this Section,
the term "default" means any event which is, or after notice or
lapse of time, or both, would become, an Event of Default.
SECTION 903. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 901 and to the
applicable provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting in good faith 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 reasonably 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 Request or
Company Order, or as otherwise expressly provided herein, and
any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and the written
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 Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at
the request or direction of any Holder pursuant to this
Indenture, unless such Holder shall have offered to the
Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee 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 Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as
it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall (subject to
applicable legal requirements) be entitled to examine, during
normal business hours, the books, records and premises of the
Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or
by or through agents or attorneys, and the Trustee shall not
be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder;
and
(h) the Trustee shall not be charged with knowledge of
any default or Event of Default, as the case may be, with
respect to the Securities of any series for which it is acting
as Trustee unless either (1) a Responsible Officer of the
Trustee shall have actual knowledge of the default or Event of
Default, as the case may be, or (2) written notice of such
default or Event of Default, as the case may be, shall have
been given to the Trustee by the Company, any other obligor on
such Securities or by any Holder of such Securities.
SECTION 904. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES.
The recitals contained herein and in the Securities (ex-
cept the Trustee's certificates of authentication) shall be taken
as the statements of the Company, and neither the Trustee nor any
Authenticating Agent assumes responsibility for their correct-
ness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. Neither the
Trustee nor any Authenticating Agent shall be accountable for the
use or application by the Company of Securities or the proceeds
thereof.
SECTION 905. MAY HOLD SECURITIES.
Each of the Trustee, any Authenticating Agent, any Paying
Agent, any Security Registrar or any other agent of the Company,
in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 908 and 913, may
otherwise deal with the Company with the same rights it would
have if it were not the Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.
SECTION 906. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be
segregated from other funds, except to the extent required by
law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as expressly provided
herein or otherwise agreed with, and for the sole benefit of, the
Company.
SECTION 907. COMPENSATION AND REIMBURSEMENT.
The Company shall
(a) pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein,
reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or
made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except
to the extent that any such expense, disbursement or advance
may be attributable to the Trustee's negligence, wilful
misconduct or bad faith; and
(c) indemnify the Trustee for, and hold it harmless from
and against, any loss, liability or expense reasonably
incurred by it arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder
or the performance of its duties hereunder, including the
reasonable costs and expenses of defending itself against any
claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except
to the extent any such loss, liability or expense may be
attributable to its negligence, wilful misconduct or bad
faith.
As security for the performance of the obligations of the
Company under this Section, the Trustee shall have a lien prior
to the Securities upon all property and funds held or collected
by the Trustee as such other than property and funds held in
trust under Section 703 (except as otherwise provided in Section
703). "Trustee" for purposes of this Section shall include any
predecessor Trustee; provided, however, that the negligence,
wilful misconduct or bad faith of any Trustee hereunder shall not
affect the rights of any other Trustee hereunder.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 801(d)
or Section 801(e), 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.
SECTION 908. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee shall have or acquire any conflicting
interest within the meaning of the Trust Indenture Act, it shall
either eliminate such conflicting interest or resign to the
extent, in the manner and with the effect, and subject to the
conditions, provided in the Trust Indenture Act and this
Indenture. For purposes of Section 310(b)(1) of the Trust
Indenture Act and to the extent permitted thereby, the Trustee,
in its capacity as trustee in respect of the Securities of any
series, shall not be deemed to have a conflicting interest
arising from its capacity as trustee in respect of the Securities
of any other series or any securities of any series issued under
the Indenture (For Unsecured Debt Securities Series A) dated as
of October 1, 1997 of the Company to the Trustee, the Indenture
(For Unsecured Debt Securities Series B) dated as of October 1,
1997 of the Company to the Trustee, or the Indenture (For
Unsecured Debt Securities Series C), dated as of January 1, 1998
of the Company to the Trustee.
SECTION 909. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which
shall be
(a) a corporation organized and doing business under the
laws of the United States, any State or Territory thereof or
the District of Columbia, authorized under such laws to
exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000 and subject to supervision or
examination by Federal or State authority, or
(b) if and to the extent permitted by the Commission by
rule, regulation or order upon application, a corporation or
other Person organized and doing business under the laws of a
foreign government, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus
of at least $50,000,000 or the Dollar equivalent of the
applicable foreign currency and subject to supervision or
examination by authority of such foreign government or a
political subdivision thereof substantially equivalent to
supervision or examination applicable to United States
institutional trustees,
and, in either case, qualified and eligible under this Article
and the Trust Indenture Act. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of such 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 Trustee 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 910. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article
shall become effective until the acceptance of appointment by
the successor Trustee in accordance with the applicable
requirements of Section 911.
(b) The Trustee may resign at any time with respect to
the Securities of one or more series by giving written notice
thereof to the Company. If the instrument of acceptance by a
successor Trustee required by Section 911 shall not have been
delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such
series.
(c) The Trustee may be removed at any time with respect
to the Securities of any series by Act of the Holders of a
majority in principal amount of the Outstanding Securities of
such series delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section
908 after written request therefor by the Company or by
any Holder who has been a bona fide Holder for at least
six months, or
(2) the Trustee shall cease to be eligible under
Section 909 and shall fail to resign after written re-
quest therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver
of the Trustee or of its property shall be appointed or
any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (x) the Company by a Board Resolution
may remove the Trustee with respect to all Securities or
(y) subject to Section 814, any Holder who has been a bona
fide Holder for at least six months may, on behalf of himself
and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee with
respect to all Securities and the appointment of a successor
Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office
of Trustee for any cause (other than as contemplated in clause
(y) in Subsection (d) of this Section), with respect to the
Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or
Trustees with respect to the Securities of that or those
series (it being understood that any such successor Trustee
may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only
one Trustee with respect to the Securities of any particular
series) and shall comply with the applicable requirements of
Section 911. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series
shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the succes-
sor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable
requirements of Section 911, become the successor Trustee with
respect to the Securities of such series and to that extent
supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the
Holders and accepted appointment in the manner required by
Section 911, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf
of itself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such
series.
(f) So long as no event which is, or after notice or
lapse of time, or both, would become, an Event of Default
shall have occurred and be continuing, and except with respect
to a Trustee appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities pursuant to
Subsection (e) of this Section, if the Company shall have
delivered to the Trustee (i) a Board Resolution appointing a
successor Trustee, effective as of a date specified therein,
and (ii) an instrument of acceptance of such appointment,
effective as of such date, by such successor Trustee in
accordance with Section 911, the Trustee shall be deemed to
have resigned as contemplated in Subsection (b) of this
Section, the successor Trustee shall be deemed to have been
appointed by the Company pursuant to Subsection (e) of this
Section and such appointment shall be deemed to have been
accepted as contemplated in Section 911, all as of such date,
and all other provisions of this Section and Section 911 shall
be applicable to such resignation, appointment and acceptance
except to the extent inconsistent with this Subsection (f).
(g) The Company (or, should the Company fail so to act
promptly, the successor trustee at the expense of the Company)
shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the
Securities of any series by mailing written notice of such
event by first-class mail, postage prepaid, to all Holders of
Securities of such series as their names and addresses appear
in the Security Register. Each notice shall include the name
of the successor Trustee with respect to the Securities of
such series and the address of its corporate trust office.
SECTION 911. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of all series, every
such successor Trustee so appointed shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the
request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of all sums owed to it, execute
and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring
Trustee hereunder.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not
all) series, the Company, the retiring Trustee and each
successor Trustee with respect to the Securities of one or
more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall
accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the
retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the
retiring Trustee and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder
by more than one Trustee, it being understood that nothing
herein or in such supplemental indenture shall constitute such
Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution
and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any succes-
sor Trustee, such retiring Trustee, upon payment of all sums
owed to it, shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring
Trustee hereunder with respect to the Securities of that or
those series to which the appointment of such successor
Trustee relates.
(c) Upon request of any such successor Trustee, the
Company shall execute any instruments which fully vest in and
confirm to such successor Trustee all such rights, powers and
trusts referred to in Subsection (a) or (b) of this Section,
as the case may be.
(d) No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee
shall be qualified and eligible under this Article.
SECTION 912. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation 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 Securities shall have been
authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver
the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.
SECTION 913. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If the Trustee shall be or become a creditor of the
Company or any other obligor upon the Securities (other than by
reason of a relationship described in Section 311(b) of the Trust
Indenture Act), the Trustee shall be subject to any and all
applicable provisions of the Trust Indenture Act regarding the
collection of claims against the Company or such other obligor.
For purposes of Section 311(b) of the Trust Indenture Act:
(a) the term "cash transaction" means any transaction in
which full payment for goods or securities sold is made within
seven days after delivery of the goods or securities in
currency or in checks or other orders drawn upon banks or
bankers and payable upon demand;
(b) the term "self-liquidating paper" means any draft,
bill of exchange, acceptance or obligation which is made,
drawn, negotiated or incurred by the Company for the purpose
of financing the purchase, processing, manufacturing,
shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to, possession
of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods,
wares or merchandise previously constituting the security,
provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship
with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or
obligation.
SECTION 914. CO-TRUSTEES AND SEPARATE TRUSTEES.
At any time or times, for the purpose of meeting the
legal requirements of any applicable jurisdiction, the Company
and the Trustee shall have power to appoint, and, upon the
written request of the Trustee or of the Holders of at least 33%
in principal amount of the Securities then Outstanding, the
Company shall for such purpose join with the Trustee in the
execution and delivery of all instruments and agreements
necessary or proper to appoint, one or more Persons approved by
the Trustee either to act as co-trustee, jointly with the
Trustee, or to act as separate trustee, in either case with such
powers as may be provided in the instrument of appointment, and
to vest in such Person or Persons, in the capacity aforesaid, any
property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section. If the Company
does not join in such appointment within 15 days after the
receipt by it of a request so to do, or if an Event of Default
shall have occurred and be continuing, the Trustee alone shall
have power to make such appointment.
Should any written instrument or instruments from the
Company be required by any co-trustee or separate trustee so
appointed to more fully confirm to such co-trustee or separate
trustee such property, title, right or power, any and all such
instruments shall, on request, be executed, acknowledged and
delivered by the Company.
Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject
to the following conditions:
(a) the Securities shall be authenticated and delivered,
and all rights, powers, duties and obligations hereunder in
respect of the custody of securities, cash and other personal
property held by, or required to be deposited or pledged with,
the Trustee hereunder, shall be exercised solely, by the
Trustee;
(b) the rights, powers, duties and obligations hereby
conferred or imposed upon the Trustee in respect of any
property covered by such appointment shall be conferred or
imposed upon and exercised or performed either by the Trustee
or by the Trustee and such co-trustee or separate trustee
jointly, as shall be provided in the instrument appointing
such co-trustee or separate trustee, except to the extent that
under any law of any jurisdiction in which any particular act
is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights,
powers, duties and obligations shall be exercised and
performed by such co-trustee or separate trustee;
(c) the Trustee at any time, by an instrument in writing
executed by it, with the concurrence of the Company, may
accept the resignation of or remove any co-trustee or separate
trustee appointed under this Section, and, if an Event of
Default shall have occurred and be continuing, the Trustee
shall have power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the concurrence of
the Company. Upon the written request of the Trustee, the
Company shall join with the Trustee in the execution and
delivery of all instruments and agreements necessary or proper
to effectuate such resignation or removal. A successor to any
co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section;
(d) no co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the
Trustee, or any other such trustee hereunder; and
(e) any Act of Holders delivered to the Trustee shall be
deemed to have been delivered to each such co-trustee and
separate trustee.
SECTION 915. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents
with respect to the Securities of one or more series, or Tranche
thereof, which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series or Tranche
issued upon original issuance and upon exchange, registration of
transfer or partial redemption thereof or pursuant to Section
306, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the
Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation
organized and doing business under the laws of the United States,
any State or territory thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having
a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State
authority. If such Authenticating Agent 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 Authenticating Agent 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 an Authenticating Agent
shall cease to be eligible in accordance with the provisions of
this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which such Authenticating Agent shall be a
party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation
shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part
of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The
Trustee may at any time terminate the agency of an Authenticating
Agent by giving written notice thereof to such Authenticating
Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee may
appoint a successor Authenticating Agent which shall be
acceptable to the Company. Any successor Authenticating Agent
upon acceptance of its appointment hereunder shall become vested
with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent
from time to time reasonable compensation for its services under
this Section, and the Trustee shall be entitled to be reimbursed
for such payments, in accordance with, and subject to the
provisions of, Section 907.
The provisions of Sections 308, 904 and 905 shall be ap-
plicable to each Authenticating Agent.
If an appointment with respect to the Securities of one
or more series shall be made pursuant to this Section, the
Securities of such series may have endorsed thereon, in addition
to the Trustee's certificate of authentication, an alternate
certificate of authentication substantially in the following
form:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
Dated:
------------------------
As Trustee
By
----------------------
As Authenticating
Agent
By
----------------------
Authorized Signatory
If all of the Securities of a series may not be
originally issued at one time, and if the Trustee does not have
an office capable of authenticating Securities upon original
issuance located in a Place of Payment where the Company wishes
to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested by the Company in writing
(which writing need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel), shall appoint, in
accordance with this Section and in accordance with such
procedures as shall be acceptable to the Trustee, an
Authenticating Agent having an office in a Place of Payment
designated by the Company with respect to such series of
Securities.
ARTICLE TEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 1001. LISTS OF HOLDERS.
Semiannually, not later than June 1 and December 1 in
each year, commencing December 1, 1998, and at such other times
as the Trustee may request in writing, the Company shall furnish
or cause to be furnished to the Trustee information as to the
names and addresses of the Holders, and the Trustee shall
preserve such information and similar information received by it
in any other capacity and afford to the Holders access to
information so preserved by it, all to such extent, if any, and
in such manner as shall be required by the Trust Indenture Act;
provided, however, that no such list need be furnished so long as
the Trustee shall be the Security Registrar.
SECTION 1002. REPORTS BY TRUSTEE AND COMPANY.
Not later than November 1 in each year, commencing
November 1, 1998, the Trustee shall transmit to the Holders, the
Commission and each securities exchange upon which any Securities
are listed, a report, dated as of the next preceding September
15, with respect to any events and other matters described in
Section 313(a) of the Trust Indenture Act, in such manner and to
the extent required by the Trust Indenture Act. The Trustee
shall transmit to the Holders, the Commission and each securities
exchange upon which any Securities are listed, and the Company
shall file with the Trustee (within 30 days after filing with the
Commission in the case of reports which pursuant to the Trust
Indenture Act must be filed with the Commission and furnished to
the Trustee) and transmit to the Holders, such other information,
reports and other documents, if any, at such times and in such
manner, as shall be required by the Trust Indenture Act. The
Company shall notify the Trustee of the listing of any Securities
on any securities exchange.
ARTICLE ELEVEN
CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER
SECTION 1101. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS.
The Company shall not consolidate with or merge into any
other corporation, or convey or otherwise transfer or lease its
properties and assets substantially as an entirety to any Person,
unless
(a) the corporation formed by such consolidation or into
which the Company is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a
Person organized and validly existing under the laws of the
United States, any State thereof or the District of Columbia,
and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form sat-
isfactory to the Trustee, the due and punctual payment of the
principal of and premium, if any, and interest, if any, on all
Outstanding Securities and the performance of every covenant
of this Indenture on the part of the Company to be per-
formed or observed;
(b) immediately after giving effect to such transaction
no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have
occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating
that such consolidation, merger, conveyance, or other transfer
or lease and such supplemental indenture comply with this
Article and that all conditions precedent herein provided for
relating to such transactions have been complied with.
SECTION 1102. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation by the Company with or merger by
the Company into any other corporation or any conveyance, or
other transfer or lease of the properties and assets of the
Company substantially as an entirety in accordance with Section
1101, the successor corporation formed by such consolidation or
into which the Company is merged or the Person to which such
conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor Person
shall be relieved of all obligations and covenants under this
Indenture and the Securities Outstanding hereunder.
ARTICLE TWELVE
SUPPLEMENTAL INDENTURES
SECTION 1201. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
HOLDERS.
Without the consent of any Holders, the Company and the
Trustee, at any time and from time to time, may enter into one or
more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(a) 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 Securities, all as
provided in Article Eleven; or
(b) to add one or more covenants of the Company or other
provisions for the benefit of all Holders or for the benefit
of the Holders of, or to remain in effect only so long as
there shall be Outstanding, Securities of one or more
specified series, or one or more specified Tranches thereof,
or to surrender any right or power herein conferred upon the
Company; or
(c) to add any additional Events of Default with respect
to all or any series of Securities Outstanding hereunder; or
(d) to change or eliminate any provision of this Inden-
ture or to add any new provision to this Indenture; provided,
however, that if such change, elimination or addition shall
adversely affect the interests of the Holders of Securities of
any series or Tranche Outstanding on the date of such
indenture supplemental hereto in any material respect, such
change, elimination or addition shall become effective with
respect to such series or Tranche only pursuant to the
provisions of Section 1202 hereof or when no Security of such
series or Tranche remains Outstanding; or
(e) to provide collateral security for all but not part
of the Securities; or
(f) to establish the form or terms of Securities of any
series or Tranche as contemplated by Sections 201 and 301; or
(g) to provide for the authentication and delivery of
bearer securities and coupons appertaining thereto
representing interest, if any, thereon and for the procedures
for the registration, exchange and replacement thereof and for
the giving of notice to, and the solicitation of the vote or
consent of, the holders thereof, and for any and all other
matters incidental thereto; or
(h) to evidence and provide for the acceptance of
appointment hereunder by a separate or successor Trustee or
co-trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 911(b); or
(i) to provide for the procedures required to permit the
Company to utilize, at its option, a noncertificated system of
registration for all, or any series or Tranche of, the Securi-
ties; or
(j) to change any place or places where (1) the
principal of and premium, if any, and interest, if any, on all
or any series of Securities, or any Tranche thereof, shall be
payable, (2) all or any series of Securities, or any Tranche
thereof, may be surrendered for registration of transfer, (3)
all or any series of Securities, or any Tranche thereof, may
be surrendered for exchange and (4) notices and demands to or
upon the Company in respect of all or any series of
Securities, or any Tranche thereof, and this Indenture may be
served; or
(k) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with
any other provision herein, or to make any other changes to
the provisions hereof or to add other provisions with respect
to matters or questions arising under this Indenture, provided
that such other changes or additions shall not adversely
affect the interests of the Holders of Securities of any
series or Tranche in any material respect.
Without limiting the generality of the foregoing, if the
Trust Indenture Act as in effect at the date of the execution and
delivery of this Indenture or at any time thereafter shall be
amended and
(x) if any such amendment shall require one or more
changes to any provisions hereof or the inclusion herein
of any additional provisions, or shall by operation of
law be deemed to effect such changes or incorporate such
provisions by reference or otherwise, this Indenture
shall be deemed to have been amended so as to conform to
such amendment to the Trust Indenture Act, and the
Company and the Trustee may, without the consent of any
Holders, enter into an indenture supplemental hereto to
effect or evidence such changes or additional provisions;
or
(y) if any such amendment shall permit one or more
changes to, or the elimination of, any provisions hereof
which, at the date of the execution and delivery hereof
or at any time thereafter, are required by the Trust
Indenture Act to be contained herein, this Indenture
shall be deemed to have been amended to effect such
changes or elimination, and the Company and the Trustee
may, without the consent of any Holders, enter into an
indenture supplemental hereto to evidence such amendment
hereof.
SECTION 1202. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of a majority in
aggregate principal amount of the Securities of all series then
Outstanding under this Indenture, considered as one class, by Act
of said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to, or changing in any
manner or eliminating any of the provisions of, this Indenture or
modifying in any manner the rights of the Holders of Securities
of such series under the Indenture; provided, however, that if
there shall be Securities of more than one series Outstanding
hereunder and if a proposed supplemental indenture shall directly
affect the rights of the Holders of Securities of one or more,
but less than all, of such series, then the consent only of the
Holders of a majority in aggregate principal amount of the
Outstanding Securities of all series so directly affected,
considered as one class, shall be required; and provided,
further, that if the Securities of any series shall have been
issued in more than one Tranche and if the proposed supplemental
indenture shall directly affect the rights of the Holders of
Securities of one or more, but less than all, of such Tranches,
then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all Tranches so
directly affected, considered as one class, shall be required;
and provided, further, that no such supplemental indenture shall:
(a) change the Stated Maturity of the principal of, or
any installment of principal of or interest on, any Security,
or reduce the principal amount thereof or the rate of interest
thereon (or the amount of any installment of interest thereon)
or change the method of calculating such rate or reduce any
premium payable upon the redemption thereof, or reduce the
amount of the principal of a Discount Security that would be
due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 802, or change the coin
or currency (or other property), in which any Security or any
premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such
payment on or after the Stated Maturity of any Security (or,
in the case of redemption, on or after the Redemption Date),
without, in any such case, the consent of the Holder of such
Security, or
(b) reduce the percentage in principal amount of the
Outstanding Securities of any series, or any Tranche thereof,
the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which
is required for any waiver of compliance with any provision of
this Indenture or of any default hereunder and its conse-
quences, or reduce the requirements of Section 1304 for quorum
or voting, without, in any such case, the consent of the
Holders of each Outstanding Security of such series or
Tranche, or
(c) modify any of the provisions of this Section,
Section 607 or Section 813 with respect to the Securities of
any series, or any Tranche thereof, except to increase the
percentages in principal amount referred to in this Section or
such other Sections or to provide that other provisions of
this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be
deemed to require the consent of any Holder with respect to
changes in the references to "the Trustee" and concomitant
changes in this Section, or the deletion of this proviso, in
accordance with the requirements of Sections 911(b), 914 and
1201(h).
A supplemental indenture which changes or eliminates any covenant
or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series
of Securities, or one or more Tranches thereof, or which modifies
the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not
to affect the rights under this Indenture of the Holders of
Securities of any other series or Tranche.
It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act
shall approve the substance thereof. A waiver by a Holder of
such Holder's right to consent under this Section shall be deemed
to be a consent of such Holder.
SECTION 1203. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created
by, any supplemental indenture permitted by this Article or the
modifications thereby of the trusts created by this Indenture,
the Trustee shall be entitled to receive, and (subject to Section
901) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Trustee may,
but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties,
immunities or liabilities under this Indenture or otherwise.
SECTION 1204. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under
this Article, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby. Any supplemental indenture permitted by
this Article may restate this Indenture in its entirety, and,
upon the execution and delivery thereof, any such restatement
shall supersede this Indenture as theretofore in effect for all
purposes.
SECTION 1205. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture
Act as then in effect.
SECTION 1206. REFERENCE IN SECURITIES TO SUPPLEMENTAL
INDENTURES.
Securities of any series, or any Tranche thereof,
authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Securities of
any series, or any Tranche thereof, so modified as to conform, in
the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series or Tranche.
SECTION 1207. MODIFICATION WITHOUT SUPPLEMENTAL INDENTURE.
If the terms of any particular series of Securities shall
have been established in a Board Resolution or an Officer's
Certificate as contemplated by Section 301, and not in an
indenture supplemental hereto, additions to, changes in or the
elimination of any of such terms may be effected by means of a
supplemental Board Resolution or Officer's Certificate, as the
case may be, delivered to, and accepted by, the Trustee;
provided, however, that such supplemental Board Resolution or
Officer's Certificate shall not be accepted by the Trustee or
otherwise be effective unless all conditions set forth in this
Indenture which would be required to be satisfied if such
additions, changes or elimination were contained in a
supplemental indenture shall have been appropriately satisfied.
Upon the acceptance thereof by the Trustee, any such supplemental
Board Resolution or Officer's Certificate shall be deemed to be a
"supplemental indenture" for purposes of Section 1204 and 1206.
ARTICLE THIRTEEN
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
SECTION 1301. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Securities of one or more, or
all, series, or any Tranche or Tranches thereof, may be called at
any time and from time to time pursuant to this Article to make,
give or take any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Indenture to be made, given or taken by Holders of Securities of
such series or Tranches.
SECTION 1302. CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of
Holders of Securities of one or more, or all, series, or any
Tranche or Tranches thereof, for any purpose specified in
Section 1301, to be held at such time and at such place in the
Borough of Manhattan, The City of New York, as the Trustee
shall determine, or, with the approval of the Company, at any
other place. Notice of every such meeting, setting forth the
time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given,
in the manner provided in Section 106, not less than 21 nor
more than 180 days prior to the date fixed for the meeting.
(b) If the Trustee shall have been requested to call a
meeting of the Holders of Securities of one or more, or all,
series, or any Tranche or Tranches thereof, by the Company or
by the Holders of 33% in aggregate principal amount of all of
such series and Tranches, considered as one class, for any
purpose specified in Section 1301, by written request setting
forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have given the notice
of such meeting within 21 days after receipt of such request
or shall not thereafter proceed to cause the meeting to be
held as provided herein, then the Company or the Holders of
Securities of such series and Tranches in the amount above
specified, as the case may be, may determine the time and the
place in the Borough of Manhattan, The City of New York, or in
such other place as shall be determined or approved by the
Company, for such meeting and may call such meeting for such
purposes by giving notice thereof as provided in Subsection
(a) of this Section.
(c) Any meeting of Holders of Securities of one or more,
or all, series, or any Tranche or Tranches thereof, shall be
valid without notice if the Holders of all Outstanding
Securities of such series or Tranches are present in person or
by proxy and if representatives of the Company and the Trustee
are present, or if notice is waived in writing before or after
the meeting by the Holders of all Outstanding Securities of
such series, or any Tranche or Tranches thereof, or by such of
them as are not present at the meeting in person or by proxy,
and by the Company and the Trustee.
SECTION 1303. PERSONS ENTITLED TO VOTE AT MEETINGS.
To be entitled to vote at any meeting of Holders of
Securities of one or more, or all, series, or any Tranche or
Tranches thereof, a Person shall be (a) a Holder of one or more
Outstanding Securities of such series or Tranches, or (b) a
Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Securities of such
series or Tranches by such Holder or Holders. The only Persons
who shall be entitled to attend any meeting of Holders of
Securities of any series or Tranche shall be the Persons entitled
to vote at such meeting and their counsel, any representatives of
the Trustee and its counsel and any representatives of the
Company and its counsel.
SECTION 1304. QUORUM; ACTION.
The Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Securities of the series and
Tranches with respect to which a meeting shall have been called
as hereinbefore provided, considered as one class, shall
constitute a quorum for a meeting of Holders of Securities of
such series and Tranches; provided, however, that if any action
is to be taken at such meeting which this Indenture expressly
provides may be taken by the Holders of a specified percentage,
which is less than a majority, in principal amount of the
Outstanding Securities of such series and Tranches, considered as
one class, the Persons entitled to vote such specified percentage
in principal amount of the Outstanding Securities of such series
and Tranches, considered as one class, shall constitute a quorum.
In the absence of a quorum within one hour of the time appointed
for any such meeting, the meeting shall, if convened at the
request of Holders of Securities of such series and Tranches, be
dissolved. In any other case the meeting may be adjourned for
such period as may be determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a
quorum at any such adjourned meeting, such adjourned meeting may
be further adjourned for such period as may be determined by the
chairman of the meeting prior to the adjournment of such
adjourned meeting. Except as provided by Section 1305(e), notice
of the reconvening of any meeting adjourned for more than 30 days
shall be given as provided in Section 1302(a) not less than 10
days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage, as provided above, of the
principal amount of the Outstanding Securities of such series and
Tranches which shall constitute a quorum.
Except as limited by Section 1202, any resolution pre-
sented to a meeting or adjourned meeting duly reconvened at which
a quorum is present as aforesaid may be adopted only by the
affirmative vote of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of the series and
Tranches with respect to which such meeting shall have been
called, considered as one class; provided, however, that, except
as so limited, any resolution with respect to any action which
this Indenture expressly provides may be taken by the Holders of
a specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of such series and
Tranches, considered as one class, may be adopted at a meeting
or an adjourned meeting duly reconvened and at which a quorum is
present as aforesaid by the affirmative vote of the Holders of
such specified percentage in principal amount of the Outstanding
Securities of such series and Tranches, considered as one class.
Any resolution passed or decision taken at any meeting of
Holders of Securities duly held in accordance with this Section
shall be binding on all the Holders of Securities of the series
and Tranches with respect to which such meeting shall have been
held, whether or not present or represented at the meeting.
SECTION 1305. ATTENDANCE AT MEETINGS; DETERMINATION OF VOTING
RIGHTS; CONDUCT AND ADJOURNMENT OF MEETINGS.
(a) Attendance at meetings of Holders of Securities may
be in person or by proxy; and, to the extent permitted by law,
any such proxy shall remain in effect and be binding upon any
future Holder of the Securities with respect to which it was
given unless and until specifically revoked by the Holder or
future Holder of such Securities before being voted.
(b) Notwithstanding any other provisions of this Inden-
ture, the Trustee may make such reasonable regulations as it
may deem advisable for any meeting of Holders of Securities in
regard to proof of the holding of such Securities and of the
appointment of proxies and in regard to the appointment and
duties of inspectors of votes, the submission and examination
of proxies, certificates and other evidence of the right to
vote, and such other matters concerning the conduct of the
meeting as it shall deem appropriate. Except as otherwise
permitted or required by any such regulations, the holding of
Securities shall be proved in the manner specified in Section
104 and the appointment of any proxy shall be proved in the
manner specified in Section 104. Such regulations may provide
that written instruments appointing proxies, regular on their
face, may be presumed valid and genuine without the proof
specified in Section 104 or other proof.
(c) The Trustee shall, by an instrument in writing,
appoint a temporary chairman of the meeting, unless the
meeting shall have been called by the Company or by Holders as
provided in Section 1302(b), in which case the Company or the
Holders of Securities of the series and Tranches calling the
meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the
Persons entitled to vote a majority in aggregate principal
amount of the Outstanding Securities of all series and
Tranches represented at the meeting, considered as one class.
(d) At any meeting each Holder or proxy shall be
entitled to one vote for each $1 principal amount of
Securities held or represented by him; provided, however, that
no vote shall be cast or counted at any meeting in respect of
any Security challenged as not Outstanding and ruled by the
chairman of the meeting to be not Outstanding. The chairman
of the meeting shall have no right to vote, except as a Holder
of a Security or proxy.
(e) Any meeting duly called pursuant to Section 1302 at
which a quorum is present may be adjourned from time to time
by Persons entitled to vote a majority in aggregate principal
amount of the Outstanding Securities of all series and
Tranches represented at the meeting, considered as one class;
and the meeting may be held as so adjourned without further
notice.
SECTION 1306. COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of
Holders shall be by written ballots on which shall be subscribed
the signatures of the Holders or of their representatives by
proxy and the principal amounts and serial numbers of the
Outstanding Securities, of the series and Tranches with respect
to which the meeting shall have been called, held or represented
by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports of
all votes cast at the meeting. A record of the proceedings of
each meeting of Holders shall be prepared by the secretary of the
meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more persons having knowledge of
the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1302
and, if applicable, Section 1304. Each copy shall be signed and
verified by the affidavits of the permanent chairman and
secretary of the meeting and one such copy shall be delivered to
the Company, and another to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at
the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
SECTION 1307. ACTION WITHOUT MEETING.
In lieu of a vote of Holders at a meeting as hereinbefore
contemplated in this Article, any request, demand, authorization,
direction, notice, consent, waiver or other action may be made,
given or taken by Holders by written instruments as provided in
Section 104.
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
SECTION 1401. LIABILITY SOLELY CORPORATE.
No recourse shall be had for the payment of the principal
of or premium, if any, or interest, if any, on any Securities, or
any part thereof, or for any claim based thereon or otherwise in
respect thereof, or of the indebtedness represented thereby, or
upon any obligation, covenant or agreement under this Indenture,
against any incorporator, shareholder, officer or director, as
such, past, present or future of the Company or of any
predecessor or successor corporation (either directly or through
the Company or a predecessor or successor corporation), whether
by virtue of any constitutional provision, statute or rule of
law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly agreed and understood that this
Indenture and all the Securities are solely corporate
obligations, and that no personal liability whatsoever shall
attach to, or be incurred by, any incorporator, shareholder,
officer or director, past, present or future, of the Company or
of any predecessor or successor corporation, either directly or
indirectly through the Company or any predecessor or successor
corporation, because of the indebtedness hereby authorized or
under or by reason of any of the obligations, covenants or
agreements contained in this Indenture or in any of the
Securities or to be implied herefrom or therefrom, and that any
such personal liability is hereby expressly waived and released
as a condition of, and as part of the consideration for, the
execution of this Indenture and the issuance of the Securities.
ARTICLE FIFTEEN
SECURITIES OF THE FIRST SERIES
SECTION 1501. DESIGNATION OF SECURITIES OF THE FIRST SERIES.
There is hereby created a series of Securities designated
" % Series D Senior Notes due " (herein sometimes
----- ----
referred to as "Securities of the First Series") and limited in
aggregate principal amount (except as contemplated in Section
201(b) hereof) to Dollars ($ ).
------------------- -----------
The form and terms of the Securities of the First Series shall be
established in an Officer's Certificate.
-------------------------
This instrument may be executed in any number of counter-
parts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but
one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the day and year first
above written.
TEXAS UTILITIES COMPANY
By:
---------------------------------------
ROBERT S. SHAPARD
Treasurer
<PAGE>
THE BANK OF NEW YORK, Trustee
By:
---------------------------------------
W.N. GITLIN
Vice President
<PAGE>
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the day of , 1998, before me personally
----- -------
came Robert S. Shapard, to me known, who, being by me duly sworn,
did depose and say that he is the Treasurer of Texas Utilities
Company, one of the corporations described in and which executed
the foregoing instrument; and that he signed his name thereto by
authority of the Board of Directors of said corporation.
--------------------------------
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of , 1998, before me personally
----- -------
came W.N. Gitlin, to me known, who, being by me duly sworn, did
depose and say that he is a Vice President of The Bank of New
York, one of the corporations described in and which executed the
foregoing instrument; and that he signed his name thereto by
authority of the Board of Directors of said corporation.
-------------------------------------
------------
Notary Public, State of New York
TEXAS UTILITIES COMPANY
OFFICER'S CERTIFICATE
Robert S. Shapard, the Treasurer of Texas Utilities Company
(the "Company"), pursuant to the authority granted in the Board
Resolutions of the Company dated , 1998, and Sections 201,
---------
301 and 1501 of the Indenture defined herein, does hereby certify
to The Bank of New York (the "Trustee"), as Trustee under the
Indenture of the Company (For Unsecured Debt Securities Series D)
dated as of 1, 1998 (the "Indenture") that:
-------
1. The securities of the first series to be issued under the
Indenture shall be designated " % Series D Senior Notes
-----
due " (the "Senior Notes of the First Series"). All
----
capitalized terms used in this certificate which are not
defined herein but are defined in the Indenture shall have
the meanings set forth in the Indenture;
2. The Senior Notes of the First Series shall be limited in
aggregate principal amount to $ at any time
-----------
Outstanding, except as contemplated in Section 301(b) of the
Indenture;
3. The Senior Notes of the First Series shall mature and the
principal shall be due and payable together with all accrued
and unpaid interest thereon on , ;
------- ----
4. The Senior Notes of the First Series shall be issued in the
denominations of $ [if other than denominations of$1,000
----
and any integral multiple thereof];
5. The Senior Notes of the First Series shall bear interest at
the rate of % per annum payable [semi-annually]
-----
[quarterly] on of each year (each, an "Interest
-----------
Payment Date") commencing on . Interest on the
----------
Senior Notes of the First Series will accrue from ,
--------
1998, but if interest has been paid on such Senior Notes of
the First Series, then from the most recent Interest Payment
Date to which interest has been paid or duly provided for.
In the event that any Interest Payment Date is not a
Business Day, then payment of interest payable on such date
will be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of
such delay), with the same force and effect as if made on
such Interest Payment Date;
6. Each installment of interest on a Senior Note of the First
Series shall be payable to the Person in whose name such
Senior Note of the First Series is registered at the close of
business on the th day of the calendar month next preceding
--
the corresponding Interest Payment Date (the "Regular Record
Date") for the Senior Notes of the First Series. [Subject
to paragraph 9 hereof,] Any installment of interest on the
Senior Notes of the First Series not punctually paid or duly
provided for shall forthwith cease to be payable to the
Holders of such Senior Notes of the First Series on such
Regular Record Date, and may be paid to the Persons in whose
name such Senior Notes of the First Series are registered at
the close of business on a Special Record Date to be fixed
by the Trustee for the payment of such Defaulted Interest.
Notice of such Defaulted Interest and Special Record Date
shall be given to the Holders of such Senior Notes of the
First Series not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any
securities exchange on which such Senior Notes of the First
Series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the
Indenture;
7. The principal and each installment of interest on the Senior
Notes of the First Series shall be payable at, and
registration and registration of transfers and exchanges in
respect of the Senior Notes of the First Series may be
effected at, the office or agency of the Company in The City
of New York; provided that payment of interest may be made
at the option of the Company by check mailed to the address
of the persons entitled thereto. Notices and demands to or
upon the Company in respect of the Senior Notes of the First
Series may be served at the office or agency of the Company
in The City of New York. The Corporate Trust Office of the
Trustee will initially be the agency of the Company for such
payment, registration and registration of transfers and
exchanges and service of notices and demands and the Company
hereby appoints the Trustee as its agent for all such
purposes; provided, however, that the Company reserves the
right to change, by one or more Officer's Certificates, any
such office or agency and such agent. The Trustee will be
the Security Registrar and the Paying Agent for the Senior
Notes of the First Series;
8. [Redemption provisions will be inserted here];
9. [Extension of interest payment provisions, if any, will be
inserted here];
10. [If the Senior Notes of the First Series are to be held by a
securities depositary, the matters contemplated in clause
(r) of Section 301 of the Indenture will be established
here];
11. No service charge shall be made for the registration of
transfer or exchange of the Senior Notes of the First
Series; provided, however, that the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with
the exchange or transfer;
12. If the Company shall make any deposit of money and/or
Eligible Obligations with respect to any Senior Notes of the
First Series, or any portion of the principal amount
thereof, as contemplated by Section 701 of the Indenture,
the Company shall not deliver an Officer's Certificate
described in clause (z) in the first paragraph of said
Section 701 unless the Company shall also deliver to the
Trustee, together with such Officer's Certificate, either:
(A) an instrument wherein the Company, notwithstanding
the satisfaction and discharge of its indebtedness in
respect of the Senior Notes of the First Series, shall
assume the obligation (which shall be absolute and
unconditional) to irrevocably deposit with the Trustee or
Paying Agent such additional sums of money, if any, or
additional Eligible Obligations (meeting the requirements of
Section 701), if any, or any combination thereof, at such
time or times, as shall be necessary, together with the
money and/or Eligible Obligations theretofore so deposited,
to pay when due the principal of and premium, if any, and
interest due and to become due on such Senior Notes of the
First Series or portions thereof, all in accordance with and
subject to the provisions of said Section 701; provided,
however, that such instrument may state that the obligation
of the Company to make additional deposits as aforesaid
shall be subject to the delivery to the Company by the
Trustee of a notice asserting the deficiency accompanied by
an opinion of an independent public accountant of nationally
recognized standing, selected by the Trustee, showing the
calculation thereof; or
(B) an Opinion of Counsel to the effect that, as a
result of a change in law occurring after the date of this
certificate, the Holders of such Senior Notes of the First
Series, or portions of the principal amount thereof, will
not recognize income, gain or loss for United States federal
income tax purposes as a result of the satisfaction and
discharge of the Company's indebtedness in respect thereof
and will be subject to United States federal income tax on
the same amounts, at the same times and in the same manner
as if such satisfaction and discharge had not been effected.
13. The obligations of the Company under the Senior Notes of the
First Series and under the Indenture to the extent related
to such series will be subject to assignment by the Company
to and assumption by a wholly owned Subsidiary of the
Company at any time, as provided in the form set forth in
Exhibit A hereto with respect to the Senior Notes of the
First Series.
In the event that such Subsidiary assumes the obligations
under the Senior Notes of the First Series, the Company will
unconditionally guarantee payment of the Senior Notes of the
First Series and will execute a guarantee in form and
substance satisfactory to the Trustee. Pursuant to the
guarantee, the Company will fully and unconditionally
guarantee the payment of the obligations of such assuming
Subsidiary under the Senior Notes of the First Series and
under the Indenture, including, without limitation, payment,
as and when due, of the principal of, premium, if any, and
interest on, the Senior Notes of the First Series. Other
than the obligation to make such payments, the Company will
be released and discharged from all of its other obligations
under the Indenture. The foregoing assignment and
assumption shall be in compliance with applicable law
including the Securities Act of 1933.
14. The Senior Notes of the First Series shall have such other
terms and provisions as are provided in the form thereof set
forth in Exhibit A hereto, and shall be issued in
substantially such form.
15. The undersigned has read all of the covenants and conditions
contained in the Indenture relating to the issuance of the
Senior Notes of the First Series and the definitions in the
Indenture relating thereto and in respect of which this
certificate is made;
16. The statements contained in this certificate are based upon
the familiarity of the undersigned with the Indenture, the
documents accompanying this certificate, and upon
discussions by the undersigned with officers and employees
of the Company familiar with the matters set forth herein;
17. In the opinion of the undersigned, he has made such
examination or investigation as is necessary to enable him
to express an informed opinion whether or not such covenants
and conditions have been complied with; and
18. In the opinion of the undersigned, such conditions and
covenants and conditions precedent, if any (including any
covenants compliance with which constitutes a condition
precedent) to the authentication and delivery of the Senior
Notes of the First Series requested in the accompanying
Company Order have been complied with.
IN WITNESS WHEREOF, I have executed this Officer's Certificate
this day of , 1998.
---- -----
-----------------------------
Treasurer
<PAGE>
EXHIBIT A
[depository legend]
[Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), 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 in such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.]
[FORM OF FACE OF SENIOR NOTE]
TEXAS UTILITIES COMPANY
% SERIES D SENIOR NOTES DUE
----- ----
TEXAS UTILITIES COMPANY, a corporation duly organized and
existing under the laws of the State of Texas (herein referred to
as the "Company", which term includes any successor Person under
the Indenture), for value received, hereby promises to pay to
or registered assigns, the principal sum of
--------------------
Dollars on , , and to pay interest on said principal
--------- ----
sum [semi-annually] [quarterly] on of each year (each an
---------
Interest Payment Date) commencing , at the rate of %
--------- -----
per annum until the principal hereof is paid or made available
for payment. Interest on the Securities of this series will
accrue from , 1998, to the first Interest Payment Date, and
------
thereafter will accrue from the last Interest Payment Date to
which interest has been paid or duly provided for. In the event
that any Interest Payment Date is not a Business Day, then
payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest
or other payment in respect of such delay) with the same force
and effect as if made on the Interest Payment Date. The interest
so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be
paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, which shall be the
th day of the calendar month next preceding such Interest
---
Payment Date. [Subject to the extension of interest payment
provisions,] Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder
on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest
to be fixed by the Trustee, notice whereof shall be given to
Holders of Securities of this series not less than 10 days prior
to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may
be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture referred
to on the reverse hereof.
Payment of the principal of (and premium, if any) and
interest on this Security will be made at the office or agency of
the Company maintained for that purpose in The City of New York,
the State of New York in such coin or currency of the United
States of America as at the time of payment is legal tender for
payment of public and private debts, provided, however, that, at
the option of the Company, interest on this Security may be paid
by check mailed to the address of the person entitled thereto, as
such address shall appear on the Security Register. Reference is
hereby made to the further provisions of this Security set forth
on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
<PAGE>
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
TEXAS UTILITIES COMPANY
By:
------------------------------
ATTEST:
----------------------------
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:
-------------------------------
Authorized Signatory
<PAGE>
[FORM OF REVERSE OF SENIOR NOTE]
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an Indenture
(for Unsecured Debt Securities Series D), dated as of , 1998
-------
(herein, together with any amendments thereto, called the
"Indenture", which term shall have the meaning assigned to it in
such instrument), between the Company and The Bank of New York,
as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), and reference is hereby
made to the Indenture, including the Board Resolutions and
Officer's Certificate filed with the Trustee on , 1998
------- --
creating the series designated on the face hereof, for a
statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof,
limited in aggregate principal amount to $ .
-----------
[Redemption provisions will be inserted here].
The Indenture contains provisions for defeasance at any
time of the entire indebtedness of this Security upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Holders of the Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of all series to be affected.
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the
Indenture, the Holder of this Security shall not have the right
to institute any proceeding with respect to the Indenture or for
the appointment of a receiver or trustee or for any other remedy
thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with
respect to the Securities of this series, the Holders of a
majority in aggregate principal amount of the Securities of all
series at the time Outstanding in respect of which an Event of
Default shall have occurred and be continuing shall have made
written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in aggregate principal
amount of Securities of all series at the time Outstanding in
respect of which an Event of Default shall have occurred and be
continuing a direction inconsistent with such request, and shall
have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal
hereof or any premium or [,subject to the extension of interest
payment provisions,] interest hereon on or after the respective
due dates expressed herein.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this
Security at the times, place and rate, and in the coin or
currency, herein prescribed.
[Extension of interest payment provisions, if any, will
be inserted here].
The Securities of this series are issuable only in
registered form without coupons in denominations of $ . As
-----
provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for
a like aggregate principal amount of Securities of this series
and of like tenor and of authorized denominations, as requested
by the Holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security
is registered as the absolute owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the
contrary.
Unless an Event of Default, or an event which, after
notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing, the obligations
of the Company under the Securities of this series and the
Indenture to the extent related to such series may be assigned by
the Company to, and be assumed in whole, on a full recourse
basis, by a wholly owned Subsidiary of the Company at any time;
provided, however, that such assumption shall be subject to, and
-------- -------
permitted only upon the fulfillment and satisfaction of, the
following terms and conditions: (a) an assumption agreement and
a supplemental indenture to the Indenture evidencing such
assumption shall be in substance and form reasonably satisfactory
to the Trustee and shall, inter alia, include modifications and
----- ----
amendments to the Indenture making the obligations under the
Securities of this series and under the Indenture to the
extent related to such series primary obligations of such
Subsidiary, substituting such Subsidiary of the Company for
the Company in the form of the Securities of this series
and in provisions of the Indenture to the extent related to
such series and releasing and discharging the Company from its
obligations under the Securities of this series and the
Indenture to the extent related to such series; and (b) the
Trustee shall have received (i) an executed counterpart
of such assumption agreement and supplemental indenture;
(ii) evidence satisfactory to the Trustee and the Company
that all necessary authorizations, consents, orders, approvals,
waivers, filings and declarations of or with, Federal, state,
county, municipal, regional or other governmental authorities,
agencies or boards (collectively, "Governmental Actions")
relating to such assumption have been duly obtained and are in
full force and effect, (iii) evidence satisfactory to the Trustee
that any security interest intended to be created by the Indenture
is not in any material way adversely affected or impaired by
any of the agreements or transactions relating to such assumption
and (iv) an Opinion of Counsel for such Subsidiary, reasonably
satisfactory in substance, scope and form to the Trustee and
the Company, to the effect that (A) the supplemental indenture
evidencing such assumption has been duly authorized, executed
and delivered by such Subsidiary, (B) the execution and delivery
by such Subsidiary of such supplemental indenture and the
consummation of the transactions contemplated thereby do
not contravene any provision of law or any governmental
rule applicable to such Subsidiary or any provision of such
Subsidiary's charter documents or by-laws and do not contravene
any provision of, or constitute a default under, or result
in the creation or imposition of any lien upon any of such
Subsidiary's properties or assets under any indenture, mortgage,
contract or other agreement to which such Subsidiary is a party
or by which such Subsidiary or any of its properties may be bound
or affected, (C) all necessary Governmental Actions relating to
such assumption have been duly obtained and are in full force and
effect and (D) such agreement and supplemental indenture
constitute the legal, valid and binding obligations of such
Subsidiary, enforceable in accordance with their respective
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws at the time in effect affecting the rights of
creditors generally.
At the time of such assumption the Company will
unconditionally guarantee payment of the Securities of this
series and will execute a guarantee in form and substance
satisfactory to the Trustee. Pursuant to the guarantee, the
Company will fully and unconditionally guarantee the payment of
the obligations of such assuming Subsidiary under the Securities
of this series and under the Indenture, including, without
limitation, payment, as and when due, of the principal of,
premium, if any, and interest on, the Securities of this series.
Other than the obligation to make such payments, the Company
shall be released and discharged from all other obligations under
the Indenture.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.
=================================================================
TEXAS UTILITIES COMPANY
AND
,
AS PURCHASE CONTRACT AGENT
------------
FORM OF PURCHASE CONTRACT AGREEMENT
------------
DATED AS OF , 1998
------------
=================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
Definitions and Other Provisions
of General Application . . . . . . . . . .
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . .
Section 1.2. Compliance Certificates and Opinions . . . . . . .
Section 1.3. Form of Documents Delivered to Agent . . . . . . .
Section 1.4. Acts of Holders; Record Dates . . . . . . . . . .
Section 1.5. Notices . . . . . . . . . . . . . . . . . . . . .
Section 1.6. Notice to Holders; Waiver . . . . . . . . . . . .
Section 1.7. Effect of Headings and Table of Contents . . . . .
Section 1.8. Successors and Assigns . . . . . . . . . . . . . .
Section 1.9. Separability Clause . . . . . . . . . . . . . . .
Section 1.10. Benefits of Agreement . . . . . . . . . . . . . .
Section 1.11. Governing Law . . . . . . . . . . . . . . . . . .
Section 1.12. Legal Holidays . . . . . . . . . . . . . . . . . .
Section 1.13. Counterparts . . . . . . . . . . . . . . . . . . .
Section 1.14. Inspection of Agreement . . . . . . . . . . . . .
ARTICLE II
Certificate Forms . . . . . . . . . . . .
Section 2.1. Forms of Certificates Generally . . . . . . . . .
Section 2.2. Form of Agent's Certificate of Authentication . .
ARTICLE III
The Securities . . . . . . . . . . . .
Section 3.1. Title and Terms; Denominations . . . . . . . . . .
Section 3.2. Rights and Obligations Evidenced by the
Certificates . . . . . . . . . . . . . . . . . . .
Section 3.3. Execution, Authentication, Delivery and Dating . .
Section 3.4. Temporary Certificates . . . . . . . . . . . . . .
Section 3.5. Registration; Registration of Transfer and
Exchange . . . . . . . . . . . . . . . . . . . . .
Section 3.6. Book-Entry Interests . . . . . . . . . . . . . . .
Section 3.7. Notices to Holders . . . . . . . . . . . . . . . .
Section 3.8. Appointment of Successor Clearing Agency . . . . .
Section 3.9. Definitive Certificates . . . . . . . . . . . . .
Section 3.10. Mutilated, Destroyed, Lost and Stolen
Certificates . . . . . . . . . . . . . . . . . . .
Section 3.11. Persons Deemed Owners . . . . . . . . . . . . . .
Section 3.12. Cancellation . . . . . . . . . . . . . . . . . . .
Section 3.13. Establishment or Reestablishment of Type B
Securities . . . . . . . . . . . . . . . . . . . .
Section 3.14. Establishment or Reestablishment of Type A
Securities . . . . . . . . . . . . . . . . . . . .
Section 3.15. Transfer of Collateral upon Occurrence of
Termination Event . . . . . . . . . . . . . . . .
Section 3.16. No Consent to Assumption . . . . . . . . . . . . .
ARTICLE IV
The Debt Securities . . . . . . . . . . .
Section 4.1. Payment of Interest; Rights to Interest Preserved;
Interest Rate Reset; Notice . . . . . . . . . . .
Section 4.2. Notice and Voting . . . . . . . . . . . . . . . .
Section 4.3. Tax Event Redemption . . . . . . . . . . . . . . .
ARTICLE V
The Purchase Contracts . . . . . . . . . .
Section 5.1. Purchase of Shares of Common Stock . . . . . . . .
Section 5.2. Contract Adjustment Payments . . . . . . . . . . .
Section 5.3. Deferral of Payment Dates For Contract Adjustment
Payments . . . . . . . . . . . . . . . . . . . . .
Section 5.4. Payment of Purchase Price . . . . . . . . . . . .
Section 5.5. Issuance of Shares of Common Stock . . . . . . . .
Section 5.6. Adjustment of Settlement Rate . . . . . . . . . .
Section 5.7. Notice of Adjustments and Certain Other Events . .
Section 5.8. Termination Event; Notice . . . . . . . . . . . .
Section 5.9. Early Settlement . . . . . . . . . . . . . . . . .
Section 5.10. No Fractional Shares . . . . . . . . . . . . . . .
Section 5.11. Charges and Taxes . . . . . . . . . . . . . . . .
ARTICLE VI
Remedies . . . . . . . . . . . . . .
Section 6.1. Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Common Stock .
Section 6.2. Restoration of Rights and Remedies . . . . . . . .
Section 6.3. Rights and Remedies Cumulative . . . . . . . . . .
Section 6.4. Delay or Omission Not Waiver . . . . . . . . . . .
Section 6.5. Undertaking for Costs . . . . . . . . . . . . . .
Section 6.6. Waiver of Stay or Extension Laws . . . . . . . . .
ARTICLE VII
The Agent . . . . . . . . . . . . . .
Section 7.1. Certain Duties and Responsibilities . . . . . . .
Section 7.2. Notice of Default . . . . . . . . . . . . . . . .
Section 7.3. Certain Rights of Agent . . . . . . . . . . . . .
Section 7.4. Not Responsible for Recitals or Issuance of
Securities . . . . . . . . . . . . . . . . . . . .
Section 7.5. May Hold Securities . . . . . . . . . . . . . . .
Section 7.6. Money Held in Custody . . . . . . . . . . . . . .
Section 7.7. Compensation and Reimbursement . . . . . . . . . .
Section 7.8. Corporate Agent Required; Eligibility . . . . . .
Section 7.9. Resignation and Removal; Appointment of Successor
Section 7.10. Acceptance of Appointment by Successor . . . . . .
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . .
Section 7.12. Preservation of Information; Communications to
Holders . . . . . . . . . . . . . . . . . . . . .
Section 7.13. No Obligations of Agent . . . . . . . . . . . . .
Section 7.14. Tax Compliance . . . . . . . . . . . . . . . . . .
ARTICLE VIII
Supplemental Agreements . . . . . . . . . .
Section 8.1. Supplemental Agreements Without Consent of
Holders . . . . . . . . . . . . . . . . . . . . .
Section 8.2. Supplemental Agreements with Consent of Holders .
Section 8.3. Execution of Supplemental Agreements . . . . . . .
Section 8.4. Effect of Supplemental Agreements . . . . . . . .
Section 8.5. Reference to Supplemental Agreements . . . . . . .
ARTICLE IX
Consolidation, Merger, Sale or Conveyance . . . . . .
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions . . . . .
Section 9.2. Rights and Duties of Successor Corporation . . . .
Section 9.3. Opinion of Counsel Given to Agent . . . . . . . .
ARTICLE X
Covenants . . . . . . . . . . . . . .
Section 10.1. Performance Under Purchase Contracts . . . . . . .
Section 10.2. Maintenance of Office or Agency . . . . . . . . .
Section 10.3. Company to Reserve Common Stock . . . . . . . . .
Section 10.4. Covenants as to Common Stock . . . . . . . . . . .
EXHIBIT A Form of Type A Certificate
EXHIBIT B Form of Type B Certificate
EXHIBIT C Instruction to Collateral Agent
EXHIBIT D Instruction to Purchase Contract Agent
EXHIBIT E Notice to Settle with Separate Cash
<PAGE>
FORM OF PURCHASE CONTRACT AGREEMENT, dated as of 1998,
-----
between Texas Utilities Company, a Texas corporation (the
"Company"), and
-------------------------------------------------
, acting as purchase contract agent for the
------------------
Holders of Securities from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery
of this Agreement and the Certificates evidencing the Securities.
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 Agent, as
provided in this Agreement, the valid obligations of the Company,
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 Securities by the Holders thereof, it is mutually agreed as
follows:
ARTICLE I
Definitions and Other Provisions
of General Applications
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 or other subdivision;
(d) the following terms have the meanings given to them in
the Officer's Certificate: (i) Applicable Ownership Interest;
(ii) Applicable Principal Amount; (iii) Authorized Newspaper;
(iv) Indenture, (v) Primary Treasury Dealer; (vi) Quotation
Agent; (vii) Redemption Amount; (viii) Redemption Price; (ix)
Reset Agent; (x) Reset Announcement Date; (xii) Reset Rate;
(xiii) Reset Spread; (xiv) Tax Event; (xv) Tax Event Redemption;
(xvi) Tax Event Redemption Date; (xvii) Two-Year Benchmark
Treasury; (xix) Treasury Portfolio; and (xx) Treasury Portfolio
Purchase Price; and
(e) the following terms have the meanings given to them in
this Section 1.1(e).
"Act" when used with respect to any Holder, has the meaning
specified in Section 1.4.
"Affiliate" has the same meaning as given to that term in
Rule 405 of the Securities Act or any successor rule thereunder.
"Agent" means the Person named as the "Agent" in the first
paragraph of this instrument until a successor Agent shall have
become such pursuant to the applicable provisions of this
Agreement, and thereafter "Agent" shall mean such Person.
"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.
"Authorized Officer" means the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant
Treasurer, 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).
"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
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 in New York City
(in the State of New York) are permitted or required by any
applicable law to close.
"Cash Settlement" has the meaning set forth in Section
5.4(a)(i).
"Certificate" means a Type A Certificate or a Type B
Certificate.
"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 Securities and in whose
name, or in the name of a nominee of that organization, shall be
registered a Global Certificate and which shall undertake to
effect book entry transfers and pledges of the Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
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.
"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" has the meaning specified in
Section 3.13.
"Common Stock" means the Common Stock, without par value, 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 provision of this
Agreement, and thereafter "Company" shall mean such successor.
"Company Certificate" means a certificate signed by an
Authorized Officer and delivered to the Agent.
"Contract Adjustment Payments" means the fee payable by the
Company in respect of each Purchase Contract issued in connection
with Type B Securities, equal to % per annum of the Stated
---
Amount, computed on the basis of a 360 day year of twelve 30
day months, plus any Deferred Contract Adjustment Payments
accrued pursuant to Section 5.2.
"Corporate Trust Office" means the principal corporate trust
office of the Agent at which, at any particular time, its
corporate trust business shall be administered, which office at
the date hereof is located at .
----------------------------------
"Coupon Rate" means the percentage rate per annum at which
each Debt Security will bear interest initially.
"Current Market Price" has the meaning specified in Section
5.6(a)(8).
"Debt Securities" means the series of debt securities of the
Company designated the % Series D Senior Notes due ,
--- ------
, to be issued under the Indenture as of the date hereof.
----
"Deferred Contract Adjustment Payments" has the meaning
specified in Section 5.3.
"Depositary" means, initially, DTC until another Clearing
Agency becomes its successor.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"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).
"Early Settlement Rate" has the meaning specified in Section
5.9(b).
"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.
"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 Section
5.4(b).
"Global Debt Security Certificate" means a certificate
evidencing the rights and obligations of a Holder in respect of
the number of Debt Securities specified on such certificate and
which is registered in the name of a Clearing Agency or a nominee
thereof.
"Global Certificate" means a Certificate that evidences all
or part of the Securities and is registered in the name of a
Depositary or a nominee thereof.
"Holder," when used with respect to a Security, means the
Person in whose name the Security evidenced by an Type A
Certificate and/or a Type B Certificate is registered in the
related Type A Register and/or the Type B Register, as the case
may be.
"Indenture" has the meaning set forth in Section 1.1 of the
Declaration.
"Indenture Trustee" means ,
---------------------------------
as trustee under the Indenture, or any successor thereto.
"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 Agent.
"NYSE" has the meaning specified in Section 5.1.
"Officer's Certificate" means a certificate signed by an
authorized signatory of the Company establishing the terms of the
debt securities of any series 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 Agent.
"Outstanding Securities," with respect to any Type A
Securities and Type B Securities means, as of the date of
determination, all Type A Securities or Type B Securities
evidenced by Certificates theretofore authenticated, executed and
delivered under this Agreement, except:
(i) If a Termination Event has occurred, (A) Type
B Securities and (B) Type A Securities for which the
Stated Amount of the related Debt Security or the
appropriate Applicable Ownership Interest of the
Treasury Portfolio has been theretofore deposited with
the Agent in trust for the Holders of such Type A
Securities;
(ii) Type A Securities and Type B Securities
evidenced by Certificates theretofore cancelled by the
Agent or delivered to the Agent for cancellation or
deemed cancelled pursuant to the provisions of this
Agreement; and
(iii) Type A Securities and Type B Securities
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
Agent proof satisfactory to it that such Certificate is
held by a bona fide purchaser in whose hands the Type A
Securities or Type B Securities evidenced by such
Certificate are valid obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite number of the Type A Securities or Type B Securities
have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Type A Securities or Type B
Securities owned by the Company or any Affiliate of the Company
shall be disregarded and deemed not to be outstanding, except
that, in determining whether the Agent shall be protected in
relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Type A Securities or Type B
Securities which a Responsible Officer of the Agent knows to be
so owned shall be so disregarded. Type A Securities or Type B
Securities so owned which have been pledged in good faith may be
regarded as Outstanding Securities if the pledgee establishes to
the satisfaction of the Agent the pledgee's right so to act with
respect to such Type A Securities or Type B Securities and that
the pledgee is not the Company or any Affiliate of the Company.
"Payment Date" means each ,
-------------------------------
commencing , 1998.
-------------------------------
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association,
joint-stock company, limited liability company, trust,
unincorporated association or government or any agency or
political subdivision thereof or any other entity of whatever
nature.
"Permitted Investments" has the meaning set forth in Section
1 of the Pledge Agreement.
"Pledge" means the pledge under the Pledge Agreement of the
Debt Securities, the Treasury Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, in each
case constituting a part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of
the date hereof, by and among the Company, the Collateral Agent,
the Custodial Agent, the Securities Intermediary and the Agent,
on its own behalf and as attorney-in-fact for the Holders from
time to time of the Securities.
"Predecessor Certificate" means a Predecessor Type A
Certificate or a Predecessor Type B Certificate.
"Predecessor Type A Certificate" of any particular Type A
Certificate means every previous Type A Certificate evidencing
all or a portion of the rights and obligations of the Company and
the Holder under the Type A Security evidenced thereby; and, for
the purposes of this definition, any Type A Certificate
authenticated and delivered under Section 3.10 in exchange for or
in lieu of a mutilated, destroyed, lost or stolen Type A
Certificate shall be deemed to evidence the same rights and
obligations of the Company and the Holder as the mutilated,
destroyed, lost or stolen Type A Certificate.
"Predecessor Type B Certificate" of any particular Type B
Certificate means every previous Type B Certificate evidencing
all or a portion of the rights and obligations of the Company and
the Holder under the Type B Securities evidenced thereby; and,
for the purposes of this definition, any Type B Certificate
authenticated and delivered under Section 3.10 in exchange for or
in lieu of a mutilated, destroyed, lost or stolen Type B
Certificate shall be deemed to evidence the same rights and
obligations of the Company and the Holder as the mutilated,
destroyed, lost or stolen Type B Certificate.
"Proceeds" has the meaning set forth in Section 1 of the
Pledge Agreement.
"Purchase Contract," when used with respect to any Security,
means the contract forming a part of such Security and obligating
the Company to (i) sell and the Holder of such Security to
purchase Common Stock and (ii) pay the Holder Contract Adjustment
Payments, if any, on the terms and subject to the conditions set
forth in Article Five hereof.
"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.
"Purchased Shares" has the meaning specified in Section
5.6(a)(6).
"Record Date" for the distribution 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 more than one Business Day but less than 60
Business Days prior to such Payment Date.
"Register" means the Type A Register and the Type B
Register.
"Registrar" means the Type A Registrar and the Type B
Registrar.
"Remarketing Agent" has the meaning specified in Section
5.4.
"Remarketing Agreement" means the Remarketing Agreement
dated , 1998 by and between the Company, the Trust,
------------
the Remarketing Agent and the Purchase Contract Agent.
"Remarketing Fee" has the meaning specified in Section 5.4.
"Remarketing Underwriting Agreement" has the meaning
specified in the Remarketing Agreement.
"Reorganization Event" has the meaning specified in Section
5.6(b).
"Responsible Officer," when used with respect to the Agent,
means any officer of the Agent assigned by the Agent to
administer its corporate trust matters.
"Security" means a Type A Security or a Type B Security.
"Senior Indebtedness" means indebtedness of any kind of the
Company unless the instrument under which such indebtedness is
incurred expressly provides that it is on parity with or
subordinated in right of payment to the Contract Adjustment
Payments.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $10.
"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,
adjudicating the Company to be insolvent, or approving as
properly filed a petition seeking reorganization or liquidation
of the Company or any other similar applicable Federal or State
law, 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.
"Threshold Appreciation Price" has the meaning specified in
Section 5.1.
"TIA" means the Trust Indenture Act of 1939, as amended, or
any successor statute.
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Security" means zero-coupon U.S. Treasury
Securities (CUSIP Number ) which are the principal strip
----------
of the U.S. Treasury Securities which mature on .
--------------
"Type A Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of
Type A Securities specified on such certificate.
"Type A Register" and "Type A Registrar" have the respective
meanings specified in Section 3.5.
"Type A Security" means the collective rights and
obligations of a Holder of a Type A Certificate in respect of a
Debt Security or an appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, subject in each case
to the Pledge thereof, and the related Purchase Contract.
"Type B Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of
Type B Security specified on such certificate.
"Type B Register" and "Type B Registrar" have the respective
meanings specified in Section 3.5.
"Type B Security" means, following the substitution of one
or more Treasury Securities for Debt Securities or for the
Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, as collateral to secure a holder's obligations under
a Purchase Contract, the collective rights and obligations of a
holder of a Type B Certificate in respect of such Treasury
Securities, subject in each case to the Pledge thereof, and the
related Purchase Contract.
"Underwriting Agreement" means the Underwriting Agreement
dated , 1998 among the Company, and,
----------------- ---------
.
---------------------------------------------------
"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 Agent to
take any action under any provision of this Agreement, the
Company shall furnish to the 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 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 covenant or condition
and the definitions herein relating thereto;
(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 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 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 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 Agent and the Company, if
made in the manner provided in this Section.
(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
Agent deems sufficient.
(c) The ownership of Securities shall be proved by the Type
A Register or the Type B Register, as the case may be.
(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
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 Securities
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 Securities. If any record date is set
pursuant to this paragraph, the Holders of the Outstanding Type A
Securities and the Outstanding Type B Securities, 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 Type A Securities
or the Type B Securities 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 Securities 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
Securities 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 Agent in writing and to each Holder of Securities
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 Agent in writing, and to each Holder of Securities
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 Holders or other document provided or
permitted by this Agreement to be made upon, given or furnished
to, or filed with,
(1) the 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 and personally delivered or mailed,
first-class postage prepaid, to the Agent at
---------------
, Attention: , or at any other
--------------- --------------
address previously furnished in writing by the Agent to the
Holders and the Company; or
(2) the Company by the 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 and personally delivered or mailed,
first-class postage prepaid, to the Company at Texas
Utilities Company, 1601 Energy Plaza, Dallas, Texas 75201,
Attention: Secretary, or at any other address previously
furnished in writing to the Agent by the Company; or
(3) the Collateral Agent by the 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 and personally delivered or
mailed, first-class postage prepaid, addressed to the
Collateral Agent at
----------------------------------------
, or at any other address previously
-------------------
furnished in writing by the Collateral Agent to the 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 and personally delivered or mailed,
first-class postage prepaid, addressed to the Indenture
Trustee at
-------------------------------------------------
Attention: 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 applicable 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
Agent, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
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 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 Securities
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 Securities, 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
Securities evidenced by their Certificates by their acceptance of
delivery of such Certificates.
Section 1.11. Governing Law.
THIS AGREEMENT AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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 Type A Certificates or the Type B Certificates) payment of
the Contract Adjustment Payments, 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, provided that 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.
In any case where any Purchase Contract Settlement Date
shall not be a Business Day, then (notwithstanding any other
provision of this Agreement, the Type A Certificates or the Type
B Certificates), the Purchase Contracts shall not be performed on
such date, but the Purchase Contracts shall be performed on the
immediately following Business Day with the same force and effect
as if performed on the Purchase Contract Settlement Date.
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.
ARTICLE II
Certificate Forms
Section 2.1. Forms of Certificates Generally.
The Type A Certificates (including the form of Purchase
Contract forming part of the Type A Securities evidenced thereby)
shall be in substantially the form set forth in Exhibit A 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 Type A Securities are
listed or any depositary therefor, or as may, consistently
herewith, be determined by the officers of the Company executing
such Type A Certificates, as evidenced by their execution of the
Type A Certificates.
The definitive Type A 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 Type A Securities evidenced by such
Type A Certificates, consistent with the provisions of this
Agreement, as evidenced by their execution thereof.
The Type B Certificates (including the form of Purchase
Contracts forming part of the Type B Securities evidenced
thereby) shall be in substantially the form set forth in 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 Type B
Securities may be listed or any depositary therefor, or as may,
consistently herewith, be determined by the officers of the
Company executing such Type B Certificates, as evidenced by their
execution of the Type B Certificates.
The definitive Type B 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 Type B Securities evidenced by such
Type B 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 in
substantially the following form:
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.
Section 2.2. Form of Agent's Certificate of Authentication.
The form of the Agent's certificate of authentication of the
Type A Securities shall be in substantially the form set forth on
the form of the Type A Certificates.
The form of the Agent's certificate of authentication of the
Type B Securities shall be in substantially the form set forth on
the form of the Type B Certificates.
ARTICLE III
The Securities
Section 3.1. Title and Terms; Denominations.
The aggregate number of Type A Securities and Type B
Securities evidenced by Certificates authenticated, executed on
behalf of the Holders and delivered hereunder is limited to
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, 3.13, 3.14, 5.9 or 8.5.
The Certificates shall be issuable only in registered form
and only in denominations of a single Type A Security or Type B
Security and any integral multiple thereof.
Section 3.2. Rights and Obligations Evidenced by the
Certificates.
Each Type A Certificate shall evidence the number of Type A
Securities specified therein, with each such Type A Security
representing the ownership by the Holder thereof of a beneficial
interest in a Debt Security or the Applicable Ownership Interest
of the Treasury Portfolio, as the case may be, subject to the
Pledge of such Debt Security or the Applicable Ownership Interest
of the Treasury Portfolio, as the case may be, by such Holder
pursuant to the Pledge Agreement, and the rights and obligations
of the Holder thereof and the Company under one Purchase
Contract. The Agent as attorney-in-fact for, and on behalf of,
the Holder of each Type A Security shall pledge, pursuant to the
Pledge Agreement, the Debt Security or the Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, forming a
part of such Type A Security, to the Collateral Agent and grant
to the Collateral Agent a security interest in the right, title,
and interest of such Holder in such Debt Security or the
Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, for the benefit of the Company, to secure the
obligation of the Holder under each Purchase Contract to purchase
the Common Stock of the Company.
Each Type B Certificate shall evidence the number of Type B
Securities specified therein, with each such Type B Security
representing the ownership by the Holder thereof of a 1/100
undivided beneficial interest in a Treasury Security with a
principal amount equal to $1,000 subject to the Pledge of such
Treasury Security by such Holder pursuant to the Pledge
Agreement, and the rights and obligations of the Holder thereof
and the Company under one Purchase Contract.
Section 3.3. Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.13 and 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 Agent for
authentication, execution on behalf of the Holders and delivery,
together with its Issuer Order for authentication of such
Certificates, and the 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 or one of its Vice
Presidents and its Treasurer or one of its Assistant Treasurers,
or its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Certificates may be
manual or facsimile.
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
Agent, as such Holder's attorney-in-fact. Such signature by an
authorized signatory of the 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 Agent by manual signature, and such
certificate 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 Agent, and the Agent
shall authenticate, execute on behalf of the Holders, and
deliver, in lieu of such definitive Certificates, temporary
Certificates which are in substantially the form set forth in
Exhibit A or Exhibit B hereto, as the case may be, 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 Type A Securities or Type B
Securities 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 Agent, and the 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 Type A Securities or Type B
Securities, 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 Type A Securities or
Type B Securities, as the case may be, evidenced thereby as
definitive Certificates.
Section 3.5. Registration; Registration of Transfer and
Exchange.
The Agent shall keep at the Corporate Trust Office a
Register (the "Type A Register") in which, subject to such
reasonable regulations as it may prescribe, the Agent shall
provide for the registration of Type A Certificates and of
transfers of Type A Certificates (the Agent, in such capacity,
the "Type A Registrar") and a Register (the "Type B Register") in
which, subject to such reasonable regulations as it may
prescribe, the Agent shall provide for the registration of the
Type B Certificates and transfers of Type B Certificates (the
Agent, in such capacity, the "Type B Registrar").
Upon surrender for registration of transfer of any
Certificate at the Corporate Trust Office, the Company shall
execute and deliver to the Agent, and the 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, like tenor, and evidencing a like
number of Type A Securities or Type B Securities, 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 Type A Securities or Type B
Securities, 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 Agent, and the 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 Type A Securities or Type B Securities, as the
case may be, and be entitled to the same benefits and subject to
the same obligations, under this Agreement as the Type A
Securities or Type B Securities, 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 for exchange shall (if so required by the Agent)
be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the 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
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 shall not be
obligated to execute and deliver to the Agent, and the Agent
shall not be obligated to authenticate, execute on behalf of the
Holder and deliver any Certificate presented or surrendered for
registration of transfer or for exchange on or after the Business
Day immediately preceding the earlier of 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 Agent
shall (i) if the Purchase Contract Settlement Date has occurred,
deliver the shares of Common Stock issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by
such Certificate, (ii) in the case of Type A Securities, if a
Termination Event shall have occurred prior to the Purchase
Contract Settlement Date, transfer the aggregate Stated Amount of
the Debt Securities or the Treasury Portfolio, as applicable,
evidenced thereby, or (iii) in the case of Type B Securities, if
a Termination Event shall have occurred prior to the Purchase
Contract Settlement Date, transfer the Treasury Securities
evidenced thereby, in each case subject to the applicable
conditions and in accordance with the applicable provisions of
Article Five 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 by, or on behalf of, the Company.
Such Global Certificate shall initially be registered on the
books and records of the Company 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 Agent shall enter into an agreement with the
Depositary if so requested by the Company. Unless and until
definitive, fully registered Certificates have been issued to
Beneficial Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in full
force and effect;
(b) 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
Securities and the sole holder of the Global Certificate(s) and
shall have no obligation to the Beneficial Owners;
(c) 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
(d) 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.
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 Securities 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 Securities, the Company
may, in its sole discretion, appoint a successor Clearing Agency
with respect to the Securities.
Section 3.9. Definitive Certificates.
If (i) a Clearing Agency elects to discontinue its services
as securities depositary with respect to the Securities and a
successor Clearing Agency is not appointed within 90 days after
such discontinuance pursuant to Section 3.8, (ii) the Company
elects to terminate the book-entry system through the Clearing
Agency with respect to the Securities, or (iii) there shall have
occurred and be continuing a default by the Company in respect of
its obligations under one or more Purchase Contracts, then upon
surrender of the Global Certificates representing the Book-Entry
Interests with respect to the Securities 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 Agent,
the Company shall execute and deliver to the Agent, and the 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 Type A Securities or Type B
Securities, as the case may be, and bearing a Certificate number
not contemporaneously outstanding.
If there shall be delivered to the Company and the 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 them to hold each of
them and any agent of any of them harmless, then, in the absence
of notice to the Company or the Agent that such Certificate has
been acquired by a bona fide purchaser, the Company shall execute
and deliver to the Agent, and the 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
Certificate, evidencing the same number of Type A Securities or
Type B Securities, as the case may be, and bearing a Certificate
number not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent
shall not be obligated to authenticate, execute on behalf of the
Holder, and deliver to the Holder, a Certificate on or after the
Business Day immediately preceding the earlier of 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 Agent shall (i) if the Purchase Contract Settlement
Date has occurred, deliver the shares of Common Stock issuable in
respect of the Purchase Contracts forming a part of the
Securities evidenced by such Certificate, or (ii) if a
Termination Event shall have occurred prior to the Purchase
Contract Settlement Date, transfer the Debt Securities, the
appropriate Applicable Ownership Interest of the Treasury
Portfolio or the Treasury Securities, as the case may be,
evidenced thereby, in each case subject to the applicable
conditions and in accordance with the applicable provisions of
Article Five hereof.
Upon the issuance of any new Certificate under this Section,
the Company and the 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 expenses
(including the fees and expenses of the Agent) connected
therewith.
Every new Certificate issued pursuant to this Section in
lieu of any destroyed, lost or stolen Certificate shall
constitute an original additional contractual obligation of the
Company and of the Holder in respect of the Security evidenced
thereby, whether or not the destroyed, lost or stolen Certificate
(and the Securities 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.
Section 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration
of transfer, the Company and the Agent, and any agent of the
Company or the Agent, may treat the Person in whose name such
Certificate is registered as the owner of the Type A Securities
or Type B Securities evidenced thereby, for the purpose of
receiving interest on the Debt Securities or distributions on the
maturing quarterly interest strips of the Treasury Portfolio, as
applicable, receiving payments of Contract Adjustment Payments,
performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any interest on the Debt Securities or
the Contract Adjustment Payments payable in respect of the
Purchase Contracts constituting a part of the Type A Securities
or Type B Securities evidenced thereby shall be overdue and
notwithstanding any notice to the contrary, and neither the
Company nor the Agent, nor any agent of the Company or the Agent,
shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global
Certificate, nothing herein shall prevent the Company, the Agent
or any agent of the Company or the Agent, 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.
Section 3.12. Cancellation.
All Certificates surrendered for delivery of shares of
Common Stock on or after the Purchase Contract Settlement Date,
upon the transfer of Debt Securities, the appropriate Applicable
Ownership Interest of the Treasury Portfolio or Treasury
Securities, as the case may be, after the occurrence of a
Termination Event or pursuant to an Early Settlement, or upon the
registration of a transfer or exchange of a Security, or a
Collateral Substitution or the re-establishment of a Type A
Security shall, if surrendered to any Person other than the
Agent, be delivered to the Agent and, if not already cancelled,
shall be promptly cancelled by it. The Company may at any time
deliver to the 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 Issuer Order, be promptly cancelled by
the 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 Certificates
held by the 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 Agent cancelled or for
cancellation.
Section 3.13. Establishment or Reestablishment of Type B
Securities.
A Holder may separate the Debt Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as
applicable, from the related Purchase Contracts in respect of a
Type A Security by substituting for such Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, Treasury Securities in an
aggregate principal amount equal to the aggregate principal
amount of such Debt Securities or for the aggregate Stated Amount
of the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable (a "Collateral Substitution"), at any
time from and after the date of this Agreement and on or prior to
the fifth Business Day immediately preceding the Purchase
Contract Settlement Date in the case of the Debt Securities and
on or prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date in the case of the appropriate
Applicable Ownership Interest of the Treasury Portfolio, in each
case by (a) depositing with the Collateral Agent Treasury
Securities having an aggregate principal amount equal to the
aggregate principal amount of the Debt Securities comprising part
of such Type A Securities or for the aggregate Stated Amount of
the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury
Portfolio comprising part of such Type A Securities, as the case
may be, and (b) (i) by delivering cash in an amount equal to the
excess of the Contract Adjustment Payments that would have
accrued since the last Payment Date through the date of
substitution on the Type B Securities being created by the
holder, over the Contract Adjustment Payments that have accrued
over the same time period on the related Type A Securities, which
amount the Agent shall promptly remit to the Company, and (ii)
transferring the related Type A Securities to the Agent
accompanied by a notice to the Agent, substantially in the form
of Exhibit D hereto, stating that the Holder has transferred the
relevant amount of Treasury Securities to the Collateral Agent
and requesting that the Agent instruct the Collateral Agent to
release the Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,
underlying such Type A Securities, whereupon the Agent shall
promptly give such instruction to the Collateral Agent,
substantially in the form of Exhibit C hereto. Upon receipt of
the Treasury Securities described in clause (a) above and the
instruction described in clause (b) above, in accordance with the
terms of the Pledge Agreement, the Collateral Agent will release
to the Agent, on behalf of the Holder, Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, having a corresponding aggregate
principal amount of such Debt Securities or aggregate Stated
Amount of the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, from the Pledge, free and
clear of the Company's security interest therein, and upon
receipt thereof the Agent shall promptly:
(i) cancel the related Type A Securities;
(ii) transfer the Debt Securities or the
appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, to the Holder;
and
(iii) authenticate, execute on behalf of such
Holder and deliver a Type B Certificate executed by the
Company in accordance with Section 3.3 evidencing the
same number of Purchase Contracts as were evidenced by
the cancelled Type A Securities.
Holders who elect to separate the Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, from the related Purchase Contract
and to substitute Treasury Securities for such Debt Securities or
the appropriate Applicable Ownership Interest of 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.
Holders may make Collateral Substitutions (i) only in
integral multiples of 100 Type A Securities if Debt Securities
are being substituted by Treasury Securities, or (ii) only in
integral multiples of Type A Securities if the
----------
appropriate Applicable Ownership Interests of the Treasury
Portfolio are being substituted by Treasury Securities.
In the event a Holder making a Collateral Substitution
pursuant to this Section 3.13 fails to effect a book-entry
transfer of the Type A Securities or fails to deliver a Type A
Certificate(s) to the Agent after depositing Treasury Securities
with the Collateral Agent, the Debt Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, constituting a part of such Type A Security, and any
interest on such Debt Securities or distributions with respect to
the Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, shall be held in the name of the Agent or its
nominee in trust for the benefit of such Holder, until such Type
A Security is so transferred or the Type A Certificate is so
delivered, as the case may be, or, with respect to a Type A
Certificate, such Holder provides evidence satisfactory to the
Company and the Agent that such Type A Certificate has been
destroyed, lost or stolen, together with any indemnity that may
be required by the Agent and the Company.
Except as described in this Section 3.13, for so long as the
Purchase Contract underlying a Type A Security remains in effect,
such Type A Security shall not be separable into its constituent
parts, and the rights and obligations of the Holder in respect of
the Debt Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, and
Purchase Contract comprising such Type A Security may be
acquired, and may be transferred and exchanged, only as a Type A
Security.
Section 3.14. Establishment or Reestablishment of Type A
Securities.
A Holder of a Type B Security may create or recreate Type A
Securities at any time on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, if a
Tax Event Redemption has not occurred, and (ii) on or prior to
the second Business Day immediately preceding the Purchase
Contract Settlement Date, if a Tax Event Redemption has occurred,
in each case by (a) depositing with the Collateral Agent Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, having an aggregate
principal amount in the case of the Debt Securities, or an
aggregate Stated Amount of the appropriate Applicable Ownership
Interest (as defined in clause (A) of the definition of such
term) of the Treasury Portfolio, as the case may be, equal to the
aggregate principal amount of the Treasury Securities comprising
part of the Type B Securities and (b) transferring the related
Type B Securities to the Agent accompanied by a notice to the
Agent, substantially in the form of Exhibit D hereto, stating
that the Holder has transferred the relevant amount of Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, to the Collateral
Agent and requesting that the Agent instruct the Collateral Agent
to release the Treasury Securities underlying such Type B
Securities, whereupon the Agent shall promptly give such
instruction to the Collateral Agent, substantially in the form of
Exhibit C hereto. Upon receipt of the Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, described in clause (a) above and
the instruction described in clause (b) above, in accordance with
the terms of the Pledge Agreement, the Collateral Agent will
effect the release of the Treasury Securities having a
corresponding aggregate principal amount from the Pledge to the
Agent free and clear of the Company's security interest therein,
and upon receipt thereof the Agent shall promptly:
(i) cancel the related Type B Security;
(ii) transfer the Treasury Securities to the Holder;
and
(iii) authenticate, execute on behalf of such Holder
and deliver an Type A Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of
Purchase Contracts as were evidenced by the cancelled Type B
Securities.
Holders who elect to separate Treasury Securities from the
related Purchase Contract and to substitute Debt Securities 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.
Holders of Type B Securities may establish or reestablish
Type A Securities in integral multiples of 100 Type B Securities
for 100 Type A Securities if a Tax Event Redemption has not
occurred, and in integral multiples of Type B
---------
Securities for Type A Securities if a Tax Event
----------------
Redemption has occurred.
In the event a Holder making a Collateral Substitution
pursuant to this Section 3.13 fails to effect a book-entry
transfer of the Type B Securities or fails to deliver a Type B
Certificate(s) to the Agent after depositing Debt Securities with
the Collateral Agent, the Treasury Securities constituting a part
of such Type B Security, and any interest on such Treasury
Securities shall be held in the name of the Agent or its nominee
in trust for the benefit of such Holder, until such Type B
Security is so transferred or the Type B Certificate is so
delivered, or, with respect to a Type B Certificate, such Holder
provides evidence satisfactory to the Company and the Agent that
such Type B Certificate has been destroyed, lost or stolen,
together with any indemnity that may be required by the Agent and
the Company.
Except as provided in this Section 3.14, for so long as the
Purchase Contract underlying a Type B Security remains in effect,
such Type B Security shall not be separable into its constituent
parts and the rights and obligations of the Holder of such Type B
Security in respect of the Treasury Security and Purchase
Contract comprising such Type B Security may be acquired, and may
be transferred and exchanged only as a Type B Security.
Section 3.15. Transfer of Collateral upon Occurrence of
Termination Event.
Upon the occurrence of a Termination Event and the transfer
to the Agent of the Debt Securities, the appropriate Applicable
Ownership Interest of the Treasury Portfolio or the Treasury
Securities, as the case may be, underlying the Type A Securities
and the Type B Securities pursuant to the terms of the Pledge
Agreement, the Agent shall request transfer instructions with
respect to such Debt Securities or the appropriate Applicable
Ownership Interest of 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
Type A Register or the Type B Register, as the case may be. Upon
book-entry transfer of the Type A Securities or Type B Securities
or delivery of a Type A Certificate or Type B Certificate to the
Agent with such transfer instructions, the Agent shall transfer
the Debt Securities, the Treasury Portfolio or Treasury
Securities, as the case may be, underlying such Type A Securities
or Type B Securities, 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 Type
A Securities or Type B Securities fails to effect such transfer
or delivery, the Debt Securities, the appropriate Applicable
Ownership Interest of the Treasury Portfolio or Treasury
Securities, as the case may be, underlying such Type A Securities
or Type B Securities, as the case may be, and any interest
thereon, shall be held in the name of the Agent or its nominee in
trust for the benefit of such Holder, until such Type A
Securities or Type B Securities are transferred or the Type A
Certificate or Type B Certificate is surrendered or such Holder
provides satisfactory evidence that such Type A Certificate or
Type B Certificate has been destroyed, lost or stolen, together
with any indemnity that may be required by the Agent and the
Company.
Section 3.16. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall 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, receiver, liquidator or a
person or entity performing similar functions, its trustee in the
event that the Company becomes the debtor under the Bankruptcy
Code or subject to other similar state or federal law providing
for reorganization or liquidation.
ARTICLE IV
The Debt Securities
Section 4.1. Payment of Interest; Rights to Interest Preserved;
Interest Rate Reset; Notice.
A payment of interest on any Debt Securities or distribution
with respect to the appropriate Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, which is paid on any
Payment Date shall, subject to receipt thereof by the Agent from
the Collateral Agent as provided by the terms of the Pledge
Agreement, be paid to the Person in whose name the Type A
Certificate (or one or more Predecessor Type A Certificates) of
which such Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,
is a part is registered at the close of business on the Record
Date for such Payment Date.
Each Type A Certificate evidencing Debt Securities delivered
under this Agreement upon registration of transfer of or in
exchange for or in lieu of any other Type A Certificate shall
carry the rights to payment of interest accrued and unpaid, and
to accrue interest, which is carried by the Debt Securities
underlying such other Type A Certificate.
In the case of any Type A Security 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 of the underlying Purchase Contract is
effected on an Early Settlement Date, 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 Debt Securities or distributions
with respect to the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, underlying such Type
A Securities otherwise payable on such Payment Date shall be
payable on such Payment Date notwithstanding such Cash Settlement
or Early Settlement or Collateral Substitution, and such
interests shall, subject to receipt thereof by the Agent, be
payable to the Person in whose name the Type A Certificate (or
one or more Predecessor Type A 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 Type A Securities with respect to which Cash
Settlement or Early Settlement of the underlying Purchase
Contract is effected on the Business Day immediately preceding
the Purchase Contract Settlement Date or an Early Settlement
Date, as the case may be, or with respect to which a Collateral
Substitution has been effected, payment of interest on the
related Debt Securities or distributions with respect to the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, that would otherwise be payable
after the Purchase Contract Settlement Date or Early Settlement
Date shall not be payable hereunder to the Holder of such Type A
Securities; provided, however, that to the extent that such
Holder continues to hold the separated Debt Securities that
formerly comprised a part of such Holder's Type A Securities,
such Holder shall be entitled to receive the payment of interest
on such separated Debt Securities.
The applicable Coupon Rate on the Debt Securities on and
after the Purchase Contract Settlement Date will be reset on the
third Business Day immediately preceding the Purchase Contract
Settlement Date to the Reset Rate (such Reset Rate to be in
effect on and after the Purchase Contract Settlement Date). On
the Reset Announcement Date the Reset Spread and the Two-Year
Benchmark Treasury to be used to determine the Reset Rate will be
announced by the Company. On the Business Day immediately
following the Reset Announcement Date, the Debt Securities
Holders will be notified of such Reset Spread and Two-Year
Benchmark Treasury by the Company. Such notice shall be
sufficiently given to Holders of Debt Securities if published in
an Authorized Newspaper in The City of New York.
Not later than 7 calendar days nor more than 15 calendar
days prior to the Reset Announcement Date, the Company will
notify the DTC or its nominee (or any successor Clearing Agency
or its nominee) by first-class mail, postage prepaid, to notify
the Beneficial Owners or Clearing Agency Participants holding
Type A Securities or Type B Securities, of such Reset
Announcement Date and the procedures to be followed by such
Holders of Type Securities A who intend to settle their
obligation under the Purchase Contract with separate cash on the
Purchase Contract Settlement Date.
Section 4.2. Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be
entitled to exercise the voting and any other consensual rights
pertaining to the Debt Securities pledged with the Collateral
Agent but only to the extent instructed by the Holders as
described below. Upon receipt of notice of any meeting at which
holders of Debt Securities are entitled to vote or upon any
solicitation of consents, waivers or proxies of holders of Debt
Securities, the Agent shall, as soon as practicable thereafter,
mail to the Holders of Type A Securities a notice (a) containing
such information as is contained in the notice or solicitation,
(b) stating that each Holder on the record date set by the Agent
therefor (which, to the extent possible, shall be the same date
as the record date for determining the holders of Debt Securities
entitled to vote) shall be entitled to instruct the Agent as to
the exercise of the voting rights pertaining to the Debt
Securities underlying their Type A Securities and (c) stating the
manner in which such instructions may be given. Upon the written
request of the Holders of Type A Securities on such record date,
the 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 Debt Securities as to which
any particular voting instructions are received. In the absence
of specific instructions from the Holder of an Type A Securities,
the Agent shall abstain from voting the Debt Security underlying
such Type A Securities. The Company hereby agrees, if applicable,
to solicit Holders of Type A Securities to timely instruct the
Agent in order to enable the Agent to vote such Debt Securities
and the Trust shall covenant to such effect in the Declaration.
Section 4.3. Tax Event Redemption.
Upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Redemption Price payable
on the Tax Event Redemption Date with respect to the Applicable
Principal Amount of Debt Securities shall be delivered to the
Collateral Agent in exchange for the Pledged Debt Securities.
Thereafter, pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Redemption
Amount of such Redemption Price to purchase on behalf of the
Holders of Type A Securities the Treasury Portfolio and promptly
remit the remaining portion of such Redemption Price to the Agent
for payment to the Holders of such Type A Securities. The
Treasury Portfolio will be substituted for the Pledged Debt
Securities, 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 Type A Security to purchase the
Common Stock of the Company under the Purchase Contract
constituting a part of such Type A Security. Following the
occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Holders of Type A Securities and
the Collateral Agent shall have such security interests, rights
and obligations with respect to the Treasury Portfolio as the
Holder of Type A Securities and the Collateral Agent had in
respect of the Debt Security 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 Debt Securities shall
be deemed to be reference to such Treasury Portfolio. The Company
may cause to be made in any Type A Certificates thereafter to be
issued such change in phraseology and form (but not in substance)
as may be appropriate to reflect the liquidation of the Trust and
the substitution of the Treasury Portfolio for Debt Securities as
collateral.
ARTICLE V
The Purchase Contracts
Section 5.1. Purchase of Shares of Common Stock.
Each Purchase Contract shall, unless an Early Settlement has
occurred in accordance with Section 5.9 hereof, obligate the
Holder of the related Security to purchase, and the Company to
sell, on the Purchase Contract Settlement Date at a price equal
to the Stated Amount (the "Purchase Price"), a number of newly
issued shares of Common Stock equal to the Settlement Rate
unless, on or prior to the Purchase Contract Settlement Date,
there shall have occurred a Termination Event with respect to the
Security of which such Purchase Contract is a part. 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, (b) if the Applicable Market Value is less
than the Threshold Appreciation Price, but is greater than $ ,
----
the number of shares of Common Stock equal to the Stated Amount
divided by the Applicable Market Value and (c) if the Applicable
Market Value is less than or equal to $ , shares of
----- -----
Common Stock per Purchase Contract, 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 of the 20
consecutive Trading Days ending on the third Trading Day
immediately preceding the Purchase Contract Settlement Date. 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 NYSE. 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 association and (B) has traded at least once on the
national or regional securities exchange or association that is
the primary market for the trading of the Common Stock.
Each Holder of a Type A Security or a Type B Security, by
its acceptance thereof, irrevocably authorizes the 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, and consents to the
provisions hereof, irrevocably authorizes the Agent as its
attorney-in-fact 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 Debt Securities, the Treasury
Portfolio or the Treasury Securities pursuant to the Pledge
Agreement; provided that upon a Termination Event, the rights of
the Holder of such Security under the Purchase Contract may be
enforced without regard to any other rights or obligations. Each
Holder of a Type A Security or a Type B Security, 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 Stated Amount of the Debt Securities or the Proceeds of
the Treasury Securities or 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), 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.
Subject to 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 at the close of business on the Record Date next
preceding such Payment Date. The Contract Adjustment Payments
will be payable at the office of the Agent in The City of New
York maintained for that purpose 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 Type A
Register or Type B Register.
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.
Each Certificate delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of
(including as a result of a Collateral Substitution or the
re-establishment of a Type A Security) any other Certificate
shall carry the rights to Contract Adjustment Payments accrued
and unpaid, and to accrue Contract Adjustment Payments, which
were carried by the Purchase Contracts underlying such other
Certificates.
Subject to Section 5.9, in the case of any Security with
respect to which Early Settlement of the underlying Purchase
Contract is effected on an Early Settlement Date 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, and such Contract
Adjustment Payments shall be paid to the Person in whose name the
Certificate evidencing such Security (or one or more Predecessor
Certificates) is 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 Security with
respect to which Early Settlement of the underlying Purchase
Contract is effected on an Early Settlement Date, Contract
Adjustment Payments that would otherwise be payable after the
Early Settlement Date with respect to such Purchase Contract
shall not be payable.
The Company's obligations with respect to Contract
Adjustment Payments, will be subordinated 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, but only if the Company shall give the Holders and
the Agent written notice of its election to defer such payment
(specifying the amount to be deferred) 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 Securities, but
in any event not less than one Business Day prior to such Record
Date. Any Contract Adjustment Payments so deferred shall bear
additional Contract Adjustment Payments thereon at the rate of
% per annum (computed on the basis of 360 day year of twelve
---
30 day months), compounding on each succeeding Payment Date,
until paid in full (such deferred installments of Contract
Adjustment Payments together with the additional Contract
Adjustment Payments accrued thereon, being referred to herein as
the "Deferred Contract Adjustment Payments"). Deferred Contract
Adjustment Payments shall be due on the next succeeding Payment
Date except to the extent that payment is deferred pursuant to
this Section. No Contract Adjustment Payments may be deferred to
a date that is after the Purchase Contract Settlement Date. 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 that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the
Purchase Contract Settlement Date, each Holder will receive on
the Purchase Contract Settlement Date in lieu of a cash payment a
number of shares of Common Stock (in addition to a number of
shares of Common Stock equal to the Settlement Rate) equal to (x)
the aggregate amount of Deferred Contract Adjustment Payments
payable to such Holder divided by (y) the Applicable Market
Value.
No fractional shares of Common Stock will be issued by the
Company with respect to the payment of Deferred Contract
Adjustment Payments on the Purchase Contract Settlement Date. In
lieu of fractional shares otherwise issuable with respect to such
payment of Deferred Contract Adjustment Payments, the Holder will
be entitled to receive an amount in cash as provided in Section
5.10.
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
or acquisitions of shares of capital stock of the Company in
connection with the satisfaction by the Company of its
obligations under any employee benefit plans or the satisfaction
by the Company of its obligations pursuant to any contract or
security outstanding on the date of such event requiring the
Company to purchase capital stock of the Company, (ii) as a
result of a reclassification of the Company's capital stock or
the exchange or conversion 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 such capital stock or
the security being converted or exchanged, (iv) dividends or
distributions in capital stock of the Company (or rights to
acquire capital stock) or repurchases or redemptions of capital
stock solely from the issuance or exchange of capital stock or
(v) redemptions or repurchases of any rights outstanding under a
shareholder rights plan or the declaration thereunder of a
dividend of rights in the future).
Section 5.4. Payment of Purchase Price.
(a) (i) Unless a Tax Event Redemption has occurred 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, each Holder of a Type A Security must
notify the Agent by use of a notice in substantially the form of
Exhibit E hereto of its intention to pay in cash ("Cash
Settlement") the Purchase Price for the shares of Common Stock to
be purchased pursuant to a Purchase Contract. Such notice shall
be made on or prior to 5:00 p.m., New York City time, on the
fifth Business Day immediately preceding the Purchase Contract
Settlement Date. The 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 Type A Security who has so notified
the 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 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 distributed to the Agent
when received for payment to the Holder.
(iii) If a Holder of a Type A Security fails to notify
the Agent of its intention to make a Cash Settlement in
accordance with paragraph (a)(i) above, such failure shall
constitute an event of default and the Holder shall be
deemed to have consented to the disposition of the pledged
Debt Securities pursuant to the Remarketing as described in
paragraph (b) below. If a Holder of a Type A Security does
notify the Agent as provided in paragraph (a)(i) above of
its intention to pay the Purchase Price in cash, but fails
to make such payment as required by paragraph (a)(ii) above,
such failure shall also constitute a default; however, the
Debt Securities 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 Debt Securities, including those rights
specified in paragraph (c) below.
(b) In order to dispose of the Debt Securities of Type A
Security Holders who have not notified the Agent of their
intention to effect a Cash Settlement as provided in paragraph
(a)(i) above, the Company shall engage a nationally recognized
investment bank (the "Remarketing Agent") pursuant to the
Remarketing Agreement to sell such Debt Securities. In order to
facilitate the remarketing, the Agent shall notify, by 10:00
a.m., New York City time, on the fourth Business Day immediately
preceding the Purchase Contract Settlement Date, the Remarketing
Agent of the aggregate number of Debt Securities to be
remarketed. Concurrently, the Collateral Agent, pursuant to the
terms of the Pledge Agreement, will present for remarketing such
Debt Securities to the Remarketing Agent. Upon receipt of such
notice from the Agent and such Debt Securities from the
Collateral Agent, the Remarketing Agent will, on the third
Business Day immediately preceding the Purchase Contract
Settlement Date, use its reasonable efforts to remarket such Debt
Securities on such date at a price of approximately 100.5% (but
not less than 100%) of the aggregate principal amount of such
Debt Securities, plus accrued and unpaid interest (including
deferred interest), if any, thereon. After deducting as the
remarketing fee ("Remarketing Fee") an amount not exceeding 25
basis points (.25%) of the aggregate principal amount of the
remarketed Debt Securities from any amount of such proceeds in
excess of the aggregate principal amount of the remarketed Debt
Securities plus accrued and unpaid interest (including any
deferred interest), if any, then the Remarketing Agent will remit
the entire amount of the proceeds from such remarketing to the
Collateral Agent. Such portion of the proceeds, equal to the
aggregate principal amount of such Debt Securities, will
automatically be applied by the Collateral Agent, in accordance
with the Pledge Agreement to satisfy in full such Type A Security
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 Agent for payment to the Holders of the
related Type A Security. Type A Security Holders whose Debt
Securities are so remarketed will not otherwise be responsible
for the payment of any Remarketing Fee in connection therewith.
If, in spite of using its reasonable efforts, the Remarketing
Agent cannot remarket the related Debt Securities of such Holders
of Type A Securities at a price not less than 100% of the
aggregate principal amount of such Debt Securities plus accrued
and unpaid interest (including deferred interest), if any, the
remarketing will be deemed to have failed (a "Failed
Remarketing") and in accordance with the terms of the Pledge
Agreement the Collateral Agent for the benefit of the Company
will exercise its rights as a secured party with respect to such
Debt Securities, including those actions specified in paragraph
(c) below; provided, that if upon a Failed Remarketing the
Collateral Agent exercises such rights for the benefit of the
Company with respect to such Debt Securities, any accrued and
unpaid interest (including any deferred interest) on such Debt
Securities will become payable by the Company to the Agent for
payment to the Holder of the Type A Securities to which such Debt
Securities relates. Such payment will be made by the Company on
or prior to 11 a.m. New York City time on the Purchase Contract
Settlement Date in lawful money of the United States by certified
or cashiers' check or wire transfer in immediately available
funds payable to or upon the order of the Agent. The Company will
cause a notice of such Failed Remarketing to be published on the
Second Business Day immediately preceding the Purchase Contract
Settlement Date in a daily newspaper in the English language of
general circulation in The City of New York, which is expected to
be The Wall Street Journal.
(c) With respect to any Debt Securities beneficially owned
by Holders who have elected Cash Settlement but failed to deliver
cash as required in (a)(ii) above, or with respect to Debt
Securities 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 (h) below, may, among other
things, (i) retain the Debt Securities in full satisfaction of
the Holders obligations under the Purchase Contracts or (ii) sell
the Debt Securities in one or more public or private sales.
(d) (i) Unless a Holder of Type B Securities or Type A
Securities (if a Tax Event Redemption has occurred) 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 Type B Security or Type A Security (if a
Tax Event Redemption has occurred) must notify the Agent by use
of a notice in substantially the form of Exhibit E hereto of its
intention to pay in cash the Purchase Price for the shares of
Common Stock to be purchased pursuant to a Purchase Contract on
or prior to 5:00 p.m., New York City time, on the second Business
Day immediately preceding the Purchase Contract Settlement Date.
(ii) A Holder of a Type B Security or Type A Security
(if a Tax Event Redemption has occurred) who has so notified
the Agent of its intention to make a Cash Settlement in
accordance with paragraph (d)(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 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 distributed to the Agent when received
for payment to the Holder.
(iii) If a Holder of a Type B Security fails to notify
the Agent of its intention to make a Cash Settlement in
accordance with paragraph (d)(i) above, or if a Holder of a
Type A Security (if a Tax Event Redemption has occurred)
does notify the Agent as provided in paragraph (d)(i) above
its intention to pay the Purchase Price in cash, but fails
to make such payment as required by paragraph (d)(ii) above,
then upon the maturity of the Pledged Treasury Securities or
the appropriate Applicable Ownership Interest of 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 Treasury Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case
may be, 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 as payment thereof
without receiving any instructions from the Holder. In the
event the sum of the proceeds from the related Pledged
Treasury Securities or the appropriate Applicable Ownership
Interest of 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 Agent for the benefit of the
Holder of the related Type B Security or Type A Security
when received.
(e) Any distribution to Holders of excess funds and interest
described above, shall be payable at the office of the Agent in
The City of New York 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
Register.
(f) Unless a Holder settles the underlying Purchase Contract
through the early delivery of cash to the Collateral Agent in the
manner described herein, 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.
(g) Upon Cash Settlement of any Purchase Contract, (i) the
Collateral Agent will in accordance with the terms of the Pledge
Agreement cause the Pledged Debt Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, or the Pledged Treasury Securities underlying the
relevant Security to be released from the Pledge by the
Collateral Agent free and clear of any security interest of the
Company and transferred to the 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 Agent
shall, by book-entry transfer, or other appropriate procedures,
in accordance with instructions provided by the Holder thereof,
transfer such Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,
or such Treasury Securities (or, if no such instructions are
given to the Agent by the Holder, the Agent shall hold such Debt
Securities or the Treasury Portfolio, as the case may be, or such
Treasury Securities, and any distribution thereon, in the name of
the Agent or its nominee in trust for the benefit of such
Holder).
(h) The obligations of the Holders to pay the Purchase Price
are non-recourse obligations and are payable solely out of any
Cash Settlement or the proceeds of any Collateral pledged to
secure the obligations of the Holders 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 or an Early Settlement shall have
occurred, on the Purchase Contract Settlement Date, upon its
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 Agent, for
the benefit of the Holders of the Outstanding Securities, one or
more certificates representing the newly issued shares of Common
Stock registered in the name of the Agent (or its nominee) as
custodian for the Holders (such certificates for shares of Common
Stock, together with any dividends or distributions for which
both a record date and payment date for such dividend or
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
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 Five (after taking
into account all Securities then held by such Holder) together
with cash in lieu of fractional shares as provided in Section
5.10 and any dividends or distributions with respect to such
shares constituting part of the Purchase Contract Settlement
Fund, but without any interest thereon, and the 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 Agent. If any shares of Common Stock issued in respect of
a Purchase Contract are to be registered to a Person other than
the Person in whose name the Certificate evidencing such Purchase
Contract 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 Contract or has established to the
satisfaction of the Company that such tax either has been paid or
is not payable.
Section 5.6. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits,
Etc.
(1) In case the Company shall pay or make a dividend or
other distribution on the Common Stock in Common Stock, the
Settlement Rate, as in effect at the opening of business on the
day following the date fixed for the determination of
stockholders entitled to receive such dividend or other
distribution shall be increased by dividing such 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 distribution on
shares of Common Stock held in the treasury of the Company.
(2) In case the Company shall issue rights, options or
warrants to all holders of its Common Stock (not being available
on an equivalent basis to Holders of the Securities upon
settlement of the Purchase Contracts underlying such Securities)
entitling them, for a period expiring within 45 days after the
record date for the determination of stockholders entitled to
receive such rights, options or warrants, to subscribe for or
purchase shares of Common Stock at a price per share less than
the Current Market Price per share of the Common Stock on the
date fixed for the determination of stockholders entitled to
receive such rights, options or warrants (other than pursuant to
a dividend reinvestment plan), the 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 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 or warrants in respect of shares of Common Stock
held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be
subdivided or split into a greater number of shares of Common
Stock, the Settlement Rate, in effect at the opening of business
on the day following the day upon which such subdivision or split
becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each
be combined into a smaller number of shares of Common Stock, the
Settlement Rate, in effect at the opening of business on the day
following the day upon which such combination 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 or combination becomes effective.
(4) 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 or warrants referred to in paragraph (2)
of this Section, any dividend or distribution paid exclusively in
cash and any dividend or distribution referred to in paragraph
(1) of this Section), the Settlement Rate, shall be adjusted so
that the same shall equal the rate determined by dividing the
Settlement Rate in effect immediately prior to the close of
business on the date fixed for the determination of stockholders
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 filed with the Agent) 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 stockholders
entitled to receive such distribution. In any case in which this
paragraph (4) is applicable, paragraph (2) of this Section shall
not be applicable.
(5) In case the Company shall, (I) by dividend or
otherwise, distribute to all holders of its Common Stock cash
(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 aggregate
amount that, combined together with (II) the aggregate amount of
any other distributions to all holders of its Common Stock made
exclusively in cash within the 12 months preceding the date of
payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (5) or paragraph (6) of
this Section has been made and (III) the aggregate of any cash
plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described
in a Board Resolution) of consideration payable in respect of any
tender or exchange offer by the Company or any of its
subsidiaries for all or any portion of the Common Stock concluded
within the 12 months preceding the date of payment of the
distribution described in clause (I) above and in respect of
which no adjustment pursuant to this paragraph (5) or paragraph
(6) of this Section has been made, exceeds 15% of the product of
the Current Market Price per share of the Common Stock on the
date for the determination of holders of shares of Common Stock
entitled to receive such distribution times the number of shares
of Common Stock outstanding on such date, then, and in each such
case, immediately after the close of business on such date for
determination, the Settlement Rate, shall be increased so that
the same shall equal the rate determined by dividing the
Settlement Rate in effect immediately prior to the close of
business on the date fixed for determination of the stockholders
entitled to receive such distribution by a fraction (i) the
numerator of which shall be equal to the Current Market Price per
share of the Common Stock on the date fixed for such
determination less an amount equal to the quotient of (x) the
combined amount distributed or payable in the transactions
described in clauses (I), (II) and (III) above and (y) the number
of shares of Common Stock outstanding on such date for
determination and (ii) the denominator of which shall be equal to
the Current Market Price per share of the Common Stock on such
date for determination.
(6) In case (I) a tender 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 or exchange
offer (as amended upon the expiration thereof) shall require the
payment to stockholders (based on the acceptance (up to any
maximum specified in the terms of the tender or exchange offer)
of Purchased Shares) of an aggregate consideration having a fair
market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board
Resolution) that combined together with (II) the aggregate of the
cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described
in a Board Resolution), as of the expiration of such tender or
exchange offer, of consideration payable in respect of any other
tender or exchange offer, by the Company or any subsidiary of the
Company for all or any portion of the Common Stock expiring
within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to
paragraph (5) of this Section or this paragraph (6) has been made
and (III) the aggregate amount of any distributions to all
holders of the Company's Common Stock made exclusively in cash
within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to
paragraph (5) of this Section or this paragraph (6) has been
made, exceeds 15% of the product of the Current Market Price per
share of the Common Stock as of the last time (the "Expiration
Time") tenders could have been made pursuant to such tender or
exchange offer (as it may be amended) times the number of shares
of Common Stock outstanding (including any tendered shares) on
the Expiration Time, then, and in each such case, immediately
prior to the opening of business on the day after the date of the
Expiration Time, the Settlement Rate, shall be adjusted so that
the same shall equal the rate determined by dividing the
Settlement Rate immediately prior to the close of business on the
date of the Expiration Time by a fraction (i) the numerator of
which shall be equal to (A) the product of (I) the Current Market
Price per share of the Common Stock on the date of the Expiration
Time and (II) the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time less (B)
the amount of cash plus the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders
based on the transactions described in clauses (I), (II) and
(III) above (assuming in the case of clause (I) the acceptance,
up to any maximum specified in the terms of the tender or
exchange offer, of Purchased Shares), and (ii) the denominator of
which shall be equal to the product of (A) the Current Market
Price per share of the Common Stock as of the Expiration Time and
(B) the number of shares of Common Stock outstanding (including
any tendered shares) as of the Expiration Time less the number of
all shares validly tendered and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "Purchased 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 stockholders 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 on any day means the average of the daily Closing Prices
for the 5 consecutive Trading Days selected by the Company
commencing not more than 30 Trading Days before, and ending not
later than, the earlier of 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
trades regular way on such exchange or in such market without the
right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate, shall be
calculated to the nearest 1/10,000th of a share of Common Stock
(or if there is not a nearest 1/10,000th of a share to the next
lower 1/10,000th of a share). No adjustment in the 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 the 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. Such adjustment shall be made
by multiplying the Applicable Market Value by a fraction of which
the numerator shall be the Settlement Rate immediately after such
adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6),
(7) or (10) of this Section 5.6(a) and the denominator shall be
the Settlement Rate immediately before such adjustment; provided,
however, that if such adjustment to the Settlement Rate is
required to be made pursuant to the occurrence of any of the
events contemplated by paragraph (1), (2), (3), (4), (5), (7) or
(10) of this Section 5.6(a) during the period taken into
consideration for determining the Applicable Market Value,
appropriate and customary adjustments shall be made to the
Settlement Rate.
(10) The Company may 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 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.
(b) Adjustment for Consolidation, Merger or Other
Reorganization Event. In the event of (i) any consolidation or
merger of the Company with or into another Person (other than a
merger or consolidation in which the Company is the continuing
corporation and in which the Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash,
securities or other property of the Company or another
corporation), (ii) any sale, transfer, lease or conveyance to
another Person of the property of the Company as an entirety or
substantially as an entirety, (iii) any statutory exchange of
securities of the Company with another Person (other than in
connection with a merger or acquisition) 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 (any such
event, a "Reorganization Event"), the Settlement Rate will be
adjusted to provide that each Holder of Securities will receive
on the Purchase Contract Settlement Date with respect to each
Purchase Contract forming a part thereof, the kind and amount of
securities, cash and other property receivable upon such
Reorganization Event (without any interest thereon, and without
any right to dividends or distribution thereon which have a
record date that is prior to the Purchase Contract Settlement
Date) 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
Reorganization Event assuming such Holder of Common Stock is not
a Person with which the Company consolidated or into which the
Company merged or which merged into the Company or to which such
sale or transfer was made, as the case may be (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 and such Holder failed to exercise its rights of
election, if any, as to the kind or amount of securities, cash
and other property receivable upon such Reorganization Event
(provided that if the kind or amount of securities, cash and
other property receivable upon such Reorganization Event is not
the same for each share of Common Stock held immediately prior to
such Reorganization Event by other than a Constituent Person or
an Affiliate thereof and in respect of which such rights of
election shall not have been exercised ("non-electing share"),
then for the purpose of this Section the kind and amount of
securities, cash and other property receivable upon such
Reorganization Event by each non-electing share shall be deemed
to be the kind and amount so receivable per share by a plurality
of the non-electing shares). In the event of such a
Reorganization Event, the Person formed by such consolidation,
merger or exchange or the Person which acquires the assets of the
Company or, in the event of a liquidation or dissolution of the
Company, the Company or a liquidating trust created in connection
therewith, shall execute and deliver to the Agent an agreement
supplemental hereto providing that the Holders of each
Outstanding Security shall have the rights provided by this
Section 5.6. Such supplemental agreement shall provide for
adjustments which, for events subsequent to the effective date of
such supplemental agreement, shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section.
The above provisions of this Section shall similarly apply to
successive Reorganization Events.
Section 5.7. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein
provided, the Company shall:
(i) forthwith compute the Settlement Rate in accordance
with Section 5.6 and prepare and transmit to the Agent a
Company Certificate setting forth the 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
Securities 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 Agent shall not at any time be under any duty or
responsibility to any Holder of Securities 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 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 Agent makes no
representation with respect thereto. The Agent shall not be
responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock 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 Deferred Contract Adjustment Payments, if the Company shall
have such obligation, and the rights and obligations of Holders
to purchase Common Stock, shall immediately and automatically
terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase
Contract Settlement Date, a Termination Event shall have
occurred. Upon and after the occurrence of a Termination Event,
the Securities shall thereafter represent the right to receive
the Debt Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, forming a
part of such Securities in the case of Type A Securities, or
Treasury Securities in the case of Type B Securities, in
accordance with the provisions of Section 4.3 of the Pledge
Agreement. 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 Agent, the Collateral
Agent and to the Holders, at their addresses as they appear in
the Register.
Section 5.9. Early Settlement.
(a) Subject to and upon compliance with the provisions of
this Section 5.9, at the option of the Holder thereof, Purchase
Contracts underlying Securities, having an aggregate Stated
Amount equal to $1,000 or an integral multiple thereof, may be
settled early ("Early Settlement") in the case of Type A
Securities (unless a Tax Event Redemption has occurred) on or
prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date and in the case of Type B
Securities on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date, in each case, as
provided herein; provided however, that if a Tax Event Redemption
has occurred and the Treasury Portfolio has become a component of
the Type A Securities, Purchase Contracts underlying Type A
Securities may be settled early, on or prior to the second
Business Day immediately preceding the Purchase Contract
Settlement Date, but only in an aggregate amount of $40,000,000
or in an integral multiple thereof. In order to exercise the
right to effect Early Settlement with respect to any Purchase
Contracts, the Holder of the Certificate evidencing Securities
shall deliver such Certificate to the Agent at the Corporate
Trust Office duly endorsed for transfer to the Company or in
blank with the form of Election to Settle Early on the reverse
thereof duly completed and accompanied by payment (payable to the
Company in immediately available funds in an amount (the "Early
Settlement Amount") equal to (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
next preceding any Payment Date to the opening of business on
such Payment Date, an amount equal to the sum of (x) the Contract
Adjustment Payments payable on such Payment Date with respect to
such Purchase Contracts plus (y) in the case of Type A
Certificate, the payment of interest on the related Debt
Securities payable on such Payment Date. Except as provided in
the immediately preceding sentence and subject to the second to
last paragraph of Section 5.2, no payment or adjustment shall be
made upon Early Settlement of any Purchase Contract on account of
any Contract Adjustment Payments accrued on such Purchase
Contract or on account of any dividends on the Common Stock
issued upon such Early Settlement. If the foregoing requirements
are first satisfied with respect to Purchase Contracts underlying
any Securities at or prior to 5:00 p.m., New York City time, on a
Business Day, such day shall be the "Early Settlement Date" with
respect to such Securities and if such requirements are first
satisfied after 5:00 p.m., New York City time, on a Business Day
or on a day that is not a Business Day, the "Early Settlement
Date" with respect to such Securities shall be the next
succeeding Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder
of the related Securities, the Company shall issue, and the
Holder shall be entitled to receive, shares of Common Stock
on account of each Purchase Contract as to which Early Settlement
is effected (the "Early Settlement Rate"); provided, however,
that upon the Early Settlement of the Purchase Contracts, the
Holder of such related Securities will forfeit the right to
receive any Deferred 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 promptly as
practicable after Early Settlement of Purchase Contracts in
accordance with the provisions of this Section 5.9, the Company
shall issue and shall deliver to the Agent at the Corporate Trust
Office 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.
(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 delivered, and (ii) the related Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, in the case of Type A Securities, or the
related Treasury Securities, in the case of Type B Securities, to
be released from the Pledge by the Collateral Agent and
transferred, in each case to the 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 Debt Securities, the appropriate Applicable Ownership
Interest of the Treasury Portfolio or Treasury Securities, as the
case may be, from the Collateral Agent, as applicable, the Agent
shall, in accordance with the instructions provided by the Holder
thereof on the applicable form of Election to Settle Early on the
reverse of the Certificate evidencing the related Securities, (i)
transfer to the Holder the Debt Securities, Treasury Portfolio or
Treasury Securities, as the case may be, forming a part of such
Securities, 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
Securities evidenced by a Certificate, upon such Early Settlement
the Company shall execute and the Agent shall authenticate,
countersign and deliver to the Holder thereof, at the expense of
the Company, a Certificate evidencing the Securities 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 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, the Company, through
the Agent, shall make a cash payment in respect of such
fractional interest in an amount equal to the value of such
fractional shares times the Applicable Market Value. The Company
shall provide the Agent from time to time with sufficient funds
to permit the 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 and in payment
of any Deferred Contract Adjustment Payments; 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 Security 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 Securities evidenced thereby, other than in the name of the
Agent, as custodian for such Holder, and the Company shall not be
required to issue or deliver such 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.
ARTICLE VI
Remedies
Section 6.1. Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Common Stock.
In the event that Contract Adjustment Payments shall
constitute a component of Type A Securities or Type B Securities,
the Holder of any Type A Security or Type B Security 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) and to the forfeiture of any Deferred Contract
Adjustment Payments upon Early Settlement pursuant to Section
5.9(b) or upon the occurrence of a Termination Event), to receive
payment of each installment of the Contract Adjustment Payments
with respect to the Purchase Contract constituting a part of such
Security on the respective Payment Date for such Security 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 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 Type
A Securities or Type B Securities, by its acceptance of such Type
A Securities or Type B Securities 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 Agent for any action taken, suffered or
omitted by it as 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 Agent,
to any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than 10% of the Outstanding
Securities, or to any suit instituted by any Holder for the
enforcement of payment of interest on any Debt Securities or
Contract Adjustment Payments, if any, on any Purchase Contract on
or after the respective Payment Date therefor in respect of any
Security held by such Holder, or for enforcement of the right to
purchase shares of Common Stock under the Purchase Contracts
constituting part of any Security 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 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 AGENT
Section 7.1. Certain Duties and Responsibilities.
(a) (1) The Agent undertakes to perform, with respect to
the Securities, such duties and only such duties as are
specifically set forth in this Agreement and the Pledge
Agreement, and no implied covenants or obligations shall be
read into this Agreement against the Agent; and
(2) The Agent may, with respect to the Securities,
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the 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
Agent, the 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 Agent from liability for its own negligent action,
its own negligent failure to act, or its own wilful misconduct,
except that
(1) this Subsection shall not be construed to limit
the effect of Subsection (a) of this Section;
(2) the 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 Agent was negligent in
ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require the
Agent to expend or risk its own funds or otherwise incur any
financial liability in the 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 Agent shall be
subject to the provisions of this Section.
(d) The Agent is authorized to execute and deliver the
Pledge Agreement in its capacity as Agent.
Section 7.2. Notice of Default.
Within 30 days after the occurrence of any default by the
Company hereunder of which a Responsible Officer of the Agent has
actual knowledge, the Agent shall transmit by mail to the Company
and the Holders of Securities, as their names and addresses
appear in the Register, notice of such default hereunder, unless
such default shall have been cured or waived.
Section 7.3. Certain Rights of Agent.
Subject to the provisions of Section 7.1:
(a) the Agent may 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;
(c) whenever in the administration of this Agreement the
Agent shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Agent (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon a Company Certificate of the Company;
(d) the 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 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 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 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 agent or attorney; and
(f) the 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 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.
Section 7.4. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Certificates shall
be taken as the statements of the Company and the Agent assumes
no responsibility for their accuracy. The Agent makes no
representations as to the validity or sufficiency of either this
Agreement or of the Securities, or of the Pledge Agreement or the
Pledge. The 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 Securities.
Any Registrar or any other agent of the Company, or the
Agent and its Affiliates, in their individual or any other
capacity, may become the owner or pledgee of Securities 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
Registrar or such other agent, or the Agent.
Section 7.6. Money Held in Custody.
Money held by the Agent in custody hereunder need not be
segregated from the other funds except to the extent required by
law or provided herein. The Agent shall be under no obligation to
invest or pay interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
Section 7.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Agent from time to time such
compensation for all services rendered by it hereunder as
the parties shall agree from time to time;
(2) except as otherwise expressly provided herein, to
reimburse the Agent upon its request for all reasonable
expenses, disbursements and advances incurred or made by the
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
(3) to indemnify the Agent and any predecessor Agent
for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of its duties hereunder, including the costs
and expenses of defending itself against any claim or
liability in connection with the exercise or performance of
any of its powers or duties hereunder.
Section 7.8. Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall
be 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 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 Agent and no
appointment of a successor Agent pursuant to this Article shall
become effective until the acceptance of appointment by the
successor Agent in accordance with the applicable requirements of
Section 7.10.
(b) The 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 Agent required by Section 7.10 shall not have been
delivered to the Agent within 30 days after the giving of such
notice of resignation, the resigning Agent may petition any court
of competent jurisdiction for the appointment of a successor
Agent.
(c) The Agent may be removed at any time by Act of the
Holders of a majority in number of the Outstanding Securities
delivered to the Agent and the Company.
(d) if at any time
(1) the Agent fails to comply with Section 310(b) of
the TIA, as if the Agent were an indenture trustee under an
indenture qualified under the TIA, after written request
therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the 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 Agent shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Agent or
of its property shall be appointed or any public officer shall
take charge or control of the 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 Agent, or (ii) any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Agent and the
appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Agent for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Agent and shall comply with the
applicable requirements of Section 7.10. If no successor Agent
shall have been so appointed by the Company and accepted
appointment in the manner required by Section 7.10, any Holder
who has been a bona fide Holder of a Security 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 Agent.
(f) The Company shall give, or shall cause such successor
Agent to give, notice of each resignation and each removal of the
Agent and each appointment of a successor 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 applicable Register. Each notice shall include the name of
the successor Agent and the address of its Corporate Trust
Office.
Section 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Agent, every such successor Agent so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Agent
an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Agent shall become
effective and such successor Agent, without any further act, deed
or conveyance, shall become vested with all the rights, powers,
agencies and duties of the retiring Agent; but, on the request of
the Company or the successor Agent, such retiring Agent shall,
upon payment of its charges, execute and deliver an instrument
transferring to such successor Agent all the rights, powers and
trusts of the retiring Agent and shall duly assign, transfer and
deliver to such successor Agent all property and money held by
such retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company
shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Agent all
such rights, powers and agencies referred to in paragraph (a) of
this Section.
(c) No successor Agent shall accept its appointment unless
at the time of such acceptance such successor Agent shall be
qualified and eligible under this Article.
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Agent may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate
trust business of the Agent, shall be the successor of the Agent
hereunder, provided such corporation 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
Agent then in office, any successor by merger, conversion or
consolidation to such Agent may adopt such authentication and
execution and deliver the Certificates so authenticated and
executed with the same effect as if such successor Agent had
itself authenticated and executed such Securities.
Section 7.12. Preservation of Information; Communications to
Holders.
(a) The Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders
received by the Agent in its capacity as Registrar.
(b) If three or more Holders (herein referred to as
"applicants") apply in writing to the Agent, and furnish to the
Agent reasonable proof that each such applicant has owned a
Security 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 Securities and
is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the
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 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 Agent.
Except to the extent otherwise provided in this Agreement,
the 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 Security thereunder. The Company agrees, and each Holder of a
Certificate, by his acceptance thereof, shall be deemed to have
agreed, that the 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 Agent shall have no obligation to
perform such Purchase Contracts on behalf of the Holders, except
to the extent expressly provided in Article Five hereof.
Section 7.14. Tax Compliance.
(a) The 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 Securities or (ii) the
issuance, delivery, holding, transfer, redemption or exercise of
rights under the Securities. 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 Agent shall comply with any written direction
received from the Company with respect to the application of such
requirements to particular payments or Holders or in other
particular circumstances, and may for purposes of this Agreement
rely on any such direction in accordance with the provisions of
Section 7.1(a)(2) hereof.
(c) The 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.
ARTICLE VIII
Supplemental Agreements
Section 8.1. Supplemental Agreements Without Consent of
Holders.
Without the consent of any Holders, the Company and the
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 Agent, for any of the following purposes:
(1) 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; or
(2) 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; or
(3) to evidence and provide for the acceptance of
appointment hereunder by a successor Agent; or
(4) to make provision with respect to the rights of
Holders pursuant to the requirements of Section 5.6(b); or
(5) 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.
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
Agent, the Company, when authorized by a Board Resolution, and
the 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 Securities; provided,
however, that, except as contemplated herein, no such
supplemental agreement shall, without the consent of the Holder
of each Outstanding Security affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral
required to be Pledged to secure a Holder's Obligations under the
Purchase Contract, impair the right of the Holder of any Purchase
Contract to receive distributions on the related Collateral
(except for the rights of Holders of Type A Securities to
substitute the Treasury Securities for the Pledged Debt
Securities or the rights of holders of Type B Securities to
substitute Debt Securities for the Pledged Treasury Securities)
or otherwise adversely affect the Holder's rights in or to such
Collateral or adversely alter the rights in or to such
Collateral;
(3) 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;
(4) impair the right to institute suit for the
enforcement of any Purchase Contract;
(5) reduce the number of shares of Common Stock to be
purchased pursuant to any Purchase Contract, increase the price
to purchase shares of Common Stock upon settlement of any
Purchase Contract, change the Purchase Contract Settlement Date
or otherwise adversely affect the Holder's rights under any
Purchase Contract; or
(6) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any such
supplemental agreement;
provided, that if any amendment or proposal referred to
above would adversely affect only the Type A Securities or
the Type B Securities, then only the affected class of
Holder as of the record date for the Holders entitled to
vote thereon will be entitled to vote on 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.
It shall not be necessary for any Act of 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 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 Agent may, but
shall not be obligated to, enter into any such supplemental
agreement which affects the Agent's own rights, duties or
immunities under this Agreement or otherwise.
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 Agent, bear a notation in form approved by the 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 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 Agent in exchange for Outstanding Certificates.
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions.
The Company covenants that it will not merge or consolidate
with 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 corporation, or the successor (if other
than the Company) shall be a corporation organized and existing
under the laws of the United States of America or a State thereof
or the District of Columbia and such corporation 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
Agent and the Collateral Agent, executed and delivered to the
Agent and the Collateral Agent by such corporation, and (ii) the
Company or such successor corporation, 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
the performance of any covenant or condition hereunder, under any
of the Securities or under the Pledge Agreement.
Section 9.2. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance and upon any such assumption by a
successor corporation in accordance with Section 9.1, such
successor corporation 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 corporation thereupon may cause to be
signed, and may issue either in its own name or in the name of
Texas Utilities Company any or all of the Certificates evidencing
Securities issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Agent; and, upon
the order of such successor corporation, instead of the Company,
and subject to all the terms, conditions and limitations in this
Agreement prescribed, the 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 Agent for authentication and execution, and
any Certificate evidencing Securities which such successor
corporation thereafter shall cause to be signed and delivered to
the 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
Securities thereafter to be issued as may be appropriate.
Section 9.3. Opinion of Counsel Given to Agent.
The Agent, subject to Sections 7.1 and 7.3, shall receive 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 Securities 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 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 re-establishment of a
Type A Security and where notices and demands to or upon the
Company in respect of the Securities and this Agreement may be
served. The Company will give prompt written notice to the Agent
of the location, and any change in the location, of such office
or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the 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 Agent as its agent to receive
all such presentations, surrenders, notices and demands.
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 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 Securities the Corporate Trust
Office and appoints the 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 Securities 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
Securities will, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
TEXAS UTILITIES COMPANY
By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
,
-------------------------
as Purchase Contract Agent
By:
----------------------------
Name:
Title:
<PAGE>
EXHIBIT A
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 Type A Securities
-------
Form of Face of Type A Certificate
% Type A Securities
----
This Type A Certificate certifies that is the
-----------
registered Holder of the number of Type A Securities set forth
above. Each Type A Security represents (i) either (a) one %
-----
Debt Security due (the "Debt Security") of Texas
------------
Utilities Company (the "Company"), in an aggregate principal
amount of $ , subject to the Pledge of such Debt Securities by
----
such Holder pursuant to the Pledge Agreement or (b) upon the
occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the appropriate Applicable Ownership
Interest of the Treasury Portfolio, subject to the Pledge of such
Applicable Ownership Interest of the Treasury Portfolio by such
Holder pursuant to the Pledge Agreement, and (ii) the rights and
obligations of the Holder under one Purchase Contract with the
Company. All capitalized terms used herein which are defined in
the Purchase Contract Agreement have the meaning set forth
therein.
Pursuant to the Pledge Agreement, the Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, constituting part of each Type A
Securities 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 portion of
such Type A Securities.
The Pledge Agreement provides that all payments of the
Stated Amount of or the appropriate Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of
the Treasury Portfolio, as the case may be, or payments of
interest on, any (as defined in the Pledge Agreement) or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, constituting part of the Type A
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 (A) cash distributions with respect to Pledged Debt
Securities or the appropriate Applicable Ownership Interest (as
specified in clause (B) of the definition of such term) of the
Treasury Portfolio, as the case may be, and (B) any payments of
the Stated Amount or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such
terms) of the Treasury Portfolio, as the case may be, with
respect to any Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,
that have been released from the Pledge pursuant to the Pledge
Agreement, to the Agent to the account designated by the 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 Stated
Amount or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, of any Pledged Debt
Securities or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the
Treasury Portfolio, 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
Type A Securities of which such Pledged Debt Securities or the
Treasury Portfolio, as the case may be, are a part under the
Purchase Contracts forming a part of such Type A Securities.
Payment of interest on any Debt Security or the appropriate
Applicable Ownership Interest (as specified in clause (B) of the
definition of such term) of the Treasury Portfolio, as the case
may be, forming part of a Type A Security evidenced hereby which
are payable quarterly in arrears on
-----------------------------
and each year, commencing , 1998
---------------- ----------------
(a "Payment Date"), shall, subject to receipt thereof by the
Agent from the Collateral Agent, be paid to the Person in whose
name this Type A Certificate (or a Predecessor Type A
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 Type A Certificate to purchase, and the Company to sell,
on (the "Purchase Contract Settlement Date"), at a
----------
price equal to $10 (the "Stated Amount"), a number of shares of
Common Stock, no par value ("Common Stock"), of the Company,
equal to the Settlement Rate, unless on or prior to the Purchase
Contract Settlement Date there shall have occurred a Termination
Event or an Early Settlement with respect to the Type A
Securities 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 purchase price (the
"Purchase Price") for the shares of Common Stock purchased
pursuant to each Purchase Contract evidenced hereby, if not paid
earlier, shall be paid on the Purchase Contract Settlement Date
by application of payment received in respect of the Stated
Amount or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, of the Pledged Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, pledged to secure the
obligations under such Purchase Contract of the Holder of the
Type A Security of which such Purchase Contract is a part.
The Company shall pay, on each Payment Date, in respect of
each Purchase Contract forming part of a Type A Security
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 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 Type A Certificate (or a Predecessor
Type A Certificate) is registered at the close of business on the
Record Date for such Payment Date.
Payment of interest on the Debt Securities or the
appropriate Applicable Ownership Interest (as specified in clause
(B) of the definition of such term) of the Treasury Portfolio, as
the case may be, and Contract Adjustment Payments will be payable
at the office of the Agent in The City of New York or, at the
option of the Company, by check mailed to the address of the
Person entitled thereto as such address appears on the Type A
Register.
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 Agent by manual signature, this Type A
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.
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed.
TEXAS UTILITIES COMPANY
By:
-------------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By:
-------------------------------------
not individually but solely as
Attorney-in-Fact of such Holder
By:
-------------------------------------
Name:
Title:
Dated: , 1998
---------
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Type A Certificates referred to in the
within mentioned Purchase Contract Agreement.
By:
-------------------------------------
as Purchase Contract Agent
By:
-------------------------------------
Authorized Officer
(Form of Reverse of Type A Certificate)
Each Purchase Contract evidenced hereby is governed by a
Purchase Contract Agreement, dated as of , 1998 (as may
---------
be supplemented from time to time, the "Purchase Contract
Agreement"), between the Company and ,
---------------------------
as Purchase Contract Agent (herein called the "Agent"), to which
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 Agent, the Company, and the Holders and of the
terms upon which the Type A Certificates are, and are to be,
executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder
of this Type A Certificate to purchase, and the Company to sell,
on the Purchase Contract Settlement Date at a price equal to the
Stated Amount (the "Purchase Price"), a number of shares of
Common Stock of the Company equal to the Settlement Rate, unless,
on or prior to the Purchase Contract Settlement Date, there shall
have occurred a Termination Event or Early Settlement with
respect to the Security of which such Purchase Contract is a
part. 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, (b) if the Applicable Market Value
is less than the Threshold Appreciation Price but is greater than
$ , the number of shares of Common Stock per Purchase
-------
Contract equal to the Stated Amount divided by the Applicable
Market Value and (c) if the Applicable Market Amount is less than
or equal to $ , shares of Common Stock per Purchase
----- -------
Contract, 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.
Each Purchase Contract evidenced hereby, which is settled
either through Early Settlement or Cash Settlement, shall
obligate the Holder of the related Type A Securities to purchase
at the Purchase Price, and the Company to sell, a number of newly
issued shares of Common Stock equal to the Early Settlement Rate
or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the
Closing Price per share of Common Stock on each of the 20
consecutive Trading Days ending on the third Trading Day
immediately preceding the Purchase Contract Settlement Date. 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 listed on a United
States national or regional securities exchange, the last quoted
bid price for the Common Stock in the over-the-counter market as
reported on the NYSE, if such bid price is not available, the
market value of the Common Stock on such. 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 association at
the close of business and (B) has traded at least once on the
national or regional securities exchange or association that is
the primary market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract
Agreement, the Holder of this Type A Certificate shall pay the
Purchase Price for the shares of Common Stock purchased pursuant
to each Purchase Contract evidenced hereby by effecting a Cash
Settlement, an Early Settlement or from the proceeds of a
remarketing of the related Pledged Debt Securities of such
holders. A Holder of Type A Securities who does not elect, on or
prior to 5:00 p.m. New York City time on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, to
make an effective Cash Settlement or an Early Settlement, shall
pay the Purchase Price for the shares of Common Stock to be
issued under the related Purchase Contract from the Proceeds of
the sale of the related Pledged Debt Securities held by the
Collateral Agent. Such sale will be made by the Remarketing Agent
pursuant to the terms of the Remarketing Agreement and the
Remarketing Underwriting Agreement on the third Business Day
immediately preceding the Purchase Contract Settlement Date. If,
as provided in the Purchase Contract Agreement, upon the
occurrence of a Failed Remarketing the Collateral Agent, for the
benefit of the Company, exercises its rights as a secured
creditor with respect to the Pledged Debt Securities related to
this Type A Certificate, any accrued and unpaid interest
(including deferred interest) on such Pledged Debt Securities
will become payable by the Company to the holder of this Type A
Security Certificate in the manner provided for in the Purchase
Contract Agreement.
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 aggregate purchase price for the shares of
Common Stock to be purchased thereunder in the manner herein set
forth.
Each Purchase Contract evidenced hereby and all obligations
and rights of the Company and the Holder thereunder shall
terminate if a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall give written
notice to the Agent and to the Holders, at their addresses as
they appear in the Type A Register. Upon and after the occurrence
of a Termination Event, the Collateral Agent shall release the
Pledged Debt Security (as defined in the Pledge Agreement) or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio forming a part of each Type A Security from the Pledge.
A Type A Security shall thereafter represent the right to receive
the Debt Security or the appropriate Applicable Ownership
Interest of the Treasury Portfolio forming a part of such Type A
Security in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement.
Under the terms of the Pledge Agreement, the Agent will be
entitled to exercise the voting and any other consensual rights
pertaining to the Pledged Debt Securities. Upon receipt of notice
of any meeting at which holders of Debt Securities are entitled
to vote or upon the solicitation of consents, waivers or proxies
of holders of Debt Securities, the Agent shall, as soon as
practicable thereafter, mail to the Type A Security holders a
notice (a) containing such information as is contained in the
notice or solicitation, (b) stating that each Type A Security
holder on the record date set by the Agent therefor (which, to
the extent possible, shall be the same date as the record date
for determining the holders of Debt Securities entitled to vote)
shall be entitled to instruct the Agent as to the exercise of the
voting rights pertaining to the Debt Securities constituting a
part of such holder's Type A Securities and (c) stating the
manner in which such instructions may be given. Upon the written
request of the Type A Security Holders on such record date, the
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 Debt Securities as to which any
particular voting instructions are received. In the absence of
specific instructions from the Holder of a Type A Security, the
Agent shall abstain from voting the Debt Security evidenced by
such Type A Securities.
Upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Redemption Price payable
on the Tax Event Redemption Date with respect to the Debt
Securities shall be delivered to the Collateral Agent in exchange
for the Pledged Debt Securities. Thereafter, pursuant to the
terms of the Pledge Agreement, the Collateral Agent for the
benefit of the Company will apply an amount equal to the
Redemption Amount of such Redemption Price to purchase, the
Treasury Portfolio and promptly remit the remaining portion of
such Redemption Price to the Agent for payment to the Holders of
such Type A Securities.
Following the occurrence of a Tax Event Redemption prior to
the Purchase Contract Settlement Date, the Holders of Type A
Securities and the Collateral Agent shall have such security
interests rights and obligations with respect to the Treasury
Portfolio as the Holder of Type A Securities and the Collateral
Agent had in respect of the Debt Securities, as the case may be,
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 Debt Securities shall be deemed to be reference to such
Treasury Portfolio.
The Type A Certificates are issuable only in registered form
and only in denominations of a single Type A Security and any
integral multiple thereof. The transfer of any Type A Certificate
will be registered and Type A Certificates may be exchanged as
provided in the Purchase Contract Agreement. The Type A Registrar
may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents permitted by the Purchase
Contract Agreement. No service charge shall be required for any
such registration of transfer or exchange, but the Company and
the 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 Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, thereby creating Type B Securities, 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 Type A Security
remains in effect, such Type A Security shall not be separable
into its constituent parts, and the rights and obligations of the
Holder of such Type A Security in respect of Debt Securities or
the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, and Purchase Contract constituting
such Type A Security may be transferred and exchanged only as a
Type A Security. The holder of an Type A Securities may
substitute for the Pledged Debt Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio securing
its obligation under the related Purchase Contract, Treasury
Securities in an aggregate principal amount equal to the
aggregate Stated Amount of the Pledged Debt Securities or the
appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) 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 Security for which such Pledged Treasury
Securities secures the holder's obligation under the Purchase
Contract shall be referred to as a "Type B Security." A Holder
may make such Collateral Substitution only in integral multiples
of 100 Type A Securities for 100 Type B Securities; provided,
however, that if a Tax Event Redemption has occurred and the
Treasury Portfolio has become a component of the Type A
Securities, a Holder may make such Collateral Substitutions only
in integral multiples of 4,000,000 Type A Securities for
4,000,000 Type B Securities. Such Collateral Substitution may
cause the equivalent aggregate principal amount of this
Certificate to be increased or decreased; provided, however, the
equivalent aggregate principal amount outstanding under this Type
A Certificate shall not exceed $103,500,000. All such adjustments
to the equivalent aggregate principal amount of this Type A
Certificate shall be duly recorded by placing an appropriate
notation on the Schedule attached hereto.
A Holder of Type B Securities may create or recreate Type A
Securities by delivering to the Collateral Agent Debt Securities
or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, with a Stated Amount, in the case of such Debt
Securities, or with the appropriate Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of
the Treasury Portfolio, in the case of such appropriate
Applicable Ownership Interest of the Treasury Portfolio, equal to
the aggregate principal amount of the Pledged Treasury Securities
in exchange for the release of such Pledged Treasury Securities
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 Type A Certificate evidencing such Purchase
Contract is registered at the close of business on the Record
Date for such Payment Date. Contract Adjustment Payments will be
payable at the office of the Agent in The City of New York 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 Type
A Register.
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, but only if the Company shall give the Holders and
the Agent written notice of its election to defer such payment
(specifying the amount to be deferred) 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 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 that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the
Purchase Contract Settlement Date, the Holder of this Type A
Certificate will receive on the Purchase Contract Settlement
Date, in lieu of a cash payment, a number of shares of Common
Stock equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of this Type A
Certificate divided by (y) the Applicable Market Value.
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
or acquisitions of capital stock of the Company in connection
with the satisfaction by the Company of its obligations under any
employee benefit plans or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on
the date of such event requiring the Company to purchase capital
stock of the Company, (ii) as a result of a reclassification of
the Company's capital stock or the exchange or conversion 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 such capital
stock or the security being converted or exchanged, (iv)
dividends or distributions in capital stock of the Company (or
rights to acquire capital stock) or repurchases or redemptions of
capital stock solely from the issuance or exchange of capital
stock or (v) redemptions or repurchases of any rights outstanding
under a shareholder rights plan or a declaration thereunder of a
dividend of 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, shall immediately
and automatically terminate, without the necessity of any notice
or action by any Holder, the 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 Agent, the
Collateral Agent and to the Holders, at their addresses as they
appear in the Type A Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, 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, at the option of the Holder thereof,
Purchase Contracts underlying Securities having an aggregate
Stated Amount equal to $1,000 or an integral multiple thereof may
be settled early ("Early Settlement") as provided in the Purchase
Contract Agreement; provided, however, that if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a
component of the Type A Securities, Holders may early settle Type
A Securities only in integral multiples of 4,000,000 Type A
Securities. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts evidenced by
this Type A Certificate, the Holder of this Type A Certificate
shall deliver this Type A Certificate to the Agent at the
Corporate Trust Office duly endorsed for transfer to the Company
or in blank with the form of Election to Settle Early set forth
below duly completed and accompanied by payment in the form of
immediately available funds payable to the order of the Company
in an amount (the "Early Settlement Amount") equal to (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 for any Payment Date to the opening
of business on such Payment Date, an amount equal to the Contract
Adjustment Payments payable on such Payment Date with respect to
such Purchase Contracts. Upon Early Settlement of Purchase
Contracts by a Holder of the related Securities, the Pledged Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio underlying such Securities 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 Type A Security as to which Early Settlement is effected equal
to the Early Settlement Rate; provided however, that upon the
Early Settlement of the Purchase Contracts, the Holder thereof
will forfeit the right to receive any Deferred Contract
Adjustment Payments, if any, on such Purchase Contracts. The
Early Settlement Rate shall initially be equal to shares of
Common Stock and 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 Type 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 Agent pursuant to the Purchase Contract Agreement), under
the terms of the Purchase Contract Agreement and the Purchase
Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by
this Type A Certificate. The Company covenants and agrees, and
the Holder, by its acceptance thereof, likewise covenants and
agrees, to be bound by the provisions of this paragraph.
The Holder of this Type A Certificate, by its acceptance
hereof, authorizes the Agent to enter into and perform the
related Purchase Contracts forming part of the Type A Securities
evidenced hereby on his behalf as his attorney-in-fact, expressly
withholds any consent to the assumption (i.e., affirmance) of the
Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the
Bankruptcy Code, 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, authorizes the Agent to enter into
and perform the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to the Pledge of the Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, underlying this Type
A Certificate pursuant to the Pledge Agreement. The Holder
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
to the Stated Amount of the Pledged Debt Securities, or the
appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of 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.
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.
The Purchase Contracts shall for all purposes be governed
by, and construed in accordance with, the laws of the State of
New York.
The Company, the Agent and its Affiliates and any agent of
the Company or the Agent may treat the Person in whose name this
Type A Certificate is registered as the owner of the Type A
Securities evidenced hereby for the purpose of receiving payments
of interest payable quarterly on the Debt 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 in respect thereof be overdue and notwithstanding
any notice to the contrary, and neither the Company, the Agent
nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement
thereof, 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 Agent.
<PAGE>
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------------
(cust) (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.
------------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
-----------------------------------------------------------------
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(Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee)
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(Please Print or Type Name and Address Including Postal Zip Code
of Assignee) the within Type A Certificates and all rights
thereunder, hereby irrevocably constituting and appointing
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attorney to transfer said Type A Certificates on the books of
Texas Utilities Company 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
Type A 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 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.
<PAGE>
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 Type A Securities evidenced by this Type
A Certificate 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:
--------------
(if assigned to another person)
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.
If shares are to be registered REGISTERED HOLDER
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:
Please print name and address
of Registered Holder:
------------------------------
------------------------------
Name Name
------------------------------
------------------------------
Address Address
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
Social Security or other
Taxpayer Identification
Number, if any -----------------------------
<PAGE>
ELECTION TO SETTLE EARLY
The undersigned Holder of this Type A Certificate hereby
irrevocably exercises the option to effect Early Settlement in
accordance with the terms of the Purchase Contract Agreement with
respect to the Purchase Contracts underlying the number of Type A
Securities evidenced by this Type A Certificate specified below.
The undersigned Holder directs that a certificate for shares of
Common Stock deliverable upon such Early Settlement be registered
in the name of, and delivered, together with a check in payment
for any fractional share and any Type A Certificate representing
any Type A evidenced hereby as to which 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. Pledged Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, deliverable upon such Early
Settlement will be transferred in accordance with the transfer
instructions set forth 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 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.
Number of Securities evidenced hereby as to which Early
Settlement of the related Purchase Contracts is being elected:
If shares of Common Stock or
Type A Certificates are to be
registered in the name of and
delivered to and Pledged Debt
Securities, or the Treasury REGISTERED HOLDER
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:
Please print name and address
of Registered Holder:
------------------------------
------------------------------
Name Name
------------------------------
------------------------------
Address Address
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
Social Security or other
Taxpayer Identification
Number, if any
------------------------------
Transfer Instructions for Pledged Debt Securities, or the
Treasury Portfolio, as the case may be, Transferable Upon Early
Settlement or a Termination Event:
---------------------------------------------------------------
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<PAGE>
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
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Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized
Principal Principal Certificate officer of
Amount Amount following such Trustee or
of the Global of the Global decrease or Securities
Date Certificate Certificate increase Custodian
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<PAGE>
EXHIBIT B
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF
THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS
REGISTERED IN THE NAME OF A 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 THEREON 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 THEREIN.
No. Number of Type B Securities Cusip No.
--------- ------ ---------
Form of Face of Type B Certificate
This Type B Certificate certifies that
-----------------------
is the registered Holder of the number of Type B Securities set
forth above. Each Type B Security represents (i) a 1/100
undivided beneficial ownership interest, of a Treasury Security
having a principal amount at maturity equal to $1,000, subject to
the Pledge of such Treasury Security by such Holder pursuant to
the Pledge Agreement, and (ii) the rights and obligations of the
Holder under one Purchase Contract with Texas Utilities Company,
a Texas corporation (the "Company"). All capitalized terms used
herein which are defined in the Purchase Contract Agreement have
the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities
constituting part of each Type B Securities 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 portion of such Type B Securities.
Each Purchase Contract evidenced hereby obligates the Holder
of this Type B Certificate to purchase, and the Company, to sell,
on (the "Purchase Contract Settlement Date"), at a
-------------
price equal to $10 (the "Stated Amount"), a number of shares of
Common stock, no par value per share ("Common Stock"), of the
Company equal to the Settlement Rate, unless on or prior to the
Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the Type
B Securities 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 purchase price for the
shares of Common Stock purchased pursuant to each Purchase
Contract evidenced hereby will be paid by application of the
Proceeds from the Treasury Securities pledged to secure the
obligations under such Purchase Contract in accordance with the
terms of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of each
Purchase Contract evidenced hereby an amount (the "Contract
Adjustment Payments") equal to % per annum of the Stated
--
Amount, computed on the basis of the actual number of days
elapsed in a year of 360 day year of twelve 30 day months, as the
case may be, 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 Type B
Certificate (or a Predecessor Type B Certificate) is registered
at the close of business on the Record Date for such Payment
Date.
Contract Adjustment Payments will be payable at the office of
the Agent in The City of New York or, at the option of the
Company, by check mailed to the address of the Person entitled
thereto as such address appears on the Type B Register.
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 Agent by manual signature, this Type B
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.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
TEXAS UTILITIES COMPANY
By:
------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under
the Purchase Contracts)<PAGE>
By: ,
-----------------------------
not individually but solely as
Attorney-in-Fact of such
Holder
By:
-----------------------------
Name:
Title:
Dated: , 1998
--------------
<PAGE>
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Type B Securities referred to in the
within-mentioned Purchase Contract Agreement.
By: ,
--------------------------
as Purchase Contract Agent
By:
--------------------------
Authorized Signatory
<PAGE>
(Reverse of
Type B Certificate)
Each Purchase Contract evidenced hereby is governed by a
Purchase Contract Agreement, dated as of , 1998 (as may be
-------
supplemented from time to time, the "Purchase Contract
Agreement") between the Company and The First National Bank of
Chicago, as Purchase Contract Agent (including its successors
thereunder, herein called the "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 Agent, the Company and the Holders and of the
terms upon which the Type B Certificates are, and are to be,
executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder
of this Type B Certificate to purchase, and the Company to sell,
on the Purchase Contract Settlement Date at a price equal to the
Stated Amount (the "Purchase Price") a number of shares of Common
Stock of the Company equal to the Settlement Rate, unless on or
prior to the Purchase Contract Settlement Date, there shall have
occurred a Termination Event or an Early Settlement with respect
to the Security of which such Purchase Contract is a part. 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, (b) if the Applicable Market Value is less
than the Threshold Appreciation Price but is greater than
$ , the number of shares of Common Stock per Purchase
-------
Contract equal to the Stated Amount divided by the Applicable
Market Value and (c) if the Applicable Market Amount is less than
or equal to $ , then shares of Common Stock per
------- ----
Purchase Contract, 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 "Applicable Market Value" means the average of the Closing
Prices per share of Common Stock on each of the twenty
consecutive Trading Days ending on the third Trading Day
immediately preceding the Purchase Contract Settlement Date. 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 listed on a United
States national or regional securities exchange, the last quoted
bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau 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 for this purpose by the Company. 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 association 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 association or over-the-counter market that is the
primary market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract
Agreement, the Holder of this Type B Certificate shall pay the
Purchase Price for the shares of Common Stock purchased pursuant
to each Purchase Contract evidenced hereby by effecting either an
Early Settlement of each such Purchase Contract or by applying a
principal amount of the Pledged Treasury Securities underlying
such Holder's Type B Securities equal to the Stated Amount of
such Purchase Contract to the purchase of the Common Stock.
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 aggregate purchase price for the shares of
Common Stock to be purchased thereunder in the manner herein set
forth.
Each Purchase Contract evidenced hereby and all obligations
and rights of the Company and the Holder thereunder shall
terminate if a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall give written
notice to the Agent and to the Holders, at their addresses as
they appear in the Type B Register. Upon and after the occurrence
of a Termination Event, the Collateral Agent shall release the
Pledged Treasury Securities (as defined in the Pledge Agreement)
forming a part of each Type B Certificate.
The Type B Certificates are issuable only in registered form
and only in denominations of a single Type B Security and any
integral multiple thereof. The transfer of any Type B Certificate
will be registered and Type B Certificates may be exchanged as
provided in the Purchase Contract Agreement. The Type B Registrar
may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents permitted by the Purchase
Contract Agreement. No service charge shall be required for any
such registration of transfer or exchange, but the Company and
the 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 Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, for Treasury Securities, thereby
recreating Type A Securities, shall be responsible for any fees
or expenses associated therewith. Except as provided in the
Purchase Contract Agreement, for so long as the Purchase Contract
underlying a Type B Security remains in effect, such Type B
Security shall not be separable into its constituent parts, and
the rights and obligations of the Holder of such Type B Security
in respect of the Treasury Security and the Purchase Contract
constituting such Type B Security may be transferred and
exchanged only as a Type B Security. A Holder of Type B
Securities may create or recreate Type A Securities by delivering
to the Collateral Agent Debt Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, with a
Stated Amount, in the case of such Debt Securities, or with the
appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio, in
the case of such appropriate Applicable Ownership Interest of the
Treasury Portfolio, equal to the aggregate principal amount of
the Pledged Treasury Securities in exchange for the release of
such Pledged Treasury Securities in accordance with the terms of
the Purchase Contract Agreement and the Pledge Agreement. From
and after such substitution, the Holder's Security shall be
referred to as a "Type A Security." Such substitution may cause
the equivalent aggregate principal amount of this Certificate to
be increased or decreased; provided, however, the equivalent
aggregate principal amount outstanding under this Type B
Certificate shall not exceed $103,500,000. All such adjustments
to the equivalent aggregate principal amount of this Type B
Certificate shall be duly recorded by placing an appropriate
notation on the Schedule attached hereto.
A Holder of a Type A Security may create or recreate a Type B
Security by delivering to the Collateral Agent Treasury
Securities in an aggregate principal amount equal to the
aggregate principal amount of the Pledged Debt Securities or the
appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio, as
the case may be, in exchange for the release of such Pledged Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, in accordance with
the terms of the Purchase Contract Agreement and the Pledge
Agreement. Any such recreation of a Type B Security may be
effected only in multiples of 100 Type A Securities for 100 Type
B Securities; provided, however, if a Tax Event Redemption has
occurred and the Treasury Portfolio has become a component of the
Type A Securities, a Holder may make such Collateral Substitution
in integral multiples of 4,000,000 Type A Securities for
4,000,000 Type B Securities.
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 Type B Certificate evidencing such Purchase
Contract is registered at the close of business on the Record
Date for such Payment Date. Contract Adjustment Payments will be
payable at the office of the Agent in The City of New York 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 Type
B Register.
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, but only if the Company shall give the Holders and
the Agent written notice of its election to defer such payment
(specifying the amount to be deferred) 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 of twelve 30 day months), compounding on each
succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments 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 that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the
Purchase Contract Settlement Date, the Holder of this Type B
Certificate will receive on the Purchase Contract Settlement
Date, in lieu of a cash payment, a number of Shares of Common
Stock equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of the Type B
Certificate divided by (y) the Applicable Market Value.
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
or acquisitions of shares of capital stock of the Company in
connection with the satisfaction by the Company of its
obligations under any employee benefit plans or the satisfaction
by the Company of its obligations pursuant to any contract or
security outstanding on the date of such event requiring the
Company to purchase capital stock of the Company, (ii) as a
result of a reclassification of the Company's capital stock or
the exchange or conversion 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, (iv)
dividends or distributions in capital stock of the Company (or
rights to acquire capital stock) or repurchases or redemptions of
capital stock solely from the issuance or exchange of capital
stock or (v) redemptions or repurchases of any rights outstanding
under a shareholder rights plan or the declaration thereunder of
a dividend of 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 Contract Adjustment Payments or
any Deferred Contract Adjustment Payments, shall immediately and
automatically terminate, without the necessity of any notice or
action by any Holder, the 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 Agent, the
Collateral Agent and to the Holders, at their addresses as they
appear in the Type B 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.
Subject to and upon compliance with the provisions of the
Purchase Contract Agreement, at the option of the Holder thereof,
Purchase Contracts underlying Securities having an aggregate
Stated Amount equal to $1,000 or an integral multiple thereof may
be settled early ("Early Settlement") as provided in the Purchase
Contract Agreement. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced
by this Type B Certificate, the Holder of this Type B Certificate
shall deliver this Type B Certificate to the Agent at the
Corporate Trust Office duly endorsed for transfer to the Company
or in blank with the form of Election to Settle Early set forth
below duly completed and accompanied by payment in the form of
immediately available funds payable to the order of the Company
in an amount (the "Early Settlement Amount") equal to (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 for 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. Upon Early Settlement of
Purchase Contracts by a Holder of the related Securities, the
Pledged Treasury Securities underlying such Securities 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 Type B Security as to which Early Settlement is effected equal
to shares of Common Stock per Purchase Contract (the "Early
-----
Settlement Rate"); provided however, that upon the Early
Settlement of the Purchase Contracts, the Holder thereof will
forfeit the right to receive any Deferred Contract Adjustment
Payments on such Purchase Contracts. 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 Type B 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 Agent pursuant to the Purchase Contract Agreement), under
the terms of the Purchase Contract Agreement and the Purchase
Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by
this Type B Certificate. The Company covenants and agrees, and
the Holder, by his acceptance hereof, likewise covenants and
agrees, to be bound by the provisions of this paragraph.
The Holder of this Type B Certificate, by its acceptance
hereof, authorizes the Agent to enter into and perform the
related Purchase Contracts forming part of the Type B Securities
evidenced hereby on his behalf as its attorney-in-fact, expressly
withholds any consent to the assumption (i.e., affirmance) of the
Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the
Bankruptcy Code, 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, authorizes the Agent to enter into
and perform the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to the Pledge of the Treasury
Securities underlying this Type B Certificate pursuant to the
Pledge Agreement. The Holder 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 to the Stated Amount 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.
The Purchase Contracts shall for all purposes be governed by,
and construed in accordance with, the laws of the State of New
York.
The Company, the Agent and its Affiliates and any agent of the
Company or the Agent may treat the Person in whose name this Type
B Certificate is registered as the owner of the Type B Securities
evidenced hereby for the purpose of receiving payments of
interest 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 in respect
thereof be overdue and notwithstanding any notice to the
contrary, and neither the Company, the Agent nor any such agent
shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement
thereof, 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 Agent.
<PAGE>
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------------
(cust) (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.
--------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
-----------------------------------------------------------------
(Please insert Social Security or Taxpayer I.D. or
other Identifying Number of Assignee)
-----------------------------------------------------------------
(Please Print or Type Name and Address Including
Postal Zip Code of Assignee)
the within Type B Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
-----------------------------------------------------------------
attorney to transfer said Type B Certificates on the books of
Texas Utilities Company 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 Type B 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 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.
<PAGE>
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 Type B Securities evidenced by this Type
B Certificate 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 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.
If shares are to be registered REGISTERED HOLDER
in the name of and delivered
to a Person other than the
Holder, please print such
Person's name and address: Please print name and address
of Registered Holder:
----------------------------- -----------------------------
Name Name
----------------------------- -----------------------------
Address Address
Social Security or other
Taxpayer Identification
Number, if any
-----------------------------
<PAGE>
ELECTION TO SETTLE EARLY
The undersigned Holder of this Type B Certificate hereby
irrevocably exercises the option to effect Early Settlement in
accordance with the terms of the Purchase Contract Agreement with
respect to the Purchase Contracts underlying the number of Type B
Securities evidenced by this Type B Certificate specified below.
The option to effect Early Settlement may be exercised only with
respect to Purchase Contracts underlying Type B Securities with
an aggregate Stated Amount equal to $1,000 or an integral
multiple thereof. The undersigned Holder directs that a
certificate for shares of Common Stock deliverable upon such
Early Settlement be registered in the name of, and delivered,
together with a check in payment for any fractional share and any
Type B Certificate representing any Type B Securities evidenced
hereby as to which 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. Pledged Treasury Securities deliverable upon
such Early Settlement will be transferred in accordance with the
transfer instructions set forth 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 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.
<PAGE>
Number of Securities evidenced hereby as to which Early
Settlement of the related Purchase Contracts is being elected:
If shares of Common Stock of REGISTERED HOLDER
Type B 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: Please print name and address
of Registered Holder:
------------------------------ ------------------------------
Name Name
------------------------------ ------------------------------
Address Address
Social Security or other
Taxpayer Identification
Number, if any
------------------------------
Transfer Instructions for Pledged Treasury Securities
Transferable Upon Early Settlement or a Termination Event:
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-----------------------------------------------------------------
-----------------------------------------------------------------
<PAGE>
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
=================================================================
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized
Principal Principal Certificate officer of
Amount Amount following such Trustee or
of the Global of the Global decrease or Securities
Date Certificate Certificate increase Custodian
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<PAGE>
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
COLLATERAL AGENT
Attention:
Re: Securities of Texas Utilities Company (the "Company")
We hereby notify you in accordance with Section [4.1] [4.2]
of the Pledge Agreement, dated as of , 1998, among the
------- ---
Company, yourselves, as Collateral Agent, and ourselves, as
Purchase Contract Agent and as attorney-in-fact for the holders
of [Type A Securities] [Type B Securities] from time to time,
that the holder of securities listed below (the "Holder") has
elected to substitute [$ aggregate [principal amount] of
-----
Treasury Securities] [$ aggregate principal amount of Debt
-------
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be,] in exchange for the
[Pledged Debt Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] [Pledged
Treasury Securities] held by you in accordance with the Pledge
Agreement and has delivered to us a notice stating that the
Holder has Transferred [Treasury Securities] [Debt Securities or
the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] to you, as Collateral Agent. We
hereby instruct you, upon receipt of such [Pledged Treasury
Securities] [Pledged Debt Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the
case may be], and upon the payment by such Holder of any
applicable fees, to release the [Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Treasury Securities] related to
such [Type A Securities] [Type B Securities] to us in accordance
with the Holder's instructions.
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 electing to
substitute [Treasury Securities] [Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] for the [Pledged Debt Securities
or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Pledged Treasury Securities]:
--------------------------- ---------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
---------------------------
---------------------------
<PAGE>
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
Attention:
Re: Securities of Texas Utilities Company (the "Company")
The undersigned Holder hereby notifies you that it has
delivered to The Chase Manhattan Bank, as Collateral Agent,
$ aggregate principal amount of [Treasury Securities]
-------
[Debt Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be,] in exchange for
the [Pledged Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may
be,] [Pledged Treasury Securities] held by the Collateral Agent,
in accordance with Section [4.1][4.2] of the Pledge Agreement,
dated , 1998, between you, the Company and the
------- ---
Collateral Agent. The undersigned Holder has paid the Collateral
Agent all applicable fees relating to such exchange. The
undersigned Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the undersigned
Holder the [Pledged Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may
be,] [Pledged Treasury Securities] related to such [Type A
Securities] [Type B Securities].
Dated: By:
------------------ -------------------------------
Name:
Title:
Signature Guarantee:
------------
<PAGE>
Please print name and address of Registered Holder:
-------------------------- ---------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
---------------------------
---------------------------
<PAGE>
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
Attention:
Re: Securities of Texas Utilities Company (the "Company")
The undersigned Holder hereby irrevocably notifies you
in accordance with Section 5.4 of the Purchase Contract
Agreement, dated as of , 1998 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 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 Contract on the Purchase
Contract Settlement Date. The undersigned Holder hereby instructs
you to notify promptly the Collateral Agent of the undersigned
Holders election to make such cash settlement with respect to the
Purchase Contracts related to such Holder's [Type A Securities]
[Type B Securities].
Dated:
----------------------- -----------------------------
Signature
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.
<PAGE>
Please print name and address of Registered Holder:
-------------------------- ---------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
---------------------------
---------------------------
TEXAS UTILITIES COMPANY
,
--------------
as Collateral Agent, Custodial Agent
and Securities Intermediary
AND
,
----------------
as Purchase Contract Agent
FORM OF PLEDGE AGREEMENT
Dated as of , 1998
--------- --
<PAGE>
TABLE OF CONTENTS
PAGE
----
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Definitions . . . . . . . . . . . . . . . . . . . 2
Section 2. Pledge; Control and Perfection. . . . . . . . . . 5
Section 2.1. The Pledge . . . . . . . . . . . . . 5
Section 2.2. Control and Perfection. . . . . . . . 7
Section 3. Distributions on Pledged Collateral . . . . . . . 8
Section 4. Substitution, Release, Repledge and
Settlement of Debt Securities . . . . . . . . . . . . . 9
Section 4.1. Substitution for Debt Securities and
the Creation of Type B Securities. . . . . . . . . 9
Section 4.2. Substitution of Treasury Securities
and the Creation of Type A Securities. . . . . . . 10
Section 4.3. Termination Event . . . . . . . . . . 10
Section 4.4. Cash Settlement . . . . . . . . . . . 11
Section 4.5. Early Settlement. . . . . . . . . . . 12
Section 4.6. Application of Proceeds Settlement. . 13
Section 5. Voting Rights -- Debt Securities . . . . . . . . 14
Section 6. Rights and Remedies; Distribution of the
Debentures; Tax Event Redemption . . . . . . . . . . . . 15
Section 6.1. Rights and Remedies of the
Collateral Agent . . . . . . . . . . . . . . . . . 15
Section 6.2. Tax Event Redemption. . . . . . . . . 16
Section 7. Representations and Warranties; Covenants . . . . 16
Section 7.1. Representations and Warranties. . . . 16
Section 7.2. Covenants . . . . . . . . . . . . . . 17
Section 8. The Collateral Agent. . . . . . . . . . . . . . . 18
Section 8.1. Appointment, Powers and Immunities . 18
Section 8.2. Instructions of the Company . . . . . 19
Section 8.3. Reliance by Collateral Agent. . . . 19
Section 8.4. Rights in Other Capacities. . . . . . 19
Section 8.5. Non-Reliance on Collateral Agent . . 19
Section 8.6. Compensation and Indemnity . . . . . 20
Section 8.7. Failure to Act. . . . . . . . . . . . 20
Section 8.8. Resignation of Collateral Agent. . . 20
Section 8.9. Right to Appoint Agent or Advisor. . 21
Section 8.10. Survival. . . . . . . . . . . . . . 21
Section 8.11. Exculpation. . . . . . . . . . . . 21
Section 9. Amendment . . . . . . . . . . . . . . . . . . . . 22
Section 9.1. Amendment Without Consent of
Holders. . . . . . . . . . . . . . . . . . . . . . 22
Section 9.2. Amendment with Consent of Holders. . 22
Section 9.3. Execution of Amendments . . . . . . . 23
Section 9.4. Effect of Amendments. . . . . . . . 23
Section 9.5. Reference to Amendments. . . . . . . 23
Section 10. Miscellaneous. . . . . . . . . . . . . . . . . . 23
Section 10.1. No Waiver. . . . . . . . . . . . . 23
Section 10.2. Governing Law . . . . . . . . . . . 24
Section 10.3. Notices. . . . . . . . . . . . . . 24
Section 10.4. Successors and Assigns. . . . . . . 24
Section 10.5. Counterparts. . . . . . . . . . . . 24
Section 10.6. Severability. . . . . . . . . . . . 24
Section 10.7. Expenses, etc. . . . . . . . . . . . 25
Section 10.8. Security Interest Absolute. . . . . 25
EXHIBIT A Instruction to Collateral Agent
EXHIBIT B Instruction to Purchase Contract Agent
EXHIBIT C Instruction to Custodial Agent Regarding Remarketing
EXHIBIT D Instruction to Custodial Agent Regarding Withdrawal
From Remarketing
<PAGE>
PLEDGE AGREEMENT
FORM OF PLEDGE AGREEMENT, dated as of , 1998
---------
(this "Agreement"), among Texas Utilities Company, a Texas
corporation (the "Company"), , not individually but
-----------
solely as collateral agent (in such capacity, together with its
successors in such capacity, the "Collateral Agent") as custodial
agent (in such capacity, together with its successors in such
capacity, the "Custodial Agent") and in its capacity as a
"securities intermediary" as defined in Section 8-102(a)(14) of
the Code (as defined herein) (in such capacity, together with its
successors in such capacity, the "Securities Intermediary"), and
, not individually but solely as purchase contract
-----------
agent and as attorney-in-fact of the Holders (as defined in the
Purchase Contract Agreement) from time to time of the Securities
(as hereinafter defined) (in such capacity, together with its
successors in such capacity, the "Purchase Contract Agent") under
the Purchase Contract Agreement (as hereinafter defined).
RECITALS
The Company and the Purchase Contract Agent are parties
to the Purchase Contract Agreement, dated as of the date hereof
(as modified and supplemented and in effect from time to time,
the "Purchase Contract Agreement"), pursuant to which there may
be issued up to New Securities of the Company, having
----------
a stated amount of $10 (the "Stated Amount") per New Security.
The New Securities will initially consist of (A)
,000,000 units (referred to as "Type A Securities") with a face
--
amount, per Type A Security, equal to the Stated Amount and (B)
,000,000 units (referred to as "Type B Securities" and,
--
together with the Type A Securities, the "Securities") with a
face amount, per Type B Security, equal to the Stated Amount.
Each Type A Security will initially be comprised of (a) a stock
purchase contract (a "Purchase Contract") under which the
holder will purchase from the Company on (the "Purchase
---------
Contract Settlement Date"), for an amount of cash equal to the
Stated Amount, a number of newly issued shares of common stock,
no par value per share (the "Common Stock"), of the Company equal
to the Settlement Rate (as defined below) and (b) either
beneficial ownership of a Debt Security (as defined below) or
upon the occurrence of a Tax Event Redemption the Applicable
Ownership Interest of the Treasury Portfolio. Each Type B
Security will initially be comprised of (a) a Purchase Contract
under which (i) the holder will purchase from the Company on the
Purchase Contract Settlement Date, for an amount in cash equal to
the Stated Amount, a number of newly issued shares of Common
Stock of the Company, equal to the Settlement Rate, and (ii) the
Company will pay the Holder Contract Adjustment Payments (as
defined below) at the rate of % of the Stated Amount per annum,
--
and (b) a 1/100 undivided beneficial interest in a zero-coupon
U.S. Treasury Security (CUSIP No. ) having a principal
--------
amount equal to $1,000 and maturing on (the "Treasury
--------
Securities").
Pursuant to the terms of the Indenture (as defined
below), the Company will issue % Series D Senior Notes
----- --
due (the "Debt Securities") in an aggregate principal amount
equal to the aggregate Stated Amount of all Type A Securities.
Pursuant to the terms of the Purchase Contract
Agreement and the Purchase Contracts, the Holders, from time to
time, of the Securities have irrevocably authorized the Purchase
Contract Agent, as attorney-in-fact of such Holders, among other
things, to execute and deliver this Agreement on behalf of such
Holders and to grant the pledge provided hereby of the Debt
Securities, any Applicable Ownership Interest in the Treasury
Portfolio and any Treasury Securities to secure each Holder's
obligations under the related Purchase Contract, as provided
herein and subject to the terms hereof. Upon such pledge, the
Debt Securities will be beneficially owned by the Holders but
will be owned of record by the Purchase Contract Agent subject to
the Pledge hereunder.
Accordingly, the Company, the Collateral Agent, the
Securities Intermediary, the Custodial Agent and the Purchase
Contract Agent, on its own behalf and as attorney-in-fact of the
Holders from time to time of the Securities, agree as follows:
Section 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;
(b) 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 or other subdivision;
(c) the following terms have the meanings assigned
to them in the Purchase Contract Agreement: (i) Act,
(ii) Agent, (iii) Board Resolution, (iv) Cash
Settlement, (v) Certificate, (vi) Contract Adjustment
Payments, (vii) Debentures, (viii) Early Settlement,
(ix) Early Settlement Amount, (x) Early Settlement
Date, (xi) Failed Remarketing, (xii) Holder, (xiii)
Opinion of Counsel, (xiv) Outstanding Securities, (xv)
Purchase Contract, (xvi) Purchase Contract Settlement
Date, (xvii) Remarketing Agent, (xviii) Remarketing
Agreement, (xix) Remarketing Underwriting Agreement,
(xx) Settlement Rate, and (xxi) Termination Event; and
(d) the following terms have the meanings assigned
to them in the Indenture and the Officer's Certificate
establishing the terms of the New Securities (i)
Applicable Ownership Interest, (ii) Applicable
Principal Amount, (iii) Primary Treasury Dealer, (iv)
Quotation Agent, (v) Redemption Amount, (vi) Redemption
Price, (vii) Tax Event, (viii) Tax Event Redemption,
(ix) Tax Event Redemption Date, (x) Treasury Portfolio,
(xi) Treasury Portfolio Purchase Price.
"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.
"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.
"Business Day" means any day other than a Saturday, a
Sunday or any other day on which banking institutions in The City
of New York (in the State of New York) are permitted or required
by any applicable law to close.
"Cash" means any coin or currency of the United States
as at the time shall be legal tender for payment of public and
private debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1
hereof.
"Collateral Account" means the securities account
(number ) maintained at in the name
----- -------------
" , as Purchase Contract Agent on behalf of the holders
-----------
of Securities subject to the security interest of the Pledge
Agreement, of as Collateral Agent, for the benefit of
----------
Texas Utilities Company, as pledgee" and any successor account.
"Collateral Agent" has the meaning specified in the
first paragraph of this instrument.
"Common Stock" has the meaning specified in the
Recitals.
"Company" means the Person named as the "Company" in
the first paragraph of this instrument until a successor shall
have become such, and thereafter "Company" shall mean such
successor.
"Custodial Agent" has the meaning specified in the
Recitals.
"Debt Securities" has the meaning specified in the
Recitals.
"Indenture" means the Trust Indenture, dated
, between the Company and the Trustee with respect to
----------
the Debt Securities.
"Intermediary" means any entity that in the ordinary
course of its business maintains securities accounts for others
and is acting in that capacity.
"Officer's Certificate" means the instrument setting
forth the terms of the Debt Securities pursuant to the Indenture.
"Permitted Investments" means any one of the following
which shall mature not later than the next succeeding Business
Day (i) any evidence of indebtedness with an original maturity of
365 days or less issued, or directly and fully guaranteed or
insured, by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit
of the United States of America is pledged in support thereof or
such indebtedness constitutes a general obligation of it); (ii)
deposits, certificates of deposit or acceptances with an original
maturity of 365 days or less of any institution which is a member
of the Federal Reserve System having combined capital and surplus
and undivided profits of not less than US $200.0 million at the
time of deposit; (iii) investments with an original maturity of
365 days or less of any Person that is fully and unconditionally
guaranteed by a bank referred to in clause (ii); (iv) investments
in commercial paper, other than commercial paper issued by the
Company or its affiliates, of any corporation incorporated under
the laws of the United States or any State thereof, which
commercial paper has a rating at the time of purchase at least
equal to "A-1" by Standard & Poor's Ratings Services ("S&P") or
at least equal to "P-1" by Moody's Investors Service, Inc.
("Moody's"); and (v) investments in money market funds registered
under the Investment Company Act of 1940, as amended, rated in
the highest applicable rating category by S&P or Moody's.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Pledge" has the meaning specified in Section 2.1
hereof.
"Pledged Debt Securities" has the meaning specified in
Section 2.1 hereof.
"Pledged Treasury Securities" has the meaning specified
in Section 2.1 hereof.
"Proceeds" means all interest, dividends, cash,
instruments, securities, financial assets (as defined in Section
8-102(a)(9) of the Code) and other property from time to time
received, receivable or otherwise distributed upon the sale,
exchange, collection or disposition of the Collateral or any
proceeds thereof.
"Purchase Contract" has the meaning specified in the
Recitals.
"Purchase Contract Agent" has the meaning specified in
the first paragraph of this Agreement.
"Purchase Contract Agreement" has the meaning specified
in the Recitals.
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in
the first paragraph of this Agreement.
"Security Entitlement" has the meaning set forth in
Section 8-102(a)(17) of the Code.
"Separate Debt Securities" means any Debt Securities
that are not Pledged Debt Securities.
"Stated Amount" has the meaning specified in the
Recitals.
"TRADES" means the Treasury/Reserve Automated Debt
Entry System maintained by the Federal Reserve Bank of New York
pursuant to the TRADES Regulations.
"TRADES Regulations" means the regulations of the
United States Department of the Treasury, published at 31 C.F.R.
Part 357, as amended from time to time. Unless otherwise defined
herein, all terms defined in the TRADES Regulations are used
herein as therein defined.
"Transfer" means, with respect to the Collateral and in
accordance with the instructions of the Collateral Agent, the
Purchase Contract Agent or the Holder, as applicable:
(i) in the case of Collateral
consisting of securities which
cannot be delivered by book-entry
or which the parties agree are to
be delivered in physical form,
delivery in appropriate physical
form to the recipient accompanied
by any duly executed instruments of
transfer, assignments in blank,
transfer tax stamps and any other
documents necessary to constitute a
legally valid transfer to the
recipient;
(ii) in the case of Collateral
consisting of securities maintained
in book-entry form by causing a
"securities intermediary" (as
defined in Section 8-102(a)(14) of
the Code) to (i) credit a "security
entitlement" (as defined in Section
8-102(a)(17) of the Code) with
respect to such securities to a
"securities account" (as defined in
Section 8-501(a) of the Code)
maintained by or on behalf of the
recipient and (ii) to issue a
confirmation to the recipient with
respect to such credit. In the
case of Collateral to be delivered
to the Collateral Agent, the
securities intermediary shall be
the Securities Intermediary and the
securities account shall be the
Collateral Account.
"Treasury Security" means a zero-coupon U.S. Treasury
Security (Cusip Number ) which are the principal strips
--------
of the U.S. Treasury Securities which mature on .
-----
"Trustee" means , as trustee under the
--------------
Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Value" with respect to any item of Collateral on any
date means, as to (i) Debt Securities, the aggregate principal
amount thereof, (ii) Cash, the face amount thereof and (iii)
Treasury Securities, the aggregate principal amount thereof at
maturity.
Section 2. Pledge; Control and Perfection.
Section 2.1. The Pledge. The Holders from time to
time acting through the Purchase Contract Agent, as their
attorney-in-fact, hereby pledge and grant to the Collateral
Agent, for the benefit of the Company, as collateral security for
the performance when due by such Holders of their respective
obligations under the related Purchase Contracts, a security
interest in (i) all of the right, title and interest of such
Holders (a) in the Debt Securities and Treasury Securities
constituting a part of the Securities and any Treasury Securities
delivered in exchange for any Debt Securities, and any Debt
Securities delivered in exchange for any Treasury Securities, in
accordance with Section 4 hereof, in each case that have been
Transferred to or received by the Collateral Agent and not
released by the Collateral Agent to such Holders under the
provisions of this Agreement; (b) in payments made by Holders
pursuant to Section 4.4; (c) in the Collateral Account and all
securities, financial assets, Cash and other property credited
thereto and all Security Entitlements related thereto; (d) in the
Treasury Portfolio purchased on behalf of the Holders of Type A
Securities by the Collateral Agent upon the occurrence of a Tax
Event Redemption as provided in Section 6.2 and (e) all Proceeds
of the foregoing (all of the foregoing, collectively, the
"Collateral"). Prior to or concurrently with the execution and
delivery of this Agreement, the Purchase Contract Agent, on
behalf of the initial Holders of the Securities, shall cause the
Debt Securities comprising a part of the Type A Securities, and
the Treasury Securities comprising a part of the Type B
Securities, to be Transferred to the Collateral Agent for the
benefit of the Company. Such Debt Securities shall be Transferred
by physically delivering such Securities to the Securities
Intermediary endorsed in blank and causing the Securities
Intermediary to credit the Collateral Account with such
Securities and sending the Collateral Agent a confirmation of the
deposit of such Securities. In the event a Holder of Type A
Securities so elects, such Holder may Transfer Treasury
Securities to the Collateral Agent for the benefit of the Company
in exchange for the release by the Collateral Agent on behalf of
the Company of Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,
with an aggregate stated liquidation amount equal to the
aggregate principal amount of the Treasury Securities so
Transferred, in the case of Debt Securities, or with an
appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio
equal to the aggregate principal amount of the Treasury
Securities so transferred, in the event that a
Tax Event Redemption has occurred, to the Purchase Contract Agent
on behalf of such Holder. Treasury Securities and the Treasury
Portfolio, as applicable, shall be Transferred to the Collateral
Account maintained by the Collateral Agent at the Securities
Intermediary by book-entry transfer to the Collateral Account in
accordance with the TRADES Regulations and other applicable law
and by the notation by the Securities Intermediary on its books
that a Security Entitlement with respect to such Treasury
Securities or Treasury Portfolio, has been credited to the
Collateral Account. For purposes of perfecting the Pledge under
applicable law, including, to the extent applicable, the TRADES
Regulations or the Uniform Commercial Code as adopted and in
effect in any applicable jurisdiction, the Collateral Agent shall
be the agent of the Company as provided herein. The pledge
provided in this Section 2.1 is herein referred to as the
"Pledge" and the Debt Securities or Treasury Securities subject
to the Pledge, excluding any Debt Securities or Treasury
Securities released from the Pledge as provided in Section 4
hereof, are hereinafter referred to as "Pledged Debt Securities"
or the "Pledged Treasury Securities," respectively. Subject to
the Pledge and the provisions of Section 2.2 hereof, the Holders
from time to time shall have full beneficial ownership of the
Collateral. Whenever directed by the Collateral Agent acting on
behalf of the Company, the Securities Intermediary shall have the
right to reregister the Debt Securities or any other Securities
held in physical form in its name.
Except as may be required in order to release Debt
Securities in connection with a Holder's election to convert its
investment from Type A Securities to Type B Securities, or except
as otherwise required to release Securities as specified herein,
neither the Collateral Agent nor the Securities Intermediary
shall relinquish physical possession of any certificate
evidencing Debt Securities or Treasury Securities prior to the
termination of this Agreement. If it becomes necessary for the
Securities Intermediary to relinquish physical possession of a
certificate in order to release a portion of the Debt Securities
evidenced thereby from the Pledge, the Securities Intermediary
shall use its best efforts to obtain physical possession of a
replacement certificate evidencing any Debt Securities remaining
subject to the Pledge hereunder registered to it or endorsed in
blank within fifteen days of the date it relinquished possession.
The Securities Intermediary shall promptly notify the Company and
the Collateral Agent of the Securities Intermediary's failure to
obtain possession of any such replacement certificate as required
hereby.
Section 2.2. Control and Perfection. (a) In
connection with the Pledge granted in Section 2.1, and subject to
the other provisions of this Agreement, the Holders from time to
time acting through the Purchase Contract Agent, as their
attorney-in-fact, hereby authorize and direct the Securities
Intermediary (without the necessity of obtaining the further
consent of the Purchase Contract Agent or any of the Holders),
and the Securities Intermediary agrees, to comply with and follow
any instructions and entitlement orders (as defined in Section
8-102(a)(8) of the Code) that the Collateral Agent on behalf of
the Company may give in writing with respect to the Collateral
Account, the Collateral credited thereto and any security
entitlements with respect to any thereof. Such instructions and
entitlement orders may, without limitation, direct the Securities
Intermediary to transfer, redeem, sell, liquidate, assign,
deliver or otherwise dispose of the Debt Securities, the Treasury
Securities, the Treasury Portfolio, and any Security Entitlements
with respect thereto and to pay and deliver any income, proceeds
or other funds derived therefrom to the Company. The Holders from
time to time acting through the Purchase Contract Agent hereby
further authorize and direct the Collateral Agent, as Agent of
the Company, to itself issue instructions and entitlement orders,
and to otherwise take action, with respect to the Collateral
Account, the Collateral credited thereto and any security
entitlements with respect thereto, pursuant to the terms and
provisions hereof, all without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the
Holders. The Collateral Agent shall be the Agent of the Company
and shall act as directed in writing by the Company. Without
limiting the generality of the foregoing, the Collateral Agent
shall issue entitlement orders to the Securities Intermediary
when and as directed by the Company.
(b) The Securities Intermediary hereby confirms and
agrees that: (i) all securities or other property underlying any
financial assets credited to the Collateral Account shall be
registered in the name of the Securities Intermediary, indorsed
to the Securities Intermediary or in blank or credited to another
Collateral Account maintained in the name of the Securities
Intermediary and in no case will any financial asset credited to
the Collateral Account be registered in the name of the Purchase
Contract Agent, the Collateral Agent, the Company or any Holder,
payable to the order of, or specially indorsed to, the Purchase
Contract Agent, the Collateral Agent, the Company or any Holder
except to the extent the foregoing have been specially indorsed
to the Securities Intermediary or in blank; (ii) all property
delivered to the Securities Intermediary pursuant to this Pledge
Agreement (including, without limitation, any Debt Securities,
the Treasury Portfolio or Treasury Securities) will be promptly
credited to the Collateral Account; (iii) the Collateral Account
is an account to which financial assets are or may be credited,
and the Securities Intermediary shall, subject to the terms of
this Agreement, treat the Purchase Contract Agent as entitled to
exercise the rights of any financial asset credited to the
Collateral Account; (iv) the Securities Intermediary has not
entered into, and until the termination of the this Agreement
will not enter into, any agreement with any other person relating
to the Collateral Account and/or any financial assets credited
thereto pursuant to which it has agreed to comply with
entitlement orders (as defined in Section 8-102(a)(8) of the
Code) of such other person; and (v) the Securities Intermediary
has not entered into, and until the termination of this Agreement
will not enter into, any agreement with the debtor or the secured
party purporting to limit or condition the obligation of the
Securities Intermediary to comply with entitlement orders as set
forth in this Section 2.2 hereof.
(c) The Securities Intermediary hereby agrees that each
item of property (whether investment property, financial asset,
security, instrument or cash) credited to the Collateral Account
shall be treated as a "financial asset" within the meaning of
Section 8-102(a)(9) of the Code.
(d) In the event of any conflict between this Agreement
(or any portion thereof) and any other agreement now existing or
hereafter entered into, the terms of this Agreement shall
prevail.
Section 3. Distributions on Pledged Collateral. So
long as the Purchase Contract Agent is the registered owner of
the Pledged Debt Securities, it shall receive all payments
thereon. If the Pledged Debt Securities are reregistered, such
that the Collateral Agent becomes the registered holder, all
payments of the Stated Amount or, if applicable, the appropriate
Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, or payments
of interest on, the Pledged Debt Securities or distributions on
the appropriate Applicable Ownership Interest (as specified in
clause (B) of the definition of such term) of the Treasury
Portfolio, as the case may be, and all payments of the principal
of, or cash distributions on, any Pledged Treasury Securities
received by the Collateral Agent that are properly payable
hereunder shall be paid by the Collateral Agent by wire transfer
in same day funds:
(i) In the case of (A) payment of interest with
respect to the Pledged Debt Securities or cash
distributions on the appropriate Applicable
Ownership Interest (as specified in clause (B) of
the definition of such term) of the Treasury
Portfolio, as the case may be, and (B) any
payments of the Stated Amount or, if applicable,
the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such
term) of the Treasury Portfolio with respect to
any Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as
the case may be, that have been released from the
Pledge pursuant to Section 4.3 hereof, to the
Purchase Contract Agent, for the benefit of the
relevant Holders of Securities, to the account
designated by the Purchase Contract Agent 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);
(ii) In the case of any principal payments with respect
to any Treasury Securities that have been released
from the Pledge pursuant to Section 4.3 hereof, to
the Holders of the Type B Securities 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
(iii) In the case of payments of the principal of
any Pledged Debt Securities or the Stated
Amount of the appropriate Applicable
Ownership Interest (as specified in clause
(A) of the definition of such term) of the
Treasury Portfolio, as the case may be, or
the principal of any Pledged Treasury
Securities, to the Company on the Purchase
Contract Settlement Date in accordance with
the procedure set forth in Section 4.6(a) or
4.6(b) hereof, in full satisfaction of the
respective obligations of the Holders under
the related Purchase Contracts.
All payments received by the Purchase Contract Agent as provided
herein shall be applied by the Purchase Contract Agent pursuant
to the provisions of the Purchase Contract Agreement. If,
notwithstanding the foregoing, the Purchase Contract Agent shall
receive any payments of the Stated Amount or, if applicable, the
appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) on account of any Debt
Security or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as applicable that, at the time of such
payment, is a Pledged Debt Security or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,
or a Holder of a Type B Securities shall receive any payments of
principal on account of any Treasury Securities that, at the time
of such payment, are Pledged Treasury Securities, the Purchase
Contract Agent or such Holder shall hold the same as trustee of
an express trust for the benefit of the Company (and promptly
deliver the same over to the Company) for application to the
obligations of the Holders under the related Purchase Contracts,
and the Holders shall acquire no right, title or interest in any
such payments of Stated Amount or principal so received.
Section 4. Substitution, Release, Repledge and
Settlement of Debt Securities.
Section 4.1. Substitution for Debt Securities and the
Creation of Type B Securities. At any time on or prior to the
fifth Business Day immediately preceding the Purchase Contract
Settlement Date (unless a Tax Event Redemption has occurred), a
Holder of Type A Securities shall have the right to substitute
Treasury Securities for the Pledged Debt Securities securing such
Holder's obligations under the Purchase Contract(s) comprising a
part of its Type A Securities in integral multiples of 100 Type A
Securities by (a) Transferring to the Collateral Agent Treasury
Securities having a Value equal to the aggregate Stated Amount of
the Pledged Debt Securities to be released and (b)(i) in the
event that Contract Adjustment Payments are at a higher rate for
Type B Securities than for Type A Securities, delivering to the
Purchase Contract Agent Cash in an amount equal to the excess of
the Contract Adjustment Payments that would have accrued since
the last Payment Date through the date of substitution on the
Type B Securities being created by the Holder, over the Contract
Adjustment Payments that have accrued over the same time period
on the related Type A Securities, which amount the Purchase
Contract Agent shall promptly remit to the Company, and (ii)
delivering the related Type A Securities to the Purchase Contract
Agent, accompanied by a notice, substantially in the form of
Exhibit B hereto, to the Purchase Contract Agent stating that
such Holder has Transferred Treasury Securities to the Collateral
Agent pursuant to clause (a) above (stating the Value of the
Treasury Securities Transferred by such Holder) and requesting
that the Purchase Contract Agent instruct the Collateral Agent to
release from the Pledge the Pledged Debt Securities related to
such Type A Securities. The Purchase Contract Agent shall
instruct the Collateral Agent in the form provided in Exhibit A;
provided, however, that if a Tax Event Redemption has occurred
and the Treasury Portfolio has become a component of the Type A
Securities, Holders of Type A Securities may make such
substitution only in integral multiples of Type A
Securities at any time on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date.
Upon receipt of Treasury Securities from a Holder of Type A
Securities and the related instruction from the Purchase Contract
Agent, the Collateral Agent shall release the Pledged Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, and shall promptly
Transfer such Pledged Debt Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, free and clear of any lien, pledge or security
interest created hereby, to the Purchase Contract Agent.
Section 4.2. Substitution of Treasury Securities and
the Creation of Type A Securities. At any time on or prior to
the fifth Business Day immediately preceding the Purchase
Contract Settlement Date (unless a Tax Event Redemption has
occurred), a Holder of Type B Securities shall have the right to
establish or reestablish Type A Securities consisting of the
Purchase Contracts and Debt Securities in integral multiples of
100 Type A Securities by (a) Transferring to the Collateral Agent
Debt Securities having a Value equal to the Value of the Pledged
Treasury Securities to be released and (b) delivering the related
Type B Securities to the Purchase Contract Agent, accompanied by
a notice, substantially in the form of Exhibit B hereto, to the
Purchase Contract Agent stating that such Holder has transferred
Debt Securities to the Collateral Agent pursuant to clause (a)
above and requesting that the Purchase Contract Agent instruct
the Collateral Agent to release from the Pledge the Pledged
Treasury Securities related to such Type B Securities. The
Purchase Contract Agent shall instruct the Collateral Agent in
the form provided in Exhibit A; provided, however, that if a Tax
Event Redemption has occurred and the Treasury Portfolio has
become a component of the Type A Securities, Holders of Type B
Securities may make such substitution only in integral multiples
of Type B Securities, at any time on or prior to the
Business Day immediately preceding the Purchase Contract
Settlement Date. Upon receipt of the Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, from such Holder and the
instruction from the Purchase Contract Agent, the Collateral
Agent shall release the Treasury Securities and shall promptly
Transfer such Treasury Securities, free and clear of any lien,
pledge or security interest created hereby, to the Purchase
Contract Agent.
Section 4.3. Termination Event. Upon receipt by the
Collateral Agent of written notice from the Company or the
Purchase Contract Agent that there has occurred a Termination
Event, the Collateral Agent shall release all Collateral from the
Pledge and shall promptly Transfer any Pledged Debt Securities
(or the Applicable Ownership Interest of the Treasury Portfolio
if a Tax Event Redemption has occurred) and Pledged Treasury
Securities to the Purchase Contract Agent for the benefit of the
Holders of the Type A Securities and the Type B Securities,
respectively, free and clear of any lien, pledge or security
interest or other interest created hereby.
If such Termination Event shall result from the
Company's becoming a debtor under the Bankruptcy Code, and if the
Collateral Agent shall for any reason fail promptly to effectuate
the release and Transfer of all Pledged Debt Securities, the
Treasury Portfolio or of the Pledged Treasury Securities, as the
case may be, as provided by this Section 4.3, the Purchase
Contract Agent shall (i) use its best efforts to obtain an
opinion of a nationally recognized law firm reasonably acceptable
to the Collateral Agent to the effect that, as a result of the
Company's being the debtor in such a bankruptcy case, the
Collateral Agent will not be prohibited from releasing or
Transferring the Collateral as provided in this Section 4.3, and
shall deliver such opinion to the Collateral Agent within ten
days after the occurrence of such Termination Event, and if (y)
the Purchase Contract Agent shall be unable to obtain such
opinion within ten days after the occurrence of such Termination
Event or (z) the Collateral Agent shall continue, after delivery
of such opinion, to refuse to effectuate the release and Transfer
of all Pledged Debt Securities, the Treasury Portfolio or the
Pledged Treasury Securities, as the case may be, as provided in
this Section 4.3, then the Purchase Contract Agent shall within
fifteen days after the occurrence of such Termination Event
commence an action or proceeding in the court with jurisdiction
of the Company's case under the Bankruptcy Code seeking an order
requiring the Collateral Agent to effectuate the release and
transfer of all Pledged Debt Securities, the Treasury Portfolio
or of the Pledged Treasury Securities, as the case may be, as
provided by this Section 4.3 or (ii) commence an action or
proceeding like that described in subsection (i)(z) hereof within
ten days after the occurrence of such Termination Event.
Section 4.4. Cash Settlement. (a) Upon receipt by the
Collateral Agent of (i) a notice from the Purchase Contract Agent
promptly after the receipt by the Purchase Contract Agent of such
notice that a Holder of an Type A Securities or Type B Securities
has elected, in accordance with the procedures specified in
Section 5.4(a)(i) or (d)(i) of the Purchase Contract Agreement,
respectively, to settle its Purchase Contract with Cash and (ii)
payment by such Holder on or prior to 11:00 a.m., New York City
time, on the 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 immediately
available funds payable to or upon the order of the Company, then
the Collateral Agent shall, promptly invest any Cash received
from a Holder in connection with a Cash Settlement in Permitted
Investments. Upon receipt of the proceeds upon the maturity of
the Permitted Investments on the Purchase Contract Settlement
Date, the Collateral Agent shall pay the portion of such proceeds
and deliver any certified or cashiers' checks received, in an
aggregate amount equal to the Purchase Price, to the Company on
the Purchase Contract Settlement Date, and shall distribute any
funds in respect of the interest earned from the Permitted
Investments to the Purchase Contract Agent for payment to the
relevant Holders.
(b) If a Holder of Type A Securities fails to notify
the Purchase Contract Agent of its intention to make a Cash
Settlement in accordance with Section 5.4(a)(i) of the Purchase
Contract Agreement, such failure shall constitute an event of
default under the Purchase Contract Agreement and hereunder, and
the Holder shall be deemed to have consented to the disposition
of the pledged Debt Securities pursuant to the remarketing as
described in Section 5.4(b) of the Purchase Contract Agreement,
which is incorporated herein by reference. If a Holder of Type
A Securities does notify the Agent as provided in Section
5.4(a)(i) of the Purchase Contract Agreement of its intention to
make a Cash Settlement, but fails to make such payment as
required by Section 5.4(a)(ii) of the Purchase Contract
Agreement, the Debt Securities 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 Debt Securities at the direction of the Company
to retain or dispose of the Collateral in accordance with
applicable law. In addition, in the event of a Failed Remarketing
as described in Section 5.4(b) of the Purchase Contract
Agreement, such Failed Remarketing shall constitute an event of
default hereunder by such Holder and the Collateral Agent, for
the benefit of the Company, will also exercise its rights as a
secured party with respect to such Debt Securities at the
direction of the Company to retain or dispose of the Collateral
in accordance with applicable law.
(c) If a Holder of a Type B Securities fails to notify
the Purchase Contract Agent of such Holder's intention to make a
Cash Settlement in accordance with Section 5.4(d)(i) of the
Purchase Contract Agreement, or if a Holder of a Type B
Securities does notify the Agent as provided in paragraph
5.4(d)(i) of the Purchase Contract Agreement of its intention to
make a Cash Settlement, but fails to make such payment as
required by paragraph 5.4(d)(ii) of the Purchase Contract
Agreement, such failure shall constitute an event of default
hereunder by such Holder and upon the maturity of any Pledged
Treasury Securities or the Treasury Portfolio, if any, held by
the Collateral Agent on the Business Day immediately preceding
the Purchase Contract Settlement Date, the principal amount of
the Pledged Treasury Securities or the Treasury Portfolio
received by the Collateral Agent shall, upon written direction of
the Company, be invested promptly in Permitted Investments. On
the Purchase Contract Settlement Date, an amount equal to the
Purchase Price will be remitted to the Company as payment
thereof. In the event the sum of the proceeds from the related
Pledged Treasury Securities or 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 Type B Securities or
Type A Securities when received.
Section 4.5. Early Settlement. Upon written notice to
the Collateral Agent by the Purchase Contract Agent that one or
more Holders of Securities have elected to effect Early
Settlement of their respective obligations under the Purchase
Contracts forming a part of such Securities in accordance with
the terms of the Purchase Contracts and the Purchase Contract
Agreement (setting forth the number of such Purchase Contracts as
to which such Holders have elected to effect Early Settlement),
and that the Purchase Contract Agent has received from such
Holders, and paid to the Company as confirmed in writing by the
Company, the related Early Settlement Amounts pursuant to the
terms of the Purchase Contracts and the Purchase Contract
Agreement and that all conditions to such Early Settlement have
been satisfied, then the Collateral Agent shall release from the
Pledge, (a) Pledged Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio in the case of a
Holder of Type A Securities or (b) Pledged Treasury Securities in
the case of a Holder of Type B Securities in each case with a
principal amount equal to the product of (i) the Stated Amount
times (ii) the number of such Purchase Contracts as to which such
Holders have elected to effect Early Settlement and shall Transfer
all such Pledged Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio or Pledged Treasury
Securities, as the case may be, free and clear of the Pledge
created hereby, to the Purchase Contract Agent for the benefit of
the Holders.
Section 4.6. Application of Proceeds Settlement. (a)
In the event a Holder of Type A Securities (if a Tax Event
Redemption has not occurred) has not elected to make an effective
Cash Settlement by notifying the Purchase Contract Agent in the
manner provided for in paragraph 5.4(a)(i) in the Purchase
Contract Agreement or has not made an Early Settlement of the
Purchase Contract(s) underlying its Type A Securities, such
Holder shall be deemed to have elected to pay for the shares of
Common Stock to be issued under such Purchase Contract(s) from
the Proceeds of the related Pledged Debt Securities. The
Collateral Agent shall, by 10:00 a.m., New York City time, on the
fourth Business Day immediately preceding the Purchase Contract
Settlement Date, without any instruction from such Holder of Type
A Securities, present the related Pledged Debt Securities to the
Remarketing Agent for remarketing. Upon receiving such Pledged
Debt Securities, the Remarketing Agent, pursuant to the terms of
the Remarketing Agreement and the Remarketing Underwriting
Agreement, will use its reasonable efforts to remarket such
Pledged Debt Securities on such date at a price not less than
approximately 100.5% of the aggregate Value of such Pledged Debt
Securities, plus accrued and unpaid distributions (including
deferred distributions), if any, thereon. After deducting as the
Remarketing Fee an amount not exceeding 25 basis points (.25%) of
the aggregate Value of the Pledged Debt Securities from any
amount of such Proceeds in excess of the aggregate Value, plus
such accrued and unpaid distributions (including deferred
distributions) of the remarketed Pledged Debt Securities, the
Remarketing Agent will remit the entire amount of the Proceeds of
such remarketing to the Collateral Agent. On the Purchase
Contract Settlement Date, the Collateral Agent shall apply that
portion of the Proceeds from such remarketing equal to the
aggregate Value, plus such accrued and unpaid distributions
(including deferred distributions) of such Pledged Debt
Securities, to satisfy in full the obligations of such Holders of
Type A Securities to pay the Purchase Price to purchase the
Common Stock under the related Purchase Contracts. The remaining
portion of such Proceeds, if any, shall be distributed by the
Collateral Agent to the Purchase Contract Agent for payment to
the Holders. If the Remarketing Agent advises the Collateral
Agent in writing that it cannot remarket the related Pledged Debt
Securities of such Holders of Type A Securities at a price not
less than 100% of the aggregate Value of such Pledged Debt
Securities plus any accrued and unpaid distributions (including
deferred distributions), thus resulting in a Failed Remarketing
and an event of default under the Purchase Contract Agreement and
hereunder, the Collateral Agent, for the benefit of the Company
will, at the written direction of the Company, retain or dispose
of the Pledged Debt Securities in accordance with applicable law
and satisfy in full, from any such disposition or retention, such
Holder's obligation to pay the Purchase Price for the Common
Stock.
(b) In the event a Holder of Type B Securities or Type
A Securities (if a Tax Event Redemption has occurred) has not
made an Early Settlement of the Purchase Contract(s) underlying
its Type B Securities or Type A Securities, such Holder shall be
deemed to have elected to pay for the shares of Common Stock to
be issued under such Purchase Contract(s) from the Proceeds of
the related Pledged Treasury Securities or the Treasury
Portfolio, as the case may be. On the Business Day immediately
prior to the Purchase Contract Settlement Date, the Collateral
Agent shall, at the written direction of the Purchase Contract
Agent, invest the Cash proceeds of the maturing Pledged Treasury
Securities or the Treasury Portfolio, as the case may be, in
overnight Permitted Investments. Without receiving any
instruction from any such Holder of Type B Securities or Type A
Securities, the Collateral Agent shall apply the Proceeds of the
related Pledged Treasury Securities or Treasury Portfolio to the
settlement of such Purchase Contracts on the Purchase Contract
Settlement Date.
In the event the sum of the Proceeds from the related
Pledged Treasury Securities or Treasury Portfolio and the
investment earnings from the investment in overnight Permitted
Investments is in excess of the aggregate Purchase Price of the
Purchase Contracts being settled thereby, the Collateral Agent
shall distribute such excess, when received, to the Purchase
Contract Agent for the benefit of the Holders.
(c) Pursuant to the Remarketing Agreement and subject
to the terms of the Remarketing Underwriting Agreement, on or
prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, but no earlier than the
Payment Date immediately preceding the Purchase Contract
Settlement Date, holders of Separate Debt Securities may elect to
have their Separate Debt Securities remarketed by delivering
their Separate Debt Securities, together with a notice of such
election, substantially in the form of Exhibit C hereto, to the
Custodial Agent. The Custodial Agent will hold such Separate Debt
Securities in an account separate from the Collateral Account. A
holder of Separate Debt Securities electing to have its Separate
Debt Securities remarketed will also have the right to withdraw
such election by written notice to the Custodial Agent,
substantially in the form of Exhibit D hereto, on or prior to the
fifth Business Day immediately preceding the Purchase Contract
Settlement Date, upon which notice the Custodial Agent will
return such Separate Debt Securities to such holder. On the
fourth Business Day immediately preceding the Purchase Contract
Settlement Date, the Custodial Agent will deliver to the
Remarketing Agent for remarketing all separate Debt Securities
delivered to the Custodial Agent pursuant to this Section 4.6(c)
and not withdrawn pursuant to the terms hereof prior to such
date. The portion of the proceeds from such remarketing equal to
the aggregate Value of such Separate Debt Securities will
automatically be remitted by the Remarketing Agent to the
Custodial Agent for the benefit of the holders of such Separate
Debt Securities. In addition, after deducting as the Remarketing
Fee an amount not exceeding 25 basis points (.25%) of the Value
of the remarketed Separate Debt Securities, from any amount of
such proceeds in excess of the aggregate Value of the remarketed
Separate Debt Securities plus any accrued and unpaid
distributions (including deferred distributions, if any), the
Remarketing Agent will remit to the Custodial Agent the remaining
portion of the proceeds, if any, for the benefit of such holders.
If, despite using its reasonable efforts, the Remarketing Agent
advises the Custodial Agent in writing that it cannot remarket
the related Separate Debt Securities of such holders at a price
not less than 100% of the aggregate Value of such Separate Debt
Securities plus accrued and unpaid distributions (including
deferred distributions) and thus resulting in a Failed
Remarketing, the Remarketing Agent will promptly return such
Separate Debt Securities to the Custodial Agent for redelivery to
such holders.
Section 5. Voting Rights -- Debt Securities. The
Purchase Contract Agent may exercise, or refrain from exercising,
any and all voting and other consensual rights pertaining to the
Pledged Debt Securities or any part thereof for any purpose not
inconsistent with the terms of this Agreement and in accordance
with the terms of the Purchase Contract Agreement; provided, that
the Purchase Contract Agent shall not exercise or, as the case
may be, shall not refrain from exercising such right if, in the
judgment of the Company, such action would impair or otherwise
have a material adverse effect on the value of all or any of the
Pledged Debt Securities; and provided, further, that the Purchase
Contract Agent shall give the Company and the Collateral Agent at
least five days' prior written notice of the manner in which it
intends to exercise, or its reasons for refraining from
exercising, any such right. Upon receipt of any notices and other
communications in respect of any Pledged Debt Securities,
including notice of any meeting at which holders of Debt
Securities are entitled to vote or solicitation of consents,
waivers or proxies of holders of Debt Securities, the Collateral
Agent shall use reasonable efforts to send promptly to the
Purchase Contract Agent such notice or communication, and as soon
as reasonably practicable after receipt of a written request
therefor from the Purchase Contract Agent, execute and deliver to
the Purchase Contract Agent such proxies and other instruments in
respect of such Pledged Debt Securities (in form and substance
satisfactory to the Collateral Agent) as are prepared by the
Purchase Contract Agent with respect to the Pledged Debt
Securities.
Section 6. Rights and Remedies; Distribution of the
Debentures; Tax Event Redemption
Section 6.1. Rights and Remedies of the Collateral
Agent. (a) In addition to the rights and remedies specified in
Section 4.4 hereof or otherwise available at law or in equity,
after an event of default hereunder, the Collateral Agent shall
have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code
as in effect in the State of New York (the "Code") (whether or
not the Code is in effect in the jurisdiction where the rights
and remedies are asserted) and the TRADES Regulations and such
additional rights and remedies to which a secured party is
entitled under the laws in effect in any jurisdiction where any
rights and remedies hereunder may be asserted. Without limiting
the generality of the foregoing, such remedies may include, to
the extent permitted by applicable law, (i) retention of the
Pledged Debt Securities or other Collateral in full satisfaction
of the Holders' obligations under the Purchase Contracts or (ii)
sale of the Pledged Debt Securities or other Collateral in one or
more public or private sales.
(b) Without limiting any rights or powers otherwise
granted by this Agreement to the Collateral Agent, in the event
the Collateral Agent is unable to make payments to the Company on
account of the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the
Treasury Portfolio or on account of principal payments of any
Pledged Treasury Securities as provided in Section 3 hereof in
satisfaction of the obligations of the Holder of the Securities
of which such Pledged Treasury Securities, or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as
applicable, is a part under the related Purchase Contracts, the
inability to make such payments shall constitute an event of
default hereunder and the Collateral Agent shall have and may
exercise, with reference to such Pledged Treasury Securities, or
such appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable, and such obligations of such Holder,
any and all of the rights and remedies available to a secured
party under the Code and the TRADES Regulations after default by
a debtor, and as otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise
granted by this Agreement to the Collateral Agent, the Collateral
Agent is hereby irrevocably authorized to receive and collect all
payments of (i) the Stated Amount of, or cash distributions on,
the Pledged Debt Securities, (ii) the principal amount of the
Pledged Treasury Securities, or (iii) the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio, subject, in each case,
to the provisions of Section 3, and as otherwise granted herein.
(d) The Purchase Contract Agent and each Holder of
Securities, in the event such Holder becomes the Holder of Type B
Securities, agree that, from time to time, upon the written
request of the Collateral Agent, the Purchase Contract Agent or
such Holder shall execute and deliver such further documents and
do such other acts and things as the Collateral Agent may
reasonably request in order to maintain the Pledge, and the
perfection and priority thereof, and to confirm the rights of the
Collateral Agent hereunder. The Purchase Contract Agent shall
have no liability to any Holder for executing any documents or
taking any such acts requested by the Collateral Agent hereunder,
except for liability for its own negligent act, its own negligent
failure to act or its own willful misconduct.
Section 6.2. Tax Event Redemption. Upon the
occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax
Event Redemption Date with respect to the Applicable Principal
Amount of Debt Securities shall be delivered to the Collateral
Agent by the Trustee on or prior to 12:30 p.m., New York City
time, by check or wire transfer in immediately available funds at
such place and at such account as may be designated by the
Collateral Agent in exchange for the Pledged Debt Securities. In
the event the Collateral Agent receives such Redemption Price,
the Collateral Agent will, at the written direction of the
Company, apply an amount equal to the Redemption Amount of such
Redemption Price to purchase from the Quotation Agent, the
Treasury Portfolio and promptly remit the remaining portion of
such Redemption Price to the Purchase Contract Agent for payment
to the Holders of Type A Securities. The Collateral Agent shall
Transfer the Treasury Portfolio to the Collateral Account in the
manner specified herein for Pledged Debt Securities to secure the
obligation of all Holders of Type A Securities to purchase Common
Stock of the Company under the Purchase Contracts constituting a
part of such Type A Securities, in substitution for the Pledged
Debt Securities. Thereafter the Collateral Agent shall have such
security interests, rights and obligations with respect to the
Treasury Portfolio as it had in respect of the Pledged Debt
Securities, as provided in Sections 2, 3, 4, 5 and 6, and any
reference herein to the Pledged Debt Securities shall be deemed
to be a reference to such Treasury Portfolio.
Section 6.3. Substitutions. Whenever a Holder has the
right to substitute Treasury Securities, Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, for Collateral held by the
Collateral Agent, such substitution shall not constitute a
novation of the security interest created hereby.
Section 7. Representations and Warranties; Covenants.
Section 7.1. Representations and Warranties. The
Holders from time to time, acting through the Purchase Contract
Agent as their attorney-in-fact (it being understood that the
Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder),
hereby represent and warrant to the Collateral Agent, which
representations and warranties shall be deemed repeated on each
day a Holder Transfers Collateral that:
(a) such Holder has the power to grant
a security interest in and lien on
the Collateral;
(b) such Holder is the sole beneficial
owner of the Collateral and, in the
case of Collateral delivered in
physical form, is the sole holder
of such Collateral and is the sole
beneficial owner of, or has the
right to Transfer, the Collateral
it Transfers to the Collateral
Agent, free and clear of any
security interest, lien,
encumbrance, call, liability to pay
money or other restriction other
than the security interest and lien
granted under Section 2 hereof;
(c) upon the Transfer of the Collateral
to the Collateral Account, the
Collateral Agent, for the benefit
of the Company, will have a valid
and perfected first priority
security interest therein (assuming
that any central clearing operation
or any Intermediary or other entity
not within the control of the
Holder involved in the Transfer of
the Collateral, including the
Collateral Agent, gives the notices
and takes the action required of it
hereunder and under applicable law
for perfection of that interest and
assuming the establishment and
exercise of control pursuant to
Section 2.2 hereof); and
(d) the execution and performance by
the Holder of its obligations under
this Agreement will not result in
the creation of any security
interest, lien or other encumbrance
on the Collateral other than the
security interest and lien granted
under Section 2 hereof or violate
any provision of any existing law
or regulation applicable to it or
of any mortgage, charge, pledge,
indenture, contract or undertaking
to which it is a party or which is
binding on it or any of its assets.
Section 7.2. Covenants. The Holders from time to
time, acting through the Purchase Contract Agent as their
attorney-in-fact (it being understood that the Purchase Contract
Agent shall not be liable for any covenant made by or on behalf
of a Holder), hereby covenant to the Collateral Agent that for so
long as the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent
nor such Holders will create or
purport to create or allow to
subsist any mortgage, charge, lien,
pledge or any other security
interest whatsoever over the
Collateral or any part of it other
than pursuant to this Agreement;
and
(b) neither the Purchase Contract Agent
nor such Holders will sell or
otherwise dispose (or attempt to
dispose) of the Collateral or any
part of it except for the
beneficial interest therein,
subject to the pledge hereunder,
transferred in connection with the
Transfer of the Securities.
Section 8. The Collateral Agent. It is hereby agreed
as follows:
Section 8.1. Appointment, Powers and Immunities. The
Collateral Agent shall act as Agent for the Company hereunder
with such powers as are specifically vested in the Collateral
Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto. Each of the
Collateral Agent, the Custodial Agent and the Securities
Intermediary: (a) shall have no duties or responsibilities except
those expressly set forth in this Agreement and no implied
covenants or obligations shall be inferred from this Agreement
against any of them, nor shall any of them be bound by the
provisions of any agreement by any party hereto beyond the
specific terms hereof; (b) shall not be responsible for any
recitals contained in this Agreement, or in any certificate or
other document referred to or provided for in, or received by it
under, this Agreement, the Securities or the Purchase Contract
Agreement, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement
(other than as against the Collateral Agent), the Securities or
the Purchase Contract Agreement or any other document referred to
or provided for herein or therein or for any failure by the
Company or any other Person (except the Collateral Agent, the
Custodial Agent or the Securities Intermediary, as the case may
be) to perform any of its obligations hereunder or thereunder or
for the perfection, priority or, except as expressly required
hereby, maintenance of any security interest created hereunder;
(c) shall not be required to initiate or conduct any litigation
or collection proceedings hereunder (except in the case of the
Collateral Agent, pursuant to directions furnished under Section
8.2 hereof, subject to Section 8.6 hereof); (d) shall not be
responsible for any action taken or omitted to be taken by it
hereunder or under any other document or instrument referred to
or provided for herein or in connection herewith or therewith,
except for its own negligence or willful misconduct; and (e)
shall not be required to advise any party as to selling or
retaining, or taking or refraining from taking any action with
respect to, the Securities or other property deposited hereunder.
Subject to the foregoing, during the term of this Agreement, the
Collateral Agent shall take all reasonable action in connection
with the safekeeping and preservation of the Collateral
hereunder.
No provision of this Agreement shall require the
Collateral Agent, the Custodial Agent or the Securities
Intermediary to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties
hereunder. In no event shall the Collateral Agent, the Custodial
Agent or the Securities Intermediary be liable for any amount in
excess of the Value of the Collateral. Notwithstanding the
foregoing, the Collateral Agent, the Custodial Agent and
Securities Intermediary, each in its individual capacity, hereby
waive any right of setoff, bankers lien, liens or perfection
rights as securities intermediary or any counterclaim with
respect to any of the Collateral.
Section 8.2. Instructions of the Company. The Company
shall have the right, by one or more instruments in writing
executed and delivered to the Collateral Agent, the Custodial
Agent or the Securities Intermediary, as the case may be, to
direct the time, method and place of conducting any proceeding
for the realization of any right or remedy available to the
Collateral Agent, or of exercising any power conferred on the
Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be, or to direct the taking or
refraining from taking of any action authorized by this
Agreement; provided, however, that (i) such direction shall not
conflict with the provisions of any law or of this Agreement and
(ii) the Collateral Agent, the Custodial Agent and the Securities
Intermediary shall be adequately indemnified as provided herein.
Nothing in this Section 8.2 shall impair the right of the
Collateral Agent in its discretion to take any action or omit to
take any action which it deems proper and which is not
inconsistent with such direction.
Section 8.3. Reliance by Collateral Agent. Each of the
Securities Intermediary, the Custodial Agent and the Collateral
Agent shall be entitled conclusively to rely upon any
certification, order, judgment, opinion, notice or other
communication (including, without limitation, any thereof by
telephone, telecopy, telex or facsimile) believed by it to be
genuine and correct and to have been signed or sent by or on
behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein), and upon
advice and statements of legal counsel and other experts selected
by the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be. As to any matters not expressly
provided for by this Agreement, the Collateral Agent, the
Custodial Agent and the Securities Intermediary shall in all
cases be fully protected in acting, or in refraining from acting,
hereunder in accordance with instructions given by the Company in
accordance with this Agreement.
Section 8.4. Rights in Other Capacities. The
Collateral Agent, the Custodial Agent and the Securities
Intermediary and their affiliates may (without having to account
therefor to the Company) accept deposits from, lend money to,
make their investments in and generally engage in any kind of
banking, trust or other business with the Purchase Contract Agent
and any Holder of Securities (and any of their respective
subsidiaries or affiliates) as if it were not acting as the
Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be, and the Collateral Agent, the
Custodial Agent and the Securities Intermediary and their
affiliates may accept fees and other consideration from the
Purchase Contract Agent and any Holder of Securities without
having to account for the same to the Company; provided that each
of the Securities Intermediary, the Custodial Agent and the
Collateral Agent covenants and agrees with the Company that it
shall not accept, receive or permit there to be created in favor
of itself and shall take no affirmative action to permit there to
be created in favor of any other Person, any security interest,
lien or other encumbrance of any kind in or upon the Collateral.
Section 8.5. Non-Reliance on Collateral Agent. None of
the Securities Intermediary, the Custodial Agent or the
Collateral Agent shall be required to keep itself informed as to
the performance or observance by the Purchase Contract Agent or
any Holder of Securities of this Agreement, the Purchase Contract
Agreement, the Securities or any other document referred to or
provided for herein or therein or to inspect the properties or
books of the Purchase Contract Agent or any Holder of Securities.
The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall not have any duty or responsibility to provide
the Company with any credit or other information concerning the
affairs, financial condition or business of the Purchase Contract
Agent or any Holder of Securities (or any of their respective
affiliates) that may come into the possession of the Collateral
Agent, the Custodial Agent or the Securities Intermediary or any
of their respective affiliates.
Section 8.6. Compensation and Indemnity. The Company
agrees: (i) to pay each of the Collateral Agent and the Custodial
Agent from time to time such compensation as shall be agreed in
writing between the Company and the Collateral Agent or the
Custodial Agent, as the case may be, for all services rendered by
each of them hereunder and (ii) to indemnify the Collateral
Agent, the Custodial Agent and the Securities Intermediary for,
and to hold each of them harmless from and against, any loss,
liability or reasonable out-of-pocket expense incurred without
negligence, willful misconduct or bad faith on its part, arising
out of or in connection with the acceptance or administration of
its powers and duties under this Agreement, including the
reasonable out-of-pocket costs and expenses (including reasonable
fees and expenses of counsel) of defending itself against any
claim or liability in connection with the exercise or performance
of such powers and duties.
Section 8.7. Failure to Act. In the event of any
ambiguity in the provisions of this Agreement or any dispute
between or conflicting claims by or among the parties hereto or
any other Person with respect to any funds or property deposited
hereunder, the Collateral Agent and the Custodial Agent shall be
entitled, after prompt notice to the Company and the Purchase
Contract Agent, at its sole option, to refuse to comply with any
and all claims, demands or instructions with respect to such
property or funds so long as such dispute or conflict shall
continue, and neither the Collateral Agent nor the Custodial
Agent shall be or become liable in any way to any of the parties
hereto for its failure or refusal to comply with such conflicting
claims, demands or instructions. The Collateral Agent and the
Custodial Agent shall be entitled to refuse to act until either
(i) such conflicting or adverse claims or demands shall have been
finally determined by a court of competent jurisdiction or
settled by agreement between the conflicting parties as evidenced
in a writing, satisfactory to the Collateral Agent or the
Custodial Agent, as the case may be, or (ii) the Collateral Agent
or the Custodial Agent, as the case may be, shall have received
security or an indemnity satisfactory to the Collateral Agent or
the Custodial Agent, as the case may be, sufficient to save the
Collateral Agent or the Custodial Agent, as the case may be,
harmless from and against any and all loss, liability or
reasonable out-of-pocket expense which the Collateral Agent or
the Custodial Agent, as the case may be, may incur by reason of
its acting. The Collateral Agent or the Custodial Agent may in
addition elect to commence an interpleader action or seek other
judicial relief or orders as the Collateral Agent or the
Custodial Agent, as the case may be, may deem necessary.
Notwithstanding anything contained herein to the contrary,
neither the Collateral Agent nor the Custodial Agent shall be
required to take any action that is in its opinion contrary to
law or to the terms of this Agreement, or which would in its
opinion subject it or any of its officers, employees or directors
to liability.
Section 8.8. Resignation of Collateral Agent. Subject
to the appointment and acceptance of a successor Collateral Agent
or Custodial Agent as provided below, (a) the Collateral Agent
and the Custodial Agent may resign at any time by giving notice
thereof to the Company and the Purchase Contract Agent as
attorney-in-fact for the Holders of Securities, (b) the
Collateral Agent and the Custodial Agent may be removed at any
time by the Company and (c) if the Collateral Agent or the
Custodial Agent fails to perform any of its material obligations
hereunder in any material respect for a period of not less than
20 days after receiving written notice of such failure by the
Purchase Contract Agent and such failure shall be continuing, the
Collateral Agent or the Custodial Agent may be removed by the
Purchase Contract Agent. The Purchase Contract Agent shall
promptly notify the Company of any removal of the Collateral
Agent pursuant to clause (c) of the immediately preceding
sentence. Upon any such resignation or removal, the Company shall
have the right to appoint a successor Collateral Agent or
Custodial Agent, as the case may be. If no successor Collateral
Agent or Custodial Agent, as the case may be, shall have been so
appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's or Custodial Agent's giving
of notice of resignation or such removal, then the retiring
Collateral Agent or Custodial Agent, as the case may be, may
petition any court of competent jurisdiction for the appointment
of a successor Collateral Agent or Custodial Agent, as the case
may be. Each of the Collateral Agent and the Custodial Agent
shall be a bank which has an office in New York, New York with a
combined capital and surplus of at least $75,000,000. Upon the
acceptance of any appointment as Collateral Agent or Custodial
Agent, as the case may be, hereunder by a successor Collateral
Agent or Custodial Agent, as the case may be, such successor
shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Collateral Agent or
Custodial Agent, as the case may be, and the retiring Collateral
Agent or Custodial Agent, as the case may be, shall take all
appropriate action to transfer any money and property held by it
hereunder (including the Collateral) to such successor. The
retiring Collateral Agent or Custodial Agent shall, upon such
succession, be discharged from its duties and obligations as
Collateral Agent or Custodial Agent hereunder. After any retiring
Collateral Agent's or Custodial Agent's resignation hereunder as
Collateral Agent or Custodial Agent, the provisions of this
Section 8 shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was
acting as the Collateral Agent or Custodial Agent. Any
resignation or removal of the Collateral Agent hereunder shall be
deemed for all purposes of this Agreement as the simultaneous
resignation or removal of the Custodial Agent and the Securities
Intermediary.
Section 8.9. Right to Appoint Agent or Advisor. The
Collateral Agent shall have the right to appoint agents or
advisors in connection with any of its duties hereunder, and the
Collateral Agent shall not be liable for any action taken or
omitted by, or in reliance upon the advice of, such agents or
advisors selected in good faith. The appointment of agents
pursuant to this Section 8.9 shall be subject to prior consent of
the Company, which consent shall not be unreasonably withheld.
Section 8.10. Survival. The provisions of this Section
8 shall survive termination of this Agreement and the resignation
or removal of the Collateral Agent or the Custodial Agent.
Section 8.11. Exculpation. Anything in this Agreement
to the contrary notwithstanding, in no event shall any of the
Collateral Agent, the Custodial Agent or the Securities
Intermediary or their officers, employees or agents be liable
under this Agreement to any third party for indirect, special,
punitive, or consequential loss or damage of any kind whatsoever,
including lost profits, whether or not the likelihood of such
loss or damage was known to the Collateral Agent, the Custodial
Agent or the Securities Intermediary, or any of them, incurred
without any act or deed that is found to be attributable to gross
negligence or willful misconduct on the part of the Collateral
Agent, the Custodial Agent or the Securities Intermediary.
Section 9. Amendment.
Section 9.1. Amendment Without Consent of Holders.
Without the consent of any Holders or the holders of any Separate
Debt Securities, the Company, the Collateral Agent, the Custodial
Agent, the Securities Intermediary and the Purchase Contract
Agent, at any time and from time to time, may amend this
Agreement, in form satisfactory to the Company, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent, for any of the following purposes:
(1) to evidence the succession of another Person
to the Company, and the assumption by any such
successor of the covenants of the Company; or
(2) 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 so long as such
covenants or such surrender do not adversely affect the
validity, perfection or priority of the security
interests granted or created hereunder; or
(3) to evidence and provide for the acceptance of
appointment hereunder by a successor Collateral Agent,
Securities Intermediary or Purchase Contract Agent; or
(4) to cure any ambiguity, to correct or
supplement any provisions herein which may be
inconsistent with any other such 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.
Section 9.2. Amendment with Consent of Holders. With
the consent of the Holders of not less than a majority of the
Purchase Contracts at the time outstanding, by Act of said
Holders delivered to the Company, the Purchase Contract Agent or
the Collateral Agent, as the case may be, the Company, when duly
authorized, the Purchase Contract Agent, the Collateral Agent,
the Custodial Agent and the Securities Intermediary may amend
this Agreement for the purpose of modifying in any manner the
provisions of this Agreement or the rights of the Holders in
respect of the Securities; provided, however, that no such
supplemental agreement shall, without the consent of the Holder
of each Outstanding Security adversely affected thereby,
(1) change the amount or type of Collateral
underlying a Security (except for the rights of holders
of Type A Securities to substitute the Treasury
Securities for the Pledged Debt Securities or the
appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, or the rights
of Holders of Type B Securities to substitute Debt
Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as applicable, for
the Pledged Treasury Securities), impair the right of
the Holder of any Security to receive distributions on
the underlying Collateral or otherwise adversely affect
the Holder's rights in or to such Collateral; or
(2) otherwise effect any action that would require
the consent of the Holder of each Outstanding Security
affected thereby pursuant to the Purchase Contract
Agreement if such action were effected by an agreement
supplemental thereto; or
(3) reduce the percentage of Purchase Contracts
the consent of whose Holders is required for any such
amendment.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed amendment,
but it shall be sufficient if such Act shall approve the
substance thereof.
Section 9.3. Execution of Amendments. In executing any
amendment permitted by this Section, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent shall be entitled to receive and (subject to
Section 6.1 hereof, with respect to the Collateral Agent, and
Section 7.1 of the Purchase Contract Agreement, with respect to
the Purchase Contract Agent) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that
all conditions precedent, if any, to the execution and delivery
of such amendment have been satisfied.
Section 9.4. Effect of Amendments. Upon the execution
of any amendment under this Section 9, this Agreement shall be
modified in accordance therewith, and such amendment 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 under the Purchase Contract
Agreement shall be bound thereby.
Section 9.5. Reference to Amendments. Security
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any amendment pursuant to this
Section may, and shall if required by the Collateral Agent or the
Purchase Contract Agent, bear a notation in form approved by the
Purchase Contract Agent and the Collateral Agent as to any matter
provided for in such amendment. If the Company shall so
determine, new Security Certificates so modified as to conform,
in the opinion of the Collateral Agent, the Purchase Contract
Agent and the Company, to any such amendment may be prepared and
executed by the Company and authenticated, executed on behalf of
the Holders and delivered by the Purchase Contract Agent in
accordance with the Purchase Contract Agreement in exchange for
Outstanding Security Certificates.
Section 10. Miscellaneous.
Section 10.1. No Waiver. No failure on the part of the
Collateral Agent or any of its agents to exercise, and no course
of dealing with respect to, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the
Collateral Agent or any of its agents of any right, power or
remedy hereunder preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. The remedies
herein are cumulative and are not exclusive of any remedies
provided by law.
Section 10.2. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. Without limiting the foregoing, the above
choice of law is expressly agreed to by the Company, the
Securities Intermediary, the Custodial Agent, the Collateral
Agent and the Holders from time to time acting through the
Purchase Contract Agent, as their attorney-in-fact, in connection
with the establishment and maintenance of the Collateral Account.
The Company, the Collateral Agent and the Holders from time to
time of the Securities, acting through the Purchase Contract
Agent as their attorney-in-fact, hereby submit to the
nonexclusive jurisdiction of the United States District Court for
the Southern District of New York and of any New York state court
sitting in New York City for the purposes of all legal
proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. The Company, the Collateral
Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact,
irrevocably waive, to the fullest extent permitted by applicable
law, any objection which they may now or hereafter have to the
laying of the venue of any such proceeding brought in such a
court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
Section 10.3. Notices. All notices, requests, consents
and other communications provided for herein (including, without
limitation, any modifications of, or waivers or consents under,
this Agreement) shall be given or made in writing (including,
without limitation, by telecopy) delivered to the intended
recipient at the "Address for Notices" specified below its name
on the signature pages hereof or, as to any party, at such other
address as shall be designated by such party in a notice to the
other parties. Except as otherwise provided in this Agreement,
all such communications shall be deemed to have been duly given
when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or
addressed as aforesaid.
Section 10.4. Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the respective
successors and assigns of the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent, and the Holders from time to time of the
Securities, by their acceptance of the same, shall be deemed to
have agreed to be bound by the provisions hereof and to have
ratified the agreements of, and the grant of the Pledge hereunder
by, the Purchase Contract Agent.
Section 10.5. Counterparts. This Agreement may be
executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such
counterpart.
Section 10.6. Severability. If any provision hereof is
invalid and unenforceable in any jurisdiction, then, to the
fullest extent permitted by law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions
of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.
Section 10.7. Expenses, etc. The Company agrees to
reimburse the Collateral Agent and the Custodial Agent for: (a)
all reasonable out-of-pocket costs and expenses of the Collateral
Agent and the Custodial Agent (including, without limitation, the
reasonable fees and expenses of the necessary services of a
Securities Intermediary and of counsel to the Collateral Agent
and the Custodial Agent), in connection with (i) the negotiation,
preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any
of the terms of this Agreement; (b) all reasonable costs and
expenses of the Collateral Agent (including, without limitation,
reasonable fees and expenses of counsel) in connection with (i)
any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its
obligations under the Purchase Contracts forming a part of the
Securities and (ii) the enforcement of this Section 10.7; and (c)
all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue
authority in respect of this Agreement or any other document
referred to herein and all costs, expenses, taxes, assessments
and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest
contemplated hereby.
Section 10.8. Security Interest Absolute. All rights
of the Collateral Agent and security interests hereunder, and all
obligations of the Holders from time to time hereunder, shall be
absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any
provision of the Purchase Contracts or the Securities
or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of
payment of, or any other term of, or any
increase in the amount of, all or any of the
obligations of Holders of Securities under the related
Purchase Contracts, or any other amendment or waiver of
any term of, or any consent to any departure from any
requirement of, the Purchase Contract Agreement or any
Purchase Contract or any other agreement or instrument
relating thereto; or
(c) any other circumstance which might otherwise
constitute a defense available to, or discharge of, a
borrower, a guarantor or a pledgor.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
TEXAS UTILITIES COMPANY
By:
------------------------------
Name:
Title:
Address for Notices:
Texas Utilities Company
1601 Bryan Street
Dallas, Texas 75201
Attention: Treasurer
Telecopy:
,
-------------------------
as Purchase Contract Agent and as
attorney-in-fact of the Holders from
time to time of the Securities
By:
------------------------------
Name:
Title:
Address for Notices:
,
------------------------------
as Collateral Agent, Custodial
Agent and as Securities Intermediary
By:
----------------------------
Name:
Title:
Address for Notices:
<PAGE>
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
Re: Securities of Texas Utilities Company (the "Company")
We hereby notify you in accordance with Section [4.1]
[4.2] of the Pledge Agreement, dated as of , 1998, (the
----------
"Pledge Agreement") among the Company, yourselves, as Collateral
Agent, Custodial Agent and Securities Intermediary and ourselves,
as Purchase Contract Agent and as attorney-in-fact for the
holders of [Type A Securities] [Type B Securities] from time to
time, that the holder of Securities listed below (the "Holder")
has elected to substitute [$ principal amount of Treasury
-----
Securities] [$ principal amount of Debt Securities or
-------
Stated Amount of the appropriate Applicable Ownership Interest of
the Treasury Portfolio] in exchange for an equal Value of
[Pledged Debt Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio] [Pledged Treasury Securities]
held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred
[Treasury Securities] [Debt Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio] to you,
as Collateral Agent. We hereby instruct you, upon receipt of such
[Pledged Treasury Securities] [Pledged Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio], to release the [Debt Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio]
[Treasury Securities] related to such [Type A Securities] [Type B
Securities] to us in accordance with the Holder's instructions.
Capitalized terms used herein but not defined shall have the
meaning set forth in the Pledge Agreement.
Date:
-------------------- ---------------------------------
By:
-----------------------------
Name:
Title:
Signature Guarantee:
---------
Please print name and address of Registered Holder electing to
substitute [Treasury Securities] [Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio] for the [Pledged Debt Securities or the Treasury
Portfolio] [Pledged Treasury Securities]:
________________________ __________________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
--------------------------------
--------------------------------
--------------------------------
<PAGE>
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
Re: Securities of Texas Utilities Company (the "Company")
The undersigned Holder hereby notifies you that it has
delivered to , as Collateral Agent,
-------------------------
[$ principal amount of Treasury Securities] [$
------- ---------
principal amount of Debt Securities or Stated Amount of the
appropriate Applicable Ownership Interest of the Treasury
Portfolio] in exchange for an equal Value of [Pledged Debt
Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio] [Pledged Treasury Securities] held
by the Collateral Agent, in accordance with Section 4.1 of the
Pledge Agreement, dated , 1998 (the "Pledge Agreement"),
--------
between you, the Company and the Collateral Agent. The undersigned
Holder hereby instructs you to instruct the Collateral Agent to
release to you on behalf of the undersigned Holder the [Pledged
Debt Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio] [Pledged Treasury Securities] related
to such [Type A Securities] [Type B Securities]. Capitalized
terms used herein but not defined shall have the meaning set
forth in the Pledge Agreement.
Dated:
----------------------- ---------------------------
Signature
Signature Guarantee:
--------
Please print name and address of Registered Holder:
-------------------------- ---------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
-------------------------------
-------------------------------
-------------------------------
<PAGE>
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
Re: Securities of Texas Utilities Company (the "Company")
The undersigned hereby notifies you in accordance with
Section 4.6(c) of the Pledge Agreement, dated as of ,
--------
1998 (the "Pledge Agreement"), among the Company, yourselves, as
Collateral Agent, Securities Intermediary and Custodial Agent,
and , as Purchase Contract Agent and as
--------------
attorney-in-fact for the Holders of Type A Securities and Type B
Securities from time to time, that the undersigned elects to
deliver $ principal amount of Debt Securities for
--------
delivery to the Remarketing Agent on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date for
remarketing pursuant to Section 4.6(c) of the Pledge Agreement.
The undersigned will, upon request of the Remarketing Agent,
execute and deliver any additional documents deemed by the
Remarketing Agent or by the Company to be necessary or desirable
to complete the sale, assignment and transfer of the Debt
Securities tendered hereby.
The undersigned hereby instructs you, upon receipt of
the Proceeds of such remarketing from the Remarketing Agent to
deliver such Proceeds to the undersigned in accordance with the
instructions indicated herein under "A. Payment Instructions".
The undersigned hereby instructs you, in the event of Failed
Remarketing, upon receipt of the Debt Securities tendered
herewith from the Remarketing Agent, to deliver such Debt
Securities to the person(s) and the address(es) indicated herein
under "B. Delivery Instructions."
With this notice, the undersigned hereby (i) represents
and warrants that the undersigned has full power and authority to
tender, sell, assign and transfer the Debt Securities tendered
hereby and that the undersigned is the record owner of any Debt
Securities tendered herewith in physical form or a participant in
The Depositary Trust Company ("DTC") and the beneficial owner of
any Debt Securities tendered herewith by book-entry transfer to
your account at DTC and (ii) agrees to be bound by the terms and
conditions of Section 4.6(c) of the Pledge Agreement. Capitalized
terms used herein but not defined shall have the meaning set
forth in the Pledge Agreement.
Date:___________________________ _____________________________
By:
--------------------------
Name:
Title:
Signature Guarantee:
------
Please print name and address:
-------------------------- -----------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
---------------------------------
---------------------------------
---------------------------------
A. PAYMENT INSTRUCTIONS B. DELIVERY INSTRUCTIONS
Proceeds of the remarketing In the event of a Failed
should be paid by check in the Remarketing, Debt
name of the person(s) set Securities which are in
forth below and mailed to the physical form should be
address set forth below. delivered to the person(s)
set forth below and mailed
Name(s) to the address set forth
below.
------------------------------
(Please Print) Name(s)
Address ---------------------------
(Please Print)
------------------------------
Address
------------------------------
(Please Print) ---------------------------
---------------------------
------------------------------ (Please Print)
(Zip Code)
---------------------------
------------------------------ (Zip Code)
(Tax Identification or Social
Security Number)
---------------------------
(Tax Identification or
Social Security Number)
In the event of a Failed
Remarketing, Debt
Securities which are in
book-entry form should be
credited to the account at
The Depositary Trust
Company set forth below.
----------------------
DTC Account Number
Name of Account
Party:
---------------------
<PAGE>
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
Re: Securities of Texas Utilities Company (the "Company")
The undersigned hereby notifies you in accordance with
Section 4.6(c) of the Pledge Agreement, dated as of ,
---------
1998 (the "Pledge Agreement") among the Company, yourselves, as
Collateral Agent, Securities Intermediary and Custodial Agent and
, as Purchase Contract Agent
and as attorney-in-fact for the Holders of Type A Securities and
Type B Securities from time to time, that the undersigned elects
to withdraw the $ principal amount of Debt Securities
-----
delivered to the Custodial Agent on for remarketing
------------
pursuant to Section 4.6(c) of the Pledge Agreement. The
undersigned hereby instructs you to return such Debt Securities
to the undersigned in accordance with the undersigned's
instructions. With this notice, the Undersigned hereby agrees to
be bound by the terms and conditions of Section 4.6(c) of the
Pledge Agreement. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.
Date:
--------------------- ----------------------------------
By:
-------------------------------
Name:
Title:
Signature Guarantee:___________
Please print name and address:
-------------------------- -------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
-----------------------------
-----------------------------
-----------------------------
FORM OF REMARKETING AGREEMENT
FORM OF REMARKETING AGREEMENT, dated as of ,
-------- --
1998 (the "Remarketing Agreement") by and between Texas
Utilities Company, a Texas corporation (the "Company"), and
-----
not individually but solely as Purchase Contract Agent and as
attorney-in-fact of the holders of Purchase Contracts (each as
defined in the Purchase Contract Agreement (as defined herein)),
and ,
--------------------------------------- --------------------
(the "Remarketing Agent").
WITNESSETH:
WHEREAS, the Company will issue an aggregate Stated
Amount $ of its Securities (the "Securities") under the
----------
Purchase Contract Agreement, dated as of , 1998, by and
------ --
between the Purchase Contract Agent and the Company (the
"Purchase Contract Agreement"); and
WHEREAS, the Securities will initially consist of
units referred to as "Type A Securities," each such
-----------
security consisting of a % Series D Senior Note due
--- ----------
issued by the Company in the principal amount of $ (a "Debt
Security") and a Purchase Contract issued by the Company
("Purchase Contract") pursuant to the Purchase Contract Agreement
and units referred to as "Type B Securities," each such
---------
security consisting of certain U.S. Treasury Securities and a
Purchase Contract.
WHEREAS, the Debt Securities will be pledged pursuant
to the Pledge Agreement (the "Pledge Agreement"), dated as of
----
, 1998, by and between the Company, , as
-- ---------------------
Collateral Agent, Securities Intermediary and Custodial Agent
(the "Collateral Agent") and the Purchase Contract Agent, to
secure a Type A Security holder's obligations under the related
Purchase Contract on the Purchase Contract Settlement Date; and
WHEREAS, the Debt Securities of such holders electing
to have their Debt Securities that are not pledged pursuant to
the Pledge Agreement remarketed, or of such Type A Security
holders who have elected not to settle the Purchase Contracts
related to their Type A Security from the proceeds of a Cash
Settlement and who have not early settled their Purchase
Contracts, will be remarketed by the Remarketing Agent on the
third Business Day immediately preceding the Purchase Contract
Settlement Date; and
WHEREAS, the applicable interest rate on the Debt
Securities that remain outstanding on and after the Purchase
Contract Settlement Date will be reset on the third Business Day
immediately preceding the Purchase Contract Settlement Date, to
the Reset Rate to be determined by the Reset Agent as the rate
that such Debt Securities should bear in order to have an
approximate market value of 100.5% of the aggregate principal
amount of the Debt Securities on the third Business Day
immediately preceding the Purchase Contract Settlement Date,
provided that in the determination of such Reset Rate, the
Company may limit the Reset Spread (a component of the Reset
Rate) to be no higher than 200 basis points (2%); and
WHEREAS, the Company has requested
-------------------
(" ") to act as the Reset Agent and as the Remarketing
-------------
Agent and as such to perform the services described herein; and
WHEREAS, is willing to act as Reset Agent
-------------
and Remarketing Agent and as such to perform such duties on the
terms and conditions expressly set forth herein;
NOW, THEREFORE, for and in consideration of the
covenants herein made, and subject to the conditions herein set
forth, the parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used and not
defined in this Agreement shall have the meanings assigned to
them in the Purchase Contract Agreement or, if not therein
stated, the Pledge Agreement.
Section 2. Appointment and Obligations of Reset Agent
and Remarketing Agent. The Company hereby appoints
--------------,
and hereby accepts such appointment, (i) as the Reset
---------
Agent to determine, and in consultation with the Company and in
the manner provided for in the Indenture, the Reset Rate, that in
the opinion of the Reset Agent, will, when applied to the Debt
Securities, enable the Debt Securities, to have an approximate
market value of approximately 100.5% of the aggregate principal
amount of such Debt Securities, provided that the Company may
limit such Reset Rate to be no higher than the rate on the
Two-Year Benchmark Treasury plus 200 basis points (2%), and (ii)
as the exclusive Remarketing Agent to remarket the Debt
Securities (a) of Debt Securities holders electing to have their
Debt Securities remarketed, or (b) of Type A Security holders who
have not early settled the related Purchase Contracts and have
failed to notify the Purchase Contract Agent, on or prior to the
fifth Business Day immediately preceding the Purchase Contract
Settlement Date, of their intention to settle the related
Purchase Contracts through Cash Settlement, for settlement on the
Purchase Contract Settlement Date, pursuant to the Remarketing
Underwriting Agreement attached hereto as Exhibit A, among the
Company, the Purchase Contract Agent and the Remarketing Agent
(with such changes as the Company, the Purchase Contract Agent
and the Remarketing Agent may agree upon, it being understood
that changes may be necessary in the representations, warranties,
covenants and other provisions of the Remarketing Underwriting
Agreement due to changes in law or facts and circumstances).
Pursuant to the Remarketing Underwriting Agreement, the
Remarketing Agent, either as the sole remarketing underwriter or
as the representative of a syndicate including the Remarketing
Agent and one or more other remarketing underwriters designated
by the Remarketing Agent, will agree, subject to the terms and
conditions set forth therein, that the Remarketing Agent and any
such other remarketing underwriters will purchase, severally, the
Debt Securities to be sold by the holder or holders of Debt
Securities or Type A Securities on the third Business Day
immediately preceding the Purchase Contract Settlement Date and
will use their reasonable efforts to remarket such Debt
Securities (such purchase and remarketing being hereinafter
referred to as the "Remarketing"), at a price of approximately
100.5% of the aggregate principal amount of such Debt Securities
plus any accrued and unpaid interest (including any deferred
interest). Notwithstanding the preceding sentence, the
Remarketing Agent shall not remarket any Debt Securities for a
price less than 100% of the aggregate principal amount of such
Debt Securities, plus accrued and unpaid interest and shall not
be required to purchase any Debt Securities not remarketed. The
proceeds of such remarketing shall be paid to the Collateral
Agent in accordance with Section 4.6 of the Pledge Agreement and
Section 5.4 of the Purchase Contract Agreement (both of which
Sections are incorporated herein by reference).
Section 3. Fees. With respect to the Remarketing, the
Remarketing Agent shall retain as Remarketing Fee an amount not
exceeding 25 basis points (.25%), of the aggregate principal
amount of the remarketed securities from any amount received in
connection with such Remarketing in excess of aggregate principal
amount of such remarketed Debt Securities plus any accrued and
unpaid interest (including any deferred interest). In addition,
the Reset Agent shall receive from the Company a reasonable and
customary fee for acting as the Reset Agent (the "Reset Agent
Fee"); provided, however, that if the Remarketing Agent shall
also act as the Reset Agent, then the Reset Agent shall not be
entitled to receive any such Reset Agent Fee. Payment of such
Reset Agent Fee shall be made by the Company on the third
Business Day immediately preceding the Purchase Contract
Settlement Date in immediately available funds or, upon the
instructions of the Reset Agent, by certified or official bank
check or checks or by wire transfer.
Section 4. Replacement and Resignation of Remarketing
Agent and Reset Agent. (a) The Company may in its absolute
discretion replace as the Remarketing Agent and/or as
-------------
the Reset Agent in its capacity hereunder by giving notice prior
to 3:00 p.m., New York City time, on the eleventh Business Day
immediately prior to the Purchase Contract Settlement Date. Any
such replacement shall become effective upon the Company's
appointment of a successor to perform the services that would
otherwise be performed hereunder by the Remarketing Agent and/or
the Reset Agent. Upon providing such notice, the Company shall
use all reasonable efforts to appoint such a successor and to
enter into a remarketing agreement with such successor as soon as
reasonably practicable.
(b) may resign at any time and be
-------------
discharged from its duties and obligations hereunder as the
Remarketing Agent and/or as the Reset Agent by giving notice
prior to 3:00 p.m., New York City time, on the eleventh Business
Day immediately prior to the Purchase Contract Settlement Date.
Any such resignation shall become effective upon the Company's
appointment of a successor to perform the services that would
otherwise be performed hereunder by the Remarketing Agent and/or
the Reset Agent. Upon receiving notice from the Remarketing Agent
and/or the Reset Agent that it wishes to resign hereunder, the
Company shall appoint such a successor and enter into a
remarketing agreement with it as soon as reasonably practicable.
Section 5. Dealing in the Securities. The Remarketing
Agent, when acting hereunder or under the Remarketing
Underwriting Agreement or acting in its individual or any other
capacity, may, to the extent permitted by law, buy, sell, hold or
deal in any of the Debt Securities. With respect to any Debt
Securities owned by it, the Remarketing Agent may exercise any
vote or join in any action with like effect as if it did not act
in any capacity hereunder. The Remarketing Agent, in its
individual capacity, either as principal or agent, may also
engage in or have an interest in any financial or other
transaction with the Company as freely as if it did not act in
any capacity hereunder.
Section 6. Registration Statement and Prospectus. In
connection with the Remarketing, if and to the extent required
(in the opinion of counsel for either the Remarketing Agent or
the Company) by applicable law, regulations or interpretations in
effect at the time of such Remarketing, the Company shall use its
reasonable efforts to have a registration statement relating to
the Debt Securities effective under the Securities Act of 1933 by
the third Business Day immediately preceding the Purchase
Contract Settlement Date, shall furnish a current prospectus
and/or prospectus supplement to be used in such Remarketing by
the remarketing underwriter or underwriters under the Remarketing
Underwriting Agreement, and shall pay all expenses relating
thereto.
Section 7. Conditions to the Remarketing Agent's
Obligations. (a) The obligations of the Remarketing Agent and any
other remarketing underwriters to purchase and remarket the Debt
Securities, as the case may be, shall be subject to the terms and
conditions of the Remarketing Underwriting Agreement.
(b) If at any time during the term of this Agreement,
any Event of Default (as defined therein) under the Indenture, or
event that with the passage of time or the giving of notice or
both would become an Event of Default under the Indenture, has
occurred and is continuing, then the obligations and duties of
the Remarketing Agent under this Agreement shall be suspended
until such default or event has been cured. The Company will
cause the Trustee to give the Remarketing Agent notice of all
such defaults and events of which the Trustee is aware.
Section 8. Termination of Remarketing Agreement. This
Agreement shall terminate as to the Remarketing Agent on the
effective date of its replacement pursuant to Section 4(a) hereof
or pursuant to Section 4(b) hereof. Notwithstanding any such
termination, the obligations set forth in Section 3 hereof shall
survive and remain in full force and effect until all amounts
payable under said Section 3 shall have been paid in full.
Section 9. Remarketing Agent's Performance; Duty of
Care. The duties and obligations of the Remarketing Agent
hereunder shall be determined solely by the express provisions of
this Agreement and the Remarketing Underwriting Agreement.
Section 10. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York.
Section 11. Term of Agreement. Unless otherwise
terminated in accordance with the provisions hereof and except as
otherwise provided herein, this Agreement shall remain in full
force and effect from the date hereof until the first day
thereafter on which no Debt Securities are outstanding.
Section 12. Successors and Assigns. The rights and
obligations of the Company hereunder may not be assigned or
delegated to any other person without the prior written consent
of as the Remarketing Agent and the Purchase
--------------------
Contract Agent. The rights and obligations of as the
-------------
Remarketing Agent and/or as the Reset Agent hereunder may not be
assigned or delegated to any other person without the prior
written consent of the Company. This Agreement shall inure to the
benefit of and be binding upon the Company and as the
------------
Remarketing Agent and/or as the Reset Agent and their respective
successors and assigns. The terms "successors" and "assigns"
shall not include any purchaser of Securities merely because of
such purchase.
Section 13. Headings. Section headings have been
inserted in this Agreement as a matter of convenience of
reference only, and it is agreed that such section headings are
not a part of this Agreement and will not be used in the
interpretation of any provision of this Agreement.
Section 14. Severability. If any provision of this
Agreement shall be held or deemed to be or shall, in fact, be
invalid, inoperative or unenforceable as applied in any
particular case in any or all jurisdictions because it conflicts
with any provisions of any constitution, statute, rule or public
policy or for any other reason, such circumstances shall not have
the effect of rendering the provision in question invalid,
inoperative or unenforceable in any other case, circumstances or
jurisdiction, or of rendering any other provision or provisions
of this Agreement invalid, inoperative or unenforceable to any
extent whatsoever.
Section 15. Counterparts. This Agreement may be
executed in counterparts, each of which shall be regarded as an
original and all of which shall constitute one and the same
document.
Section 16. Amendments. This Agreement may be amended
by any instrument in writing signed by the parties hereto.
Section 17. Notices. Unless otherwise specified, any
notices, requests, consents or other communications given or made
hereunder or pursuant hereto shall be made in writing or
transmitted by any standard form of telecommunication, including
telephone, telegraph or telecopy, and confirmed in writing. All
written notices and confirmations of notices by telecommunication
shall be deemed to have been validly given or made when delivered
or mailed, registered or certified mail, return receipt requested
and postage prepaid. All such notices, requests, consents or
other communications shall be addressed as follows: if to the
Company, to Texas Utilities Company, 1601 Bryan Street, Dallas,
Texas 75201, Attention: Treasurer; if to the Remarketing Agent or
Reset Agent, ; and if to the
------------------------------------
Purchase Contract Agent, , or to such other
----------------------
address as any of the above shall specify to the other in writing.
IN WITNESS WHEREOF, each of the Company, the
Remarketing Agent and the Purchase Contract Agent has caused this
Agreement to be executed in its name and on its behalf by one of
its duly authorized officers as of the date first above written.
TEXAS UTILITIES COMPANY
By:
----------------------------
Name:
Title:
CONFIRMED AND ACCEPTED:
---------------------------------
---------------------------------
By:
----------------------------
Authorized Signatory
---------------------------------
not individually but solely as
Purchase Contract Agent and as
attorney-in-fact for the holders
of the Purchase Contracts
By:
------------------------------------
Name:
Title:
<PAGE>
Exhibit A to
Remarketing Agreement
FORM OF REMARKETING UNDERWRITING AGREEMENT
------------------------------------------------------ (the
"Remarketing Underwriter") hereby agrees, subject to the terms
and conditions herein set forth or incorporated herein, to
purchase the Debt Securities as set forth in Schedule I hereto,
that have been tendered by the holders of the Type A Securities
for sale on .
--------------
1. Definitions. Capitalized terms used and not defined in
this Agreement shall have the meanings assigned to them in the
purchase contract agreement (the "Purchase Contract Agreement"),
the pledge agreement (the "Pledge Agreement"), the underwriting
agreement, dated , between the Company and
--------------
, as underwriters with respect to the issuance and
--------------
sale of the Securities (the "Underwriting Agreement"), and the
Indenture (For Unsecured Debt Securities Series D), dated
, between and the Company (the
----------- -----------------------
"Indenture").
2. Registration Statement and Prospectus. If required (in
the opinion of counsel to either the Remarketing Underwriter or
the Company) by applicable law, the Company has filed with the
Securities and Exchange Commission, and there has become
effective, a registration statement on Form S-3 (No. 333- ),
------
including a prospectus, relating to the Debt Securities. Such
registration statement, as amended to the date of this
Agreement, is hereinafter referred to as the "Registration
Statement", the prospectus included in the Registration Statement
is hereinafter referred to as the "Basic Prospectus" and the
Basic Prospectus, as amended or supplemented to the date of
this Agreement to relate to the Debt Securities and to the
remarketing of the Debt Securities, is hereinafter referred
to as the "Final Prospectus" (including in each case all
documents incorporated by reference).
3. Provisions Incorporated by Reference.
(a) Subject to Section 3(b), the provisions of Sections
and of the Underwriting Agreement shall be incorporated,
---- ----
as applicable into this Agreement and made applicable to the
obligations of the Remarketing Underwriter, except as explicitly
amended hereby.
(b) With respect to the provisions of the Underwriting
Agreement incorporated herein, for the purposes hereof, (i) all
references therein to the "Underwriter" or "Underwriters" or the
"Representative" or "Representatives", as the case may be, shall
be deemed to refer to the Remarketing Underwriter; (ii) all
references therein to the "Securities" which are the subject
thereof shall be deemed to refer to the Debt Securities as
defined herein; (iii) all references therein to the "Closing
Date" shall be deemed to refer to the Remarketing Closing Date
specified in Schedule I hereto (the "Remarketing Closing Date");
(iv) all references therein to the "Registration Statement", the
"Basic Prospectus" and the "Final Prospectus" shall be deemed to
refer to the Registration Statement, the Basic Prospectus and the
Final Prospectus, respectively, as defined herein.
4. Purchase and Sale; Remarketing Underwriting Fee.
Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth or incorporated
herein, the Remarketing Underwriter agrees to purchase from the
registered holder or holders thereof in the manner specified in
Section 5 hereof, the principal amount of remarketed Debt
Securities set forth in Schedule I hereto at a purchase price not
less than 100% of the aggregate principal amount of such Debt
Securities, plus any accrued and unpaid interest thereon. In
connection therewith, the registered holder or holders thereof
agree, in the manner specified in Section 5 hereof, to pay to the
Remarketing Underwriter a Remarketing Underwriting Fee equal to
an amount not exceeding 25 basis points (.25%) of the aggregate
principal amount of the remarketed Debt Securities, from any amount
received from such Remarketing in excess of the aggregate
principal amount of such remarketed Debt Securities, plus any
accrued and unpaid interest.
5. Delivery and Payment. Delivery of payment for the
remarketed Debt Securities and payment of the Remarketing
Underwriting Fee shall be made on the Remarketing Closing Date at
the location and time specified in Schedule I hereto (or such
later date not later than five business days after such date as
the Remarketing representatives shall designate), which date and
time may be postponed by agreement between the Remarketing
Underwriter, the Company, and the registered holder or holders
thereof. Delivery of the remarketed Debt Securities and payment
of the Remarketing Underwriting Fee shall be made to the
Remarketing Underwriter [to or upon the order of the [registered
holder or holders of the remarketed Debt Securities] by certified
or official bank check or checks drawn on or by a New York Clearing
House bank and payable in immediately available funds] [in
immediately available funds by wire transfer to an account or
accounts designated by the [Company] [registered holder or
holders of the remarketed Debt Securities]] or, if the remarketed
Debt Securities are represented by a Global Security, by any
method of transfer agreed upon by the Remarketing Underwriter and
the Depositary for the Debt Securities under the Indenture.
[It is understood that any registered holder or, if the Debt
Securities are represented by a Global Security, any beneficial
owner, that has an account at the Remarketing Underwriter and
tenders its Debt Securities through such account will not be
required to pay any fee or commission to the Remarketing
Underwriter.]
If the Debt Securities are not represented by a Global
Security, certificates for the Debt Securities shall be
registered in such names and denominations as the Remarketing
Underwriter may request not less than three full business days in
advance of the Remarketing Closing Date, and the Company, and the
[registered holder or holders thereof] agree to have such
certificates available for inspection, packaging and checking by
the Remarketing Underwriter in New York, New York not later than
1:00 p.m. on the Business Day prior to the Remarketing Closing
Date.
6. Notices. Unless otherwise specified, any notices,
requests, consents or other communications given or made
hereunder or pursuant hereto shall be made in writing or
transmitted by any standard form of telecommunication, including
telephone, telegraph or telecopy, and confirmed in writing. All
written notices and confirmations of notices by telecommunication
shall be deemed to have been validly given or made when delivered
or mailed, registered or certified mail, return receipt requested
and postage prepaid. All such notices, requests, consents or
other communications shall be addressed as follows: if to the
Company, to Texas Utilities Company, 1601 Bryan Street, Dallas,
Texas 75201, Attention: Treasurer; if to the Remarketing Agent or
Reset Agent, to ; and if to the Purchase Contract
----------------
Agent, to , or to such other address as
-------------------------
any of the above shall specify to the other in writing.
<PAGE>
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us the
enclosed duplicate hereof, whereupon this letter and your
acceptance shall represent a binding agreement among the Company
and the several Remarketing Underwriters.
Very truly yours,
TEXAS UTILITIES COMPANY
By:
-------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED:
--------------------------------
--------------------------------
By:
------------------------------------
Authorized Signatory
not individually but solely as
----------------------------------
Purchase Contract Agent and as attorney-in-fact for the holders
of the Purchase Contracts
By:
------------------------------------
Name:
Title:
<PAGE>
SCHEDULE I
Title of Securities: % Series D Senior Notes due
--- ----
Principal Amount of Securities: $
Underwriting Agreement, dated as of , 1998, between the
------- --
Company and
---------------------------------------
Remarketing [Underwriting] Fee: % ($ )
Remarketing Closing Date, Time and Location:
WORSHAM, FORSYTHE & WOOLDRIDGE, L.L.P
1601 BRYAN STREET
DALLAS, TEXAS 75201
Exhibit 5(b)
(214) 979-3000
New York, New York
June 4, 1998
Texas Utilities Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Ladies and Gentlemen:
Referring to the proposed issuance by Texas Utilities
Company (Company) of up to $900,000,000 of the Company's
securities, which may include any of the following securities
(together hereinafter referred to as the Securities) (i) shares
of Common Stock, without par value (Common Stock), (ii) contracts
to purchase shares of Common Stock (Stock Purchase Contracts),
(iii) units, each comprised of a Stock Purchase Contract and
either unsecured senior notes (Debt Securities) or debt
obligations of third parties, including U.S. Treasury securities,
pledged to secure the holder's obligation to purchase Common
Stock under the Stock Purchase Contracts (Stock Purchase Units),
and (iv) Debt Securities issued not as a part of Stock Purchase
Units, all as contemplated in the Company's Form S-3 registration
statement (Registration Statement) to be filed by the Company
with the Securities and Exchange Commission (Commission) under
the Securities Act of 1933, on or about the date hereof, we are
of the opinion that:
1. The Company is a corporation validly organized and
existing under the laws of the State of Texas.
2. All requisite action necessary to make any Debt
Securities valid, legal and binding obligations of the Company
will have been taken when:
a. A Debt Securities Indenture with respect to such
Debt Securities shall have been executed and delivered
by a duly authorized officer or representative of the
Company and by the trustee under such Debt Securities
Indenture; and
b. The Board of Directors of the Company, or the
Executive Committee thereof pursuant to express
authority conferred on it by the Board of Directors, or
an officer duly authorized thereby, shall have taken
such action, pursuant to the terms of such Debt
Securities Indenture, as may be necessary to fix and
determine the terms of such Debt Securities, and such
Debt Securities shall have been issued and delivered in
accordance with the terms and provisions of such Debt
Securities Indenture and for the consideration
contemplated by, and otherwise in conformity with, the
Prospectus contained in the Registration Statement as
supplemented by a Prospectus Supplement with respect to
such issuance and delivery and the proceedings referred
to above.
3. All requisite action necessary to make any Stock
Purchase Contracts and Stock Purchase Units valid, legal and
binding obligations of the Company will have been taken when the
Board of Directors of the Company, or the Executive Committee
thereof pursuant to express authority conferred on it by the
Board of Directors, shall have taken such action as may be
necessary to fix and determine the terms of such Stock Purchase
Contracts or Stock Purchase Units, as the case may be, and such
Stock Purchase Contracts or Stock Purchase Units, as the case may
be shall have been issued and delivered in accordance with the
terms and provisions thereof and for the consideration
contemplated by, and otherwise in conformity with, the Prospectus
contained in the Registration Statement as supplemented by a
Prospectus Supplement with respect to such issuance and delivery
and the proceedings referred to above.
4. All requisite action necessary to make the Stock
validly issued, fully paid and non-assessable shall have been
taken when:
a. The Company's Board of Directors, or the Executive
Committee thereof pursuant to express authority
conferred on it by the Board of Directors, shall have
adopted appropriate resolutions approving and
authorizing the issuance and sale of the Stock and any
other action necessary to the consummation of the
proposed issuance and sale thereof; and
b. The Stock shall have been issued and delivered for
the consideration contemplated by, and otherwise in
conformity with, the Prospectus contained in the
Registration Statement as supplemented by a Prospectus
Supplement with respect to such issuance and sale and
the proceedings referred to above.
We are members of the New York Bar and do not hold
ourselves out as experts on the laws of the state of Texas.
Accordingly, in rendering this opinion, we have relied, with your
consent, as to all matters governed by the laws of Texas, upon an
opinion of even date herewith addressed to you by Worsham,
Forsythe & Wooldridge, L.L.P., of Dallas, Texas, General Counsel
for the Company, which is being filed as an exhibit to the
Registration Statement.
We hereby consent to the use of our name in such
Registration Statement and to the use of this opinion as an
exhibit thereto.
Very truly yours,
Worsham, Forsythe & Wooldridge, L.L.P.
By /s/ Timothy A. Mack
------------------------------------
A Partner
REID & PRIEST LLP
40 WEST 57TH STREET
NEW YORK, NEW YORK 10019-4097
Exhibit 5(b)
(212) 603-2000
New York, New York
June 4, 1998
Texas Utilities Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Ladies and Gentlemen:
Referring to the proposed issuance by Texas Utilities
Company (Company) of up to $900,000,000 of the Company's
securities, which may include any of the following securities
(together hereinafter referred to as the Securities) (i) shares
of Common Stock, without par value (Common Stock), (ii) contracts
to purchase shares of Common Stock (Stock Purchase Contracts),
(iii) units, each comprised of a Stock Purchase Contract and
either unsecured senior notes (Debt Securities) or debt
obligations of third parties, including U.S. Treasury securities,
pledged to secure the holder's obligation to purchase Common
Stock under the Stock Purchase Contracts (Stock Purchase Units),
and (iv) Debt Securities issued not as a part of Stock Purchase
Units, all as contemplated in the Company's Form S-3 registration
statement (Registration Statement) to be filed by the Company
with the Securities and Exchange Commission (Commission) under
the Securities Act of 1933, on or about the date hereof, we are
of the opinion that:
1. The Company is a corporation validly organized and
existing under the laws of the State of Texas.
2. All requisite action necessary to make any Debt
Securities valid, legal and binding obligations of the Company
will have been taken when:
a. A Debt Securities Indenture with respect to such
Debt Securities shall have been executed and delivered
by a duly authorized officer or representative of the
Company and by the trustee under such Debt Securities
Indenture; and
b. The Board of Directors of the Company, or the
Executive Committee thereof pursuant to express
authority conferred on it by the Board of Directors,or
an officer duly authorized thereby, shall have taken
such action, pursuant to the terms of such Debt
Securities Indenture, as may be necessary to fix and
determine the terms of such Debt Securities, and such
Debt Securities shall have been issued and delivered in
accordance with the terms and provisions of such Debt
Securities Indenture and for the consideration
contemplated by, and otherwise in conformity with, the
Prospectus contained in the Registration Statement as
supplemented by a Prospectus Supplement with respect to
such issuance and delivery and the proceedings referred
to above.
3. All requisite action necessary to make any Stock
Purchase Contracts and Stock Purchase Units valid, legal and
binding obligations of the Company will have been taken when the
Board of Directors of the Company, or the Executive Committee
thereof pursuant to express authority conferred on it by the
Board of Directors, shall have taken such action as may be
necessary to fix and determine the terms of such Stock Purchase
Contracts or Stock Purchase Units, as the case may be, and such
Stock Purchase Contracts or Stock Purchase Units, as the case may
be shall have been issued and delivered in accordance with the
terms and provisions thereof and for the consideration
contemplated by, and otherwise in conformity with, the Prospectus
contained in the Registration Statement as supplemented by a
Prospectus Supplement with respect to such issuance and delivery
and the proceedings referred to above..
4. All requisite action necessary to make the Stock
validly issued, fully paid and non-assessable shall have been
taken when:
a. The Company's Board of Directors, or the Executive
Committee thereof pursuant to express authority
conferred on it by the Board of Directors, shall have
adopted appropriate resolutions approving and
authorizing the issuance and sale of the Stock and any
other action necessary to the consummation of the
proposed issuance and sale thereof; and
b. The Stock shall have been issued and delivered for
the consideration contemplated by, and otherwise in
conformity with, the Prospectus contained in the
Registration Statement as supplemented by a Prospectus
Supplement with respect to such issuance and sale and
the proceedings referred to above.
We are members of the New York Bar and do not hold
ourselves out as experts on the laws of the state of Texas.
Accordingly, in rendering this opinion, we have relied, with your
consent, as to all matters governed by the laws of Texas, upon an
opinion of even date herewith addressed to you by Worsham,
Forsythe & Wooldridge, L.L.P., of Dallas, Texas, General Counsel
for the Company, which is being filed as an exhibit to the
Registration Statement.
We hereby consent to the use of our name in such
Registration Statement and to the use of this opinion as an
exhibit thereto.
Very truly yours,
/s/ Reid & Priest LLP
Reid & Priest LLP
EXHIBIT 12
TEXAS UTILITIES COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
TWELVE MONTHS YEAR ENDED DECEMBER 31,
ENDED ---------------------------------------
MARCH 31, 1998 1997 1996 1995 1994
-------------- ---- ---- ---- ----
THOUSANDS OF DOLLARS, EXCEPT RATIOS
EARNINGS:
Net income before
preferred
dividends $ 692,466 $ 688,437 $ 806,964 $ (53,731) $ 644,682
Add: Total
federal
income taxes 393,271 376,898 375,232 (60,035) 326,638
Fixed charges
(see detail
below) 879,080 854,822 851,482 732,313 752,892
---------- ---------- ---------- --------- ----------
Total
earnings $1,964,817 $1,920,157 $2,033,678 $ 618,547 $1,724,212
========== ========== ========== ========= ==========
FIXED CHARGES:
Interest on
mortgage bonds $ 425,300 $ 439,539 $ 486,935 $ 527,131 $ 567,543
Interest on other
long-term debt 128,375 124,227 96,404 102,138 92,524
Amortization of
debt discount,
(premium) and
expense 14,576 13,146 13,239 10,649 9,591
Amortization of
loss on reacquired
debt 24,904 24,753 23,124 20,881 19,379
Other interest
charges 191,586 161,272 178,191 45,384 37,838
Preferred trust
securities
distributions 71,847 69,701 33,001 1,801 --
Rentals
representative
of the interest
factor 22,492 22,184 20,588 24,329 26,017
---------- ---------- ---------- --------- ----------
Total fixed
charges $ 879,080 $ 854,822 $ 851,482 $ 732,313 $ 752,892
========== ========== ========== ========= ==========
RATIO OF EARNINGS TO
FIXED CHARGES 2.24 2.25 2.39 0.84 2.29
==== ==== ==== ==== ====
EXHIBIT 15
Texas Utilities Company:
We have made a review, in accordance with standards established
by the American Institute of Certified Public Accountants, of the
unaudited interim condensed consolidated financial information of
Texas Utilities Company (the "Company") for the periods ended
March 31, 1998 and 1997, as indicated in our report dated May 11,
1998; because we did not perform an audit, we expressed no
opinion on that information.
We are aware that our report referred to above, which was
included in the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998, is being incorporated by reference
in this Registration Statement.
We also are aware that the aforementioned report, pursuant to
Rule 436(c) under the Securities Act of 1933, is not considered a
part of the Registration Statement prepared or certified by an
accountant or a report prepared or certified by an accountant
within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
Dallas, Texas
June 3, 1998
EXHIBIT 23(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Texas Utilities Company on Form S-3 of our report
dated February 24, 1998, appearing in the Texas Utilities Company
Annual Report on Form 10-K for the year ended December 31, 1997
and to the reference to us under the heading "Experts and
Legality" in the Prospectus which is part of this Registration
Statement.
/s/ Deloitte & Touche LLP
Dallas, Texas
June 3, 1998
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2)
------------
-----------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
48 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
TEXAS UTILITIES COMPANY
(Exact name of obligor as specified in its charter)
Texas 75-1837355
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Energy Plaza, 1601 Bryan Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
-----------------
SENIOR DEBT SECURITIES*
(Title of the indenture securities)
------------------
*Specific title(s) to be determined in connection with
issuance(s) of Debt Securities.
<PAGE>
ITEM 1. GENERAL INFORMATION.*
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Superintendent of Banks of the 2 Rector Street,
State of New York New York, N.Y. 10006
and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza,
New York, N.Y. 10045
Federal Deposit Insurance Corporation 550 17th Street, N.W.,
Washington, D.C. 20429
New York Clearing House Association New York, N.Y. 10005
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee,
describe each such affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file
with the Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture
Act of 1939 (the "Act") and Rule 24 of the Commission's Rules of
Practice.
1. - A copy of the Organization Certificate of The
Bank of New York (formerly Irving Trust
Company) as now in effect, which contains the
authority to commence business and a grant of
powers to exercise corporate trust powers.
(Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-
6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and
Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. - A copy of the existing By-laws of the
Trustee. (Exhibit 4 to Form T-1 filed with
Registration Statement No. 33-31019.)
6. - The consent of the Trustee required by
Section 321(b) of the Act. (Exhibit 6 to
Form T-1 filed with Registration Statement
No. 33-44051.)
7. - A copy of the latest report of condition of
the Trustee published pursuant to law or to
the requirements of its supervising or
examining authority.
----------------------
*Pursuant to General Instruction B, the Trustee has
responded only to Items 1, 2 and 16 of this form since to the
best of the knowledge of the Trustee the obligor is not in
default under any indenture under which the Trustee is a trustee.
<PAGE>
NOTE
Inasmuch as this Form T-1 is being filed prior to the
ascertainment by the Trustee of all facts on which to base a
responsive answer to Item 2, the answer to said Item is based on
incomplete information.
Item 2 may, however, be considered as correct unless
amended by an amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee,
The Bank of New York, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 1st day of June, 1998.
THE BANK OF NEW YORK
By: /s/ WALTER N. GITLIN
---------------------------------
Walter N. Gitlin
Vice President
- 2 -
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal
Reserve System, at the close of business December 31, 1997,
published in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of the Federal
Reserve Act.
Dollar Amounts
ASSETS in Thousands
------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin . . . . . . . . . . . . . $ 5,742,986
Interest-bearing balances . . . . . . . . . . . . 1,342,769
Securities:
Held-to-maturity securities . . . . . . . . . . . 1,099,736
Available-for-sale securities . . . . . . . . . . 3,882,686
Federal funds sold and Securities
purchased under agreements to resell . . . . . 2,568,530
Loans and lease financing
receivables:
Loans and leases, net of unearned
income . . . . . . . . . . . . . . 35,019,608
LESS: Allowance for loan and
lease losses . . . . . . . . . . . 627,350
LESS: Allocated transfer risk
reserve . . . . . . . . . . . . . . . 0
Loans and leases, net of unearned
income, allowance, and reserve . . . . . . . . 34,392,258
Assets held in trading accounts . . . . . . . . . . 2,521,451
Premises and fixed assets (including
capitalized leases) . . . . . . . . . . . . . . . 659,209
Other real estate owned . . . . . . . . . . . . . . 11,992
Investments in unconsolidated subsid-
iaries and associated companies . . . . . . . . . 226,263
Customers' liability to this bank on
acceptances outstanding . . . . . . . . . . . . . 1,187,449
Intangible assets . . . . . . . . . . . . . . . . . 781,684
Other assets . . . . . . . . . . . . . . . . . . . 1,736,574
-----------
Total assets . . . . . . . . . . . . . . . . . . . $56,153,587
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
-----------
Deposits:
In domestic offices . . . . . . . . . . . . . . . $27,031,362
Noninterest-bearing . . . . . . . . 11,899,507
Interest-bearing . . . . . . . . . 15,131,855
In foreign offices, Edge and
Agreement subsidiaries, and IBFs . . . . . . . . 13,794,449
Noninterest-bearing . . . . . . . . 590,999
Interest-bearing . . . . . . . . . 13,203,450
Federal funds purchased and Securities
sold under agreements to repurchase . . . . . . 2,338,881
Demand notes issued to the U.S.
Treasury . . . . . . . . . . . . . . . . . . . . 173,851
Trading liabilities . . . . . . . . . . . . . . . . 1,695,216
Other borrowed money:
With remaining maturity of one year or less . . . 1,905,330
With remaining maturity of more than
one year through three years . . . . . . . . . 0
With remaining maturity of more than
three years . . . . . . . . . . . . . . . . . . 25,664
Bank's liability on acceptances
executed and outstanding . . . . . . . . . . . . 1,195,923
Subordinated notes and debentures . . . . . . . . . 1,012,940
Other liabilities . . . . . . . . . . . . . . . . . 2,018,960
----------
Total liabilities . . . . . . . . . . . . . . . . . 51,192,576
----------
EQUITY CAPITAL
--------------
Common stock . . . . . . . . . . . . . . . . . . . 1,135,284
Surplus . . . . . . . . . . . . . . . . . . . . . . 731,319
Undivided profits and capital
reserves . . . . . . . . . . . . . . . . . . . . 3,093,726
Net unrealized holding gains (losses)
on available-for-sale securities . . . . . . . . 36,866
Cumulative foreign currency
translation adjustments . . . . . . . . . . . . . (36,184)
-----------
Total equity capital . . . . . . . . . . . . . . . 4,961,011
-----------
Total liabilities and equity capital . . . . . . . $56,153,587
===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Robert E. Keilman, Senior Vice President and Comptroller of
the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
Thomas A. Renyi )
Alan R. Griffith ) Directors
J. Carter Bacot )
