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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) - JULY 2, 1998
TEXAS UTILITIES COMPANY
(Exact name of registrant as specified in its charter)
TEXAS 1-12833 75-2669310
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
ENERGY PLAZA, 1601 BRYAN STREET, DALLAS, TEXAS 75201-3411
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE - (214) 812-4600
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<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS.
Exhibit
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4(a) -- Remarketing Agreement, dated as of
January 30, 1998, and form of Remarketing
Agreement Supplement with respect to
ENSERCH Corporation (ENSERCH) Remarketed
Reset Notes.
4(b) -- Indenture, (For Unsecured Subordinated
Debt Securities), dated as of June 1,
1998, between ENSERCH and The Bank of New
York, as Trustee.
4(c) -- Officer's Certificate, dated as of July
2, 1998, establishing the terms of the
ENSERCH Floating Rate Junior Subordinated
Debentures, Series A issued in connection
with the preferred securities of ENSERCH
Capital I.
4(d) -- Amended and Restated Trust Agreement,
dated as of July 2, 1998, between
ENSERCH, as Depositor, and The Bank of
New York, The Bank of New York
(Delaware), and the Administrative
Trustees thereunder, as Trustees.
4(e) -- Guarantee Agreement with respect to
ENSERCH Capital I, dated as of July 2,
1998, between ENSERCH, as Guarantor, and
The Bank of New York, as Trustee.
4(f) -- Agreement as to Expenses and Liabilities,
dated as of July 2, 1998, between ENSERCH
and ENSERCH Capital I.
4(g) -- Indenture (For Unsecured Debt Securities
Series D and Series E), dated as of July
1, 1998, between Texas Utilities Company
(Company) and the Bank of New York.
4(h) -- Officers' Certificate, dated July 22,
1998 establishing the terms of the 6.37%
Series D Senior Notes and the 6.50%
Series E Senior Notes.
4(i) -- Purchase Contract Agreement, dated as of
July 1, 1998, between the Company and The
Bank of New York with respect to the
Company's issuance of Feline PRIDES.
4(j) -- Pledge Agreement, dated as of July 1,
1998, among the Company, The Chase
Manhattan Bank and The Bank of New York
with respect to the Feline PRIDES.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
TEXAS UTILITIES COMPANY
By: /s/ Jerry W. Pinkerton
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Name: Jerry W. Pinkerton
Title: Controller
Date: August 28, 1998
<PAGE>
EXHIBIT INDEX
Exhibit
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4(a) -- Remarketing Agreement, dated as of
January 30, 1998, and form of Remarketing
Agreement Supplement, with respect to
ENSERCH Corporation (ENSERCH) Remarketed
Reset Notes.
4(b) -- Indenture, (For Unsecured Subordinated
Debt Securities), dated as of June 1,
1998, between ENSERCH and The Bank of New
York, as Trustee.
4(c) -- Officer's Certificate, dated as of July
2, 1998, establishing the terms of the
ENSERCH Floating Rate Junior Subordinated
Debentures, Series A issued in connection
with the preferred securities of ENSERCH
Capital I.
4(d) -- Amended and Restated Trust Agreement,
dated as of July 2, 1998, between
ENSERCH, as Depositor, and The Bank of
New York, The Bank of New York
(Delaware), and the Administrative
Trustees thereunder, as Trustees.
4(e) -- Guarantee Agreement with respect to
ENSERCH Capital I, dated as of July 2,
1998, between ENSERCH, as Guarantor, and
The Bank of New York, as Trustee.
4(f) -- Agreement as to Expenses and Liabilities,
dated as of July 2, 1998, between ENSERCH
and ENSERCH Capital I.
4(g) -- Indenture (For Unsecured Debt Securities
Series D and Series E), dated as of July
1, 1998, between Texas Utilities Company
(Company) and the Bank of New York.
4(h) -- Officers' Certificate, dated July 22,
1998 establishing the terms of the 6.37%
Series D Senior Notes and the 6.50%
Series E Senior Notes.
4(i) -- Purchase Contract Agreement, dated as of
July 1, 1998, between the Company and The
Bank of New York with respect to the
Company's issuance of Feline PRIDES.
4(j) -- Pledge Agreement, dated as of July 1,
1998, among the Company, The Chase
Manhattan Bank and The Bank of New York
with respect to the Feline PRIDES.
REMARKETING AGREEMENT
REMARKETING AGREEMENT, dated as of January 30, 1998 (the
"Remarketing Agreement"), by and between ENSERCH Corporation (the
"Company") and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("Merrill Lynch").
WHEREAS, the Company will issue $125,000,000 aggregate
principal amount of Remarketed Reset Notes due January 1, 2008
(the "Notes"), such Notes to be issued under the Indenture (For
Unsecured Debt Securities) dated as of January 1, 1998, (the
"Indenture"), by and between the Company and The Bank of New
York, as trustee (the "Trustee"); and
WHEREAS, the Notes are to be initially offered to the public
through Merrill Lynch; and
WHEREAS, the Company has requested Merrill Lynch to act as
Remarketing Agent (as defined in Section 2(a) hereof) in
connection with the Notes, and as such to perform the services
described herein; and
WHEREAS, Merrill Lynch is willing to act as Remarketing
Agent in connection with the Notes, 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
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defined in this Agreement shall have the respective meanings
assigned to them in the Notes or, if not therein stated, in the
Indenture or the Officer's Certificate establishing the Notes
(the "Officer's Certificate") or, if not therein stated, in the
attached Underwriting Agreement.
Section 2. Appointment and Obligations of Merrill Lynch.
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(a) The Company hereby appoints Merrill Lynch, and Merrill Lynch
hereby accepts such appointment, as the exclusive remarketing
agent (the "Remarketing Agent") for the purpose of (x)
recommending to the Company the Spread for each Subsequent Spread
Period that, in the opinion of the Remarketing Agent, will enable
the Remarketing Agent to remarket, for delivery on the applicable
Tender Date, tendered Notes at 100% of the principal amount
thereof, (y) if the Company and the Remarketing Agent agree on
the Spread referred to in (x) above, entering into a remarketing
agreement supplement (each, a "Remarketing Agreement Supplement")
with the Company, substantially in the form attached hereto as
Exhibit A, pursuant to which the Remarketing Agent will agree,
subject to the terms hereof and thereof, to use its best efforts
to remarket, at a price equal to 100% of the principal amount
thereof (the "Purchase Price"), the Notes tendered by the
beneficial owners thereof (the "Beneficial Owners") (each such
remarketing being hereinafter referred to as a "Remarketing"),
and (z) performing such other duties as are assigned to the
Remarketing Agent in this Agreement, the Notes, the Indenture
and/or the applicable Remarketing Agreement Supplement.
The Remarketing Agent will make recommendations to the
Company prior to each Duration/Mode Determination Date as to
redemption provisions, the length of Interest Periods for the
Notes and whether the Notes should be in the Fixed Rate Mode or
the Floating Rate Mode.
If the Company and the Remarketing Agent do not agree on the
Spread for any Subsequent Spread Period, then the Company is
required unconditionally to repurchase and retire all of the
Notes on the applicable Tender Date at a price equal to 100% of
the principal amount thereof, together with accrued interest, if
any, to the Tender Date.
If the Company and the Remarketing Agent have entered into a
Remarketing Agreement Supplement with respect to the applicable
Tender Date, except as otherwise provided in the next succeeding
paragraph, each Beneficial Owner may, at such Beneficial Owner's
option, upon giving notice as provided below ("Tender Notice"),
tender such Beneficial Owner's interest in such Note for
purchase, at the Purchase Price, by the Remarketing Agent on the
Tender Date with respect to a Subsequent Spread Period. The
Purchase Price will be paid by the Remarketing Agent in
accordance with the standard procedures of DTC, which currently
provide for payments in same-day funds. If such Beneficial Owner
has an account at the Remarketing Agent and tenders such
Beneficial Owner's interest in such Note through such account,
such Beneficial Owner will not be required to pay any fee or
commission to the Remarketing Agent.
In the case of a Floating Rate Spread Determination Date,
the Tender Notice must be received by the Remarketing Agent
during the period commencing on the first Business Day following
such Spread Determination Date and ending at 12:00 noon, New York
City time, on the fifth Business Day following such Spread
Determination Date. In the case of a Fixed Rate Spread
Determination Date, the Tender Notice must be received by the
Remarketing Agent during the period commencing at 12:00 noon, New
York City time, on such Spread Determination Date and ending at
12:00 noon, New York City time, on the first Business Day
following such Spread Determination Date. The term "Notice Date"
means, in either case, the time and date by which a Tender Notice
must be received by the Remarketing Agent. Except as otherwise
provided below, a Tender Notice shall be irrevocable. If a
Tender Notice is not received for any reason by the Remarketing
Agent with respect to any Note by the Notice Date, the beneficial
owner of such Note shall be deemed to have elected not to tender
such Note for purchase by the Remarketing Agent, and the interest
rate thereon will be reset automatically to the new applicable
interest rate on the Commencement Date for the next Subsequent
Spread Period.
The Remarketing Agent will attempt, on a best effort basis,
to remarket the tendered Notes at a price equal to 100% of the
aggregate principal amount so tendered. There is no assurance
that the Remarketing Agent will be able to remarket the entire
principal amount of Notes tendered in a Remarketing. The
Remarketing Agent shall also have the option, but not the
obligation, to purchase any tendered Notes at such price. If the
Remarketing Agent is unable to remarket some or all of the
tendered Notes and chooses not to purchase such tendered Notes,
the Company is obligated unconditionally to purchase and retire
on the Tender Date the remaining unsold tendered Notes at a price
equal to 100% of the principal amount thereof, together with
accrued interest, if any, to the applicable Tender Date.
No beneficial owner of any Note shall have any rights or
claims under this Agreement or any Remarketing Agreement
Supplement or against the Company or the Remarketing Agent as a
result of the Remarketing Agent's not purchasing such Notes.
Section 3. Fees and Expenses. The obligations of the
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Company to pay to the Remarketing Agent on each Tender Date the
fees and expenses set forth in the applicable Remarketing
Agreement Supplement shall survive the termination of this
Agreement and remain in full force and effect until all such
payments shall have been made in full.
Section 4. Removal of the Remarketing Agent With
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respect to any Subsequent Spread Period, the Company may in its
absolute discretion remove the Remarketing Agent by giving notice
to the Remarketing Agent prior to 3:00 p.m., New York City time,
on the Duration/Mode Determination Date applicable thereto, such
removal to be effective upon the Company's appointment of a
successor Remarketing Agent. In such case, the Company will use
its best efforts to appoint a successor Remarketing Agent and
enter into a remarketing agreement with such persons as soon as
reasonably practicable.
Section 5. Dealing in the Notes. Subject to its
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compliance with applicable laws and regulations, Merrill Lynch,
when acting as Remarketing Agent or in its individual or any
other capacity, may buy, sell, hold and deal in any of the Notes.
Merrill Lynch may exercise any vote or join in any action which
any Beneficial Owner of Notes may be entitled to exercise or take
with like effect as if it did not act in any capacity hereunder.
Merrill Lynch, 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. Likewise, Merrill Lynch or any
affiliate thereof may act as the "Reference Treasury Dealer" as
defined in the Company's Prospectus Supplement, dated January 28,
1998, relating to the Notes.
Section 6. Current Prospectus. If Merrill Lynch
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determines, based on advice of counsel, that applicable law,
regulations or interpretations of the Securities and Exchange
Commission ("Commission") make it necessary or advisable to
deliver a current prospectus in connection with a Remarketing,
the Company shall furnish a current prospectus to be used by the
Remarketing Agent in such Remarketing in such numbers as the
Remarketing Agent shall reasonably request.
Section 7. Representations and Warranties by the
-------------------------------------
Company. The Company represents and warrants to Merrill Lynch,
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as of the date hereof, and as of each Tender Date, as follows:
(a) Financial Statements. The financial statements
--------------------
of the Company included in the Company's most recently filed
Annual Report on Form 10-K and Quarterly Reports on Form 10-
Q, if any (the "34 Act Documents"), together with the
related schedules and notes, as well as those financial
statements, schedules and notes of any other entity included
therein, if any, present fairly the financial position of
the Company and its consolidated subsidiaries, or such other
entity, as the case may be, at the dates indicated and the
statement of operations, stockholders' equity and cash flows
of the Company and its consolidated subsidiaries, or such
other entity, as the case may be, for the periods specified.
Such financial statements have been prepared in conformity
with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods
involved, except as otherwise disclosed in such financial
statements or the notes thereto. The supporting schedules,
if any, included in the Company's 34 Act Documents present
fairly in accordance with GAAP the information required to
be stated therein. The selected financial data and the
summary financial information, if any, included in the
Company's 34 Act Documents present fairly the information
shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in
the Company's 34 Act Documents. In addition, any pro forma
financial statements of the Company and its subsidiaries and
the related notes thereto included in the Company's 34 Act
Documents present fairly the information shown therein, have
been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements
and have been properly compiled on the basis described
therein, and the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and
circumstances referred to therein.
(b) No Material Adverse Change in Business. Since
--------------------------------------
the respective dates as of which information is given in the
Company's 34 Act Documents, except as otherwise stated
therein, there has been no material adverse change in the
financial condition, business, earnings, or principal
properties of the Company, whether or not arising in the
ordinary course of business.
(c) Authorization of This Agreement. This Agreement
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has been duly authorized, executed and delivered by the
Company and constitutes a valid and legally binding
obligation of the Company, enforceable against the Company
in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or
affecting creditors' rights generally or by general
equitable principles.
Section 8. Conditions to the Remarketing Agent's
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Obligations. The obligations of the Remarketing Agent to
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purchase and remarket the Notes shall be subject to the terms and
conditions hereof and of the applicable Remarketing Agreement
Supplement.
Section 9. Termination of This Agreement. Subject to
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Section 3 hereof relating to the payment of fees and expenses,
this Agreement shall terminate as to the Remarketing Agent on the
effective date of the removal of such Remarketing Agent pursuant
to Section 4 hereof.
Section 10. 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, the Notes, the Indenture, the Officer's
Certificate and the applicable Remarketing Agreement Supplement.
Section 11. GOVERNING LAW. THIS AGREEMENT SHALL BE
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GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED IN SUCH STATE.
Section 12. Term of This Agreement. Unless otherwise
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terminated in accordance with the provisions hereof, this
Agreement shall remain in full force and effect from the date
hereof until the first day thereafter on which no Notes are
outstanding.
Section 13. 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 Merrill Lynch; the rights and obligations of Merrill Lynch
hereunder may not be assigned or delegated to any other person
without the prior written consent of the Company; and any attempt
by either party to do so will be unenforceable. This Agreement
shall inure to the benefit of and be binding upon the Company and
Merrill Lynch and their respective permitted successors and
assigns. The terms "successors" and "assigns" shall not include
any purchaser of any Notes merely because of such purchase.
Section 14. Headings. Section headings have been
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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 provisions of this Agreement.
Section 15. Severability. If any provision of this
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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 provision 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 16. Counterparts. This Agreement may be executed
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in several counterparts, each of which shall be regarded as an
original and all of which shall constitute one and the same
document.
Section 17. Amendments. This Agreement may be amended by
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any instrument in writing signed by each of the parties hereto.
Section 18. Notices. Unless otherwise specified, any
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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 or by
telephone and confirmed in writing. All written notices shall be
deemed to be validly given or made, if delivered by hand, when so
delivered, or if mailed, when mailed registered or certified
mail, return receipt requested and postage prepaid. All notices
by telecommunication (including telephone) shall be deemed to be
validly given or made when received. All such notices, requests,
consents or other communications shall be addressed as follows:
if to the Company, to 1601 Bryan Street, Dallas, Texas 75201,
Attention: Treasurer; and if to Merrill Lynch, to Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Merrill Lynch World
Headquarters, World Financial Center, North Tower, New York, New
York 10281-1209, Attention: Debt Syndicate, or to such other
address as either of the above shall specify to the other in
writing.
Section 19. Benefit. Nothing in this Agreement, express
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or implied, is intended or shall be construed to confer upon or
give any person other than the parties hereto any remedy or claim
under or by reason of this Agreement or any term, covenant or
condition hereof, all of which shall be for the sole and
exclusive benefit of the parties.
<PAGE>
IN WITNESS WHEREOF, each of the Company and Merrill Lynch
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.
ENSERCH CORPORATION
By: /s/ J.W. Pinkerton
---------------------------------
Name: J.W. Pinkerton
Title: Vice President
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ John Thorndike
---------------------------------
Name: John Thorndike
Title: Managing Director
<PAGE>
EXHIBIT A
REMARKETING AGREEMENT SUPPLEMENT
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Remarketing Agent") hereby agrees to purchase
the Notes described below (the "Notes") that have been tendered
by the holders thereof for sale on , (the
----------- -- ----
"Tender Date").
It is acknowledged and agreed that the Notes need not be
further registered under the Securities Act of 1933, as amended
(the "Act"), and that, in connection with the remarketing of the
Notes by the Remarketing Agent in accordance with the terms of
the Remarketing Agreement dated January 30, 1998 (the
"Remarketing Agreement"), no prospectus meeting the requirements
of Section 10 of the Act need be delivered, or filed pursuant to
Rule 424 under the Act.
It is understood that the Remarketing Agent will deliver to
purchasers and prospective purchasers, in connection with the
remarketing, one or more forms of written communication
describing the terms of the Notes (each, a "Remarketing
Memorandum"), the form of each of which shall be delivered to
ENSERCH Corporation (the "Company") not less than two Business
Days prior to its use and subject to the approval of the Company
prior to its use by the Remarketing Agent, which approval shall
not be unreasonably withheld or delayed.
The Remarketing Agent shall offer to purchase Notes, and
purchase validly tendered Notes on the Tender Date, in accordance
with all applicable laws and regulations and interpretations of
the Securities and Exchange Commission.
During the period commencing on the date hereof and
continuing to the relevant Tender Date, the Company agrees not to
issue, offer, sell, or contract to sell, in the market in which
the Notes are being remarketed, any securities of the Company
substantially similar to the Notes, without the prior written
consent of the Remarketing Agent.
The Company represents and warrants that this Agreement has
been duly authorized, executed and delivered by the Company.
The representations and warranties made pursuant to the
Remarketing Agreement; Section 10 of the attached Underwriting
Agreement (except that Section 10 is amended and supplemented to
allow termination of this Remarketing Agreement Supplement by the
Remarketing Agent if the Company's representations and warranties
herein and in the Remarketing Agreement are not accurate and
correct); paragraphs (e) and (g) of Section 7 of the attached
Underwriting Agreement (except that the first clause of paragraph
(e) shall read "Since the later of (i) the most recent dates as
of which information is given in the Registration Statement or
the Prospectus and (ii) the date of the most recent Remarketing
Agreement Supplement entered into by the Company and the
Remarketing Agent prior to the date hereof,"); and Section 11 of
the attached Underwriting Agreement are incorporated in their
entirety into this Agreement and made applicable to the
obligations of the Remarketing Agent to the extent applicable to
any remarketing of the Notes, except as such provisions are
explicitly amended hereby.
If the Remarketing Agent determines, based on advice of
counsel, that changes in applicable law, regulations or
interpretations of the Securities and Exchange Commission make it
necessary or advisable to deliver a current prospectus in
connection with this remarketing, the entirety of the attached
Underwriting Agreement (other than Sections 4 and 5) shall be
incorporated by reference into this Agreement and made applicable
hereto, except as explicitly amended hereby. For the purposes of
Section 9 of the attached Underwriting Agreement, the relative
benefits received by the Company on the one hand and the
Remarketing Agent on the other in connection with the remarketing
of the Notes pursuant to this Agreement and the Remarketing
Agreement shall be deemed to be in the same respective
proportions as the aggregate public offering price of the Notes
outstanding on the Tender Date bears to the remarketing fee
received by the Remarketing Agent pursuant to this Agreement.
To the extent the attached Underwriting Agreement is
applicable hereto, references therein to (i) the "Underwriter"
shall be deemed to refer to the Remarketing Agent, (ii) the "Debt
Securities" shall be deemed to refer to the Notes, (iii) "this
Agreement" shall be deemed to refer to this Agreement and the
Remarketing Agreement, and (iv) "Closing Date" shall be deemed
to refer to the Tender Date. To the extent the provisions of
such Underwriting Agreement refer to the "Prospectus" or the
"Registration Statement," such references shall be deemed to (i)
refer to any Remarketing Memorandum with respect to the Notes,
and any prospectus or registration statement that the Company is
required to prepare or file with respect to the Notes pursuant to
applicable law, regulations or interpretations of the Securities
and Exchange Commission in effect at the time of such remarketing
of the Notes, including all documents incorporated by reference
therein and (ii) refer to each such document as amended or
supplemented to the date hereof and the Tender Date. The term
"Incorporated Documents" in such Underwriting Agreement shall be
deemed to include those filed and incorporated through the date
hereof and the Tender Date. References to issuance and/or sale
of Debt Securities shall be deemed to refer to Remarketing of the
Notes. References in Section 9(b) to information furnished by
the Underwriter shall be deemed to refer to information provided
by the Remarketing Agent for use in the appropriate offering
documents.
All capitalized terms used and not defined in this Agreement
have the respective meanings assigned thereto in the Notes, or,
if not therein stated, in the Indenture or the Officers'
Certificate establishing the Notes or, if not therein stated, in
the attached Underwriting Agreement.
Company: ENSERCH Corporation
1601 Bryan Street
Dallas, Texas 75201
Remarketing Agent and Merrill Lynch & Co.
Address: Merrill Lynch, Pierce, Fenner
& Smith Incorporated
Merrill Lynch World
Headquarters
World Financial Center
North Tower, 26th Floor
New York, New York 10281-1209
Title of Notes: Remarketed Reset Notes due
January 1, 2008
Principal Amount of Notes
to be Purchased:
Title of Indenture: Indenture (For Unsecured Debt
Securities) dated as of January
1, 1998, by and between the
Company and the Trustee
Trustee: The Bank of New York
Current Ratings: Moody's Investors Service Inc.:
Standard & Poor's Corporation:
Duff & Phelps, Inc.:
Certain Terms of the Notes:
Maturity: January 1, 2008
Spread Determination
Date:
Duration/Mode
Determination
Date:
Tender Notice Date:
Interest Reset Dates:
Tender Date:
Next Commencement Date:
New Interest Rate: As determined by application of
the provisions set forth in the
attached form of the Notes on
the LIBOR Determination Date or
the Fixed Rate Determination
Date, as applicable.
Spread:
Interest Payment Dates:
Subsequent Spread Period:
Redemption Provisions:
Beneficial Owner Tender As set forth in the attached
Provisions: Prospectus Supplement dated
January 28, 1998. In the event
that the Remarketing Agent
fails to purchase all Notes
validly tendered for purchase
on the Tender Date, then the
Remarketing Agent shall
promptly notify the Company and
the Trustee of such failure.
Company Purchase: In the event that (A) the
Remarketing Agent fails to
purchase all Notes validly
tendered for purchase on the
Tender Date for any reason, and
(B) the Company has not given
notice of redemption of all of
the Notes then outstanding in
accordance with the provisions
described in the attached form
of the Notes, then the Company
shall purchase (at a price
equal to 100% of the principal
amount thereof, together with
accrued interest to the Tender
Date) and retire all tendered
Notes not remarketed or
purchased by the Remarketing
Agent.
Legal Opinion: If required to be delivered
pursuant to this Remarketing
Agreement Supplement, the
opinions to be delivered
pursuant to Section 7(c) of the
attached Underwriting Agreement
shall be modified to add the
following opinions: "no action
based upon an adverse claim to
the Notes (or any interest
therein) may be asserted
against the Remarketing Agent
with respect to a security
entitlement to the Notes
transferred to the Remarketing
Agent by the prior owner
thereof as recorded on the
books of DTC provided that (i)
the security entitlement (as
defined in the Uniform
Commercial Code as in effect in
the State of New York (the
"UCC")) transferred is for an
authorized denomination of the
Notes; (ii) a single global
Note registered in the name of
CEDE & Co., a nominee of DTC,
has been duly authenticated by
theTrustee under the Indenture
and is being held by DTC or The
Bank of New York as custodian
for DTC; (iii) DTC is a
securities intermediary (as such
term is defined in the UCC) and
complies with the requirements of
the UCC applicable thereto; (iv)
the security intermediary's
jurisdiction (as such term is
defined in the UCC) is New
York; (v) DTC indicates by book
entry that the portion of the
Note corresponding to such
security entitlement has been
credited to the securities
account (as such term is
defined in the UCC) of the
Remarketing Agent and debited
from the securities account of
the prior owner; (vi) the
Remarketing Agent is thereafter
identified on the books of DTC
as the person having such
security entitlement against
DTC; (vii) the Remarketing
Agent purchased such
securities entitlement for
value (as such term is defined
in the UCC); (viii) the
Remarketing Agent purchased
such security entitlement
without notice of the adverse
claim (as such term is defined
in the UCC)." No opinion need
be given as to the effect of
any rule adopted by DTC
governing rights and
obligations among DTC and its
participants.
Form of Notes: Global certificate registered
in the name of the nominee,
which currently is CEDE & Co.,
of the depository of the Notes,
which is DTC. The beneficial
owners of the Notes
("Beneficial Owners") are not
entitled to receive definitive
certificates representing their
Notes, except under limited
circumstances. A Beneficial
Owner's ownership of a Note
currently is recorded on or
through the records of the
brokerage firm or other entity
that is a participant in DTC
and that maintains such
Beneficial Owner's account.
Purchase Price: 100% of the principal amount of
the Notes, together with
accrued interest. Payable to
DTC for the Beneficial Owners
of Tendered Notes.
Remarketing Fee: % of the principal amount
-----
of the Notes outstanding on
each Tender Date multiplied by
the number of years remaining
in the Stated Maturity.
Closing: Reid & Priest LLP, 40 West
57th Street, New York, New York
at 10:00 a.m., New York time,
on the Tender Date.
The foregoing terms are hereby confirmed and agreed to as of this
day of , .
---- ----------- ----
ENSERCH CORPORATION
By:
---------------------------
Name:
Title:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By:
----------------------------
Name:
Title:
------------------------------------------
ENSERCH CORPORATION
TO
THE BANK OF NEW YORK
TRUSTEE
---------
INDENTURE
(FOR UNSECURED SUBORDINATED DEBT SECURITIES
RELATING TO TRUST SECURITIES)
DATED AS OF JUNE 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
Additional Interest . . . . . . . . . . . . . . . . 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
Dollar" or "$ . . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . 3
Governmental Authority . . . . . . . . . . . . . . 3
Government Obligations . . . . . . . . . . . . . . 3
Guarantee . . . . . . . . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . 4
Interest Payment Date . . . . . . . . . . . . . . . 4
Maturity . . . . . . . . . . . . . . . . . . . . . 4
Officer's Certificate . . . . . . . . . . . . . . . 4
Opinion of Counsel . . . . . . . . . . . . . . . . 4
Outstanding . . . . . . . . . . . . . . . . . . . . 4
Paying Agent . . . . . . . . . . . . . . . . . . . 5
Person . . . . . . . . . . . . . . . . . . . . . . 5
Place of Payment . . . . . . . . . . . . . . . . . 5
Predecessor Security . . . . . . . . . . . . . . . 5
Preferred Securities . . . . . . . . . . . . . . . 6
Redemption Date . . . . . . . . . . . . . . . . . . 6
Redemption Price . . . . . . . . . . . . . . . . . 6
Regular Record Date . . . . . . . . . . . . . . . . 6
Responsible Officer . . . . . . . . . . . . . . . . 6
Securities . . . . . . . . . . . . . . . . . . . . 6
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE
DEEMED TO BE PART OF THE INDENTURE.
<PAGE>
Security Register" and "SECURITY REGISTRAR . . . . 6
Senior Indebtedness . . . . . . . . . . . . . . . . 6
Special Record Date . . . . . . . . . . . . . . . . 6
Stated Maturity . . . . . . . . . . . . . . . . . . 6
Trust . . . . . . . . . . . . . . . . . . . . . . . 7
Trust Agreement . . . . . . . . . . . . . . . . . . 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 . . . 10
SECTION 106. Notice to Holders of Securities; Waiver . 11
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 . . . . . . . . . . 12
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 . . . . . . . . . . . 19
SECTION 305. Registration, Registration of Transfer
and Exchange . . . . . . . . . . . . . . . 20
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . 21
SECTION 307. Payment of Interest; Interest Rights
Preserved . . . . . . . . . . . . . . . . 22
SECTION 308. Persons Deemed Owners . . . . . . . . . . 23
SECTION 309. Cancellation by Security Registrar . . . . 23
SECTION 310. Computation of Interest . . . . . . . . . 24
SECTION 311. Extension of Interest Payment . . . . . . 24
SECTION 312. Additional Interest. . . . . . . . . . . . 24
ARTICLE FOUR . . . . . . . . . . . . . . . . . . . . . . . . 25
Redemption of Securities . . . . . . . . . . . . . . . . . . 25
SECTION 401. Applicability of Article . . . . . . . . . 25
SECTION 402. Election to Redeem; Notice to Trustee . . 25
SECTION 403. Selection of Securities to Be Redeemed . . 25
SECTION 404. Notice of Redemption . . . . . . . . . . . 26
SECTION 405. Securities Payable on Redemption Date . . 27
SECTION 406. Securities Redeemed in Part . . . . . . . 27
ARTICLE FIVE . . . . . . . . . . . . . . . . . . . . . . . . 28
Sinking Funds . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 501. Applicability of Article . . . . . . . . . 28
SECTION 502. Satisfaction of Sinking Fund Payments
with Securities . . . . . . . . . . . . . 28
SECTION 503. Redemption of Securities for Sinking
Fund . . . . . . . . . . . . . . . . . . . 28
ARTICLE SIX . . . . . . . . . . . . . . . . . . . . . . . . . 29
Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 601. Payment of Principal, Premium and
Interest . . . . . . . . . . . . . . . . . 29
SECTION 602. Maintenance of Office or Agency . . . . . 29
SECTION 603. Money for Securities Payments to Be Held
in Trust . . . . . . . . . . . . . . . . . 30
SECTION 604. Corporate Existence . . . . . . . . . . . 31
SECTION 605. Maintenance of Properties . . . . . . . . 31
SECTION 606. Annual Officer's Certificate as to
Compliance. . . . . . . . . . . . . . . . 32
SECTION 607. Waiver of Certain Covenants . . . . . . . 32
SECTION 608. Restriction on Payment of Dividends . . . 32
SECTION 609. Maintenance of Trust Existence . . . . . . 33
SECTION 610. Rights of Holders of Preferred
Securities . . . . . . . . . . . . . . . . 33
ARTICLE SEVEN . . . . . . . . . . . . . . . . . . . . . . . . 34
Satisfaction and Discharge . . . . . . . . . . . . . . . . . 34
SECTION 701. Satisfaction and Discharge of Securities . 34
SECTION 702. Satisfaction and Discharge of Indenture . 36
SECTION 703. Application of Trust Money . . . . . . . . 37
ARTICLE EIGHT . . . . . . . . . . . . . . . . . . . . . . . . 37
Events of Default; Remedies . . . . . . . . . . . . . . . . . 37
SECTION 801. Events of Default . . . . . . . . . . . . 37
SECTION 802. Acceleration of Maturity; Rescission and
Annulment . . . . . . . . . . . . . . . . 39
SECTION 803. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . 40
SECTION 804. Trustee May File Proofs of Claim . . . . . 41
SECTION 805. Trustee May Enforce Claims Without
Possession of Securities . . . . . . . . . 41
SECTION 806. Application of Money Collected . . . . . . 42
SECTION 807. Limitation on Suits . . . . . . . . . . . 42
SECTION 808. Unconditional Right of Holders to Receive
Principal, Premium and Interest . . . . . 43
SECTION 809. Restoration of Rights and Remedies . . . . 43
SECTION 810. Rights and Remedies Cumulative . . . . . . 43
SECTION 811. Delay or Omission Not Waiver . . . . . . . 44
SECTION 812. Control by Holders of Securities . . . . . 44
SECTION 813. Waiver of Past Defaults . . . . . . . . . 44
SECTION 814. Undertaking for Costs . . . . . . . . . . 45
SECTION 815. Waiver of Stay or Extension Laws . . . . . 45
ARTICLE NINE . . . . . . . . . . . . . . . . . . . . . . . . 45
The Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 901. Certain Duties and Responsibilities . . . 45
SECTION 902. Notice of Defaults . . . . . . . . . . . . 46
SECTION 903. Certain Rights of Trustee . . . . . . . . 46
SECTION 904. Not Responsible for Recitals or Issuance
of Securities . . . . . . . . . . . . . . 47
SECTION 905. May Hold Securities . . . . . . . . . . . 48
SECTION 906. Money Held in Trust . . . . . . . . . . . 48
SECTION 907. Compensation and Reimbursement . . . . . . 48
SECTION 908. Disqualification; Conflicting Interests. . 49
SECTION 909. Corporate Trustee Required; Eligibility . 49
SECTION 910. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . 50
SECTION 911. Acceptance of Appointment by Successor . . 52
SECTION 912. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . 53
SECTION 913. Preferential Collection of Claims Against
Company . . . . . . . . . . . . . . . . . 53
SECTION 914. Co-trustees and Separate Trustees. . . . . 54
SECTION 915. Appointment of Authenticating Agent . . . 55
ARTICLE TEN . . . . . . . . . . . . . . . . . . . . . . . . . 57
Holders' Lists and Reports by Trustee and Company . . . . . . 57
SECTION 1001. Lists of Holders . . . . . . . . . . . . 57
SECTION 1002. Reports by Trustee and Company . . . . . 57
ARTICLE ELEVEN . . . . . . . . . . . . . . . . . . . . . . . 58
Consolidation, Merger, Conveyance or Other Transfer . . . . 58
SECTION 1101. Company May Consolidate, etc., Only on
Certain Terms . . . . . . . . . . . . . . 58
SECTION 1102. Successor Person Substituted . . . . . . 58
ARTICLE TWELVE . . . . . . . . . . . . . . . . . . . . . . . 59
Supplemental Indentures . . . . . . . . . . . . . . . . . . . 59
SECTION 1201. Supplemental Indentures Without Consent
of Holders . . . . . . . . . . . . . . . 59
SECTION 1202. Supplemental Indentures With Consent of
Holders . . . . . . . . . . . . . . . . . 61
SECTION 1203. Execution of Supplemental Indentures . . 62
SECTION 1204. Effect of Supplemental Indentures . . . . 62
SECTION 1205. Conformity With Trust Indenture Act . . . 62
SECTION 1206. Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . . 63
SECTION 1207. Modification Without Supplemental
Indenture . . . . . . . . . . . . . . . . 63
ARTICLE THIRTEEN . . . . . . . . . . . . . . . . . . . . . . 63
Meetings of Holders; Action Without Meeting . . . . . . . . . 63
SECTION 1301. Purposes for Which Meetings May Be
Called . . . . . . . . . . . . . . . . . 63
SECTION 1302. Call, Notice and Place of Meetings . . . 63
SECTION 1303. Persons Entitled to Vote at Meetings . . 64
SECTION 1304. Quorum; Action . . . . . . . . . . . . . 64
SECTION 1305. Attendance at Meetings; Determination of
Voting Rights; Conduct and Adjournment of
Meetings . . . . . . . . . . . . . . . . 65
SECTION 1306. Counting Votes and Recording Action of
Meetings . . . . . . . . . . . . . . . . 66
SECTION 1307. Action Without Meeting . . . . . . . . . 67
ARTICLE FOURTEEN . . . . . . . . . . . . . . . . . . . . . . 67
Immunity of Incorporators, Shareholders Officers and
Directors . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1401. Liability Solely Corporate . . . . . . . 67
ARTICLE FIFTEEN . . . . . . . . . . . . . . . . . . . . . . . 67
Subordination of Securities . . . . . . . . . . . . . . . . . 67
SECTION 1501. Securities Subordinate to Senior
Indebtedness. . . . . . . . . . . . . . . 67
SECTION 1502. Payment Over of Proceeds of Securities . 68
SECTION 1503. Disputes with Holders of Certain Senior
Indebtedness . . . . . . . . . . . . . . 70
SECTION 1504. Subrogation . . . . . . . . . . . . . . . 70
SECTION 1505. Obligation of the Company Unconditional . 70
SECTION 1506. Priority of Senior Indebtedness Upon
Maturity . . . . . . . . . . . . . . . . 71
SECTION 1507. Trustee as Holder of Senior
Indebtedness . . . . . . . . . . . . . . 71
SECTION 1508. Notice to Trustee to Effectuate
Subordination . . . . . . . . . . . . . . 71
SECTION 1509. Modification, Extension, etc. of Senior
Indebtedness . . . . . . . . . . . . . . 72
SECTION 1510. Trustee Has No Fiduciary Duty to Holders
of Senior Indebtedness . . . . . . . . . 72
SECTION 1511. Paying Agents Other Than the Trustee . . 72
SECTION 1512. Rights of Holders of Senior Indebtedness
Not Impaired . . . . . . . . . . . . . . 73
SECTION 1513. Effect of Subordination Provisions;
Termination . . . . . . . . . . . . . . . 73
Testimonium . . . . . . . . . . . . . . . . . . . . . . . . . 76
Signatures and Seals . . . . . . . . . . . . . . . . . . . . 76
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . 78
<PAGE>
ENSERCH CORPORATION
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF JUNE 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 June 1, 1998, between ENSERCH
CORPORATION, a corporation duly organized and existing under the
laws of the State of Texas (herein called the "Company"), having
its principal office at 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 subordinated debentures, notes or other
evidences of indebtedness (herein called the "Securities"), in an
unlimited aggregate principal amount to be issued from time to
time 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.
"ADDITIONAL INTEREST" has the meaning specified in
Section 312.
"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.
"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.
"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.
"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.
"GUARANTEE" means the guarantee agreement delivered from the
Company to a Trust, for the benefit of the holders of Preferred
Securities issued by such Trust.
"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
Securities 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, 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, 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 all Outstanding Securities
of each such series, as the case may be, determined without
regard to this provision) shall be disregarded and deemed not to
be Outstanding, 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 Secu-
rities 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 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.
"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, means the place or places, specified as contem-
plated by Section 301, at which, subject to Section 602, prin-
cipal of and premium, if any, and interest, if any, on the
Securities of such series 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.
"PREFERRED SECURITIES" means any preferred trust interests
issued by a Trust or similar securities issued by permitted
successors to such Trust in accordance with the Trust Agreement
pertaining to such Trust.
"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.
"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.
"SENIOR INDEBTEDNESS" means all obligations (other than non-
recourse obligations and the indebtedness issued under this
Indenture) of, or guaranteed or assumed by, the Company for
borrowed money, including both senior and subordinated
indebtedness for borrowed money (other than the Securities), or
for the payment of money relating to any lease which is
capitalized on the consolidated balance sheet of the Company and
its subsidiaries in accordance with generally accepted accounting
principles as in effect from time to time, or evidenced by bonds,
debentures, notes or other similar instruments, and in each case,
amendments, renewals, extensions, modifications and refundings of
any such indebtedness or obligations, whether existing as of the
date of this Indenture or subsequently incurred by the Company
unless, in the case of any particular indebtedness, renewal,
extension or refunding, the instrument creating or evidencing the
same or the assumption or guarantee of the same expressly
provides that such indebtedness, renewal, extension or refunding
is not superior in right of payment to or is pari passu with the
Securities; provided that the Company's obligations under the
Guaranty shall not be deemed to be Senior Indebtedness.
"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 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).
"TRUST" means ENSERCH Capital I, a statutory business trust
formed under the laws of the State of Delaware, or any other
Trust designated pursuant to Section 301 hereof or any permitted
successor under the Trust Agreement pertaining to such Trust.
"TRUST AGREEMENT" means the Amended and Restated Trust
Agreement, dated as of July 2, 1998, relating to ENSERCH Capital
I, or an Amended and Restated Trust Agreement relating to a Trust
designated pursuant to Section 301 hereof, in each case, among
the Company, as Depositor, the trustees named therein and several
holders referred to therein as they may be amended from time to
time.
"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 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 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 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 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.
(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:
ENSERCH Corporation
1601 Bryan Street
Dallas, Texas 75201
Attention: Treasurer
Telephone: (214) 812-4600
Telecopy: (214) 812-2488
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, the Holders and, so long as the
notice described in Section 1513 hereof has not been given, the
holders of Senior Indebtedness, any benefit or any legal or
equitable right, remedy or claim under this Indenture; provided,
however, that for so long as any Preferred Securities remain
outstanding, the holders of such Preferred Securities, subject to
certain limitations set forth in this Indenture, may enforce the
Company's obligations hereunder directly against the Company as
third party beneficiaries of this Indenture without first
proceeding against the Trust issuing such Preferred Securities.
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 in the Board Resolution
or Officer's Certificate which establishes the terms of the
Securities of such series, 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, except that if
such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day,
in each case 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;
provided, however, that all Securities shall be issued to a Trust
in exchange for securities of the Company or to evidence loans by
a Trust of the proceeds of the issuance of Preferred Securities
of such Trust plus the amount deposited by the Company with such
Trust from time to time.
The Securities may be issued in one or more series.
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
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 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 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 311; 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 shall be payable, (2) registration
of transfer of Securities of such series may be effected, (3)
exchanges of Securities of such series may be effected and (4)
notices and demands to or upon the Company in respect of the
Securities of such series and this Indenture may be served;
the Security Registrar for such series; 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 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, 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
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
shall be issuable if other than denominations of $25 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
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 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 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 may be determined with reference to an index or
other fact or event ascertainable outside 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
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, in addition
to those set forth in Article Six;
(p) the terms, if any, pursuant to which the Securities
of such series 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 Government Obligations in respect of the
Securities of such series 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 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 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 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 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;
(v) the designation of the Trust to which Securities of
such series are to be issued; and
(w) any other terms of the Securities of such series not
inconsistent with the provisions of this Indenture.
All Securities of any one series shall be substantially
identical, except as to principal amount and date of issue and
except as may be set forth in the terms of such series as
contemplated above. The Securities of each series shall be
subordinated in right of payment to Senior Indebtedness as
provided in Article Fifteen.
SECTION 302. DENOMINATIONS.
Unless otherwise provided as contemplated by Section 301
with respect to any series of Securities, the Securities of each
series shall be issuable in denominations of $25 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, 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, establishing such terms;
(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).
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, 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, 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 definitive 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, after the
preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable,
without charge to the Holder thereof, for definitive Securities
of such series 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 Securi-
ties of the same series, of authorized denominations and of like
tenor and aggregate principal amount.
Until exchanged in full as hereinabove provided, the
temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive
Securities of the same series 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 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, upon surrender
for registration of transfer of any Security of such series at
the office or agency of the Company maintained pursuant to
Section 602 in a Place of Payment for such series, 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, 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, any Security of
such series may be exchanged at the option of the Holder, for one
or more new Securities of the same series, 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, 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 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 called for
redemption (or stating that all Outstanding Securities of such
series are 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 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 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, 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 311, 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, 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. 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.
SECTION 312. ADDITIONAL INTEREST.
So long as any Preferred Securities remain outstanding,
if the Trust which issued such Preferred Securities shall be
required to pay, with respect to its income derived from the
interest payments on the Securities of any series, any amounts
for or on account of any taxes, duties, assessments or
governmental charges of whatever nature imposed by the United
States, or any other taxing authority, then, in any such case,
the Company will pay as interest on such series such additional
interest ("Additional Interest") as may be necessary in order
that the net amounts received and retained by such Trust after
the payment of such taxes, duties, assessments or governmental
charges shall result in such Trust's having such funds as it
would have had in the absence of the payment of such taxes,
duties, assessments or governmental charges.
ARTICLE FOUR
REDEMPTION OF SECURITIES
SECTION 401. APPLICABILITY OF ARTICLE.
Securities of any series 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) 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 are to be
redeemed, the particular Securities to be redeemed shall be
selected by the Trustee from the Outstanding Securities of such
series 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 any integral
multiple thereof) of the principal amount of Securities of such
series of a denomination larger than the minimum authorized
denomination for Securities of such series; 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, 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,
(c) if less than all the Securities of any series 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, 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,
except as otherwise specified as contemplated by Section 301 for
Securities of such series.
The minimum amount of any sinking fund payment provided
for by the terms of Securities of any series 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 is herein referred to as an "optional
sinking fund payment". If provided for by the terms of
Securities of any series, 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 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 in respect of which a mandatory sinking fund payment is to
be made and (b) may apply as a credit Securities of such series
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, 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;
(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 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 not have delivered such Officer's
Certificate and, to the extent applicable, all such Securities,
the next suceeding sinking fund payment for such series shall be
made entirely in cash in the amount of the mandatory 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 (including Additional Interest), 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 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 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, 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, 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, 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, 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, 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, as contemplated by
Section 301, if before the time for such compliance the Holders
of at least a majority in aggregate principal amount of the
Outstanding Securities of all series 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 at least 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; provided, however, so long as a Trust holds Securities of
any series, such Trust may not waive compliance or waive any
default in compliance by the Company with any covenant or other
term contained in this Indenture or the Securities of such series
without the approval of the holders of at least a majority in
aggregate liquidation preference of the outstanding Preferred
Securities issued by such Trust affected, obtained as provided in
the Trust Agreement pertaining to such Trust.
SECTION 608. RESTRICTION ON PAYMENT OF DIVIDENDS.
So long as any Preferred Securities of any series remain
outstanding, the Company shall not declare or pay any dividend
on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock, or make any
guarantee payments with respect to the foregoing (other than
payments under the Guarantee relating to such Preferred
Securities) if at such time (a) the Company shall be in default
with respect to its payment or other obligations under the
Guarantee relating to such Preferred Securities, (b) there shall
have occurred and be continuing a payment default (whether before
or after expiration of any period of grace) or an Event of
Default hereunder or (c) the Company shall have elected to extend
any interest payment period as provided in Section 311, and any
such period, or any extension thereof, shall be continuing.
SECTION 609. MAINTENANCE OF TRUST EXISTENCE.
So long as Preferred Securities of any series remain
outstanding, the Company shall (i) maintain direct or indirect
ownership of all interests in the Trust which issued such
Preferred Securities, other than such Preferred Securities, (ii)
not voluntarily (to the extent permitted by law) dissolve,
liquidate or wind up such Trust, except in connection with a
distribution of the Securities to the holders of the Preferred
Securities in liquidation of such Trust, (iii) remain the sole
Depositor under the Trust Agreement (the "Depositor") of such
Trust and timely perform in all material respects all of its
duties as Depositor of such Trust, and (iv) use reasonable
efforts to cause such Trust to remain a business trust and
otherwise continue to be treated as a grantor trust for Federal
income tax purposes provided that any permitted successor to the
Company under this Indenture may succeed to the Company's duties
as Depositor of such Trust; and provided further that the Company
may permit such Trust to consolidate or merge with or into
another business trust or other permitted successor under the
Trust Agreement pertaining to such Trust so long as the Company
agrees to comply with this Section 609 with respect to such
successor business trust or other permitted successor.
SECTION 610. RIGHTS OF HOLDERS OF PREFERRED SECURITIES.
The Company agrees that, for so long as any Preferred
Securities remain outstanding, its obligations under this
Indenture will also be for the benefit of the holders from time
to time of Preferred Securities, and the Company acknowledges and
agrees that such holders will be entitled to enforce this
Indenture, as third party beneficiaries, directly against the
Company to the same extent as if such holders of Preferred
Securities held a principal amount of Securities equal to the
stated liquidation amount of the Preferred Securities held by
such holders.
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, Government
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, 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 Government Obligations deposited in
accordance with this Section shall be held in trust, as
provided in Section 703; and
(y) if Government Obligations shall have been
deposited, an Opinion of Counsel that the obligations so
deposited constitute Government 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 Government 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 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.
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
Government 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 Government Obligations shall have
been deposited as provided in this Section against, any tax, fee
or other charge imposed on or assessed against such Government
Obligations or the principal or interest received in respect of
such Government 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 Government 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 Government Obligations held by the Trustee
pursuant to Section 703.
SECTION 703. APPLICATION OF TRUST MONEY.
Neither the Government Obligations nor the money deposit-
ed pursuant to Section 701, nor the principal or interest
payments on any such Government 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 Government Obligations, if
not then needed for such purpose, shall, to the extent prac-
ticable and upon Company request, be invested in Government
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 Government
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 interest 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, including any
Additional Interest, on any Security of such series within 30
days after the same becomes due and payable (whether or not
payment is prohibited by the provisions of Article Fifteen
hereof); provided, however, that a valid extension of the
interest payment period by the Company as contemplated in
Section 311 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 (whether or not
payment is prohibited by the provisions of Article Fifteen
hereof); 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 of all
Securities of such series and interest accrued thereon to be due
and payable immediately (provided that the payment of principal
and interest on such Securities shall remain subordinated to the
extent provided in Article Fifteen hereof). 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 (provided that the
payment of principal and interest on such Securities shall remain
subordinated to the extent provided in the Indenture). 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 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 premium, if any, and on any overdue principal and in-
terest, 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.
Subject to the provisions of Article Fifteen, any money
collected by the Trustee pursuant to this Article 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 pre-
sentation 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 Section 307 and 311)
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;
provided, however, that so long as a Trust holds the Securities
of any series, such Trust may not waive any past default without
the consent of at least a majority in aggregate liquidation
preference of the outstanding Preferred Securities issued by such
Trust affected, obtained as provided in the Trust Agreement
pertaining to such Trust.
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 (i) the
Securities of any other series, (ii) the Trust Agreement and the
Guarantee Agreement pertaining to each Trust; and (iii) the
Indenture dated as of January 1, 1998 between the Company and The
Bank of New York, as trustee, of the series issued thereunder
shall be deemed to be specifically described in this Indenture
for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
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;
provided that so long as any Preferred Securities remain
outstanding, the Trust which issued such Preferred Securities
shall not execute any Act to remove the Trustee without the
consent of the holders of a majority in aggregate liquidation
preference of Preferred Securities issued by such Trust
outstanding, obtained as provided in the Trust Agreement
pertaining to such Trust.
(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, which shall
be authorized to act on behalf of the Trustee to authenticate
Securities of such series 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 Person, or convey or otherwise transfer or lease its
properties and assets substantially as an entirety to any Person,
unless
(a) the Person 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 PERSON SUBSTITUTED.
Upon any consolidation by the Company with or merger by
the Company into any other Person 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 Person 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 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 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 only pursuant to the provisions of Section 1202
hereof or when no Security of such series 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 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 of, the Securities; 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 shall be payable, (2) all or any
series of Securities may be surrendered for registration of
transfer, (3) all or any series of Securities may be
surrendered for exchange and (4) notices and demands to or
upon the Company in respect of all or any series of Securities
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 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 no such supplemental indenture shall:
(a) change the Stated Maturity of the principal of, or
any installment of principal of or interest on (except as
provided in Section 311 hereof), 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 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, if applicable, in
liquidation preference of any series of Preferred Securities),
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
(c) modify any of the provisions of this Section,
Section 607 or Section 813 with respect to the Securities of
any series, 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).
Notwithstanding the foregoing, so long as any of the Preferred
Securities remain outstanding, the Trustee may not consent to a
supplemental indenture under this Section 1202 without the prior
consent, obtained as provided in a Trust Agreement pertaining to
a Trust which issued such Preferred Securities, of the holders of
not less than a majority in aggregate liquidation preference of
all Preferred Securities issued by such Trust affected,
considered as one class, or, in the case of changes described in
clauses (a), (b) and (c) above, 100% in aggregate liquidation
preference of all such Preferred Securities then outstanding
which would be affected thereby, considered as one class. 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 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.
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 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 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.
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 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.
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 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 by the Company or by the Holders of 33% in aggregate
principal amount of all of such series, 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 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 shall be valid without notice if the Holders of
all Outstanding Securities of such series 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 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 a Person shall be (a) a
Holder of one or more Outstanding Securities of such series, 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 by such Holder or Holders. The only Persons who shall be
entitled to attend any meeting of Holders of Securities of any
series 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 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; 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,
considered as one class, the Persons entitled to vote such
specified percentage in principal amount of the Outstanding Secu-
rities of such series, 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, 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
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 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, 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,
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
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 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 represented at the meet-
ing, 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 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 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
SUBORDINATION OF SECURITIES
SECTION 1501. SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS.
The Company, for itself, its successors and assigns,
covenants and agrees, and each Holder of the Securities of each
series, by its acceptance thereof, likewise covenants and agrees,
that the payment of the principal of and premium, if any, and
interest, if any, on each and all of the Securities is hereby
expressly subordinated and subject to the extent and in the
manner set forth in this Article, in right of payment to the
prior payment in full of all Senior Indebtedness.
Each Holder of the Securities of each series, by its
acceptance thereof, authorizes and directs the Trustee on its
behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article, and
appoints the Trustee its attorney-in-fact for any and all such
purposes.
SECTION 1502. PAYMENT OVER OF PROCEEDS OF SECURITIES.
In the event (a) of any insolvency or bankruptcy
proceedings or any receivership, liquidation, reorganization or
other similar proceedings in respect of the Company or a
substantial part of its property, or of any proceedings for
liquidation, dissolution or other winding up of the Company,
whether or not involving insolvency or bankruptcy, or (b) subject
to the provisions of Section 1503, that (i) a default shall have
occurred with respect to the payment of principal of or interest
on or other monetary amounts due and payable on any Senior
Indebtedness, or (ii) there shall have occurred a default (other
than a default in the payment of principal or interest or other
monetary amounts due and payable) in respect of any Senior
Indebtedness, as defined therein or in the instrument under which
the same is outstanding, permitting the holder or holders thereof
to accelerate the maturity thereof (with notice or lapse of time,
or both), and such default shall have continued beyond the period
of grace, if any, in respect thereof, and, in the cases of
subclauses (i) and (ii) of this clause (b), such default shall
not have been cured or waived or shall not have ceased to exist,
or (c) that the principal of and accrued interest on the
Securities of any series shall have been declared due and payable
pursuant to Section 801 and such declaration shall not have been
rescinded and annulled as provided in Section 802, then:
(1) the holders of all Senior Indebtedness
shall first be entitled to receive payment of the
full amount due thereon, or provision shall be made
for such payment in money or money's worth, before
the Holders of any of the Securities are entitled to
receive a payment on account of the principal of or
interest on the indebtedness evidenced by the
Securities, including, without limitation, any
payments made pursuant to Articles Four and Five;
(2) any payment by, or distribution of assets
of, the Company of any kind or character, whether in
cash, property or securities, to which any Holder or
the Trustee would be entitled except for the
provisions of this Article, shall be paid or
delivered by the person making such payment or
distribution, whether a trustee in bankruptcy, a
receiver or liquidating trustee or otherwise,
directly to the holders of such Senior Indebtedness
or their representative or representatives or to the
trustee or trustees under any indenture under which
any instruments evidencing any of such Senior
Indebtedness may have been issued, ratably according
to the aggregate amounts remaining unpaid on account
of such Senior Indebtedness held or represented by
each, to the extent necessary to make payment in
full of all Senior Indebtedness remaining unpaid
after giving effect to any concurrent payment or
distribution (or provision therefor) to the holders
of such Senior Indebtedness, before any payment or
distribution is made to the Holders of the
indebtedness evidenced by the Securities or to the
Trustee under this Indenture; and
(3) in the event that, notwithstanding the
foregoing, any payment by, or distribution of assets
of, the Company of any kind or character, whether in
cash, property or securities, in respect of
principal of or interest on the Securities or in
connection with any repurchase by the Company of the
Securities, shall be received by the Trustee or any
Holder before all Senior Indebtedness is paid in
full, or provision is made for such payment in money
or money's worth, such payment or distribution in
respect of principal of or interest on the
Securities or in connection with any repurchase by
the Company of the Securities shall be paid over to
the holders of such Senior Indebtedness or their
representative or representatives or to the trustee
or trustees under any indenture under which any
instruments evidencing any such Senior Indebtedness
may have been issued, ratably as aforesaid, for
application to the payment of all Senior
Indebtedness remaining unpaid until all such Senior
Indebtedness shall have been paid in full, after
giving effect to any concurrent payment or
distribution (or provision therefor) to the holders
of such Senior Indebtedness.
Notwithstanding the foregoing, at any time after the
123rd day following the date of deposit of cash or Government
Obligations pursuant to Section 701 (provided all conditions set
out in such Section shall have been satisfied), the funds so
deposited and any interest thereon will not be subject to any
rights of holders of Senior Indebtedness including, without
limitation, those arising under this Article Fifteen; provided
that no event described in clauses (d) and (e) of Section 801
with respect to the Company has occurred during such 123-day
period.
For purposes of this Article only, the words "cash,
property or securities" shall not be deemed to include shares of
stock of the Company as reorganized or readjusted, or securities
of the Company or any other corporation provided for by a plan or
reorganization or readjustment which are subordinate in right of
payment to all Senior Indebtedness which may at the time be
outstanding to the same extent as, or to a greater extent than,
the Securities are so subordinated as provided in this Article.
The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer
of its property as an entirety, or substantially as an entirety,
to another corporation upon the terms and conditions provided for
in Article Eleven hereof shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of
this Section 1502 if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, comply with
the conditions stated in Article Eleven hereof. Nothing in
Section 1501 or in this Section 1502 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 907.
SECTION 1503. DISPUTES WITH HOLDERS OF CERTAIN SENIOR
INDEBTEDNESS.
Any failure by the Company to make any payment on or
perform any other obligation in respect of Senior Indebtedness,
other than any indebtedness incurred by the Company or assumed or
guaranteed, directly or indirectly, by the Company for money
borrowed (or any deferral, renewal, extension or refunding
thereof) or any other obligation as to which the provisions of
this Section shall have been waived by the Company in the
instrument or instruments by which the Company incurred, assumed,
guaranteed or otherwise created such indebtedness or obligation,
shall not be deemed a default under clause (b) of Section 1502 if
(i) the Company shall be disputing its obligation to make such
payment or perform such obligation and (ii) either (A) no final
judgment relating to such dispute shall have been issued against
the Company which is in full force and effect and is not subject
to further review, including a judgment that has become final by
reason of the expiration of the time within which a party may
seek further appeal or review, or (B) in the event that a
judgment that is subject to further review or appeal has been
issued, the Company shall in good faith be prosecuting an appeal
or other proceeding for review and a stay or execution shall have
been obtained pending such appeal or review.
SECTION 1504. SUBROGATION.
Senior Indebtedness shall not be deemed to have been paid
in full unless the holders thereof shall have received cash (or
securities or other property satisfactory to such holders) in
full payment of such Senior Indebtedness then outstanding.
Subject to the prior payment in full of all Senior Indebtedness,
the rights of the Holders of the Securities shall be subrogated
to the rights of the holders of Senior Indebtedness to receive
any further payments or distributions of cash, property or
securities of the Company applicable to the holders of the Senior
Indebtedness until all amounts owing on the Securities shall be
paid in full; and such payments or distributions of cash,
property or securities received by the Holders of the Securities,
by reason of such subrogation, which otherwise would be paid or
distributed to the holders of such Senior Indebtedness shall, as
between the Company, its creditors other than the holders of
Senior Indebtedness, and the Holders, be deemed to be a payment
by the Company to or on account of Senior Indebtedness, it being
understood that the provisions of this Article are and are
intended solely for the purpose of defining the relative rights
of the Holders, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
SECTION 1505. OBLIGATION OF THE COMPANY UNCONDITIONAL.
Nothing contained in this Article or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as
among the Company, its creditors other than the holders of Senior
Indebtedness and the Holders, the obligation of the Company,
which is absolute and unconditional, to pay to the Holders the
principal of and interest on the Securities as and when the same
shall become due and payable in accordance with their terms, or
is intended to or shall affect the relative rights of the Holders
and creditors of the Company other than the holders of Senior
Indebtedness, nor shall anything herein or therein prevent the
Trustee or any Holder from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture,
subject to the rights, if any, under this Article of the holders
of Senior Indebtedness in respect of cash, property or securities
of the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets or securities
of the Company referred to in this Article, the Trustee and the
Holders shall be entitled to rely upon any order or decree of a
court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are pending
for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or
distributed thereon, and all other facts pertinent thereto or to
this Article.
SECTION 1506. PRIORITY OF SENIOR INDEBTEDNESS UPON MATURITY.
Upon the maturity of the principal of any Senior
Indebtedness by lapse of time, acceleration or otherwise, all
matured principal of Senior Indebtedness and interest and
premium, if any, thereon shall first be paid in full before any
payment of principal or premium, if any, or interest, if any, is
made upon the Securities or before any Securities can be acquired
by the Company or any sinking fund payment is made with respect
to the Securities (except that required sinking fund payments may
be reduced by Securities acquired before such maturity of such
Senior Indebtedness).
SECTION 1507. TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS.
The Trustee shall be entitled to all rights set forth in
this Article with respect to any Senior Indebtedness at any time
held by it, to the same extent as any other holder of Senior
Indebtedness. Nothing in this Article shall deprive the Trustee
of any of its rights as such holder.
SECTION 1508. NOTICE TO TRUSTEE TO EFFECTUATE SUBORDINATION.
Notwithstanding the provisions of this Article or any
other provision of the Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would
prohibit the making of any payment of moneys to or by the Trustee
unless and until the Trustee shall have received written notice
thereof from the Company, from a Holder or from a holder of any
Senior Indebtedness or from any representative or representatives
of such holder and, prior to the receipt of any such written
notice, the Trustee shall be entitled, subject to Section 901, in
all respects to assume that no such facts exist; provided,
however, that, if prior to the fifth Business Day preceding the
date upon which by the terms hereof any such moneys may become
payable for any purpose, or in the event of the execution of an
instrument pursuant to Section 702 acknowledging satisfaction and
discharge of this Indenture, then if prior to the second Business
Day preceding the date of such execution, the Trustee shall not
have received with respect to such moneys the notice provided for
in this Section, then, anything herein contained to the contrary
notwithstanding, the Trustee may, in its discretion, receive such
moneys and/or apply the same to the purpose for which they were
received, and shall not be affected by any notice to the
contrary, which may be received by it on or after such date;
provided, however, that no such application shall affect the
obligations under this Article of the persons receiving such
moneys from the Trustee.
SECTION 1509. MODIFICATION, EXTENSION, ETC. OF SENIOR
INDEBTEDNESS.
The holders of Senior Indebtedness may, without affecting
in any manner the subordination of the payment of the principal
of and premium, if any, and interest, if any, on the Securities,
at any time or from time to time and in their absolute
discretion, agree with the Company to change the manner, place or
terms of payment, change or extend the time of payment of, or
renew or alter, any Senior Indebtedness, or amend or supplement
any instrument pursuant to which any Senior Indebtedness is
issued, or exercise or refrain from exercising any other of their
rights under the Senior Indebtedness including, without
limitation, the waiver of default thereunder, all without notice
to or assent from the Holders or the Trustee.
SECTION 1510. TRUSTEE HAS NO FIDUCIARY DUTY TO HOLDERS OF SENIOR
INDEBTEDNESS.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its
covenants and objectives as are specifically set forth in this
Indenture, and no implied covenants or obligations with respect
to the holders of Senior Indebtedness shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed
to owe any fiduciary duty to the holders of Senior Indebtedness,
and shall not be liable to any such holders if it shall
mistakenly pay over or deliver to the Holders or the Company or
any other Person, money or assets to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article or
otherwise.
SECTION 1511. PAYING AGENTS OTHER THAN THE TRUSTEE.
In case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then
acting hereunder, the term "Trustee" as used in this Article
shall in such case (unless the context shall otherwise require)
be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if
such Paying Agent were named in this Article in addition to or in
place of the Trustee; provided, however, that Sections 1507, 1508
and 1510 shall not apply to the Company if it acts as Paying
Agent.
SECTION 1512. RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS NOT
IMPAIRED.
No right of any present or future holder of Senior
Indebtedness to enforce the subordination herein shall at any
time or in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any noncompliance
by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.
SECTION 1513. EFFECT OF SUBORDINATION PROVISIONS; TERMINATION.
Notwithstanding anything contained herein to the
contrary, other than as provided in the immediately succeeding
sentence, all the provisions of this Indenture shall be subject
to the provisions of this Article, so far as the same may be
applicable thereto.
Notwithstanding anything contained herein to the
contrary, the provisions of this Article Fifteen shall be of no
further effect, and the Securities shall no longer be
subordinated in right of payment to the prior payment of Senior
Indebtedness, if the Company shall have delivered to the Trustee
a notice to such effect. Any such notice delivered by the
Company shall not be deemed to be a supplemental indenture for
purposes of Article Twelve.
-------------------------
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.
ENSERCH CORPORATION
By: /s/ Robert S. Shapard
---------------------------------
Robert S. Shapard
Treasurer and Assistant Secretary
<PAGE>
THE BANK OF NEW YORK, Trustee
By: /s/ Walter N. Gitlin
-----------------------------------
Walter N. Gitlin
Vice President
ENSERCH CORPORATION
OFFICER'S CERTIFICATE
Robert Shapard, the Treasurer of ENSERCH Corporation (the
"Company"), pursuant to the authority granted in the Board
Resolutions of the Company, dated February 8, 1994, December 17,
1997 and May 11, 1998, and Sections 201 and 301 of the Indenture
defined herein, does hereby certify to The Bank of New York (the
"Trustee"), as Trustee under the Indenture (For Unsecured
Subordinated Debt Securities relating to Trust Securities) of the
Company dated as of June 1, 1998 (the "Indenture") that:
1. The securities of the first series to be issued under
the Indenture shall be designated "Floating Rate Junior
Subordinated Debentures, Series A" (the "Debentures of
the First Series"). The Debentures of the First Series
are to be issued to The Bank of New York, as Property
Trustee (the "Property Trustee") of ENSERCH Capital I,
a Delaware statutory business trust (the "Trust"). 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 Debentures of the First Series shall be limited in
aggregate principal amount to $154,640,000 at any time
Outstanding, except as contemplated in Section 301(b)
of the Indenture;
3. The Debentures of the First Series shall mature and the
principal shall be due and payable together with all
accrued and unpaid interest thereon on July 1, 2028;
4. Interest on the Debentures of the First Series shall be
payable quarterly in arrears on January 1, April 1,
July 1 and October 1 of each year (each, an "Interest
Payment Date") commencing October 1, 1998. With
respect to the Debentures of the First Series, the term
"Interest Period" shall mean each period from, and
including, an Interest Payment Date to, but excluding,
the next succeeding Interest Payment Date, except that
the first Interest Period shall commence on the date of
original issuance. The amount of interest payable for
any Interest Period will be computed on the basis of
the actual number of days elapsed in a 360-day year.
Interest on the Debentures of the First Series will
accrue from, and including, the date of original
issuance, but if interest has been paid on such
Debentures 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), in each case with the same force and
effect as if made on such Interest Payment Date.
The Debentures of the First Series shall bear interest
at a variable rate per annum (the "Interest Rate")
equal to 3-month LIBOR, as described below, plus 1.35%.
The Bank of New York, as Calculation Agent (the
"Calculation Agent"), will calculate the Interest Rate
for each Interest Period based on 3-month LIBOR
determined as of two London Business Days (defined as
any day, other than a Saturday or Sunday, on which
banks are open for business in London) prior to the
first day of such Interest Period (each, a
"Determination Date"). "3-month LIBOR" means, with
respect to a Interest Period relating to an Interest
Payment Date, the London interbank offered rate for
three-month, Eurodollar deposits determined in the
following order of priority:
(a) the rate (expressed as a percentage per
annum) for Eurodollar deposits having a three-month
maturity that appears on Telerate Page 3750 as of 11:00
a.m. (London time) on the related Determination Date;
(b) if such rate does not appear on Telerate Page
3750 as of 11:00 a.m. (London time) on the related
Determination Date, 3-month LIBOR will be the
arithmetic mean (if necessary rounded upwards to the
nearest whole multiple of .00001%) of the rates
(expressed as percentages per annum) for Eurodollar
deposits having a three-month maturity that appear on
Reuters Monitor Money Rates Page LIBO ("Reuters Page
LIBO") as of 11:00 a.m. (London time) on such
Determination Date;
(c) if such rate does not appear on Reuters Page
LIBO as of 11:00 a.m. (London time) on the related
Determination Date, the Calculation Agent will request
the principal London offices of four leading banks (the
"U.K. Reference Banks") in the London interbank market
to provide such banks' offered quotations (expressed as
percentages per annum) to prime banks in the London
interbank market for Eurodollar deposits having a
three-month maturity as of 11:00 a.m. (London time) on
such Determination Date. If at least two quotations
are provided, 3-month LIBOR will be the arithmetic mean
(if necessary rounded upwards to the nearest whole
multiple of .00001%) of such quotations;
(d) if fewer than two such quotations are
provided as requested in clause (c) above, the
Calculation Agent will request four major New York City
banks ("U.S. Reference Banks", together with the "U.K.
Reference Banks", the "Reference Banks") to provide
such banks' offered quotations (expressed as
percentages per annum) to leading European banks for
loans in Eurodollars as of 11:00 a.m. (London time) on
such Determination Date. If at least two such
quotations are provided, 3-month LIBOR will be the
arithmetic mean (if necessary rounded upwards to the
nearest whole multiple of .00001%) of such quotations;
and
(e) if fewer than two such quotations are
provided as requested in clause (d) above, 3-month
LIBOR will be 3-month LIBOR determined with respect to
the Interest Period immediately preceding such current
Interest Period.
If the rate for Eurodollar deposits having a three-
month maturity that initially appears on Telerate Page
3750 or Reuters Page LIBO, as the case may be, as of
11:00 a.m. (London time) on the related Determination
Date is superseded on Telerate Page 3750 or Reuters
Page LIBO, as the case may be, by a corrected rate
before 12:00 noon (London time) on such Determination
Date, the corrected rate as so substituted on the
applicable page will be the applicable 3-month LIBOR
for such Determination Date.
The Interest Rate for any Interest Period will at no
time be higher than the maximum rate then permitted by
applicable law.
Absent manifest error, the Calculation Agent's
determination of 3-month LIBOR and its calculation of
the applicable Interest Rate for each Interest Period
will be final and binding. Investors may obtain the
Interest Rate for the current and preceding Interest
Period by writing or calling Corporate Trust
Administration at the Calculation Agent at The Bank of
New York, 101 Barclay Street, New York, New York 10286.
Determination of Interest Rate and Calculation of
Interest Amount
The Calculation Agent shall, as soon as practicable
after 11:00 a.m., London time, on each Determination
Date, determine the Interest Rate and calculate the
amount of interest payable on the Debentures of the
First Series in respect of the relevant Interest Period
(the "Interest Amount"). The Interest Amount shall be
calculated by applying the Interest Rate to the
principal amount of each Debenture of the First Series
outstanding at the commencement of such Interest
Period, multiplying each such amount by the actual
number of days in such Interest Period divided by 360
and rounding the resultant figure to the nearest cent
(with one-half cent or more being rounded upwards).
The determination of the Interest Rate and the Interest
Amount by the Calculation Agent will (in the absence of
wilful default, bad faith or manifest error) be final,
conclusive and binding on all concerned. None of the
Property Trustee, the Delaware Trustee and the
Administrative Trustees with respect to the Trust
(together, "Issuer Trustees"), the Trustee, the
Calculation Agent, the Trust or the Company (or any of
their respective officers, directors, agents,
beneficiaries, employees or affiliates) shall have any
liability to any person for (i) the selection of the
Reference Banks or (ii) any inability of the
Calculation Agent to obtain quotations from the
Reference Banks which is caused by circumstances beyond
its reasonable control.
The Calculation Agent will cause the Interest Rate, the
Interest Amount in respect of each Debenture of the
First Series and the Interest Payment Date for each
Interest Period to be notified to the Property Trustee,
one of the Administrative Trustees selected by the
Calculation Agent, the Trustee, each Paying Agent
appointed by the Trust in respect of the Preferred
Securities issued by the Trust (the "Preferred
Securities") and any securities exchange or interdealer
quotation system on which the Preferred Securities or
the Debentures of the First Series are listed, in each
case as soon as reasonably practicable after the
determination thereof, but in no event later than the
second Business Day of the relevant Interest Period.
Each such Interest Rate, Interest Amount and Interest
Payment Date shall be provided by the Calculation Agent
by telephone to Holders of the Debentures of the First
Series who telephone the Calculation Agent and request
such information.
All certificates, communications, opinions,
determinations, calculations, quotations and decisions
given, expressed, made or obtained for the purposes of
the provisions hereof relating to the calculation and
payment of interest on the Debentures of the First
Series, whether by the Reference Banks (or any of them)
or the Calculation Agent, will (in the absence of
wilful default, bad faith or manifest error) be binding
on the Trust, the Company, the Issuer Trustees, the
Trustee, the Calculation Agent and all of the Holders
of the Debentures of the First Series and all holders
of the securities issued by the Trust, and no liability
will (in the absence of wilful default, bad faith or
manifest error) attach to the Calculation Agent in
connection with the exercise or non-exercise by it of
its powers, duties and discretion in connection with
the foregoing;
5. Each installment of interest on a Debenture of the
First Series shall be payable to the Person in whose
name such Debenture of the First Series is registered
in the Securities Register on the close of business on
the fifteenth day (whether or not a Business Day)
preceding the corresponding Interest Payment Date (the
"Regular Record Date") for the Debentures of the First
Series; provided, however, that the Company shall have
the right to change the Regular Record Date by one or
more Officer's Certificates. Any installment of
interest on the Debentures of the First Series not
punctually paid or duly provided for shall forthwith
cease to be payable to the Holders of such Debentures
of the First Series on such Regular Record Date, and
may be paid to the Persons in whose name the Debentures
of the First Series are registered in the Securities
Register 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 the Debentures of the First Series not less than 10
days prior to such Special Record Date in any 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;
6. The principal and each installment of interest on the
Debentures of the First Series shall be payable at, and
registration and registration of transfers and
exchanges in respect of the Debentures 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 as such addresses appear in the Securities
Register. Notices and demands to or upon the Company
in respect of the Debentures of the First Series may be
served at such 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 services 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
Debentures of the First Series;
7. The Debentures of the First Series will be redeemable
at the option of the Company on or after July 1, 2003,
at any time in whole and from time to time in part,
upon not less than 30 nor more than 60 days' notice
given as provided in the Indenture, at a Redemption
Price equal to 100% of the principal amount thereof
plus accrued and unpaid interest thereon to the
Redemption Date.
If at any time a Tax Event shall occur and be
continuing and either (i) in the opinion of counsel to
the Company experienced in such matters, there would in
all cases, after effecting the termination of the
Trust, after satisfaction of liabilities to creditors
of the Trust, if any, as provided by applicable law,
and the distribution of the Debentures of the First
Series to the holders of the Preferred Securities, in
exchange therefor, be more than an insubstantial risk
that an Adverse Tax Consequence (as defined below)
would continue to exist or (ii) the Debentures of the
First Series are not held by the Trust, then the
Company shall have the right to redeem the Debentures
of the First Series, in whole but not in part, at any
time within 90 days following the occurrence of the Tax
Event, at 100% of the principal amount thereof plus
accrued and unpaid interest thereon to the Redemption
Date.
"Tax Event" means the receipt by the Trust or the
Company of an opinion of counsel experienced in such
matters to the effect that, as a result of (a) any
amendment to, clarification of, or change (including
any announced prospective change) in, the laws or
treaties (or any regulations thereunder) of the United
States or any political subdivision or taxing authority
thereof or therein affecting taxation, (b) any judicial
decision or any official administrative pronouncement,
ruling, regulatory procedure, notice or announcement
(including any notice or announcement of intent to
issue or adopt any such administrative pronouncement,
ruling, regulatory procedure or regulation) (each, an
"Administrative Action"), or (c) any amendment to,
clarification of, or change in the official position or
the interpretation of any such Administrative Action or
judicial decision or any interpretation or
pronouncement that provides for a position with respect
to such Administrative Action or judicial decision that
differs from the theretofore generally accepted
position, in each case by any legislative body, court,
governmental authority or regulatory body, irrespective
of the time or manner in which such amendment,
clarification or change is introduced or made known,
which amendment, clarification, or change is effective,
which Administrative Action is taken or which judicial
decision is issued, in each case on or after the date
of issuance of the Preferred Securities, there is more
than an insubstantial risk that (i) the Trust is, or
will be, subject to United States federal income tax
with respect to interest received on the Debentures of
the First Series, (ii) interest payable by the Company
on the Debentures of the First Series is not, or will
not be, fully deductible by the Company for United
States federal income tax purposes, or (iii) the Trust
is, or will be, subject to more than a de minimis
amount of other taxes, duties or other governmental
charges (each of the circumstances described in clauses
(i), (ii) or (iii) being an "Adverse Tax Consequence");
8. So long as any Debentures of the First Series are
Outstanding, the failure of the Company to pay interest
on any Debentures of the First Series within 30 days
after the same becomes due and payable (whether or not
payment is prohibited by the provisions of Article
Fifteen of the Indenture) shall constitute an Event of
Default; provided, however, that a valid extension of
the interest payment period by the Company as
contemplated in Section 311 of the Indenture and
paragraph (9) of this Certificate shall not constitute
a failure to pay interest for this purpose;
9. Pursuant to Section 311 of the Indenture, the Company
shall have the right, at any time and from time to time
during the term of the Debentures of the First Series,
so long as the Company is not in default in the payment
of interest on the Securities of any series under the
Indenture, to extend the interest payment period to a
period not exceeding 20 consecutive quarterly periods
(an "Extension Period") during which period interest
(calculated for each Interest Period in the manner
provided for in paragraph (4) of this Certificate, as
if the interest payment period had not been so
extended) will be compounded quarterly. At the end of
the Extension Period, the Company shall pay all
interest accrued and unpaid (together with interest
thereon at the rate specified for the Debentures of the
First Series, compounded quarterly, to the extent
permitted by applicable law). However, during any such
Extension Period, the Company shall not declare or pay
any dividend or distribution (other than a dividend or
distribution in common stock of the Company) on, or
redeem, purchase, acquire or make a liquidation payment
with respect to, any of its capital stock, make any
payment of principal, interest or premium, if any, on
or repay, repurchase or redeem any indebtedness that is
pari passu with the Debentures of the First Series, or
make any guarantee payments with respect to the
foregoing ("Restricted Payments"). Prior to the
termination of any such Extension Period, the Company
may further extend the interest payment period,
provided that such Extension Period together with all
such previous and further extensions thereof shall not
exceed 20 consecutive quarterly periods at any one time
or extend beyond the Maturity of the Debentures of the
First Series. Any Extension Period with respect to
payment of interest on the Debentures of the First
Series, or any extended interest payment period in
respect of similar securities will apply to the
Debentures of the First Series and all such securities
and will also apply to distributions with respect to
the Preferred Securities and all other securities with
terms substantially the same as the Preferred
Securities. Upon the termination of any such Extension
Period and the payment of all amounts then due,
including interest on deferred interest payments, the
Company may elect to begin a new Extension Period,
subject to the above requirements. No interest shall
be due and payable during an Extension Period, except
at the end thereof. The Company will give the Trust
and the Trustee notice of its election of an Extension
Period before the Business Day prior to the record date
for the distribution which would occur but for such
election and will cause the Trust to send notice of
such election to the holders of Preferred Securities;
10. At any time, the Company will have the right to
dissolve the Trust and, after satisfaction of
liabilities to creditors, if any, of the Trust as
provided by applicable law, cause the Debentures of the
First Series to be distributed to the holders of the
Preferred Securities;
11. So long as any Securities are outstanding under the
Indenture, the Company shall not make any Restricted
Payments at any time the Company is in default under
the Guarantee with respect to the Trust or is in
default with respect to payments due on any Outstanding
Securities;
12. In the event that, at any time subsequent to the
initial authentication and delivery of the Debentures
of the First Series, the Debentures of the First Series
are to be held in global form by a securities
depositary, the Company may at such time establish the
matters contemplated in clause (r) in the second
paragraph of Section 301 of the Indenture in an
Officer's Certificate supplemental to this Certificate;
13. No service charge shall be made for the registration of
transfer or exchange of the Debentures 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;
14. The Debentures 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 Debentures 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
the undersigned to express an informed opinion whether
or not such covenants and conditions have been complied
with;
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 Debentures of the First Series requested in the
accompanying Company Order have been complied with; and
19. If the Company shall make any deposit of money and/or
Government Obligations with respect to any Debentures
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 Debentures 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 Government 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
Government Obligations theretofore so deposited, to pay
when due the principal of and premium, if any, and
interest due and to become due on such Debentures 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, based on a change in
law, to the effect that the Holders of such Debentures
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.
<PAGE>
IN WITNESS WHEREOF, I have executed this Officer's
Certificate this 2nd day of July, 1998.
/s/ Robert S. Shapard
------------------------------
Robert S. Shapard
Treasurer and assistant Secretary
<PAGE>
NO.
----------------------
CUSIP NO.
----------------
EXHIBIT A
[FORM OF FACE OF JUNIOR SUBORDINATED DEBENTURE]
ENSERCH CORPORATION
FLOATING RATE JUNIOR SUBORDINATED DEBENTURES, SERIES A
ENSERCH CORPORATION, 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 referred to on the reverse hereof), for value
received, hereby promises to pay to ,
----------------------------
or registered assigns, the principal sum of
---------------------
Dollars ($ ) on July 1, 2028, and, except as hereinafter
provided, to pay interest on said principal sum, from and
including the date of original issuance, but if interest has been
paid on this Security, then from, and including, the most recent
Interest Payment Date to which interest has been paid or duly
provided for, quarterly in arrears on January 1, April 1, July 1
and October 1 of each year (each an "Interest Payment Date"),
commencing October 1, 1998, at a variable rate per annum equal to
3-month LIBOR, as described in paragraph (4) of the Officer's
Certificate referred to on the reverse hereof setting forth the
terms hereof pursuant to the Indenture, plus 1.35%, plus
Additional Interest, if any, until the principal hereof is paid
or made available for payment. The amount of interest payable on
any Interest Payment Date shall be computed on the basis of the
actual number of days elapsed in a 360-day year. 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), in each case with the
same force and effect as if made on such Interest Payment Date.
The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the
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 fifteenth day (whether or not a Business Day)
preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either
be paid to the Person in whose name this 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.
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, at7
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.
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.
ENSERCH CORPORATION
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 JUNIOR SUBORDINATED DEBENTURE]
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 Subordinated Debt Securities relating to Trust
Securities), dated as of June 1, 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 July 2, 1998 (the "Officer's Certificate"),
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 $154,640,000.
This Security will be redeemable at the option of the
Company on or after July 1, 2003, at any time in whole and from
time to time in part, upon not less than 30 nor more than 60
days' notice given as provided in the Indenture, at a Redemption
Price equal to 100% of the principal amount thereof plus accrued
and unpaid interest hereon, including Additional Interest, if
any, to the Redemption Date.
If at any time a Tax Event shall occur and be
continuing and either (i) in the opinion of counsel to the
Company experienced in such matters, there would in all cases,
after effecting the termination of the Trust, after satisfaction
of liabilities to creditors of the Trust, if any, as provided by
applicable law, and the distribution of this Security to the
holders of the Preferred Securities of the Trust (the "Preferred
Securities"), in exchange therefor, be more than an insubstantial
risk that an Adverse Tax Consequence (as defined below) would
continue to exist or (ii) this Security is not held by ENSERCH
Capital I, a Delaware statutory business trust (the "Trust"),
then the Company shall have the right to redeem this Security, in
whole but not in part, at any time within 90 days following the
occurrence of the Tax Event, at 100% of the principal amount
thereof plus accrued and unpaid interest hereon, including
Additional Interest, if any, to the Redemption Date.
"Tax Event" means the receipt by the Trust or the
Company of an opinion of counsel experienced in such matters to
the effect that, as a result of (a) any amendment to,
clarification of, or change (including any announced prospective
change) in, the laws or treaties (or any regulations thereunder)
of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, (b) any judicial
decision or any official administrative pronouncement, ruling,
regulatory procedure, notice or announcement (including any
notice or announcement of intent to issue or adopt any such
administrative pronouncement, ruling, regulatory procedure or
regulation) (each, an "Administrative Action"), or (c) any
amendment to, clarification of, or change in the official
position or the interpretation of any such Administrative Action
or judicial decision or any interpretation or pronouncement that
provides for a position with respect to such Administrative
Action or judicial decision that differs from the theretofore
generally accepted position, in each case by any legislative
body, court, governmental authority or regulatory body,
irrespective of the time or manner in which such amendment,
clarification or change is introduced or made known, which
amendment, clarification, or change is effective, which
Administrative Action is taken or which judicial decision is
issued, in each case on or after the date of issuance of the
Preferred Securities, there is more than an insubstantial risk
that (i) the Trust is, or will be, subject to United States
federal income tax with respect to interest received on this
Security, (ii) interest payable by the Company on this Security
is not, or will not be, fully deductible by the Company for
United States federal income tax purposes, or (iii) the Trust is,
or will be, subject to more than a de minimis amount of other
taxes, duties or other governmental charges (each of the
circumstances described in clauses (i), (ii) or (iii) being an
"Adverse Tax Consequence").
Interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holder of
such Security, or one or more Predecessor Securities, of record
at the close of business on the related Regular Record Date
referred to on the face hereof, all as provided in the Indenture.
In the event of redemption of this Security in part
only, a new Security or Securities of this series and of like
tenor for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
The indebtedness evidenced by this Security is, to the
extent provided in the Indenture, subordinated and subject in
right of payment to the prior payment in full of all Senior
Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of
this Security, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Trustee
on his behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes. Each Holder hereof, by his acceptance
hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by
each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such Holder upon
said provisions.
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 contains provisions permitting the Holders of a
majority in aggregate principal amount of the Securities of all
series then Outstanding to waive compliance by the Company with
certain provisions of the Indenture. 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 not less
than 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 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.
Pursuant to Section 311 of the Indenture, so long as
the Company is not in default in the payment of interest on the
Securities of any series under the Indenture, the Company shall
have the right, at any time and from time to time during the term
of the Securities of this series, to extend the interest payment
period to a period not exceeding 20 consecutive quarterly periods
(an "Extension Period") during which period interest (calculated
for each Interest Period (as defined in the Officer's
Certificate) in the manner provided for in paragraph (4) of the
Officer's Certificate, as if the interest payment period had not
been so extended) will be compounded quarterly. At the end of
the Extension Period, the Company shall pay all interest accrued
and unpaid hereon (together with interest thereon at the rate
specified for the Securities of this series, compounded
quarterly, to the extent permitted by applicable law) and
Additional Interest, if any; provided, however, that during any
such Extension Period, the Company shall not declare or pay any
dividend or distribution (other than a dividend or distribution
in common stock of the Company) on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of its capital
stock, make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any indebtedness that is
pari passu with the Securities of this series, or make any
guarantee payments with respect to the foregoing ("Restricted
Payments"). Prior to the termination of any such Extension
Period, the Company may further extend the interest payment
period, provided that such Extension Period together with all
such previous and further extensions thereof shall not exceed 20
consecutive quarterly periods at any one time or extend beyond
the Maturity of the Securities of this series. Any Extension
Period with respect to payment of interest on the Securities of
this series, or any extended interest payment period in respect
of similar securities will apply to the Securities of this series
and all such securities and will also apply to distributions with
respect to the Preferred Securities of the Trust (the "Preferred
Securities") and all other securities with terms substantially
the same as the Preferred Securities. Upon the termination of
any such Extension Period and the payment of all amounts then
due, including interest on deferred interest payments, the
Company may elect to begin a new Extension Period, subject to the
above requirements. No interest shall be due and payable during
an Extension Period, except at the end thereof. The Company
shall give the Trustee notice of its election of an Extension
Period before the Business Day prior to the record date for the
distribution which would occur but for such election.
The Securities of this series are issuable only in
registered form without coupons in denominations of $1,000 and
any integral multiple thereof. As provided in the Indenture and
subject to certain limitations therein set forth, 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.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.
=================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
between
ENSERCH CORPORATION, as Depositor
and
THE BANK OF NEW YORK,
THE BANK OF NEW YORK (DELAWARE),
ROBERT S. SHAPARD,
LAURA ANDERSON,
KEVIN LLOYD,
JAY RHODES
and
JACKIE HARRISON, as Trustees
Dated as of July 2, 1998
ENSERCH CAPITAL I
=================================================================
<PAGE>
ENSERCH CAPITAL
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Trust Agreement
Act Section Section
--------------- ---------------
Section 310(a)(1) . . . . . . . . . . . . . . 8.07
(a)(2) . . . . . . . . . . . . . . . . 8.07
(a)(3) . . . . . . . . . . . . . . . . 8.09
(a)(4) . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . 8.08
Section 311(a) . . . . . . . . . . . . . . . 8.13
(b) . . . . . . . . . . . . . . . . . 8.13
Section 312(a) . . . . . . . . . . . . . . . 5.07
(b) . . . . . . . . . . . . . . . . . 5.07
(c) . . . . . . . . . . . . . . . . . 5.07
Section 313(a) . . . . . . . . . . . . . . . 8.14(a)
(a)(4) . . . . . . . . . . . . . . . . 8.14(b)
(b) . . . . . . . . . . . . . . . . . 8.14(b)
(c) . . . . . . . . . . . . . . . . . 8.14(a)
(d) . . . . . . . . . . . . . . . . . 8.14(a),
8.14(b)
Section 314(a) . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . Not Applicable
(c)(2) . . . . . . . . . . . . . . . . Not Applicable
(c)(3) . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . Not Applicable
Section 315(a) . . . . . . . . . . . . . . . 8.01
(b) . . . . . . . . . . . . . . . . . 8.02, 8.14(b)
(c) . . . . . . . . . . . . . . . . . 8.01(a)
(d) . . . . . . . . . . . . . . . . . 8.01, 8.03
(e) . . . . . . . . . . . . . . . . . Not Applicable
Section 316(a) . . . . . . . . . . . . . . . Not Applicable
(a)(1)(A) . . . . . . . . . . . . . . . Not Applicable
(a)(1)(B) . . . . . . . . . . . . . . . Not Applicable
(a)(2) . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . Not Applicable
Section 317(a)(1) . . . . . . . . . . . . . . Not Applicable
(a)(2) . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . 5.09
Section 318(a) . . . . . . . . . . . . . . . 10.10
--------------------
Note: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Trust Agreement.
<PAGE>
TABLE OF CONTENTS
ARTICLE I.
Defined Terms
Section 1.01. Definitions . . . . . . . . . . . . 2
ARTICLE II.
Establishment of the Trust
Section 2.01. Name . . . . . . . . . . . . . . . . 11
Section 2.02. Office of the Delaware Trustee;
Principal Place of Business . . . . 11
Section 2.03. Initial Contribution of Trust
Property; Organizational Expenses . 11
Section 2.04. Issuance of the Capital Securities . 11
Section 2.05. Subscription and Purchase of
Debentures; Issuance of the
Common Securities . . . . . . . . . 12
Section 2.06. Declaration of Trust; Appointment
of Additional Administrative
Trustees . . . . . . . . . . . . . . 12
Section 2.07. Authorization to Enter into Certain
Transactions . . . . . . . . . . . . 12
Section 2.08. Assets of Trust . . . . . . . . . . 16
Section 2.09. Title to Trust Property . . . . . . 16
ARTICLE III.
Payment Account
Section 3.01. Payment Account . . . . . . . . . . 16
ARTICLE IV.
Distributions; Redemption
Section 4.01. Distributions . . . . . . . . . . . 16
Section 4.02. Redemption . . . . . . . . . . . . . 17
Section 4.03. Subordination of Common Securities . 19
Section 4.04. Payment Procedures . . . . . . . . . 20
Section 4.05. Tax Returns and Reports . . . . . . 20
Section 4.06. Payments under Indenture . . . . . . 21
ARTICLE V.
Trust Securities Certificates
Section 5.01. Initial Ownership . . . . . . . . . 21
Section 5.02. The Trust Securities Certificates . 21
Section 5.03. Execution and Delivery of Trust
Securities Certificates . . . . . . 21
Section 5.04. Registration of Transfer and
Exchange of Trust Securities
Certificates . . . . . . . . . . . . 22
Section 5.05. Mutilated, Destroyed, Lost or
Stolen Trust Securities
Certificates . . . . . . . . . . . . 22
Section 5.06. Persons Deemed Securityholders . . . 23
Section 5.07. Access to List of Securityholders'
Names and Addresses . . . . . . . . 23
Section 5.08. Maintenance of Office or Agency . . 24
Section 5.09. Appointment of Paying Agent . . . . 24
Section 5.10. Ownership of Common Securities by
Depositor . . . . . . . . . . . . . 25
Section 5.11. Definitive Capital Securities
Certificates . . . . . . . . . . . . 25
Section 5.12. Book-Entry System . . . . . . . . . 25
Section 5.13. Rights of Securityholders . . . . . 26
Section 5.14. Cancellation by Transfer Agent and
Registrar . . . . . . . . . . . . . 26
ARTICLE VI.
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 6.01. Limitations on Voting Rights . . . . 27
Section 6.02. Notice of Meetings . . . . . . . . . 28
Section 6.03. Meetings of Holders of Capital
Securities . . . . . . . . . . . . . 28
Section 6.04. Voting Rights . . . . . . . . . . . 28
Section 6.05. Proxies, etc. . . . . . . . . . . . 28
Section 6.06. Securityholder Action by Written
Consent . . . . . . . . . . . . . . 29
Section 6.07. Record Date for Voting and Other
Purposes . . . . . . . . . . . . . . 29
Section 6.08. Acts of Securityholders . . . . . . 29
Section 6.09. Inspection of Records . . . . . . . 30
ARTICLE VII.
Representations and Warranties of the Property
Trustee and the Delaware Trustee
Section 7.01. Property Trustee . . . . . . . . . . 30
Section 7.02. Delaware Trustee . . . . . . . . . . 31
ARTICLE VIII.
The Trustees
Section 8.01. Certain Duties and
Responsibilities . . . . . . . . . . 32
Section 8.02. Notice of Defaults . . . . . . . . . 33
Section 8.03. Certain Rights of Property Trustee . 33
Section 8.04. Not Responsible for Recitals or
Issuance of Securities . . . . . . . 36
Section 8.05. May Hold Securities . . . . . . . . 36
Section 8.06. Compensation; Fees; Indemnity . . . 37
Section 8.07. Certain Trustees Required;
Eligibility . . . . . . . . . . . . 37
Section 8.08. Conflicting Interests . . . . . . . 38
Section 8.09. Co-Trustees and Separate Trustee . . 38
Section 8.10. Resignation and Removal;
Appointment of Successor . . . . . . 40
Section 8.11. Acceptance of Appointment by
Successor . . . . . . . . . . . . . 41
Section 8.12. Merger, Conversion, Consolidation
or Succession to Business . . . . . 42
Section 8.13. Preferential Collection of Claims
Against Depositor or Trust . . . . . 42
Section 8.14. Reports by Property Trustee . . . . 42
Section 8.15. Reports to the Property Trustee . . 42
Section 8.16. Evidence of Compliance With
Conditions Precedent . . . . . . . . 43
Section 8.17. Number of Trustees . . . . . . . . . 43
Section 8.18. Delegation of Power . . . . . . . . 43
Section 8.19. Fiduciary Duty . . . . . . . . . . . 44
ARTICLE IX.
Termination and Liquidation
Section 9.01. Dissolution Upon Expiration Date . . 45
Section 9.02. Early Termination . . . . . . . . . 45
Section 9.03. Termination . . . . . . . . . . . . 45
Section 9.04. Liquidation . . . . . . . . . . . . 46
ARTICLE X.
Miscellaneous Provisions
Section 10.01. Guarantee by the Depositor and
Assumption of Obligations . . . . . 47
Section 10.02. Limitation of Rights of
Securityholders . . . . . . . . . . 48
Section 10.03. Amendment . . . . . . . . . . . . . 48
Section 10.04. Separability . . . . . . . . . . . . 49
Section 10.05. Governing Law . . . . . . . . . . . 49
Section 10.06. Successors . . . . . . . . . . . . . 50
Section 10.07. Headings . . . . . . . . . . . . . . 50
Section 10.08. Notice and Demand . . . . . . . . . 50
Section 10.09. Agreement Not to Petition . . . . . 50
Section 10.10. Conflict with Trust Indenture Act . 51
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of July
2, 1998, between (i) ENSERCH Corporation, a Texas corporation
(the "Depositor"), (ii) The Bank of New York, a banking
corporation duly organized and existing under the laws of New
York, as trustee (the "Property Trustee" and, in its separate
capacity and not in its capacity as Property Trustee, the
"Bank"), (iii) The Bank of New York (Delaware), a banking
corporation duly organized under the laws of Delaware, as
Delaware trustee (the "Delaware Trustee"), (iv) Robert S.
Shapard, Laura Anderson, Kevin Lloyd, Jay Rhodes and Jackie
Harrison, each an individual, and each of whose address is c/o
Texas Utilities Services Inc., 1601 Bryan Street, Dallas, Texas
75201 (each, an "Administrative Trustee" and collectively the
"Administrative Trustees") (the Property Trustee, the Delaware
Trustee and the Administrative Trustees are referred to herein
each as a "Trustee" and collectively as the "Trustees") and (v)
the several Holders, as hereinafter defined.
W I T N E S S E T H:
--------------------
WHEREAS, the Depositor, the Property Trustee, the
Delaware Trustee and Michael Perkins, as Administrative Trustee
(since resigned), have heretofore duly declared and established a
business trust pursuant to the Delaware Business Trust Act by the
entering into of that certain Trust Agreement, dated as of
December 17, 1997 (the "Original Trust Agreement"), and by the
execution by the Property Trustee, the Delaware Trustee and
Michael Perkins, as Administrative Trustee (since resigned) and
filing with the Secretary of State of the State of Delaware of
the Certificate of Trust, dated December 18, 1997, a copy of
which is attached as Exhibit A; and
WHEREAS, by and instrument of resignation dated May 22,
1998, Michael Perkins resigned as Administrative Trustee,
effective June 24, 1998 and by an instrument of appointment dated
June 24, 1998 the Administrative Trustees were appointed.
WHEREAS, the Trust and the Depositor entered into an
Underwriting Agreement dated June 25, 1998 with Morgan Stanley &
Co. Incorporated, Lehman Brothers Inc. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated.
WHEREAS, the Depositor, the Property Trustee, the
Delaware Trustee and the Administrative Trustees, desire to amend
and restate the Original Trust Agreement in its entirety as set
forth herein to provide for, among other things, (i) the
acquisition by the Trust from the Depositor of all of the right,
title and interest in the Debentures, (ii) the issuance of the
Common Securities, as hereinafter defined, by the Trust to the
Depositor and (iii) the issuance of the Capital Securities, as
hereinafter defined, by the Trust;
NOW THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged,
each party, for the benefit of the other party and for the
benefit of the Securityholders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I.
DEFINED TERMS
SECTION 1.01. DEFINITIONS. For all purposes of this
Trust 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) all other terms used herein that are defined
in the Trust Indenture Act, either directly or by
reference therein, have the meanings assigned to them
therein;
(c) unless the context otherwise requires, any
reference to an "Article" or a "Section" refers to an
Article or a Section, as the case may be, of this Trust
Agreement; and
(d) the words "herein", "hereof" and "hereunder"
and other words of similar import refer to this Trust
Agreement as a whole and not to any particular Article,
Section or other subdivision.
"Act" has the meaning specified in Section 6.08.
"Additional Amount" means, with respect to Trust
Securities of a given Liquidation Amount for a given period, the
amount of Additional Interest (as defined in the Subordinated
Indenture) paid by the Debenture Issuer on a Like Amount of
Debentures for such period.
"Administrative Trustee" means each of the individuals
identified as an "Administrative Trustee" in the preamble to this
Trust Agreement solely in their capacities as Administrative
Trustees of the Trust and not in their individual capacities, or
such trustee's successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Adverse Tax Consequence" means any of the
circumstances described in clauses (i), (ii) and (iii) of the
definition of "Tax Event" herein.
"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
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Bank" has the meaning specified in the preamble to
this Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(i) the entry of a decree or order by a court having
jurisdiction in the premises judging such Person a
bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement,
adjudication or composition of or in respect of such
Person under Federal bankruptcy law or any other
applicable Federal or State law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator
or other similar official of such Person or of any
substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days; or
(ii) the institution by such Person of proceedings to
be adjudicated a bankrupt or insolvent, or of the
consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it
of a petition or answer or consent seeking
reorganization or relief under Federal bankruptcy law
or any other applicable Federal or State law, or the
consent by it to the filing of such petition or to the
appointment of a receiver, liquidator, assignee,
trustee, sequestrator or similar official of such
Person 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.
"Bankruptcy Laws" has the meaning specified in Section
10.09.
"Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Depositor to have been duly adopted by the Depositor's Board of
Directors or a duly authorized committee thereof and to be in
full force and effect on the date of such certification, and
delivered to the appropriate Trustee.
"Business Day" means a day other than (x) a Saturday or
a Sunday, (y) a day on which banks in New York, New York are
authorized or obligated by law or executive order to remain
closed or (z) a day on which the Property Trustee's Corporate
Trust Office or the Debenture Trustee's principal corporate trust
office is closed for business.
"Capital Security" means a security representing an
undivided beneficial interest in the assets of the Trust having a
Liquidation Amount of $1,000 and having rights provided therefor
in this Trust Agreement, including the right to receive
Distributions, Debentures and a Liquidation Distribution as
provided herein and, in certain circumstances, a preference over
the Common Securities.
"Capital Securities Certificate" means a certificate
evidencing ownership of Capital Securities, substantially in the
form attached as Exhibit D.
"Certificate of Trust" has the meaning specified in
Section 2.07(d).
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.
"Closing Date" means the date of execution and delivery
of this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Commission" means the Securities and Exchange
Commission, as from time to time constituted, created under the
Exchange Act, or, if at any time after the execution of this
instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Securities Certificate" means a certificate
evidencing ownership of Common Securities, substantially in the
form attached as Exhibit B.
"Common Security" means a security representing an
undivided beneficial interest in the assets of the Trust having a
Liquidation Amount of $1,000 and having the rights provided
therefor in this Trust Agreement, including the right to receive
Distributions, Debentures and a Liquidation Distribution as
provided herein.
"Corporate Trust Office" means the principal corporate
trust office of the Property Trustee located in New York, New
York which at the date of execution of this Trust Agreement is
located at 101 Barclay Street - 21W, New York, New York 10286.
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent
of the Trust or the Trust's Affiliates; and (b) any Holder of
Trust Securities.
"Debenture Event of Default" means an "Event of
Default" as defined in the Subordinated Indenture.
"Debenture Issuer" means ENSERCH Corporation, a Texas
corporation, in its capacity as issuer of the Debentures and its
Successors.
"Debenture Redemption Date" means "Redemption Date" as
defined in the Subordinated Indenture with respect to the
Debentures.
"Debenture Trustee" means The Bank of New York, as
trustee under the Subordinated Indenture, and its permitted
successors and assigns as such trustee.
"Debentures" means the $154,640,000 aggregate principal
amount of the Debenture Issuer's Floating Rate Junior
Subordinated Debentures, Series A, issued pursuant to the
Subordinated Indenture which will mature on July 1, 2028.
"Definitive Capital Securities Certificates" means
Capital Securities Certificates issued in certificated, fully
registered form as provided in Section 5.11.
"Delaware Business Trust Act" means Chapter 38 of Title
12 of the Delaware Code, 12 Del. Code Section 3801 et seq., as it
may be amended from time to time.
"Delaware Trustee" means the banking corporation
identified as the "Delaware Trustee" in the preamble to this
Trust Agreement solely in its capacity as Delaware Trustee of the
Trust and not in its individual capacity, or its successor in
interest in such capacity, or any successor trustee appointed as
herein provided.
"Depositor" has the meaning specified in the preamble
to this Trust Agreement and includes ENSERCH Corporation in its
capacity as Holder of the Common Securities and its Successors.
"Distribution Date" has the meaning specified in
Section 4.01(a).
"Distributions" means amounts payable in respect of the
Trust Securities as provided in Section 4.01.
"Early Termination Event" has the meaning specified in
Section 9.02.
"Event of Default" means any one of the following
events (whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary or be effected by operation
of law or pursuant to any judgment, decree or order of any court
or any order, rule or regulation of any administrative or
governmental body):
(i) the occurrence of a Debenture Event of Default;
or
(ii) default by the Trust in the payment of any
Distribution when it becomes due and payable, and
continuation of such default for a period of 30 days;
or
(iii) default by the Trust in the payment of any
Redemption Price, plus accumulated and unpaid
Distributions, of any Trust Security when it becomes
due and payable; or
(iv) default in the performance, or breach, in any
material respect of any covenant or warranty of the
Trustees in this Trust Agreement (other than a covenant
or warranty a default in whose performance or breach is
specifically dealt with in clause (ii) or (iii), above)
and continuation of such default or breach for a period
of 60 days after there has been given, by registered or
certified mail, to the Trust by the Holders of at least
10% in Liquidation Amount of the Outstanding Capital
Securities 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; or
(v) the occurrence of a Bankruptcy Event with
respect to the Trust.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Expense Agreement" means the Agreement as to Expenses
and Liabilities between the Depositor and the Trust,
substantially in the form attached as Exhibit C, as amended from
time to time.
"Expiration Date" shall have the meaning specified in
Section 9.01.
"Guarantee" means the Guarantee Agreement executed and
delivered by the Depositor and The Bank of New York, a New York
banking corporation, as trustee, contemporaneously with the
execution and delivery of this Trust Agreement, for the benefit
of the Holders of the Capital Securities, as amended from time to
time.
"Indemnified Person" means any Trustee, any Affiliate
of any Trustee, or any officer, director, shareholder, member,
partners, employee, representative or agent of any Trustee, or
any employee or agent of the Trust or its Affiliates.
"Investment Company Act" means the Investment Company
Act of 1940, as amended.
"Lien" means any lien, pledge, charge, encumbrance,
mortgage, deed of trust, adverse ownership interest,
hypothecation, assignment, security interest or preference,
priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (i) Trust Securities having a
Liquidation Amount equal to the principal amount of Debentures to
be contemporaneously redeemed in accordance with the Subordinated
Indenture and the proceeds of which will be used to pay the
Redemption Price of such Trust Securities plus accumulated and
unpaid Distributions to the date of such payment and (ii)
Debentures having a principal amount equal to the Liquidation
Amount of the Trust Securities of the Holders to which such
Debentures are distributed.
"Liquidation Amount" means the stated amount of $1,000
per Trust Security.
"Liquidation Date" means the date on which Debentures
are to be distributed to Holders of Trust Securities in
connection with a termination and liquidation of the Trust
pursuant to Section 9.04.
"Liquidation Distribution" has the meaning specified in
Section 9.04(e).
"Offer" has the meaning specified in Section 2.07(c).
"Officers' Certificate" means a certificate signed by
the Chairman of the Board, a Vice Chairman of the Board, the
President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the
Depositor, and delivered to the appropriate Trustee. One of the
officers signing an Officers' Certificate given pursuant to
Section 8.16 shall be the principal executive, financial or
accounting officer of the Depositor. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant
provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or condition and
the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion,
is necessary to enable such officer 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 officer, such condition or covenant has been complied
with.
"Opinion of Counsel" means a written opinion of
counsel, who may be counsel for the Trust, the Property Trustee,
the Delaware Trustee or the Depositor, but not an employee of the
Trust, the Property Trustee, the Delaware Trustee or the
Depositor, and who shall be reasonably acceptable to the Property
Trustee. Any Opinion of Counsel delivered with respect to
compliance with a condition or covenant provided for in this
Trust Agreement shall include statements comparable to the
statements referred to in the definition of "Officers'
Certificate" herein.
"Original Trust Agreement" has the meaning specified in
the recitals to this Trust Agreement.
"Outstanding," when used with respect to Capital
Securities, means, as of the date of determination, all Capital
Securities theretofore delivered under this Trust Agreement,
except:
(i) Capital Securities theretofore canceled by the
Transfer Agent and Registrar or delivered to the
Transfer Agent and Registrar for cancellation;
(ii) Capital Securities for whose payment or
redemption money in the necessary amount has been
theretofore deposited with the Property Trustee or any
Paying Agent for the Holders of such Capital
Securities; provided that, if such Capital Securities
are to be redeemed, notice of such redemption has been
duly given pursuant to this Trust Agreement; and
(iii) Capital Securities in exchange for or in lieu of
which other Capital Securities have been delivered
pursuant to this Trust Agreement, including pursuant to
Sections 5.04, 5.05 or 5.11;
provided, however, that in determining whether the Holders of the
requisite Liquidation Amount of the Outstanding Capital
Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Capital
Securities owned by the Depositor, any Trustee or any Affiliate
of the Depositor or any Trustee shall be disregarded and deemed
not to be Outstanding, except that (a) in determining whether any
Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only
Capital Securities which such Trustee knows to be so owned shall
be so disregarded and (b) the foregoing shall not apply at any
time when all of the Outstanding Capital Securities are owned by
the Depositor, one or more of the Trustees and/or any such
Affiliate. Capital Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Administrative Trustee the
pledgee's right so to act with respect to such Capital Securities
and that the pledgee is not the Depositor or any Affiliate of the
Depositor.
"Owner" means each Person who is the beneficial owner
of a Trust Securities Certificate as reflected in the records of
the Securities Depository or, if a Securities Depository
participant is not the beneficial owner, then as reflected in the
records of a Person maintaining an account with such Securities
Depository (directly or indirectly), in accordance with the rules
of such Securities Depository.
"Paying Agent" means any paying agent or co-paying
agent appointed pursuant to Section 5.09 and shall initially be
Texas Utilities Services Inc.
"Payment Account" means a segregated non-interest-
bearing corporate trust account maintained by the Property
Trustee with The Chase Manhattan Bank, or such other banking
institution as the Depositor shall select for the benefit of the
Securityholders in which all amounts paid in respect of the
Debentures will be held and from which the Paying Agent, pursuant
to Section 5.09, shall make payments to the Securityholders in
accordance with Sections 4.01 and 4.02.
"Person" means any individual, corporation,
partnership, joint venture, trust, limited liability company or
corporation, unincorporated organization or government or any
agency or political subdivision thereof.
"Property Trustee" means the commercial bank or trust
company identified as the "Property Trustee" in the preamble to
this Trust Agreement solely in its capacity as Property Trustee
of the Trust and not in its individual capacity, or its successor
in interest in such capacity, or any successor trustee appointed
as herein provided.
"Redemption Date" means, with respect to any Trust
Security to be redeemed, the date fixed for such redemption by or
pursuant to this Trust Agreement; provided that each Debenture
Redemption Date shall be a Redemption Date for a Like Amount of
Trust Securities.
"Redemption Price" means, with respect to any date
fixed for redemption of any Trust Security, the Liquidation
Amount of such Trust Security.
"Relevant Trustee" shall have the meaning specified in
Section 8.10.
"Responsible Officer," when used with respect to the
Property Trustee means an officer of the Property Trustee
assigned by the Property Trustee to administer its corporate
trust matters.
"Securities Depository" shall have the meaning
specified in Section 5.12. The Depository Trust Company will be
the initial Securities Depository.
"Securities Register" shall mean the Securities
Register as described in Section 5.04.
"Securityholder" or "Holder" means a Person in whose
name a Trust Security or Securities is registered in the
Securities Register; any such Person shall be a beneficial owner
of such security within the meaning of the Delaware Business
Trust Act.
"Subordinated Indenture" means the Indenture, dated as
of June 1, 1998, between the Depositor and the Debenture Trustee,
as trustee, as amended or supplemented from time to time.
"Tax Event" means the receipt by the Trust or the
Depositor of an opinion of counsel experienced in such matters to
the effect that, as a result of (a) any amendment to,
clarification of, or change (including any announced prospective
change) in, the laws or treaties (or any regulations thereunder)
of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, (b) any judicial
decision or any official administrative pronouncement, ruling,
regulatory procedure, notice or announcement (including any
notice or announcement of intent to issue or adopt any such
administrative pronouncement, ruling, regulatory procedure or
regulation) (each, an "Administrative Action"), or (c) any
amendment to, clarification of, or change in the official
position or the interpretation of any such Administrative Action
or judicial decision or any interpretation or pronouncement that
provides for a position with respect to such Administrative
Action or judicial decision that differs from the theretofore
generally accepted position, in each case by any legislative
body, court, governmental authority or regulatory body,
irrespective of the time or manner in which such amendment,
clarification or change is introduced or made known, which
amendment, clarification, or change is effective, which
Administrative Action is taken or which judicial decision is
issued, in each case on or after the date of issuance of the
Capital Securities, there is more than an insubstantial risk that
(i) the Trust is, or will be, subject to United States federal
income tax with respect to interest received on the Debentures,
(ii) interest payable by the Depositor on the Debentures is not,
or will not be, fully deductible by the Depositor for United
States federal income tax purposes, or (iii) the Trust is, or
will be, subject to more than a de minimis amount of other taxes,
duties or other governmental charges.
"Transfer Agent and Registrar" shall mean the transfer
agent and registrar for the Capital Securities appointed by the
Trust and shall be initially Texas Utilities Services Inc.
"Trust" means the Delaware business trust created by
the Original Trust Agreement and the Certificate of Trust and
continued hereby and identified on the cover page to this Trust
Agreement.
"Trust Agreement" means this Amended and Restated Trust
Agreement, as the same may be modified, amended or supplemented
in accordance with the applicable provisions hereof, including
all exhibits hereto, including, for all purposes of this Amended
and Restated Trust Agreement and any such modification, amendment
or supplement, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this Amended and Restated Trust
Agreement and any such modification, amendment or supplement,
respectively.
"Trust Indenture Act" means the Trust Indenture Act of
1939 as amended and in force at the date as of which this
instrument was executed; provided, however, that in the event the
Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trust Property" means (i) the Debentures, (ii) any
cash on deposit in, or owing to, the Payment Account and (iii)
all proceeds and rights in respect of the foregoing and any other
property and assets for the time being held by the Property
Trustee pursuant to the trusts of this Trust Agreement.
"Trust Securities Certificate" means any one of the
Common Securities Certificates or the Capital Securities
Certificates.
"Trust Security" means any one of the Common Securities
or the Capital Securities.
"Underwriting Agreement" means the Underwriting
Agreement, dated as of June 25, 1998, among the Trust, the
Depositor and the underwriters named therein.
ARTICLE II.
ESTABLISHMENT OF THE TRUST
SECTION 2.01. NAME. The Trust continued hereby shall
be known as "ENSERCH Capital I", in which name the Trustees may
conduct the business of the Trust, make and execute contracts and
other instruments on behalf of the Trust and sue and be sued.
SECTION 2.02. OFFICE OF THE DELAWARE TRUSTEE;
PRINCIPAL PLACE OF BUSINESS. The office of the Delaware Trustee
in the State of Delaware is White Clay Center, Route 273, Newark,
Delaware 19711, or at such other address in Delaware as the
Delaware Trustee may designate by written notice to the
Securityholders and the Depositor. The principal place of
business of the Trust is c/o ENSERCH Corporation, Energy Plaza,
1601 Bryan Street, Dallas, Texas 75201.
SECTION 2.03. INITIAL CONTRIBUTION OF TRUST PROPERTY;
ORGANIZATIONAL EXPENSES. The Property Trustee acknowledges
receipt in trust from the Depositor in connection with the
Original Trust Agreement of the sum of $10, which constituted the
initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of any
Trustee, promptly reimburse such Trustee for any such expenses
paid by such Trustee. The Depositor shall make no claim upon the
Trust Property for the payment of such expenses.
SECTION 2.04. ISSUANCE OF THE CAPITAL SECURITIES. On
June 25, 1998, an authorized representative of the Depositor and
the Trust, both executed and delivered the Underwriting
Agreement. Contemporaneously with the execution and delivery of
this Trust Agreement, one of the Administrative Trustees, on
behalf of the Trust in accordance with Section 5.02, executed and
delivered a Capital Securities Certificate, registered in the
name of the nominee of The Depository Trust Company, having an
aggregate Liquidation Amount of $150,000,000.
SECTION 2.05. SUBSCRIPTION AND PURCHASE OF DEBENTURES;
ISSUANCE OF THE COMMON SECURITIES. Contemporaneously with the
execution and delivery of this Trust Agreement, the
Administrative Trustees, on behalf of the Trust, subscribed to
and purchased from the Debenture Issuer Debentures, registered in
the name of the Property Trustee and having an aggregate
principal amount equal to $154,640,000 and, in satisfaction of
the purchase price for such Debentures, (x) one of the
Administrative Trustees, on behalf of the Trust, executed and
delivered to the Depositor Common Securities Certificates,
registered in the name of the Depositor, representing 4,640
Common Securities having an aggregate Liquidation Amount of
$4,640,000, and (y) the Property Trustee, on behalf of the Trust,
delivered to the Debenture Issuer the sum of $150,000,000
representing the proceeds from the sale of the Capital Securities
pursuant to the Underwriting Agreement.
SECTION 2.06. DECLARATION OF TRUST; APPOINTMENT OF
ADDITIONAL ADMINISTRATIVE TRUSTEES. The exclusive purposes and
functions of the Trust are (i) to issue Trust Securities and
invest the proceeds thereof in Debentures, and (ii) to engage in
those activities necessary or incidental thereto. The Depositor
hereby appoints the Trustees as trustees of the Trust, to have
all the rights, powers and duties to the extent set forth herein.
The Property Trustee hereby declares that it will hold the Trust
Property in trust upon and subject to the conditions set forth
herein for the benefit of the Securityholders. The Trustees
shall have all rights, powers and duties set forth herein and in
accordance with applicable law with respect to accomplishing the
purposes of the Trust. Anything in this Trust Agreement to the
contrary notwithstanding, the Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee
have any of the duties and responsibilities of the Property
Trustee or the Administrative Trustees set forth herein. The
Delaware Trustee shall be one of the Trustees of the Trust for
the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Delaware Business Trust Act.
SECTION 2.07. AUTHORIZATION TO ENTER INTO CERTAIN
TRANSACTIONS. (a) The Trustees shall conduct the affairs of the
Trust in accordance with the terms of this Trust Agreement.
Subject to the limitations set forth in paragraph (b) of this
Section and Article VIII and in accordance with the following
provisions (A) and (B), the Trustees shall have the authority to
enter into all transactions and agreements determined by the
Trustees to be appropriate in exercising the authority, express
or implied, otherwise granted to the Trustees under this Trust
Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(A) As among the Trustees, the Administrative Trustees,
acting singly or together, shall have the power, duty and
authority to act on behalf of the Trust with respect to the
following matters:
(i) the issuance and sale of the Trust Securities;
(ii) without the consent of any Person, to cause the
Trust to enter into and to execute, deliver and perform
on behalf of the Trust, the Expense Agreement, and such
other agreements as may be necessary or desirable in
connection with the consummation of the Underwriting
Agreement;
(iii) to qualify the Trust to do business in any
jurisdiction as may be necessary or desirable;
(iv) the collection of interest, principal and any
other payments made in respect of the Debentures;
(v) the registration of the Capital Securities under
the Securities Act of 1933, as amended, and under state
securities or blue sky laws, and the qualification of
this Trust Agreement as a trust indenture under the
Trust Indenture Act;
(vi) the appointment of a Paying Agent and Transfer
Agent and Registrar in accordance with this Trust
Agreement;
(vii) registering transfers of the Trust Securities in
accordance with this Trust Agreement;
(viii) the establishment of a record date for any of
the purposes contemplated by Section 6.07 hereof;
(ix) to the extent provided in this Trust Agreement,
the winding up of the affairs of and liquidation of the
Trust and the preparation, execution and filing of the
certificate of cancellation with the Secretary of State
of Delaware; and
(x) the taking of any action incidental to the
foregoing as the Administrative Trustees may from time
to time determine is necessary or advisable to protect
and conserve the Trust Property for the benefit of the
Securityholders (without consideration of the effect of
any such action on any particular Securityholder).
(B) As among the Trustees, the Property Trustee shall have
the power, duty and authority to act on behalf of the Trust with
respect to the following ministerial matters:
(i) the establishment of the Payment Account;
(ii) the receipt of the Debentures;
(iii) the deposit of interest, principal and any other
payments made in respect of the Debentures in the
Payment Account;
(iv) the distribution of amounts owed to the
Securityholders in respect of the Trust Securities in
accordance with the terms of this Trust Agreement;
(v) the sending of notices of default and other
information regarding the Trust Securities and the
Debentures to the Securityholders in accordance with
the terms of this Trust Agreement;
(vi) the distribution of the Trust Property in
accordance with the terms of this Trust Agreement;
(vii) to the extent provided in this Trust Agreement,
the winding up of the affairs of and liquidation of the
Trust and the execution of the certificate of
cancellation to be prepared and filed by the
Administrative Trustees with the Secretary of State of
the State of Delaware; and
(viii) the taking of any ministerial action incidental
to the foregoing as the Property Trustee may from time
to time determine is necessary or advisable to protect
and conserve the Trust Property for the benefit of the
Securityholders (without consideration of the effect of
any such action on any particular Securityholder).
Subject to this Section 2.07(a)(B), the Property
Trustee shall have none of the duties, powers or authority of the
Administrative Trustees set forth in Sections 2.07(a)(A) and
2.07(c) or the Depositor set forth in Section 2.07(c). The
Property Trustee shall have the power and authority to exercise
all of the rights, powers and privileges of a holder of
Debentures under the Subordinated Indenture and, if an Event of
Default occurs and is continuing, the Property Trustee may, for
the benefit of Holders of the Trust Securities, in its
discretion, proceed to protect and enforce its rights as holder
of the Debentures subject to the rights of the Holders pursuant
to the terms of this Trust Agreement.
(b) So long as this Trust Agreement remains in effect,
the Trust (or the Trustees acting on behalf of the Trust) shall
not undertake any business, activities or transaction except as
expressly provided herein or contemplated hereby. In particular,
the Trustees shall not (i) acquire any investments or engage in
any activities not authorized by this Trust Agreement, (ii) sell,
assign, transfer, exchange, pledge, set-off or otherwise dispose
of any of the Trust Property or interests therein, including to
Securityholders, except as expressly provided herein, (iii) take
any action that would cause the Trust to fail or cease to qualify
as a "grantor trust" for United States federal income tax
purposes and not as an association taxable as a corporation, (iv)
incur any indebtedness for borrowed money or (v) take or consent
to any action that would result in the placement of a Lien on any
of the Trust Property. The Trustees shall defend all claims and
demands of all Persons at any time claiming any Lien on any of
the Trust Property adverse to the interest of the Trust or the
Securityholders in their capacity as Securityholders.
(c) In connection with the issue of the Capital
Securities, the Depositor and the Administrative Trustees, acting
singly or together, (and, in the case of (iii) and (v) below,
Robert J. Reger, Jr., as authorized representative of the Trust)
shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and
any actions taken by the Depositor in furtherance of the
following prior to the date of this Trust Agreement are hereby
ratified and confirmed in all respects):
(i) to prepare for filing by the Trust with the
Commission and to execute a registration statement on
Form S-3 in relation to the Capital Securities,
including any amendments thereto;
(ii) to determine the States in which to take
appropriate action to qualify or register for sale all
or part of the Capital Securities and to do any and all
such acts, other than actions which must be taken by or
on behalf of the Trust, and advise the Trustees of
actions they must take on behalf of the Trust, and
prepare for execution and filing any documents to be
executed and filed by the Trust or on behalf of the
Trust, as the Depositor deems necessary or advisable in
order to comply with the applicable laws of any such
States;
(iii) to execute and deliver on behalf of the Trust
the Underwriting Agreement and such other agreements as
may be necessary or desirable in connection with the
consummation thereof;
(iv) to select the investment banker or bankers to
act as underwriters with respect to the offer and sale
by the Trust of Capital Securities ("Offer") and
negotiate the terms of an Underwriting Agreement and
pricing agreement providing for the Offer; and
(v) to take any other actions necessary or desirable
to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary,
the Administrative Trustees are authorized and directed to
conduct the affairs of the Trust and to operate the Trust so that
the Trust will not be deemed to be an "investment company"
required to be registered under the Investment Company Act or
classified other than as a "grantor trust" for United States
federal income tax purposes and not as an association taxable as
a corporation and so that the Debentures will be treated as
indebtedness of the Debenture Issuer for United States federal
income tax purposes. In this connection, the Depositor and the
Administrative Trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust filed
with the Secretary of State of the State of Delaware with respect
to the Trust (as amended or restated from time to time, the
"Certificate of Trust") or this Trust Agreement, that each of the
Depositor and the Administrative Trustees determines in its
discretion to be necessary or desirable for such purposes, as
long as such action does not materially adversely affect the
interests of the Holders of the Capital Securities.
SECTION 2.08. ASSETS OF TRUST. The assets of the
Trust shall consist of the Trust Property.
SECTION 2.09. TITLE TO TRUST PROPERTY. Legal title to
all Trust Property shall be vested at all times in the Property
Trustee (in its capacity as such) and shall be held and
administered by the Property Trustee for the benefit of the
Securityholders in accordance with this Trust Agreement.
ARTICLE III.
PAYMENT ACCOUNT
SECTION 3.01. PAYMENT ACCOUNT.
(a) On or prior to the Closing Date, the Property
Trustee shall establish the Payment Account. The Property
Trustee and the Paying Agent appointed by the Administrative
Trustees shall have exclusive control and sole right of
withdrawal with respect to the Payment Account for the purpose of
making deposits in and withdrawals from the Payment Account in
accordance with this Trust Agreement. All monies and other
property deposited or held from time to time in the Payment
Account shall be held by the Property Trustee in the Payment
Account for the exclusive benefit of the Holders of Trust
Securities and for distribution as herein provided, including
(and subject to) any priority of payments provided for herein.
The Property Trustee shall have no liability in any respect
whatsoever in regards to any moneys or other property deposited
in the Payment Account at an institution other than the Property
Trustee.
(b) The Property Trustee shall deposit in the Payment
Account, promptly upon receipt, all payments of principal or
interest on, and any other payments or proceeds with respect to,
the Debentures. Amounts held in the Payment Account shall not be
invested by the Property Trustee pending distribution thereof.
ARTICLE IV.
DISTRIBUTIONS; REDEMPTION
SECTION 4.01. DISTRIBUTIONS.
(a) Distributions on the Trust Securities shall be
cumulative, and will accumulate whether or not there are funds of
the Trust available for the payment of Distributions.
Distributions shall accrue from the Closing Date, and, except in
the event that the Depositor exercises its right to extend the
interest payment period for the Debentures pursuant to Section
311 of the Subordinated Indenture, shall be payable quarterly in
arrears on January 1, April 1, July 1, and October 1 of each
year, commencing on October 1, 1998. If any date on which
Distributions are otherwise payable on the Trust Securities is
not a Business Day, then the payment of such Distribution shall
be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such
delay) in each case, with the same force and effect as if made on
such date (each date on which Distributions are payable in
accordance with this Section 4.01(a) a "Distribution Date").
(b) Distributions payable on the Trust Securities
shall be at the per annum floating rate to be determined
quarterly by an agent of the Depositor with respect to the
Debentures. Upon receipt of notice of the determination of any
such rate, the Property Trustee or its designee shall notify the
Holders of Capital Securities of such rate, the distribution
payable per Trust Security and the Distribution Date thereof.
The amount of Distributions payable for any quarterly period
shall be computed on the same basis as interest is calculated on
the Debentures. If the interest payment period for the
Debentures is extended pursuant to Section 311 of the
Subordinated Indenture, then Distributions on the Trust
Securities will be deferred for the period equal to the extension
of the interest payment period for the Debentures and the rate
per annum at which Distributions on the Trust Securities
accumulate shall be increased by an amount such that the
aggregate amount of Distributions that accumulate on all Trust
Securities during any such extended interest payment period is
equal to the aggregate amount of interest (including, to the
extent permitted by law, interest payable on unpaid interest at
the percentage rate per annum set forth above, compounded
quarterly) that accrues during any such extended interest payment
period on the Debentures. The amount of Distributions payable
for any period shall include the Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be
made and shall be deemed payable on each Distribution Date only
to the extent that the Trust has funds available in the Payment
Account for the payment of such Distributions.
(d) Distributions on the Trust Securities with respect
to a Distribution Date shall be payable to the Holders thereof as
they appear on the Securities Register for the Trust Securities
on the relevant record date, which shall be one Business Day
prior to the relevant Distribution Date, if Trust Securities are
in book-entry only form, and 15 days prior to the relevant
Distribution Date if Trust Securities are not in book-entry only
form.
SECTION 4.02. REDEMPTION. (a) On each Debenture
Redemption Date and at the maturity date ("Maturity Date") for
the Debentures (as defined in the Subordinated Indenture), the
Property Trustee will be required to redeem a Like Amount of
Trust Securities at the Redemption Price plus accumulated and
unpaid Distributions to the Redemption Date or Maturity Date, as
the case may be.
(b) Notice of redemption shall be given by the
Property Trustee by first-class mail, postage prepaid, mailed not
less than 30 nor more than 60 days prior to the Redemption Date
to each Holder of Trust Securities to be redeemed, at such
Holder's address appearing in the Security Register. All notices
of redemption or liquidation shall state:
(i) the Redemption Date;
(ii) the Redemption Price and the amount of
accumulated and unpaid Distributions to be paid on the
Redemption Date;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust
Securities are to be redeemed, the identification and
the total Liquidation Amount of the particular Trust
Securities to be redeemed; and
(v) that on the Redemption Date the Redemption Price
plus accumulated and unpaid Distributions to the
Redemption Date will become due and payable upon each
such Trust Security to be redeemed and that
Distributions thereon will cease to accrue on and after
said date.
(c) The Trust Securities redeemed on each Redemption
Date shall be redeemed at the Redemption Price plus accumulated
and unpaid Distributions to the Redemption Date with the proceeds
from the contemporaneous redemption of Debentures. Redemptions
of the Trust Securities shall be made and the Redemption Price
plus accumulated and unpaid Distributions to the Redemption Date
shall be deemed payable on each Redemption Date only to the
extent that the Trust has funds immediately available in the
Payment Account for such payment.
(d) If the Property Trustee gives a notice of
redemption in respect of any Capital Securities, then, by 12:00
noon, New York time, on the Redemption Date, subject to Section
4.02(c), the Property Trustee shall irrevocably deposit with the
Paying Agent funds sufficient to pay the applicable Redemption
Price plus accumulated and unpaid Distributions to the Redemption
Date and will give the Paying Agent irrevocable instructions and
authority to pay the Redemption Price plus accumulated and unpaid
Distributions to the Redemption Date to the Holders thereof upon
surrender of their Capital Securities Certificates and Common
Securities Certificates. Notwithstanding the foregoing,
Distributions on the Trust Securities with respect to
Distribution Dates occurring on or prior to the Redemption Date
for any Trust Securities called for redemption shall be payable
to the Holders of such Trust Securities as they appear on the
Securities Register for the Trust Securities on the relevant
record dates for the related Distribution Dates. If notice of
redemption shall have been given and funds deposited as required,
then on the Redemption Date, all rights of Securityholders
holding Trust Securities so called for redemption will cease,
except the right of such Securityholders to receive the
Redemption Price plus accumulated and unpaid Distributions to the
Redemption Date thereof, but without interest thereon, and such
Trust Securities will cease to be Outstanding. In the event that
any Redemption Date is not a Business Day, then payment of the
Redemption Price payable on such date plus accumulated and unpaid
Distributions to such Redemption Date shall be made on the next
succeeding day which is a Business Day (and without any interest
or other payment in respect of any such delay) with the same
force and effect as if made on such date. In the event that
payment of the Redemption Price plus accumulated and unpaid
Distributions in respect of any Trust Securities called for
redemption is improperly withheld or refused and not paid either
by the Trust or by the Depositor pursuant to the Guarantee,
Distributions on such Trust Securities will continue to accrue,
at the then applicable rate, from the Redemption Date originally
established by the Trust for such Trust Securities to the date
such Redemption Price plus accumulated and unpaid Distributions
is actually paid, in which case the actual payment date will be
deemed the date fixed for redemption for purposes of calculating
the Redemption Price plus accumulated and unpaid Distributions to
such date.
(e) Payment of the Redemption Price on the Trust
Securities shall be made to the Holders thereof as they appear on
the Securities Register for the Trust Securities on the
Redemption Date.
(f) If less than all the Outstanding Trust Securities
are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be
allocated to the Common Securities and to the Capital Securities
in the proportion that the aggregate Liquidation Amount of each
is to the aggregate Liquidation Amount of all outstanding Trust
Securities. The particular Capital Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption
Date by the Property Trustee from the Outstanding Capital
Securities not previously called for redemption, by such method
as the Property Trustee shall deem fair and appropriate and which
may provide for the selection for redemption of portions (equal
to $1,000 or integral multiples thereof) of the Liquidation
Amount of Capital Securities of a denomination larger than
$1,000. The Property Trustee shall promptly notify the Transfer
Agent and Registrar in writing of the Capital Securities selected
for redemption and, in the case of any Capital Securities
selected for partial redemption, the Liquidation Amount thereof
to be redeemed. For all purposes of this Trust Agreement, unless
the context otherwise requires, all provisions relating to the
redemption of Capital Securities shall relate, in the case of any
Capital Securities redeemed or to be redeemed only in part, to
the portion of the Liquidation Amount of Capital Securities which
has been or is to be redeemed.
SECTION 4.03. SUBORDINATION OF COMMON SECURITIES. (a)
Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price plus accumulated and
unpaid Distributions of, the Trust Securities, as applicable,
shall be made pro rata based on the Liquidation Amount of the
Trust Securities; provided, however, that if on any Distribution
Date or Redemption Date an Event of Default shall have occurred
and be continuing, no payment of any Distribution (including
Additional Amounts, if applicable) on, or Redemption Price plus
accumulated and unpaid Distributions of, any Common Security, and
no other payment on account of the redemption, liquidation or
other acquisition of Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid
Distributions (including Additional Amounts, if applicable) on
all Outstanding Capital Securities for all distribution periods
terminating on or prior thereto, or in the case of payment of the
Redemption Price plus accumulated and unpaid Distributions the
full amount of such Redemption Price plus accumulated and unpaid
Distributions on all Outstanding Capital Securities, shall have
been made or provided for, and all funds immediately available to
the Property Trustee shall first be applied to the payment in
full in cash of all Distributions (including Additional Amounts,
if applicable) on, or Redemption Price plus accumulated and
unpaid Distributions of, Capital Securities then due and payable.
(b) In the case of the occurrence of any Event of
Default resulting from a Debenture Event of Default, the Holder
of Common Securities will be deemed to have waived any such Event
of Default under this Trust Agreement until the effect of all
such Events of Default with respect to the Capital Securities
have been cured, waived or otherwise eliminated. Until all such
Events of Default under this Trust Agreement with respect to the
Capital Securities have been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of
the Holders of the Capital Securities and not the Holder of the
Common Securities, and only the Holders of the Capital Securities
will have the right to direct the Property Trustee to act on
their behalf.
SECTION 4.04. PAYMENT PROCEDURES. Payments in respect
of the Capital Securities shall be made by check mailed
to the address of the Person entitled thereto as such address
shall appear on the Securities Register or, if the Capital
Securities are held by a Securities Depository, such
Distributions shall be made to the Securities Depository, which
shall credit the relevant Persons' accounts at such Securities
Depository on the applicable Distribution Dates. Payments in
respect of the Common Securities shall be made in such manner as
shall be mutually agreed between the Administrative Trustees and
the Holder of the Common Securities.
SECTION 4.05. TAX RETURNS AND REPORTS. The
Administrative Trustees shall prepare (or cause to be prepared),
at the Depositor's expense and direction, and file all United
States federal, state and local tax and information returns and
reports required to be filed by or in respect of the Trust. In
this regard, the Administrative Trustees shall (a) prepare and
file (or cause to be prepared or filed) the Internal Revenue
Service Form 1041 (or any successor form) required to be filed in
respect of the Trust in each taxable year of the Trust and (b)
prepare and furnish (or cause to be prepared and furnished) to
each Securityholder the related Internal Revenue Service Form
1099, or any successor form or the information required to be
provided on such form. The Administrative Trustees shall provide
the Depositor and the Property Trustee with a copy of all such
returns, reports and schedules promptly after such filing or
furnishing. The Trustees shall comply with United States federal
withholding and backup withholding tax laws and information
reporting requirements with respect to any payments to
Securityholders under the Trust Securities.
SECTION 4.06. PAYMENTS UNDER INDENTURE. Any amount
payable hereunder to any Holder of Capital Securities shall be
reduced by the amount of any corresponding payment such Holder
has directly received pursuant to Section 808 of the Subordinated
Indenture. Notwithstanding the provisions hereunder to the
contrary, Securityholders acknowledge that any Holder of Capital
Securities that receives payment under Section 808 of the
Subordinated Indenture may receive amounts greater than the
amount such Holder may be entitled to receive pursuant to the
other provisions of this Trust Agreement.
ARTICLE V.
TRUST SECURITIES CERTIFICATES
SECTION 5.01. INITIAL OWNERSHIP. Upon the creation of
the Trust by the contribution by the Depositor pursuant to
Section 2.03 and until the issuance of the Trust Securities, and
at any time during which no Trust Securities are outstanding, the
Depositor shall be the sole beneficial owner of the Trust.
SECTION 5.02. THE TRUST SECURITIES CERTIFICATES. The
Trust Securities Certificates shall be issued in denominations of
$1,000 Liquidation Amount and integral multiples thereof. The
Trust Securities Certificates shall be executed on behalf of the
Trust by manual or facsimile signature of at least one
Administrative Trustee and, if executed on behalf of the Trust by
facsimile signature, the Capital Securities shall be
countersigned by the Transfer Agent and Registrar or its agent.
Trust Securities Certificates bearing the manual signatures of
individuals who were, at the time when such signatures shall have
been affixed, authorized to sign on behalf of the Trust and, if
executed on behalf of the Trust by facsimile signature,
countersigned by the Transfer Agent and Registrar or its agent,
shall be validly issued and entitled to the benefits of this
Trust Agreement, notwithstanding that such individuals or any of
them shall have ceased to be so authorized prior to the delivery
of such Trust Securities Certificates or did not hold such
offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate
shall become a Securityholder, and shall be entitled to the
rights and subject to the obligations of a Securityholder
hereunder, upon due registration of such Trust Securities
Certificate in such transferee's name pursuant to Section 5.04 or
5.12.
SECTION 5.03. EXECUTION AND DELIVERY OF TRUST
SECURITIES CERTIFICATES. On the Closing Date, the Administrative
Trustees, or any one of them, shall cause Trust Securities
Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.04 and 2.05, to be executed on behalf of the Trust,
and in the case of Capital Securities executed by facsimile
signature, countersigned by the Transfer Agent and Registrar, or
its agent, and delivered to or upon the written order of the
Depositor signed by its chairman of the board, any of its vice
presidents or its treasurer, without further corporate action by
the Depositor, in authorized denominations. The Depositor agrees
to indemnify, defend and hold The Bank of New York harmless
against any and all costs and liabilities incurred without
negligence arising out of or in connection with any such
countersigning by it.
SECTION 5.04. REGISTRATION OF TRANSFER AND EXCHANGE OF
TRUST SECURITIES CERTIFICATES. The Transfer Agent and Registrar
shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 5.08, a Securities Register in
which, subject to such reasonable regulations as it may
prescribe, the Transfer Agent and Registrar shall provide for the
registration of Capital Securities Certificates and the Common
Securities Certificates (subject to Section 5.10 in the case of
the Common Securities Certificates) and registration of transfers
and exchanges of Capital Securities Certificates as herein
provided. Texas Utilities Services Inc. shall be the initial
Transfer Agent and Registrar.
Upon surrender for registration of transfer of any
Capital Securities Certificate at the office or agency maintained
pursuant to Section 5.08, the Administrative Trustees, or any one
of them, shall execute on behalf of the Trust by manual or
facsimile signature and, if executed on behalf of the Trust by
facsimile signature, cause the Transfer Agent and Registrar or
its agent to countersign and deliver, in the name of the
designated transferee or transferees, one or more new Capital
Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount. At the option of a Holder, Capital
Securities Certificates may be exchanged for other Capital
Securities Certificates in authorized denominations of the same
class and of a like aggregate Liquidation Amount upon surrender
of the Capital Securities Certificates to be exchanged at the
office or agency maintained pursuant to Section 5.08.
Every Capital Securities Certificate presented or
surrendered for registration of transfer or exchange shall be
accompanied by a written instrument of transfer in form
satisfactory to the Administrative Trustees and the Transfer
Agent and Registrar duly executed by the Holder or such Holder's
attorney duly authorized in writing. Each Capital Securities
Certificate surrendered for registration of transfer or exchange
shall be canceled and subsequently disposed of by the
Administrative Trustees in accordance with customary practice.
The Trust shall not be required to (i) issue, register the
transfer of, or exchange any Capital Securities during a period
beginning at the opening of business 15 calendar days before the
day of mailing of a notice of redemption of any Capital
Securities called for redemption and ending at the close of
business on the day of such mailing or (ii) register the transfer
of or exchange any Capital Securities so selected for redemption,
in whole or in part, except the unredeemed portion of any such
Capital Securities being redeemed in part.
No service charge shall be made for any registration of
transfer or exchange of Capital Securities Certificates, but the
Transfer Agent and Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Capital
Securities Certificates.
SECTION 5.05. MUTILATED, DESTROYED, LOST OR STOLEN
TRUST SECURITIES CERTIFICATES. If (a) any mutilated Trust
Securities Certificate shall be surrendered to the Transfer Agent
and Registrar, or if the Transfer Agent and Registrar shall
receive evidence to its satisfaction of the destruction, loss or
theft of any Trust Securities Certificate and (b) there shall be
delivered to the Transfer Agent and Registrar and the
Administrative Trustees such security or indemnity as may be
required by them to save each of them and the Depositor harmless,
then in the absence of notice that such Trust Securities
Certificate shall have been acquired by a bona fide purchaser,
the Administrative Trustees, or any one of them, on behalf of the
Trust shall execute by manual or facsimile signature and, if
execution on behalf of the Trust is by facsimile signature,
countersigned by a Transfer Agent and Registrar or its agent; and
the Administrative Trustees, or any one of them, and, if executed
on behalf of the Trust by facsimile signature, countersigned by
the Transfer Agent and Registrar or its agent shall make
available for delivery, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Trust Securities
Certificate, a new Trust Securities Certificate of like class,
tenor and denomination. In connection with the issuance of any
new Trust Securities Certificate under this Section, the
Administrative Trustees or the Transfer Agent and Registrar may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
Any duplicate Trust Securities Certificate issued pursuant to
this Section shall constitute conclusive evidence of an ownership
interest in the Trust, as if originally issued, whether or not
the lost, stolen or destroyed Trust Securities Certificate shall
be found at any time.
SECTION 5.06. PERSONS DEEMED SECURITYHOLDERS. Prior
to due presentation of a Trust Securities Certificate for
registration of transfer, the Trustees and the Transfer Agent and
Registrar, and any agent of the Trustee and the Transfer Agent
and Registrar, shall be entitled to treat the Person in whose
name any Trust Securities Certificate shall be registered in the
Securities Register as the owner of such Trust Securities
Certificate for the purpose of receiving Distributions and for
all other purposes whatsoever, and neither the Trustees nor the
Transfer Agent and Registrar shall be bound by any notice to the
contrary.
SECTION 5.07. ACCESS TO LIST OF SECURITYHOLDERS' NAMES
AND ADDRESSES. The Administrative Trustees shall furnish or
cause to be furnished (x) to the Depositor, within 15 days after
receipt by any Administrative Trustee of a request therefor from
the Depositor in writing and (y) to the Property Trustee,
promptly after receipt by any Administrative Trustee of a request
therefor from the Property Trustee in writing in order to enable
the Property Trustee to discharge its obligations under this
Trust Agreement, a list, in such form as the Depositor or the
Property Trustee may reasonably require, of the names and
addresses of the Securityholders as of a recent date. If Holders
of Trust Securities Certificates evidencing ownership at such
time and for the previous six months not less than 25% of the
Outstanding aggregate Liquidation Amount apply in writing to any
Administrative Trustee, and such application states that the
applicants desire to communicate with other Securityholders with
respect to their rights under this Trust Agreement or under the
Trust Securities Certificates and such application is accompanied
by a copy of the communication that such applicants propose to
transmit, then the Administrative Trustees shall, within five
Business Days after the receipt of such application, afford such
applicants access during normal business hours to the current
list of Securityholders. Each Holder, by receiving and holding a
Trust Securities Certificate, shall be deemed to have agreed not
to hold either the Depositor or any Trustees accountable by
reason of the disclosure of its name and address, regardless of
the source from which such information was derived.
SECTION 5.08. MAINTENANCE OF OFFICE OR AGENCY. The
Depositor shall or shall cause the Transfer Agent and Registrar
to maintain in the Borough of Manhattan, The City of New York, an
office or offices or agency or agencies where Capital Securities
Certificates may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Depositor,
the Trust or the Transfer Agent and Registrar in respect of the
Trust Securities and the Trust Agreement may be served. The
Depositor initially designates Midwest Clearing Corporation, 40
Broad Street, New York, New York 10004 as its principal office
for such purposes. The Depositor shall or shall cause the
Transfer Agent and Registrar to give prompt written notice to the
Depositor, the Property Trustee and to the Securityholders of any
change in the location of the Securities Register or any such
office or agency. If at any time the Depositor shall fail to
maintain such office or agency or shall fail to furnish the
Property Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Property Trustee, and the Depositor
hereby appoints the Property Trustee its agent and the agent of
the Trust to receive all such presentations, surrenders, notices
and demands.
SECTION 5.09. APPOINTMENT OF PAYING AGENT. The Paying
Agent shall make distributions to Securityholders from the
Payment Account and shall report the amounts of such
distributions to the Administrative Trustees and the Property
Trustee. Any Paying Agent shall have the revocable power to
withdraw funds from the Payment Account for the purpose of making
the Distributions referred to above. The Property Trustee shall
be entitled to rely upon a certificate of the Paying Agent
stating in effect the amount of such funds so to be withdrawn and
that same are to be applied by the Paying Agent in accordance
with this Section 5.09. The Administrative Trustees or any one
of them may revoke such power and remove the Paying Agent if the
Administrative Trustee or any one of them determines in its sole
discretion that the Paying Agent shall have failed to perform its
obligations under this Trust Agreement in any material respect.
The Paying Agent shall initially be Texas Utilities Services
Inc., and it may choose any co-paying agent that is acceptable to
the Administrative Trustees and the Depositor. The Paying Agent
shall be permitted to resign upon 30 days' written notice to the
Administrative Trustees and the Depositor. In the event of the
removal or resignation of Texas Utilities Services Inc. as Paying
Agent, the Administrative Trustees shall appoint a successor that
is reasonably acceptable to the Property Trustee and the
Depositor to act as Paying Agent (which shall be a bank, trust
company or an Affiliate of the Depositor). The Administrative
Trustees shall cause such successor Paying Agent or any
additional Paying Agent appointed by the Administrative Trustees
to execute and deliver to the Trustees an instrument in which
such successor Paying Agent or additional Paying Agent shall
agree with the Trustees that as Paying Agent, such successor
Paying Agent or additional Paying Agent will hold all sums, if
any, held by it for payment to the Securityholders in trust for
the benefit of the Securityholders entitled thereto until such
sums shall be paid to such Securityholders. The Paying Agent
shall return all unclaimed funds to the Property Trustee and upon
resignation or removal of a Paying Agent such Paying Agent shall
also return all funds in its possession to the Property Trustee.
The provisions of Sections 8.01, 8.03 and 8.06 shall apply to the
Paying Agent appointed hereunder, and the Paying Agent shall be
bound by the requirements with respect to paying agents of
securities issued pursuant to the Trust Indenture Act. Any
reference in this Trust Agreement to the Paying Agent shall
include any co-paying agent unless the context requires
otherwise.
SECTION 5.10. OWNERSHIP OF COMMON SECURITIES BY
DEPOSITOR. On the Closing Date, the Depositor shall acquire, and
thereafter retain, beneficial and record ownership of the Common
Securities. Except in connection with a consolidation, merger or
sale involving the Depositor that would be permitted under
Article Eleven of the Subordinated Indenture, any attempted
transfer of the Common Securities shall be void. The
Administrative Trustees shall cause each Common Securities
Certificate issued to the Depositor to contain a legend stating
"THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN THE
TRUST AGREEMENT". Common Securities Certificates representing
the Common Securities shall be issued to the Depositor in the
form of a typewritten or definitive Common Securities
Certificate.
SECTION 5.11. DEFINITIVE CAPITAL SECURITIES
CERTIFICATES. Upon initial issuance of the Capital Securities,
the Definitive Capital Securities Certificates shall be
typewritten, printed, lithographed or engraved or may be produced
in any other manner as is reasonably acceptable to the
Administrative Trustees, as evidenced by the execution thereof by
the Administrative Trustees, or any one of them. The
Administrative Trustees, or any one of them, shall execute on
behalf of the Trust by manual or facsimile signature, and, if
executed by facsimile on behalf of the Trust, countersigned by
the Transfer Agent and Registrar or its agent, the Definitive
Capital Securities Certificates initially in accordance with the
instructions of the Depositor. Neither the Transfer Agent and
Registrar nor any of the Administrative Trustees shall 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 5.12. BOOK-ENTRY SYSTEM. Some or all of the
Capital Securities may be registered in the name of a securities
depository ("Securities Depository") or a nominee therefor, and
held in the custody of the Securities Depository or a custodian
thereof. In such event, a single certificate will be issued and
delivered to the Securities Depository for such Capital
Securities, in which case the Owners of such Capital Securities
will not receive physical delivery of certificates for Capital
Securities. Except as provided herein, all transfers of
beneficial ownership interests in such Capital Securities will be
made by book-entry only, and no investor or other party
purchasing, selling or otherwise transferring beneficial
ownership of the Capital Securities will receive, hold or deliver
any certificate for Capital Securities. The Depositor, the
Trustees and the Paying Agent will recognize the Securities
Depository or its nominee as the Holder of Capital Securities for
all purposes, including notices and voting.
The Administrative Trustees, at the direction and
expense of the Depositor, may from time to time appoint a
Securities Depository or a successor thereto and enter into a
letter of representations or other agreement with such Securities
Depository to establish procedures with respect to the Capital
Securities. Any Securities Depository shall be a Clearing
Agency.
The Depositor and the Trustees covenant and agree to
meet the requirements of a Securities Depository for the Capital
Securities with respect to required notices and other provisions
of the letter of representations or agreement executed with
respect to such Capital Securities.
Whenever the beneficial ownership of any Capital
Securities is determined through the books of a Securities
Depository, the requirements in this Trust Agreement of holding,
delivering or transferring such Capital Securities shall be
deemed modified with respect to such Capital Securities to meet
the requirements of the Securities Depository with respect to
actions of the Trustees, the Depositor and the Paying Agent. Any
provisions hereof permitting or requiring delivery of such
Capital Securities shall, while such Capital Securities are in a
book-entry system, be satisfied by the notation on the books of
the Securities Depository in accordance with applicable state
law.
SECTION 5.13. RIGHTS OF SECURITYHOLDERS. The legal
title to the Trust Property is vested exclusively in the Property
Trustee (in its capacity as such) in accordance with Section
2.09, and the Securityholders shall not have any right or title
therein other than an undivided beneficial interest in the assets
of the Trust conferred by their Trust Securities and they shall
have no right to call for any partition or division of property,
profits or rights of the Trust except as described below. The
Trust Securities shall be personal property giving only the
rights specifically set forth therein and in this Trust
Agreement. The Capital Securities shall have no preemptive or
similar rights and when issued and delivered to Securityholders
against payment of the purchase price therefor will be fully paid
and nonassessable undivided beneficial interests in the assets of
the Trust.
SECTION 5.14. CANCELLATION BY TRANSFER AGENT AND
REGISTRAR. All Trust Securities Certificates surrendered for
payment, redemption, registration of transfer or exchange shall,
if surrendered to any Person other than the Transfer Agent and
Registrar, be delivered to the Transfer Agent and Registrar and,
if not theretofore cancelled, shall be promptly cancelled by the
Transfer Agent and Registrar. No Trust Securities Certificates
shall be issued in lieu of or in exchange for any Trust
Securities Certificates cancelled as provided in this Section,
except as expressly permitted by this Trust Agreement. All
cancelled Trust Securities Certificates held by the Transfer
Agent and Registrar shall be disposed of in accordance with
customary practices.
ARTICLE VI.
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.01. LIMITATIONS ON VOTING RIGHTS. (a)
Except as provided in this Section 6.01, in Section 10.03 and as
otherwise required by law, no Holder of Capital Securities shall
have any right to vote or in any manner otherwise control the
administration, operation and management of the Trust or the
obligations of the parties hereto, nor shall anything herein set
forth, or contained in the terms of the Trust Securities
Certificates, be construed so as to constitute the
Securityholders from time to time as partners or members of an
association. If the Property Trustee fails to enforce its rights
under the Debentures or this Trust Agreement, a Holder of Capital
Securities may institute a legal proceeding directly against the
Depositor to enforce the Property Trustee's rights under the
Debentures or this Trust Agreement, to the fullest extent
permitted by law, without first instituting any legal proceeding
against the Property Trustee or any other person.
Notwithstanding the foregoing, a Holder of Capital Securities may
directly institute a proceeding for enforcement of payment to
such Holder of principal of or interest on the Debentures having
a principal amount equal to the aggregate liquidation preference
amount of the Capital Securities of such Holder on or after the
due dates specified in the Debentures.
(b) So long as any Debentures are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and
place of conducting any proceeding for any remedy available to
the Debenture Trustee, or executing any trust or power conferred
on the Debenture Trustee with respect to such Debentures, (ii)
waive any past default which is waivable under Section 813 of the
Subordinated Indenture, (iii) exercise any right to rescind or
annul a declaration that the principal of all the Debentures
shall be due and payable or (iv) consent to any amendment,
modification or termination of the Subordinated Indenture or the
Debentures, where such consent shall be required, without, in
each case, obtaining the prior approval of the Holders of at
least 66 2/3% of the aggregate Liquidation Amount of the
Outstanding Capital Securities; provided, however, that where a
consent under the Subordinated Indenture would require the
consent of each Holder of Debentures affected thereby, no such
consent shall be given by any Trustee without the prior written
consent of each Holder of Capital Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote
of the Capital Securities, except pursuant to a subsequent vote
of the Capital Securities. The Property Trustee shall notify all
Holders of the Capital Securities of any notice of default
received from the Debenture Trustee with respect to the
Debentures. In addition to obtaining the foregoing approvals of
the Holders of the Capital Securities, prior to taking any of the
foregoing actions, the Property Trustee shall, at the expense of
the Depositor, obtain an Opinion of Counsel experienced in such
matters to the effect that the Trust will be classified as a
"grantor trust" and not as an association taxable as a
corporation for United States federal income tax purposes on
account of such action.
(c) If any proposed amendment to the Trust Agreement
provides for, or the Trustees otherwise propose to effect, (i)
any action that would materially adversely affect the powers,
preferences or special rights of the Capital Securities, whether
by way of amendment to the Trust Agreement or otherwise, or (ii)
the dissolution, winding-up or termination of the Trust, other
than pursuant to the terms of this Trust Agreement, then the
Holders of Outstanding Capital Securities as a class will be
entitled to vote on such amendment or proposal and such amendment
or proposal shall not be effective except with the approval of
the Holders of at least 66 2/3% in aggregate Liquidation Amount
of the Outstanding Capital Securities.
SECTION 6.02. NOTICE OF MEETINGS. Notice of all
meetings of the Holders of Capital Securities, stating the time,
place and purpose of the meeting, shall be given by the
Administrative Trustees pursuant to Section 10.08 to each Holder
of a Capital Security, at his registered address, at least 15
days and not more than 90 days before the meeting. At any such
meeting, any business properly before the meeting may be so
considered whether or not stated in the notice of the meeting.
Any adjourned meeting may be held as adjourned without further
notice.
SECTION 6.03. MEETINGS OF HOLDERS OF CAPITAL
SECURITIES. No annual meeting of Securityholders is required to
be held. The Administrative Trustees, however, shall call a
meeting of Securityholders to vote on any matter upon the written
request of the Holders of 25% of the then Outstanding Capital
Securities (based upon their aggregate Liquidation Amount) and
may, at any time in their discretion, call a meeting of Holders
of Capital Securities to vote on any matters as to which the
Holders of Capital Securities are entitled to vote.
Holders of 50% of the then Outstanding Capital
Securities (based upon their aggregate Liquidation Amount),
present in person or by proxy, shall constitute a quorum at any
meeting of Securityholders.
If a quorum is present at a meeting, an affirmative
vote by the Holders of Capital Securities present, in person or
by proxy, holding more than the lesser of (x) 66 2/3% of the then
Outstanding Capital Securities (based upon their aggregate
Liquidation Amount) held by the Holders of then Outstanding
Capital Securities present, either in person or by proxy, at such
meeting and (y) 50% of the Outstanding Capital Securities (based
upon their aggregate Liquidation Amount) shall constitute the
action of the Securityholders, unless this Trust Agreement
requires a greater number of affirmative votes.
SECTION 6.04. VOTING RIGHTS. Securityholders shall be
entitled to one vote for each $1,000 of Liquidation Amount
represented by their Trust Securities in respect of any matter as
to which such Securityholders are entitled to vote.
SECTION 6.05. PROXIES, ETC. At any meeting of
Securityholders, any Securityholder entitled to vote thereat may
vote by proxy, provided that no proxy shall be voted at any
meeting unless it shall have been placed on file with the
Administrative Trustees, or with such other officer or agent of
the Trust as the Administrative Trustees may direct, for
verification prior to the time at which such vote shall be taken.
Only Securityholders of record shall be entitled to vote. When
Trust Securities are held jointly by several Persons, any one of
them may vote at any meeting in person or by proxy in respect of
such Trust Securities, but if more than one of them shall be
present at such meeting in person or by proxy, and such joint
owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Trust
Securities. A proxy purporting to be executed by or on behalf of
a Securityholder shall be deemed valid unless challenged at or
prior to its exercise, or, if earlier, until eleven months after
it is sent and the burden of proving invalidity shall rest on the
challenger.
SECTION 6.06. SECURITYHOLDER ACTION BY WRITTEN
CONSENT. Any action which may be taken by Securityholders at a
meeting may be taken without a meeting if Securityholders holding
a majority of all Outstanding Trust Securities entitled to vote
in respect of such action (or such larger proportion thereof as
shall be required by any express provision of this Trust
Agreement) shall consent to the action in writing (based upon
their aggregate Liquidation Amount).
SECTION 6.07. RECORD DATE FOR VOTING AND OTHER
PURPOSES. For the purposes of determining the Securityholders
who are entitled to notice of and to vote at any meeting or by
written consent, or to participate in any Distribution on the
Trust Securities in respect of which a record date is not
otherwise provided for in this Trust Agreement, or for the
purpose of any other action, the Administrative Trustees may from
time to time fix a date, not more than 90 days prior to the date
of any meeting of Securityholders or the payment of Distribution
or other action, as the case may be, as a record date for the
determination of the identity of the Securityholders of record
for such purposes.
SECTION 6.08. ACTS OF SECURITYHOLDERS. Any request,
demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Trust Agreement to be
given, made or taken by Securityholders may be embodied in and
evidenced by one or more instruments of substantially similar
tenor signed by such Securityholders in person or by an agent
duly appointed in writing; and, except as otherwise expressly
provided herein, such action shall become effective when such
instrument or instruments are delivered to the Administrative
Trustees. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Securityholders 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 Trust Agreement and (subject
to Section 8.01) conclusive in favor of the Trustees, if made in
the manner provided in this Section.
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 acknowledgements of
deeds, certifying that the individual signing such instrument or
writing acknowledged to him the execution thereof. 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. The fact and date
of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in
any other manner which any Trustee deems sufficient.
The ownership of Capital Securities shall be proved by
the Securities Register.
Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Securityholder of any Trust
Security shall bind every future Securityholder of the same Trust
Security and the Securityholder of every Trust 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 Trustees or the Trust in reliance
thereon, whether or not notation of such action is made upon such
Trust Security.
Without limiting the foregoing, a Securityholder
entitled hereunder to take any action hereunder with regard to
any particular Trust Security may do so with regard to all or any
part of the Liquidation Amount of such Trust Security or by one
or more duly appointed agents each of which may do so pursuant to
such appointment with regard to all or any part of such
Liquidation Amount.
If any dispute shall arise between or among the
Securityholders and the Administrative Trustees with respect to
the authenticity, validity or binding nature of any request,
demand, authorization, direction, consent, waiver or other Act of
such Securityholder or Trustee under this Article VI, then the
determination of such matter by the Property Trustee shall be
conclusive with respect to such matter.
SECTION 6.09. INSPECTION OF RECORDS. Subject to
Section 5.07 concerning access to the list of Securityholders,
upon reasonable notice to the Administrative Trustees and the
Property Trustee, the other records of the Trust shall be open to
inspection by Securityholders during normal business hours for
any purpose reasonably related to such Securityholder's interest
as a Securityholder.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES OF THE PROPERTY
TRUSTEE AND THE DELAWARE TRUSTEE
SECTION 7.01. PROPERTY TRUSTEE. The Property Trustee
hereby represents and warrants for the benefit of the Depositor
and the Securityholders that:
(a) the Property Trustee is a banking corporation or
trust company duly organized, validly existing and in good
standing under the laws of the State of New York;
(b) the Property Trustee has full corporate power,
authority and legal right to execute, deliver and perform its
obligations under this Trust Agreement and has taken all
necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized,
executed and delivered by the Property Trustee and constitutes
the valid and legally binding agreement of the Property Trustee
enforceable against it in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
(d) the execution, delivery and performance by the
Property Trustee of this Trust Agreement will not violate,
conflict with or constitute a breach of the Property Trustee's
charter or by-laws; and
(e) the execution, delivery and performance by the
Property Trustee of this Trust Agreement does not require the
consent or approval of, the giving of notice to, or the
registration with any Federal or New York banking authority.
SECTION 7.02. DELAWARE TRUSTEE. The Delaware Trustee
represents and warrants for the benefit of the Depositor and the
Securityholders that:
(a) the Delaware Trustee is a banking corporation or
trust company duly organized, validly existing and in good
standing under the laws of the State of Delaware;
(b) the Delaware Trustee has full corporate power,
authority and legal right to execute, deliver and perform its
obligations under this Trust Agreement and has taken all
necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized,
executed and delivered by the Delaware Trustee and constitutes
the valid and legally binding agreement of the Delaware Trustee
enforceable against it in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
(d) the execution, delivery and performance by the
Delaware Trustee of this Trust Agreement will not violate the
Delaware Trustee's charter or by-laws; and
(e) the execution, delivery and performance by the
Delaware Trustee of this Trust Agreement does not require the
consent or approval of, the giving of notice to, or the
registration with any Federal or Delaware banking authority.
ARTICLE VIII.
THE TRUSTEES
SECTION 8.01. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The duties and responsibilities of the Trustees
shall be restricted to those set forth in the express provisions
of this Trust Agreement and, in the case of the Property Trustee,
as provided in the Trust Indenture Act, and no implied covenants
or obligations shall be read into this Trust Agreement against
any of the Trustees. 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.
Notwithstanding the foregoing, no provision of this Trust
Agreement shall require any of the Trustees 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.
Notwithstanding anything contained in this Trust Agreement to the
contrary, the duties and responsibilities of the Property Trustee
under this Trust Agreement shall be subject to the protections,
exculpations and limitations on liability afforded to the
Property Trustee under this Trust Agreement, the Trust Indenture
Act, the Delaware Business Trust Act and, to the extent
applicable, Rule 3a-7 under the Investment Company Act or any
successor rule thereunder. Whether or not therein expressly so
provided, every provision of this Trust Agreement relating to the
conduct or affecting the liability of or affording protection to
the Trustees shall be subject to the provisions of this Section
8.01.
(b) All payments made by the Property Trustee or a
Paying Agent in respect of the Trust Securities shall be made
only from the income and proceeds from the Trust Property and
only to the extent that there shall be sufficient income or
proceeds from the Trust Property to enable the Property Trustee
or Paying Agent to make payments in accordance with the terms
hereof. Each Securityholder, by its acceptance of a Trust
Security, agrees that it will look solely to the income and
proceeds from the Trust Property to the extent available for
distribution to it as herein provided and that the Trustees are
not personally liable to it for any amount distributable in
respect of any Trust Security or for any other liability in
respect of any Trust Security. This Section 8.01(b) does not
limit the liability of the Trustees expressly set forth elsewhere
in this Trust Agreement or, in the case of the Property Trustee,
in the Trust Indenture Act.
(c) All duties and responsibilities of the Property
Trustee contained in this Trust Agreement are subject to the
following:
(i) the Property Trustee's sole duty with respect to
the custody, safe keeping and physical preservation of
the Trust Property shall be to deal with such property
in a similar manner as the Property Trustee deals with
similar property for its own account, subject to the
protections, exculpations and limitations on liability
afforded to the Property Trustee under this Trust
Agreement, the Trust Indenture Act, the Delaware
Business Trust Act and, to the extent applicable, Rule
3a-7 under the Investment Company Act or any successor
rule thereunder;
(ii) the Property Trustee shall have no duty or
liability for or with respect to the value,
genuineness, existence or sufficiency of the Trust
Property or the payment of any taxes or assessments
levied thereon or in connection therewith;
(iii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may
otherwise agree with the Depositor. Money held by the
Property Trustee need not be segregated from other
funds held by it except in relation to the Payment
Account established by the Property Trustee pursuant to
this Trust Agreement and except to the extent otherwise
required by law; and
(iv) the Property Trustee shall not be responsible
for monitoring the compliance by the Administrative
Trustees or the Depositor with their respective duties
under this Trust Agreement, nor shall the Property
Trustee be liable for the default or misconduct of the
Administrative Trustees or the Depositor.
SECTION 8.02. NOTICE OF DEFAULTS. (a) Within ninety
(90) days after the occurrence of any default known to the
Property Trustee, the Property Trustee shall transmit, in the
manner and to the extent provided in Section 10.08, notice of
such default to the Securityholders and the Depositor, unless
such default shall have been cured or waived. 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.
(b) Within five Business Days after receipt of
notice of the Debenture Issuer's exercise of its right to defer
the payment of interest on the Debentures pursuant to the
Subordinated Indenture, an Administrative Trustee shall transmit,
in the manner and to the extent provided in Section 10.08, notice
of such exercise to the Securityholders and the Property Trustee.
SECTION 8.03. CERTAIN RIGHTS OF PROPERTY TRUSTEE.
Subject to the provisions of Section 8.01 and except as provided
by law:
(i) the Property Trustee may rely and shall be
protected in acting or refraining from acting in good
faith upon any resolution, Opinion of Counsel,
certificate, written representation of a Holder or
transferee, certificate of auditors or any other
certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, appraisal,
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;
(ii) if (A) in performing its duties under this Trust
Agreement the Property Trustee is required to decide
between alternative courses of action or (B) in
construing any of the provisions in this Trust
Agreement the Property Trustee finds the same ambiguous
or inconsistent with any other provisions contained
herein or (C) the Property Trustee is unsure of the
application of any provision of this Trust Agreement,
then, except as to any matter as to which the Capital
Securityholders are entitled to vote under the terms of
this Trust Agreement, the Property Trustee shall
deliver a notice to the Depositor requesting written
instructions of the Depositor as to the course of
action to be taken. The Property Trustee shall take
such action, or refrain from taking such action, as the
Property Trustee shall be instructed in writing to
take, or to refrain from taking, by the Depositor;
provided, however, that if the Property Trustee does
not receive such instructions of the Depositor within
ten Business Days after it has delivered such notice,
or such reasonably shorter period of time set forth in
such notice (which to the extent practicable shall not
be less than two Business Days), it may, but shall be
under no duty to, take or refrain from taking such
action not inconsistent with this Trust Agreement as it
shall deem advisable and in the best interests of the
Securityholders, in which event the Property Trustee
shall have no liability except for its own bad faith,
negligence or willful misconduct;
(iii) whenever in the administration of this Trust
Agreement the Property Trustee shall deem it desirable
that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the
Property Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad
faith on its part, request and rely upon an Officers'
Certificate which, upon receipt of such request, shall
be promptly delivered by the Depositor or the
Administrative Trustees;
(iv) the Property Trustee may consult with counsel of
its selection 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;
(v) the Property Trustee shall be under no
obligation to exercise any of the rights or powers
vested in it by this Trust Agreement at the request or
direction of any Securityholder pursuant to this Trust
Agreement, unless such Securityholder shall have
offered to the Property Trustee reasonable security or
indemnity against the costs, expenses (including
reasonable attorneys' fees and expenses) and
liabilities which might be incurred by it in complying
with such request or direction;
(vi) the Property 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, approval, bond, debenture, note or other
evidence of indebtedness or other paper or document,
but the Property Trustee, in its discretion, may make
such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Property
Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the
books, records and premises of the Depositor personally
or by agent or attorney;
(vii) the Property Trustee may execute any of the
trusts or powers hereunder or perform any duties
hereunder either directly or by or through its agents
or attorneys, and the Property 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;
(viii) the Property Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in
good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers
conferred upon it by this Trust Agreement;
(ix) the Property Trustee shall not be charged with
knowledge of any default or Event of Default with
respect to the Trust Securities unless either (A) a
Responsible Officer of the Property Trustee shall have
actual knowledge of the default or Event of Default or
(B) written notice of such default or Event of Default
shall have been given to the Property Trustee by the
Depositor, the Administrative Trustees or by any Holder
of the Trust Securities;
(x) no provision of this Trust Agreement shall be
deemed to impose any duty or obligation on the Property
Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed
on it in any jurisdiction in which it shall be illegal,
or in which the Property Trustee shall be unqualified
or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such
right, power, duty or obligation; and no permissive or
discretionary power or authority available to the
Property Trustee shall be construed to be a duty;
(xi) no provision of this Trust Agreement shall
require the Property Trustee to expend or risk its own
funds or otherwise incur personal financial liability
in the performance of any of its duties or in the
exercise of any of its rights or powers, if the
Property Trustee shall have reasonable grounds for
believing that the repayment of such funds or liability
is not reasonably assured to it under the terms of this
Trust Agreement or adequate indemnity against such risk
or liability is not reasonably assured to it;
(xii) the Property Trustee shall have no duty to see
to any recording, filing or registration of any
instrument (including any financing or continuation
statement or any tax or securities form) (or any
rerecording, refiling or registration thereof);
(xiii) the Property Trustee shall have the right at any
time to seek instructions concerning the administration
of this Trust Agreement from any court of competent
jurisdiction; and
(xiv) whenever in the administration of this Trust
Agreement the Property Trustee shall deem it desirable
to receive instructions with respect to enforcing any
remedy or right or taking any other action hereunder,
the Property Trustee (A) may request instructions from
the Holders of the Trust Securities, which instructions
may only be given by the Holders of the same
Liquidation Amount of the Trust Securities as would be
entitled to direct the Property Trustee under the terms
of this Trust Agreement in respect of such remedies,
rights or actions, (B) may refrain from enforcing such
remedy or right or taking such other action until such
instructions are received, and (C) shall be protected
in acting in accordance with such instructions.
SECTION 8.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE
OF SECURITIES. The recitals contained herein and in the Trust
Securities Certificates shall be taken as the statements of the
Trust, and the Trustees do not assume any responsibility for
their correctness. The Trustees make no representations as to
the title to, or value or condition of, the property of the Trust
or any part thereof, nor as to the validity or sufficiency of
this Trust Agreement, the Debentures or the Trust Securities.
The Trustees shall not be accountable for the use or application
by the Trust of the proceeds of the Trust Securities.
SECTION 8.05. MAY HOLD SECURITIES. Any Trustee or any
agent of any Trustee or the Trust, in its individual or any other
capacity, may become the owner or pledgee of Trust Securities
and, except as provided in the definition of the term
"Outstanding" in Article I, may otherwise deal with the Trust
with the same rights it would have if it were not a Trustee or
such agent.
SECTION 8.06. COMPENSATION; FEES; INDEMNITY.
The Depositor agrees:
(i) to pay to the Trustees from time to time
reasonable compensation for all services rendered by the
Trustees hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a
trustee of an express trust);
(ii) except as otherwise expressly provided herein, to
reimburse the Trustees upon request for all reasonable
expenses, disbursements and advances reasonably incurred or
made by the Trustees in accordance with any provision of
this Trust 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 (gross negligence,
in the case of any Administrative Trustee), bad faith or
willful misconduct; and
(iii) to indemnify each Trustee for, and to hold each
Trustee harmless against, any and all loss, damage, claims,
liability or expense incurred without negligence (gross
negligence, in the case of any Administrative Trustee), bad
faith or willful misconduct on its part, arising out of or
in connection with the acceptance or administration of the
trust or trusts under this Trust Agreement, 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.
As security for the performance of the obligations of
the Depositor under this Section, each of the Trustees shall have
a lien prior to the Trust Securities upon all property and funds
held or collected by such Trustee as such, except funds held in
trust for the payment of Distributions on the Trust Securities.
In addition to the rights provided to each Trustee
pursuant to the provisions of the immediately preceding paragraph
of this Section 8.06, when a Trustee incurs expenses or renders
services in connection with an Event of Default resulting from a
Bankruptcy Event with respect to the Trust, the expenses
(including the reasonable charges and expenses of its counsel)
and the compensation for the services are intended to constitute
expenses of administration under any applicable Federal or State
bankruptcy, insolvency or other similar law.
The provisions of this Section 8.06 shall survive the
termination of this Trust Agreement.
SECTION 8.07. CERTAIN TRUSTEES REQUIRED; ELIGIBILITY.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a
Person that has a combined capital and surplus of at least
$50,000,000. If any such Person publishes reports of condition
at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Person 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
Property Trustee with respect to the Trust Securities 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 VIII.
(b) There shall at all times be one or more Administrative
Trustees hereunder with respect to the Trust Securities. Each
Administrative Trustee shall be either a natural person who is at
least 21 years of age or a legal entity that shall act through
one or more persons authorized to bind such entity.
(c) There shall at all times be a Delaware Trustee with
respect to the Trust Securities. The Delaware Trustee shall
either be (i) a natural person who is at least 21 years of age
and a resident of the State of Delaware or (ii) a legal entity
with its principal place of business in the State of Delaware
that otherwise meets the requirements of applicable Delaware law
and that shall act through one or more persons authorized to bind
such entity.
SECTION 8.08. CONFLICTING INTERESTS.
If the Property Trustee has or shall acquire a
conflicting interest within the meaning of the Trust Indenture
Act, the Property Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and subject
to the provisions of, the Trust Indenture Act and this Trust
Agreement. The Subordinated Indenture, the Guarantee Agreement
and the Indenture dated as of January 1, 1998 by and between
ENSERCH Corporation and The Bank of New York, as Trustee shall be
deemed to be specifically described in this Trust Agreement for
the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
SECTION 8.09. CO-TRUSTEES AND SEPARATE TRUSTEE.
Unless an Event of Default shall have occurred and be
continuing, at any time or times, for the purpose of meeting the
legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust Property may at the
time be located, the Depositor and the Property Trustee shall
have power to appoint, and upon the written request of the
Property Trustee, the Depositor shall for such purpose join with
the Property Trustee in the execution, delivery, and performance
of all instruments and agreements necessary or proper to appoint,
one or more Persons approved by the Property Trustee either to
act as co-trustee, jointly with the Property Trustee, of all or
any part of such Trust Property, or to act as separate trustee of
any such property, 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 Depositor does not join
in such appointment within 15 days after the receipt by it of a
request so to do, or in case a Debenture Event of Default has
occurred and is continuing, the Property Trustee alone shall have
power to make such appointment.
Should any written instrument from the Depositor be
required by any co-trustee or separate trustee so appointed for
more fully confirming 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 Depositor.
Every co-trustee or separate trustee shall, to the
extent permitted by law, but to such extent only, be appointed
subject to the following terms, namely:
(1) The Trust Securities shall be executed 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 Trustees designated for such purpose
hereunder, shall be exercised, solely by such Trustees.
(2) The rights, powers, duties, and obligations hereby
conferred or imposed upon the Property Trustee in respect of
any property covered by such appointment shall be conferred
or imposed upon and exercised or performed by the Property
Trustee or by the Property 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 Property
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.
(3) The Property Trustee at any time, by an instrument
in writing executed by it, with the written concurrence of
the Depositor, may accept the resignation of or remove any
co-trustee or separate trustee appointed under this Section
8.09, and, in case a Debenture Event of Default has occurred
and is continuing, the Property Trustee shall have power to
accept the resignation of, or remove, any such co-trustee or
separate trustee without the concurrence of the Depositor.
Upon the written request of the Property Trustee, the
Depositor shall join with the Property Trustee in the
execution, delivery, and performance 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.
(4) No co-trustee or separate trustee hereunder shall
be personally liable by reason of any act or omission of any
Trustee, or any other such trustee hereunder.
(5) The Property Trustee shall not be liable by reason
of any act of a co-trustee or separate trustee hereunder.
(6) Any Act of Holders delivered to the Property
Trustee shall be deemed to have been delivered to each such
co-trustee and separate trustee.
SECTION 8.10. RESIGNATION AND REMOVAL; APPOINTMENT OF
SUCCESSOR. No resignation or removal of any Trustee (as the case
may be, the "Relevant Trustee") and no appointment of a successor
Relevant Trustee pursuant to this Article shall become effective
until the acceptance of appointment by the successor Relevant
Trustee in accordance with the applicable requirements of Section
8.11.
The Relevant Trustee may resign at any time by giving
written notice thereof to the Securityholders. If the instrument
of acceptance by a successor Relevant Trustee required by Section
8.11 shall not have been delivered to the resigning Relevant
Trustee within 30 days after the giving of such notice of
resignation, the resigning Relevant Trustee may petition any
court of competent jurisdiction for the appointment of a
successor Relevant Trustee.
Unless a Debenture Event of Default shall have occurred
and be continuing, the Relevant Trustee may be removed at any
time by Act of the Common Securityholder. If a Debenture Event
of Default shall have occurred and be continuing, the Relevant
Trustee may be removed at such time by Act of the Securityholders
of a majority of the aggregate Liquidation Amount of the
Outstanding Capital Securities, delivered to the Relevant Trustee
(in its individual capacity and on behalf of the Trust).
If the Relevant Trustee shall resign, be removed or
become incapable of continuing to act as Relevant Trustee at a
time when no Debenture Event of Default shall have occurred and
be continuing, the Common Securityholder, by Act of the Common
Securityholder delivered to the retiring Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees, and
the retiring Relevant Trustee shall comply with the applicable
requirements of Section 8.11. If the Relevant Trustee shall
resign, be removed or become incapable of continuing to act as
the Relevant Trustee at a time when a Debenture Event of Default
shall have occurred and be continuing, the Capital
Securityholders, by Act of the Capital Securityholders of a
majority in aggregate Liquidation Amount of the Outstanding
Capital Securities delivered to the retiring Relevant Trustee,
shall promptly appoint a successor Relevant Trustee or Trustees,
and the Relevant Trustee shall comply with the applicable
requirements of Section 8.11. If no successor Relevant Trustee
shall have been so appointed by the Common Securityholders or the
Capital Securityholders and accepted appointment in the manner
required by Section 8.11, any Securityholder who has been a
Securityholder of Trust Securities 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 Relevant Trustee.
The retiring Relevant Trustee shall give notice of each
resignation and each removal of the Relevant Trustee and each
appointment of a successor Trustee to all Securityholders in the
manner provided in Section 10.08 and shall give notice to the
Depositor. Each notice shall include the name and address of the
successor Relevant Trustee and, in the case of the Property
Trustee, the address of its Corporate Trust Office.
Notwithstanding the foregoing or any other provision of
this Trust Agreement, in the event any Administrative Trustee or
a Delaware Trustee who is a natural person dies or becomes
incompetent or incapacitated, the vacancy created by such death,
incompetence or incapacity may be filled by (i) the unanimous act
of remaining Administrative Trustees if there are at least two of
them or (ii) otherwise by the Depositor (with the successor in
each case being an individual who satisfies the eligibility
requirements for Administrative Trustees or Delaware Trustee, as
the case may be, set forth in Section 8.07). Additionally,
notwithstanding the foregoing or any other provision of this
Trust Agreement, in the event the Depositor reasonably believes
that any Administrative Trustee who is a natural person has
become incompetent or incapacitated, the Depositor, by notice to
the remaining Trustees, may terminate the status of such Person
as an Administrative Trustee (in which case the vacancy so
created will be filled in accordance with the preceding
sentence).
No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any successor Property
Trustee or Delaware Trustee.
SECTION 8.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Relevant
Trustee, the retiring Relevant Trustee and each successor Trustee
shall execute and deliver an amendment hereto wherein each
successor Relevant 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 Relevant Trustee all the rights, powers, trusts and
duties of the retiring Relevant Trustee and (2) shall add to or
change any of the provisions of this Trust Agreement as shall be
necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Relevant Trustee, it being
understood that nothing herein or in such amendment shall
constitute such Relevant Trustees co-trustees of the same trust
and that each such Relevant Trustee shall be trustee of a trust
or trusts hereunder separate and apart from any trust or trusts
hereunder administered by any other such Relevant Trustee and
upon the execution and delivery of such amendment the resignation
or removal of the retiring Relevant Trustee shall become
effective to the extent provided therein and each such successor
Relevant Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and
duties of the retiring Relevant Trustee; but, on request of the
Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor
Trustee all Trust Property, all proceeds thereof and money held
by such retiring Relevant Trustee hereunder with respect to the
Trust Securities and the Trust.
Upon request of any such successor Relevant Trustee,
the retiring Relevant Trustee shall execute any and all
instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights,
powers and trusts referred to in the first or second preceding
paragraph, as the case may be.
No successor Relevant Trustee shall accept its
appointment unless at the time of such acceptance such successor
Relevant Trustee shall be qualified and eligible under this
Article VIII.
SECTION 8.12. MERGER, CONVERSION, CONSOLIDATION OR
SUCCESSION TO BUSINESS. Any Person into which the Property
Trustee or the Delaware Trustee or any Administrative Trustee or
any Trustee that is not a natural person may be merged or
converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which
such Relevant Trustee shall be a party, or any Person succeeding
to all or substantially all the corporate trust business of such
Relevant Trustee, shall be the successor of such Relevant Trustee
hereunder, provided such Person shall be otherwise qualified and
eligible under this Article VIII, without the execution or filing
of any paper, the giving of any notice or any further act on the
part of any of the parties hereto.
SECTION 8.13. PREFERENTIAL COLLECTION OF CLAIMS
AGAINST DEPOSITOR OR TRUST. If and when the Property Trustee
shall be or become a creditor of the Depositor or the Trust (or
any other obligor upon the Debentures or the Trust Securities),
the Property Trustee shall be subject to the provisions of the
Trust Indenture Act regarding the collection of claims against
the Depositor or Trust (or any such other obligor).
SECTION 8.14. REPORTS BY PROPERTY TRUSTEE. (a) The
Property Trustee shall transmit to Securityholders such reports
concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act
at the times and in the manner provided pursuant thereto. Such
of those reports as are required to be transmitted by the
Property Trustee pursuant to Section 313(a) of the Trust
Indenture Act shall be dated as of the next preceding September
15, and shall be transmitted no later than November 1 of each
year, commencing November 1, 1998.
(b) A copy of each such report shall, at the time of
such transmission to Holders, be filed by the Property Trustee
with each stock exchange upon which the Trust Securities are
listed, with the Commission and with the Depositor. The
Depositor will notify the Property Trustee when any Trust
Securities are listed on any stock exchange.
SECTION 8.15. REPORTS TO THE PROPERTY TRUSTEE. The
Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and
information, if any, and the compliance certificate required by
Section 314 of the Trust Indenture Act, in the form, in the
manner and at the times required by Section 314 of the Trust
Indenture Act. Delivery of such reports, information and
documents by the Depositor to the Property Trustee is for
informational purposes only and the Property Trustee's receipt of
such shall not constitute constructive notice of any information
contained therein or determinable from information contained
therein, including the Depositor's compliance with any of its
covenants hereunder (as to which the Property Trustee is entitled
to rely exclusively on Officers' Certificates).
SECTION 8.16. EVIDENCE OF COMPLIANCE WITH CONDITIONS
PRECEDENT. Each of the Depositor and the Administrative Trustees
on behalf of the Trust shall provide to the Property Trustee such
evidence of compliance with any conditions precedent, if any,
provided for in this Trust Agreement (including any covenants
compliance with which constitutes a condition precedent) that
relate to any of the matters set forth in Section 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) of the Trust
Indenture Act may be given in the form of an Officers'
Certificate.
SECTION 8.17. NUMBER OF TRUSTEES.
(a) The number of Trustees shall be seven, provided
that Depositor, by written instrument, may increase or decrease
the number of Administrative Trustees.
(b) If a Trustee ceases to hold office for any reason
and the number of Administrative Trustees is not reduced pursuant
to Section 8.17(a), or if the number of Trustees is increased
pursuant to Section 8.17(a), a vacancy shall occur. The vacancy
shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal,
bankruptcy, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy
in the number of Administrative Trustees shall occur, until such
vacancy is filled by the appointment of an Administrative Trustee
in accordance with Section 8.10, the Administrative Trustees in
office, regardless of their number (and notwithstanding any other
provision of this Agreement), shall have all the powers granted
to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Trust Agreement.
SECTION 8.18. DELEGATION OF POWER.
(a) Any Administrative Trustee may, by power of
attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the
purpose of executing any documents contemplated in Sections
2.07(a) and 2.07(c), including any registration statement or
amendment thereto filed with the Commission, or making any other
governmental filing; and
(b) the Administrative Trustees shall have power to
delegate from time to time to such of their number the doing of
such things and the execution of such instruments either in the
name of the Trust or the names of the Administrative Trustees or
otherwise as the Administrative Trustees may deem expedient, to
the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
SECTION 8.19. FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered
Person, an Indemnified Person acting under this Trust Agreement
shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Trust
Agreement. The provisions of this Trust Agreement, to the extent
that they restrict the duties and liabilities of an Indemnified
Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other
duties and liabilities of such Indemnified Person;
(b) Unless otherwise expressly provided herein and
subject to the provisions of the Trust Indenture Act:
(i) whenever a conflict of interest exists or arises
between an Indemnified Person and any Covered Person;
or
(ii) whenever this Trust Agreement or any other
agreement contemplated herein or therein provides that
an Indemnified Person shall act in a manner that is, or
provides terms that are, fair and reasonable to the
Trust or any Holder of Trust Securities, the
Indemnified Person shall resolve such conflict of
interest, take such action or provide such terms,
considering in each case the relative interest of each
party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits
and burdens relating to such interests, any customary
or accepted industry practices, and any applicable
generally accepted accounting practices or principles.
In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or
provided by the Indemnified Person shall not constitute
a breach of this Trust Agreement or any other agreement
contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise;
and
(c) Unless otherwise expressly provided herein and
subject to the provisions of the Trust Indenture Act, whenever in
this Trust Agreement an Indemnified Person is permitted or
required to make a decision
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to
consider such interests and factors as it reasonably
desires, including its own interests, and shall have no
duty or obligation to give any consideration to any
interest of or factors affecting the Trust or any other
Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such
express standard and shall not be subject to any other
or different standard imposed by this Trust Agreement
or by applicable law.
ARTICLE IX.
TERMINATION AND LIQUIDATION
SECTION 9.01. DISSOLUTION UPON EXPIRATION DATE. The
Trust shall automatically dissolve on December 31, 2050 (the
"Expiration Date") and the Trustees shall take such action as is
required by Section 9.04.
SECTION 9.02. EARLY TERMINATION. Upon the first to
occur of any of the following events (such first occurrence, an
"Early Termination Event"):
(i) the occurrence of a Bankruptcy Event in respect
of, or the dissolution or liquidation of, the
Depositor/Debenture Issuer;
(ii) the redemption of all of the Capital Securities;
(iii) an order for judicial dissolution of the Trust
having been entered by a court of competent
jurisdiction;
(iv) the election by the Depositor to dissolve the
Trust and, after satisfaction of liabilities to
creditors of the Trust, distribute the Debentures to
the Holders of Capital Securities in liquidation of the
Trust;
the Trust shall dissolve and the Trustees shall take such action
as is required by Section 9.04.
SECTION 9.03. TERMINATION. The respective obligations
and responsibilities of the Trust and the Trustees created hereby
shall terminate upon the latest to occur of the following: (i)
the distribution by the Property Trustee to Securityholders upon
the liquidation of the Trust pursuant to Section 9.04, or upon
the redemption of all of the Trust Securities pursuant to Section
4.02 or 9.04(d), of all amounts required to be distributed
hereunder upon the final payment of the Trust Securities; (ii)
the payment of any expenses owed by the Trust; and (iii) the
discharge of all administrative duties of the Administrative
Trustees, including the performance of any tax reporting
obligations with respect to the Trust or the Securityholders.
SECTION 9.04. LIQUIDATION. (a) Upon the Expiration
Date or if an Early Termination Event specified in clause (i),
(iii) or (iv) of Section 9.02 occurs, after satisfaction of
creditors of the Trust, if any, as provided by applicable law,
the Trust shall be liquidated by the Property Trustee as
expeditiously as the Property Trustee determines to be
appropriate by distributing to each Securityholder a Like Amount
of Debentures, subject to Section 9.04(e). Notice of liquidation
shall be given by the Administrative Trustees by first-class
mail, postage prepaid, mailed not later than 30 nor more than 60
days prior to the Liquidation Date to each Holder of Trust
Securities at such Holder's address appearing in the Securities
Register. All notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date,
the Trust Securities will no longer be deemed to be
outstanding and any Trust Securities Certificates not
surrendered for exchange will be deemed to represent a
Like Amount of Debentures; and
(iii) provide such information with respect to the
mechanics by which Holders may exchange Trust
Securities Certificates for Debentures, or, if Section
9.04(e) applies, receive a Liquidation Distribution, as
the Administrative Trustees or the Property Trustee
shall deem appropriate.
(b) Except where Sections 9.02(ii), 9.04(d) or 9.04(e)
apply, in order to effect the liquidation of the Trust hereunder,
and any resulting distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record
date for such distribution (which shall be not more than 45 days
prior to the Liquidation Date) and, either itself acting as
exchange agent or through the appointment of a separate exchange
agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange
for the Outstanding Trust Securities Certificates.
(c) Except where Sections 9.02(ii), 9.04(d) or 9.04(e)
apply, after any Liquidation Date, (i) the Trust Securities will
no longer be deemed to be Outstanding, (ii) certificates
representing a Like Amount of Debentures will, after satisfaction
of liabilities to creditors of the Trust, if any, as provided by
applicable law, be issued to Holders of Trust Securities
Certificates, upon surrender of such Trust Securities
Certificates to the Administrative Trustees or their agent for
exchange, (iii) any Trust Securities Certificates not so
surrendered for exchange will be deemed to represent a Like
Amount of Debentures, accruing interest at the rate provided for
in the Debentures from the last Distribution Date on which a
Distribution was made on such Trust Securities Certificates until
such Trust Securities Certificates are so surrendered (and until
such Trust Securities Certificates are so surrendered, no
payments or interest or principal will be made to Holders of
Trust Securities Certificates with respect to such Debentures)
and (iv) all rights of Securityholders holding Trust Securities
will cease, except the right of such Securityholders to receive,
after satisfaction of liabilities to creditors of the Trust, if
any, as provided by applicable law, Debentures upon surrender of
Trust Securities Certificates.
(d) If at any time, a Tax Event shall occur and be
continuing, and either (i) in the opinion of counsel to the
Depositor experienced in such matters, there would in all cases,
after effecting the dissolution of the Trust, after satisfaction
of liabilities to creditors of the Trust, if any, as provided by
applicable law, and the distribution of the Debentures to the
Holders of the Capital Securities in exchange therefor, be more
than an insubstantial risk that an Adverse Tax Consequence would
continue to exist or (ii) the Debentures are not held by the
Trust, then the Depositor shall have the right to redeem the
Debentures, in whole but not in part, at any time within 90 days
following the occurrence of the Tax Event. Whether or not a Tax
Event has occurred, the Depositor has the right, at any time, to
dissolve the Trust and, after satisfaction of liabilities to
creditors of the Trust, if any, as provided by applicable law,
cause the Debentures to be distributed to the Holders of the
Capital Securities and Common Securities in liquidation of the
Trust on a pro rata basis.
(e) In the event that, notwithstanding the other
provisions of this Section 9.04, whether because of an order for
dissolution entered by a court of competent jurisdiction or
otherwise, distribution of the Debentures in the manner provided
herein is determined by the Property Trustee not to be practical,
the Trust Property shall be liquidated, and the Trust shall be
wound-up or terminated, by the Property Trustee in such manner as
the Property Trustee determines. In such event, on the date of
the winding-up or other termination of the Trust, Securityholders
will be entitled to receive out of the assets of the Trust
available for distribution to Securityholders, after satisfaction
of liabilities to creditors of the Trust, if any, as provided by
applicable law, an amount equal to the Liquidation Amount per
Trust Security plus accumulated and unpaid Distributions thereon
to the date of payment (such amount being the "Liquidation
Distribution"). If, upon any such winding up or termination, the
Liquidation Distribution can be paid only in part because the
Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then, subject to the next
succeeding sentence, the amounts payable by the Trust on the
Trust Securities shall be paid on a pro rata basis (based upon
Liquidation Amounts). The Holder of Common Securities will be
entitled to receive Liquidation Distributions upon any such
winding-up or termination pro rata (determined as aforesaid) with
Holders of Capital Securities, except that, if a Debenture Event
of Default has occurred and is continuing or if a Debenture Event
of Default has not occurred solely by reason of a requirement
that time lapse or notice be given, the Capital Securities shall
have a priority over the Common Securities.
ARTICLE X.
MISCELLANEOUS PROVISIONS
SECTION 10.01. GUARANTEE BY THE DEPOSITOR AND
ASSUMPTION OF OBLIGATIONS. Subject to the terms and conditions
hereof, the Depositor irrevocably and unconditionally guarantees
to each Person to whom the Trust is now or hereafter becomes
indebted or liable (the "Beneficiaries"), and agrees to assume
liability for, the full payment, when and as due, of any and all
Obligations (as hereinafter defined) to such Beneficiaries. As
used herein, "Obligations" means any indebtedness, expenses or
liabilities of the Trust, other than obligations of the Trust to
pay to Holders the amounts due such Holders pursuant to the terms
of the Capital Securities. This guarantee and assumption is
intended to be for the benefit, of, and to be enforceable by, all
such Beneficiaries, whether or not such Beneficiaries have
received notice hereof.
SECTION 10.02. LIMITATION OF RIGHTS OF
SECURITYHOLDERS. The death, incapacity, bankruptcy, dissolution
or termination of any Person having an interest, beneficial or
otherwise, in a Trust Security shall not operate to terminate
this Trust Agreement, nor entitle the legal representatives or
heirs of such Person or any Securityholder for such Person, to
claim an accounting, take any action or bring any proceeding in
any court for a partition or winding up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations
and liabilities of the parties hereto or any of them.
SECTION 10.03. AMENDMENT.
(a) This Trust Agreement may be amended from time to
time by the Trust (on approval of a majority of the
Administrative Trustees and the Depositor, without the consent of
any Securityholders), (i) to cure any ambiguity, correct or
supplement any provision herein or therein which may be
inconsistent with any other provision herein or therein, or to
make any other provisions with respect to matters or questions
arising under this Trust Agreement or (ii) to modify, eliminate
or add to any provisions of this Trust Agreement to such extent
as shall be necessary to ensure that the Trust will not be
classified for United States federal income tax purposes other
than as a "grantor trust" and not as an association taxable as a
corporation at any time that any Trust Securities are outstanding
or to ensure the Trust's exemption from the status of an
"investment company" under the Investment Company Act; provided,
however, that such action shall not adversely affect in any
material respect the interests of any Securityholder and, in the
case of clause (i), any such amendments of this Trust Agreement
shall become effective when notice thereof is given to the
Securityholders.
(b) Except as provided in Sections 6.01(c) and
10.03(c), any provision of this Trust Agreement may be amended by
the Administrative Trustees and the Depositor with (i) the
consent of Holders of Trust Securities representing not less than
a majority (based upon Liquidation Amounts) of the outstanding
Trust Securities and (ii) receipt by the Trustees of an Opinion
of Counsel to the effect that such amendment or the exercise of
any power granted to the Trustees in accordance with such
amendment will not affect the Trust's status as a grantor trust
for federal income tax purposes or the Trust's exemption from
status as an "investment company" under the Investment Company
Act.
(c) In addition to and notwithstanding any other
provision in this Trust Agreement, without the consent of each
affected Securityholder (such consent being obtained in
accordance with Section 6.03 or 6.06), this Trust Agreement may
not be amended to (i) adversely change the amount or timing of
any Distribution on the Trust Securities or otherwise adversely
affect the amount of any Distribution required to be made in
respect of the Trust Securities as of a specified date or (ii)
restrict the right of a Securityholder to institute suit for the
enforcement of any such payment on or after such date.
(d) Notwithstanding any other provisions of this Trust
Agreement, no amendment to this Trust Agreement may be made if,
as a result of such amendment, the Trust would not be classified
as a "grantor trust" but an association taxable as a corporation
for United States federal income tax purposes or would to fail or
cease to qualify for the exemption from status of an "investment
company" under the Investment Company Act afforded by Rule 3a-5
thereunder.
(e) Notwithstanding anything in this Trust Agreement
to the contrary, without the consent of the Depositor and the
Trustees, this Trust Agreement may not be amended in a manner
which imposes any additional obligation on the Depositor or any
Trustee or, in the case of the Trustees, which affects any of
their respective rights, duties or immunities hereunder.
(f) In the event that any amendment to this Trust
Agreement is made, the Administrative Trustees shall promptly
provide to the Depositor a copy of such amendment.
(g) The Property Trustee and the Delaware Trustee may
join in the execution of any amendment to the Trust Agreement and
are entitled to rely upon an Opinion of Counsel as conclusive
evidence that any amendment to this Trust Agreement entered into
pursuant to this Section 10.03 is authorized or permitted by, and
conforms to, the terms of this Section 10.03, has been duly
authorized by and lawfully executed and delivered on behalf of
the other requisite parties, and that it is proper for the
Property Trustee under the provisions of this Section 10.03 to
accept the additional trusts created thereby and, if so
requested, for the Property Trustee or the Delaware Trustee to
join in the execution thereof.
SECTION 10.04. SEPARABILITY. In case any provision in
this Trust Agreement or in the Trust Securities Certificates
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 10.05. GOVERNING LAW. THIS TRUST AGREEMENT
AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE SECURITYHOLDERS,
THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT
AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES).
SECTION 10.06. SUCCESSORS. This Trust Agreement shall
be binding upon and shall inure to the benefit of any successor
to the Trust or the Relevant Trustees or any of them, including
any successor by operation of law.
SECTION 10.07. HEADINGS. The Article and Section
headings are for convenience only and shall not affect the
construction of this Trust Agreement.
SECTION 10.08. NOTICE AND DEMAND. Any notice, demand
or other communication which by any provision of this Trust
Agreement is required or permitted to be given or served to or
upon any Securityholder or the Depositor may be given or served
in writing by deposit thereof, postage prepaid, in the United
States mail, hand delivery or facsimile transmission, in each
case, addressed, (i) in the case of a Capital Securityholder, to
such Capital Securityholder as such Securityholder's name and
address may appear on the Securities Register and (ii) in the
case of the Depositor, to ENSERCH Corporation, Energy Plaza, 1601
Bryan Street, Dallas, Texas 75201, Attention: Treasurer,
facsimile no. 214-812-2488, with a copy to the Secretary,
facsimile no. 214-812-2488. Such notice, demand or other
communication to or upon a Securityholder shall be deemed to have
been sufficiently given or made, for all purposes, upon hand
delivery, mailing or transmission.
Any notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be
given or served to or upon the Trust, the Property Trustee, the
Delaware Trustee or the Administrative Trustees shall be given in
writing addressed (until another address is published by the
Trust) as follows: (i) with respect to the Property Trustee or
the Delaware Trustee, The Bank of New York, 101 Barclay Street,
Floor 21 West, New York, New York 10286, Attention: Corporate
Trust Department, with a copy to: The Bank of New York
(Delaware), White Clay Center, Route 273, Newark, Delaware 19711,
Attention: Corporate Trust Department, and (ii) with respect to
the Trust or the Administrative Trustees, at the address above
for notice to the Depositor, marked "Attention: Administrative
Trustees for ENSERCH Capital I". Such notice, demand or other
communication to or upon the Trust or the Property Trustee shall
be deemed to have been sufficiently given or made only upon
actual receipt of the writing by the Trust or the Property
Trustee.
SECTION 10.09. AGREEMENT NOT TO PETITION. Each of the
Trustees and the Depositor agrees for the benefit of the
Securityholders that, until at least one year and one day after
the Trust has been terminated in accordance with Article IX, it
shall not file, or join in the filing of, a petition against the
Trust under any bankruptcy, reorganization, arrangement,
insolvency, liquidation or other similar law (including, without
limitation, the United States Bankruptcy Code) (collectively,
"Bankruptcy Laws") or otherwise join in the commencement of any
proceeding against the Trust under any Bankruptcy Law. In the
event the Depositor takes action in violation of this Section
10.09, the Property Trustee agrees, for the benefit of
Securityholders, that it shall file an answer with the bankruptcy
court or otherwise properly contest the filing of such petition
by the Depositor against the Trust or the commencement of such
action and raise the defense that the Depositor has agreed in
writing not to take such action and should be estopped and
precluded therefrom and such other defenses, if any, as counsel
for the Property Trustee or the Trust may assert. The provisions
of this Section 10.09 shall survive the termination of this Trust
Agreement.
SECTION 10.10. CONFLICT WITH TRUST INDENTURE ACT. (a)
This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required or deemed to be part of this
Trust Agreement and shall, to the extent applicable, be governed
by such provisions.
(b) The Property Trustee shall be the only Trustee
which is a trustee for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or
conflicts with another provision hereof which is required or
deemed to be included in this Trust Agreement by any of the
provisions of the Trust Indenture Act, such required or deemed
provision shall control.
(d) The application of the Trust Indenture Act to this
Trust Agreement shall not affect the nature of the Trust
Securities as equity securities representing interests in the
Trust.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST
THEREIN BY OR ON BEHALF OF A SECURITYHOLDER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE
THE UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS
HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE
TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND THE AGREEMENT OF
THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THOSE TERMS
AND PROVISIONS SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS
BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amended and
Restated Trust Agreement to be duly executed, all as of the day
and year first above written.
ENSERCH CORPORATION
By: /s/ Robert S. Shapard
-------------------------------------
Title: Robert S. Shapard
Treasurer and Assistant
Secretary
THE BANK OF NEW YORK,
as Property Trustee
By: /s/ Walter N. Gitlin
-------------------------------------
Title: Walter N. Gitlin
Vice President
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/ Walter N. Gitlin
-------------------------------------
Title:
/s/ Robert S. Shapard
-------------------------------------
solely in his capacity as
Administrative Trustee
/s/ Laura Anderson
-------------------------------------
solely in his capacity as
Administrative Trustee
/s/ Jay Rhodes
-------------------------------------
solely in his capacity as
Administrative Trustee
/s/ Kevin Lloyd
-------------------------------------
solely in his capacity as
Administrative Trustee
/s/ Jackie Harrison
-------------------------------------
solely in his capacity as
Administrative Trustee
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
ENSERCH CAPITAL I
THIS CERTIFICATE OF TRUST of ENSERCH Capital I (the
"Trust"), dated as of December 18, 1997, is being duly executed
and filed by the undersigned, as trustees, to form a business
trust under the Delaware Business Trust Act (12 Del. C. S. 3801,
-------
et seq.).
------
1. Name. The name of the business trust being created
hereby is ENSERCH Capital I.
2. Delaware Trustee. The name and business address of
the trustee of the Trust with a principal place of business in
the State of Delaware are The Bank of New York (Delaware), White
Clay Center, Route 273, Newark, New Castle County, Delaware
19711.
3. Effective Date. This Certificate of Trust shall be
effective as of its filing.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being the only
trustees of the Trust, have executed this Certificate of Trust as
of the date first above written.
THE BANK OF NEW YORK (DELAWARE), Michael Perkins,
not in its individual capacity not in his individual capacity
but solely as Trustee but solely as Trustee
By: /s/ Mary Jane Morrissey By: /s/ Michael Perkins
----------------------- ---------------------------
Name: Mary Jane Morrissey
Title: Authorized Signatory
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Trustee
By: /s/ Mary Jane Morrissey
-----------------------
Name: Mary Jane Morrissey
Title: Vice President
<PAGE>
EXHIBIT B
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS
PROVIDED IN THE TRUST AGREEMENT
Certificate Number Number of Common Securities
C-[ ]
Certificate Evidencing Common Securities
of
ENSERCH Capital I
Common Securities
(liquidation amount $1,000 per Common Security)
ENSERCH Capital I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby
certifies that ENSERCH Corporation (the "Holder") is the
registered owner of ( ) common securities of the Trust
----- -----
representing undivided beneficial interests in the assets of the
Trust and designated the Common Securities (liquidation amount
$1,000 per Common Security) (the "Common Securities"). Except as
permitted by Section 5.10 of the Trust Agreement (as defined
below), the Common Securities are not transferable and any
attempted transfer hereof shall be void. The designations,
rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities are set forth in, and this
certificate and the Common Securities represented hereby are
issued and shall in all respects be subject to the terms and
provisions of, the Amended and Restated Trust Agreement of the
Trust dated as of July 2, 1998, as the same may be amended from
time to time (the "Trust Agreement"), including the designation
of the terms of the Common Securities as set forth therein. The
Trust will furnish a copy of the Trust Agreement to the Holder
without charge upon written request to the Trust at its principal
place of business or registered office.
Upon receipt of this certificate, the Holder is bound
by the Trust Agreement and is entitled to the benefits
thereunder.
<PAGE>
IN WITNESS WHEREOF, an Administrative Trustee of the
Trust has executed this certificate for and on behalf of the
Trust this 2nd day of July, 1998.
ENSERCH Capital I
By:
--------------------------------
not in his (her) individual
capacity, but solely as
Administrative Trustee
<PAGE>
EXHIBIT C
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of July 2, 1998 between ENSERCH
Corporation, a Texas corporation ("ENSERCH"), and ENSERCH Capital
I, a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common
Securities (the "Common Securities") to and receive Debentures
from ENSERCH and to issue its Floating Rate Capital Securities
(the "Capital Securities") with such powers, preferences and
special rights and restrictions as are set forth in the Amended
and Restated Trust Agreement of the Trust dated as of July 2,
1998 as the same may be amended from time to time (the "Trust
Agreement");
WHEREAS, ENSERCH is the issuer of the Debentures;
NOW, THEREFORE, in consideration of the acceptance of
the Capital Securities by each holder thereof, which acceptance
ENSERCH hereby agrees shall benefit ENSERCH and which acceptance
ENSERCH acknowledges will be made in reliance upon the execution
and delivery of this Agreement, ENSERCH, including in its
capacity as holder of the Common Securities, and the Trust hereby
agree as follows:
ARTICLE I
Section 1.01. Assumption by ENSERCH. Subject to the
---------------------
terms and conditions hereof, ENSERCH hereby irrevocably and
unconditionally assumes the full payment, when and as due, of any
and all Obligations (as hereinafter defined) to each person or
entity to whom the Trust is now or hereafter becomes indebted or
liable (the "Beneficiaries"). As used herein, "Obligations"
means any indebtedness, expenses or liabilities of the Trust,
other than obligations of the Trust to pay to holders of any
Capital Securities the amounts due such holders pursuant to the
terms of the Capital Securities. This Agreement is intended to
be for the benefit of, and to be enforceable by, all such
Beneficiaries, whether or not such Beneficiaries have received
notice hereof.
Section 1.02. Term of Agreement. This Agreement shall
------------------
terminate and be of no further force and effect upon the date on
which there are no Beneficiaries remaining; provided, however,
that this Agreement shall continue to be effective or shall be
reinstated, as the case may be, if at any time any holder of
Capital Securities or any Beneficiary must restore payment of any
sums paid under the Capital Securities, under any Obligation,
under the Guarantee Agreement dated the date hereof by and
between ENSERCH and The Bank of New York, as guarantee trustee,
or under this Agreement for any reason whatsoever. This
Agreement is continuing, irrevocable, unconditional and absolute.
Section 1.03. Waiver of Notice. ENSERCH hereby waives
-----------------
notice of acceptance of this Agreement and of any Obligation to
which it applies or may apply, and ENSERCH hereby waives
presentment, demand for payment, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices
and demands.
Section 1.04. No Impairment. The obligations,
--------------
covenants, agreements and duties of ENSERCH under this Agreement
shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust
of all or any portion of the Obligations or for the performance
of any other obligation under, arising out of, or in connection
with, the Obligations;
(b) any failure, omission, delay or lack of diligence
on the part of the Beneficiaries to enforce, assert or exercise
any right, privilege, power or remedy conferred on the
Beneficiaries with respect to the Obligations or any action on
the part of the Trust granting indulgence or extension of any
kind; or
(c) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Trust or any of
the assets of the Trust.
Neither the Trust nor any Beneficiary shall have any obligation
to give notice to, or obtain the consent of, ENSERCH with respect
to the happening of any of the foregoing.
Section 1.05. Enforcement. A Beneficiary may enforce
-----------
this Agreement directly against ENSERCH and ENSERCH waives any
right or remedy to require that any action be brought against the
Trust or any other person or entity before proceeding against
ENSERCH.
ARTICLE II
Section 2.01. Binding Effect. All of the obligations,
--------------
covenants and agreements contained in this Agreement shall bind
the successors, assigns, receivers, trustees and representatives
of ENSERCH and shall inure to the benefit of the Beneficiaries
and their successors and assigns.
Section 2.02. Amendment. So long as there remains any
---------
Beneficiary or any Capital Securities of any series shall be
outstanding, this Agreement shall not be modified or amended in
any manner adverse to such Beneficiary or to the holders of the
Capital Securities.
Section 2.03. Notices. Any notice, request or other
-------
communication required or permitted to be given hereunder shall
be given in writing by delivering the same against receipt
therefor by facsimile transmission (confirmed by mail), telex or
by registered or certified mail, addressed as follows (and if so
given, shall be deemed given when mailed or upon receipt of an
answer-back, if sent by telex), to wit:
ENSERCH Capital I
c/o Robert S. Shapard, Administrative Trustee
1601 Bryan Street
Dallas, Texas 75201
Facsimile No.: 214-812-2488
ENSERCH Corporation
1601 Bryan Street
Dallas, Texas 75201
Facsimile No.: 214-812-2488
Attention: Treasurer
Section 2.04 THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES).
<PAGE>
THIS AGREEMENT is executed as of the day and year first
above written.
ENSERCH CORPORATION
By:
-------------------------------------
Name:
Title:
ENSERCH CAPITAL I
By:
-------------------------------------
not in his individual capacity, but
solely as Administrative Trustee
<PAGE>
[Clearing Agency Legend]
EXHIBIT D
Certificate Number Number of Capital Securities
P- CUSIP NO.
Certificate Evidencing Capital Securities
of
ENSERCH Capital I
Floating Rate Capital Securities
(liquidation amount $1,000 per Capital Security)
ENSERCH Capital I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby
certifies that (the "Holder") is the registered
------------
owner of ( ) Capital Securities of the Trust
----- -----
representing an undivided beneficial interest in the assets of
the Trust and designated the ENSERCH Capital I Floating Rate
Capital Securities (liquidation amount $1,000 per Capital
Security) (the "Capital Securities"). The Capital Securities are
transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate
duly endorsed and in proper form for transfer as provided in
Section 5.04 or 5.12 of the Trust Agreement (as defined below).
The designations, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities are set
forth in, and this certificate and the Capital Securities
represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of July 2, 1998, as the
same may be amended from time to time (the "Trust Agreement").
The holder of this certificate is entitled to the benefits of the
Guarantee Agreement of ENSERCH Corporation, a Texas corporation,
and The Bank of New York, as guarantee trustee, dated as of July
2, 1998 (the "Guarantee") to the extent provided therein. The
Trust will furnish a copy of the Trust Agreement and the
Guarantee to the holder of this certificate without charge upon
written request to the Trust at its principal place of business
or registered office.
Upon receipt of this certificate, the holder of this
certificate is bound by the Trust Agreement and is entitled to
the benefits thereunder.
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees
of the Trust has executed this certificate for and on behalf of
the Trust.
Dated:
ENSERCH Capital I
By:
--------------------------------
not in his (her) individual
capacity, but solely as
Administrative Trustee
Countersigned and Registered:
TEXAS UTILITIES SERVICES INC.,
Transfer Agent and Registrar
By:
--------------------------------
(Authorized Signature)
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and
transfers this Capital Security to:
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
(Insert assignee's social security or tax identification number)
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
(Insert address and zip code of assignee)
of the Capital Securities represented by this Certificate and
irrevocably appoints
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
attorney to transfer such Capital Securities Certificate on the
books of the Trust. The attorney may substitute another to act
for him or her.
Date:
-------------------
Signature:
------------------------
(Sign exactly as your name appears on the other side of this
Capital Securities Certificate)
Signature:
------------------------
(Sign exactly as your name appears on the other side of this
Capital Securities Certificate)
GUARANTEE AGREEMENT
Between
ENSERCH Corporation
(as Guarantor)
and
The Bank of New York
(as Trustee)
dated as of
July 2, 1998
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . 1
SECTION 1.01 Definitions . . . . . . . . . . . . . . . 1
ARTICLE II TRUST INDENTURE ACT . . . . . . . . . . . . . . 4
SECTION 2.01 Trust Indenture Act; Application . . . . . 4
SECTION 2.02 Lists of Holders of Capital Securities . . 4
SECTION 2.03 Reports by the Guarantee Trustee . . . . . 4
SECTION 2.04 Periodic Reports to Guarantee Trustee . . 5
SECTION 2.05 Evidence of Compliance with Conditions
Precedent . . . . . . . . . . . . . . . . 5
SECTION 2.06 Events of Default; Waiver . . . . . . . . 5
SECTION 2.07 Event of Default; Notice . . . . . . . . . 5
SECTION 2.08 Conflicting Interests . . . . . . . . . . 5
ARTICLE III POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE . 6
SECTION 3.01 Powers and Duties of the Guarantee Trustee 6
SECTION 3.02 Certain Rights of Guarantee Trustee . . . 7
SECTION 3.03 Not Responsible for Recitals or Issuance of
Guarantee . . . . . . . . . . . . . . . . 9
ARTICLE IV GUARANTEE TRUSTEE . . . . . . . . . . . . . . . 10
SECTION 4.01 Guarantee Trustee; Eligibility . . . . . . 10
SECTION 4.02 Compensation and Reimbursement . . . . . . 10
SECTION 4.03 Appointment, Removal and Resignation of
Guarantee Trustee . . . . . . . . . . . . 11
ARTICLE V GUARANTEE . . . . . . . . . . . . . . . . . . . 12
SECTION 5.01 Guarantee . . . . . . . . . . . . . . . . 12
SECTION 5.02 Waiver of Notice and Demand . . . . . . . 12
SECTION 5.03 Obligations Not Affected . . . . . . . . . 12
SECTION 5.04 Rights of Holders . . . . . . . . . . . . 13
SECTION 5.05 Guarantee of Payment . . . . . . . . . . . 14
SECTION 5.06 Subrogation . . . . . . . . . . . . . . . 14
SECTION 5.07 Independent Obligations . . . . . . . . . 14
ARTICLE VI SUBORDINATION . . . . . . . . . . . . . . . . . 14
SECTION 6.01 Subordination . . . . . . . . . . . . . . 14
ARTICLE VII TERMINATION . . . . . . . . . . . . . . . . . . 15
SECTION 7.01 Termination . . . . . . . . . . . . . . . 15
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . 15
SECTION 8.01 Successors and Assigns . . . . . . . . . . 15
SECTION 8.02 Amendments . . . . . . . . . . . . . . . . 15
SECTION 8.03 Notices . . . . . . . . . . . . . . . . . 16
SECTION 8.04 Benefit . . . . . . . . . . . . . . . . . 17
SECTION 8.05 Interpretation . . . . . . . . . . . . . . 17
SECTION 8.06 Governing Law . . . . . . . . . . . . . . 17
<PAGE>
CROSS-REFERENCE TABLE*
----------------------
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
------------------- ---------
310(a) . . . . . . . . . . . . . . . . . . . . 4.01(a)
310(b) . . . . . . . . . . . . . . . . . . . . 4.01(c), 2.08
310(c) . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . 2.02(b)
311(b) . . . . . . . . . . . . . . . . . . . . 2.02(b)
311(c) . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . 2.02(a)
312(b) . . . . . . . . . . . . . . . . . . . . 2.02(b)
313 . . . . . . . . . . . . . . . . . . . . . . 2.03
314(a) . . . . . . . . . . . . . . . . . . . . 2.04
314(b) . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . 2.05
314(d) . . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . . 1.01, 2.05,
3.02
314(f) . . . . . . . . . . . . . . . . . . . . 2.01, 3.02
315(a) . . . . . . . . . . . . . . . . . . . . 3.01(d)
315(b) . . . . . . . . . . . . . . . . . . . . 2.07
315(c) . . . . . . . . . . . . . . . . . . . . 3.01
315(d) . . . . . . . . . . . . . . . . . . . . 3.01(d)
316(a) . . . . . . . . . . . . . . . . . . . . 5.04(a), 2.06
316(b) . . . . . . . . . . . . . . . . . . . . 5.03
316(c) . . . . . . . . . . . . . . . . . . . . 2.02
317(a) . . . . . . . . . . . . . . . . . . . . Inapplicable
317(b) . . . . . . . . . . . . . . . . . . . . Inapplicable
318(a) . . . . . . . . . . . . . . . . . . . . 2.01(b)
318(b) . . . . . . . . . . . . . . . . . . . . 2.01
318(c) . . . . . . . . . . . . . . . . . . . . 2.01(a)
--------------------
* This Cross-Reference Table does not constitute part of the
Guarantee Agreement and shall not affect the interpretation
of any of its terms or provisions.
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated
as of July 2, 1998, is executed and delivered by ENSERCH
Corporation, a Texas corporation (the "Guarantor"), and The Bank
of New York, as trustee (the "Guarantee Trustee"), for the
benefit of the Holders (as defined herein) from time to time of
the Capital Securities (as defined herein) of ENSERCH Capital I,
a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust
Agreement (the "Trust Agreement"), dated as of July 2, 1998 among
the Trustees named therein, ENSERCH Corporation, as Depositor,
and the several Holders (as defined therein), the Issuer is
issuing as of the date hereof $150,000,000 aggregate Liquidation
Amount of its Floating Rate Capital Securities (the "Capital
Securities") representing undivided beneficial interests in the
assets of the Issuer and having the terms set forth in the Trust
Agreement;
WHEREAS, the Capital Securities are to be issued for
sale by the Issuer and the proceeds are to be invested in
$150,000,000 principal amount of Debentures (as defined in the
Trust Agreement); and
WHEREAS, in order to enhance the value of the Capital
Securities, the Guarantor desires irrevocably and unconditionally
to agree, to the extent set forth herein, to pay to the Holders
the Guarantee Payments (as defined herein) and to make certain
other payments on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the purchase of
Debentures, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this
Guarantee Agreement for the benefit of the Holders from time to
time.
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. As used in this
Guarantee Agreement, the terms set forth below shall, unless the
context otherwise requires, have the following meanings.
Capitalized or otherwise defined terms used but not otherwise
defined herein shall have the meanings assigned to such terms in
the Trust Agreement as in effect on the date hereof.
"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
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the
foregoing.
"Common Securities" means the securities representing
undivided beneficial interests in the assets of the Issuer and
having the terms set forth in the Trust Agreement.
"Event of Default" means a default by the Guarantor on
any of its payment obligations under this Guarantee Agreement.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Capital
Securities, to the extent not paid or made by or on behalf of the
Issuer: (i) any accrued and unpaid Distributions that are
required to be paid on such Capital Securities but only if and to
the extent that the Property Trustee has available in the Payment
Account funds sufficient to make such payment, (ii) the
redemption price (the "Redemption Price"), and all accrued and
unpaid Distributions to the date of redemption, with respect to
the Capital Securities called for redemption by the Issuer but
only if and to the extent that the Property Trustee has available
in the Payment Account funds sufficient to make such payment,
(iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Capital
Securities as provided in the Trust Agreement or upon a
redemption of all of the Capital Securities upon maturity or
redemption of the Debentures as provided in the Trust Agreement),
the lesser of (a) the aggregate of the Liquidation Amount of all
Capital Securities and all accrued and unpaid Distributions on
the Capital Securities to the date of payment but only if and to
the extent that the Property Trustee has available in the Payment
Account funds sufficient to make such payment, and (b) the amount
of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the
"Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York until a
Successor Guarantee Trustee has been appointed and has accepted
such appointment pursuant to the terms of this Guarantee
Agreement and thereafter means each such Successor Guarantee
Trustee.
"Holder" means a Person in whose name a Capital
Security or Capital Securities is registered in the Securities
Register; provided, however, that in determining whether the
holders of the requisite percentage of Capital Securities have
given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the
Guarantor.
"Majority in Liquidation Amount of the Capital
Securities" means a vote by Holders, voting separately as a
class, of more than 50% of the aggregate Liquidation Amount of
all Capital Securities.
"Officer's Certificate" means a certificate signed by
the Chairman of the Board, a Vice Chairman of the Board, the
President, any Vice President, the Treasurer, or any Assistant
Treasurer of the Guarantor, and delivered to the Guarantee
Trustee. Any Officer's Certificate or Opinion of Counsel
delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that the officer or counsel signing
the Officer's Certificate or the Opinion of Counsel has read
the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Officer's Certificate or the Opinion of
Counsel;
(c) a statement that each such officer or counsel has
made such examination or investigation as, in such officer's
or counsel's opinion, is necessary to enable such officer or
counsel 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 officer or counsel, such condition or covenant has been
complied with.
"Opinion of Counsel" means a written opinion of
counsel, who may be counsel for the Guarantee Trustee or the
Guarantor or an Affiliate of the Guarantor, or an employee or any
thereof, who shall be acceptable to the Guarantee Trustee.
"Person" means any individual, corporation,
partnership, joint venture, trust, limited liability company,
unincorporated organization or government, or any agency or
political subdivision thereof, or any other entity of whatever
nature.
"Responsible Officer" means, with respect to the
Guarantee Trustee, any vice-president, any assistant vice-
president, the secretary, any assistant secretary, the treasurer,
any assistant treasurer, any trust officer or assistant trust
officer or any other officer of the Corporate Trust Department of
the Guarantee Trustee customarily performing functions similar to
those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular
subject.
"Subordinated Indenture" means the Indenture (for
Unsecured Subordinated Debt Securities relating to Trust
Securities) dated as of June 1, 1998, between the Guarantor (the
"Debenture Issuer") and The Bank of New York, as trustee pursuant
to which the Debentures are issued, together with any indenture
supplemental thereto.
"Successor Guarantee Trustee" means a successor
Guarantee Trustee possessing the qualifications to act as
Guarantee Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of
1939, as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01 TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the
provisions of the Trust Indenture Act that are required or deemed
to be part of this Guarantee Agreement and shall, to the extent
applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this
Guarantee Agreement limits, qualifies or conflicts with the
duties imposed by Section 310 to 317, inclusive, of the Trust
Indenture Act, such imposed duties shall control.
SECTION 2.02 LISTS OF HOLDERS OF CAPITAL SECURITIES.
(a) The Guarantor shall furnish or cause to be
furnished to the Guarantee Trustee (a) semiannually, not later
than December 1 and June 1 in each year, a list, in such form as
the Guarantee Trustee may reasonably require, of the names and
addresses of the Holders ("List of Holders") as of a date not
more than 15 days prior to the delivery thereof, and (b) at such
other times as the Guarantee Trustee may request in writing,
within 30 days after the receipt by the Guarantor of any such
request, a List of Holders as of a date not more than 15 days
prior to the time such list is furnished; provided that, the
Guarantor shall not be obligated to provide such List of Holders
at any time the List of Holders does not differ from the most
recent List of Holders given to the Guarantee Trustee by the
Guarantor. The Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its
obligations under Section 311(a) of the Trust Indenture Act,
subject to the provisions of Section 311(b) of the Trust
Indenture Act, and Section 312(b) of the Trust Indenture Act.
SECTION 2.03 REPORTS BY THE GUARANTEE TRUSTEE.
Not later than November 1 in each year, commencing November 1,
1998, the Guarantee Trustee shall provide to the Holders such
reports, if any, as are required by Section 313(a) of the Trust
Indenture Act in the form and in the manner provided by Section
313(a) of the Trust Indenture Act. Any such report shall be
dated as of the next preceding September 15. The Guarantee
Trustee shall also comply with the requirements of Sections
313(b), (c) and (d) of the Trust Indenture Act.
SECTION 2.04 PERIODIC REPORTS TO GUARANTEE
TRUSTEE. The Guarantor shall provide to the Guarantee Trustee
such documents, reports and information, if any, as required by
Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314
of the Trust Indenture Act.
SECTION 2.05 EVIDENCE OF COMPLIANCE WITH
CONDITIONS PRECEDENT. The Guarantor shall provide to the
Guarantee Trustee such evidence of compliance with any conditions
precedent provided for in this Guarantee Agreement as and to the
extent required by Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer and
any opinion of counsel required to be given by counsel, in each
case pursuant to Section 314(c) of the Trust Indenture Act, shall
be given in the form of an Officer's Certificate, and an Opinion
of Counsel, respectively.
SECTION 2.06 EVENTS OF DEFAULT; WAIVER. The
Holders of a Majority in Liquidation Amount of Capital Securities
may, by vote, on behalf of all of the Holders, waive any past
Event of Default and its consequences. Upon such waiver, any
such Event of Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for
every purpose of this Guarantee Agreement, but no such waiver
shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
SECTION 2.07 EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first
class postage prepaid, to the Holders, a notice of such Event of
Default known to the Guarantee Trustee, unless such default shall
have been cured or waived before the giving of such notice,
provided that the Guarantee Trustee shall be protected in
withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors or
Responsible Officers of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the
interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless a Responsible Officer of
the Guarantee Trustee charged with the administration of the
Trust Agreement shall have received written notice of such Event
of Default.
SECTION 2.08 CONFLICTING INTERESTS. The Trust
Agreement, the Subordinated Indenture and the Indenture dated as
of January 1, 1998 by and between ENSERCH Corporation and The
Bank of New York, as trustee shall be deemed to be specifically
described in this Guarantee Agreement for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.01 POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the
Guarantee Trustee for the benefit of the Holders, and the
Guarantee Trustee shall not transfer this Guarantee Agreement or
any rights hereunder to any Person except a Holder exercising his
or her rights pursuant to Section 5.04 or to a Successor
Guarantee Trustee on acceptance by such Successor Guarantee
Trustee of its appointment to act as Successor Guarantee Trustee.
The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, and such
vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Guarantee Trustee.
(b) The Guarantee Trustee, prior to the occurrence of
any Event of Default and after the curing or waiving of all
Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set
forth in this Guarantee Agreement, and no implied covenants or
obligations shall be read into this Guarantee Agreement against
the Guarantee Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.06), and
is actually known to a Responsible Officer of the Guarantee
Trustee, the Guarantee Trustee shall exercise such of the rights
and powers vested in it by this Guarantee Agreement, and use the
same degree of care and skill in its exercise thereof, as a
prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(c) No provision of this Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its
own negligent action, its own negligent failure to act, or its
own willful misconduct, except that:
(i) prior to the occurrence of any Event of
Default and after the curing or waiving of all such
Events of Default that may have occurred:
(A) the duties and obligations of the
Guarantee Trustee shall be determined solely by
the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties
and obligations as are specifically set forth in
this Guarantee Agreement, and no implied covenants
or obligations shall be read into this Guarantee
Agreement against the Guarantee Trustee; and
(B) in the absence of bad faith on the part
of the Guarantee Trustee, the Guarantee Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Guarantee
Agreement; but in the case of any such
certificates or opinions that by any provision
hereof are specifically required to be furnished
to the Guarantee Trustee, the Guarantee Trustee
shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable
for any error of judgment made in good faith by a
Responsible Officer of the Guarantee Trustee, unless it
shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken
by it in good faith in accordance with the direction of
the Holders of a Majority in Liquidation Amount of the
Capital Securities relating to the time, method and
place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any
trust or power conferred upon the Guarantee Trustee
under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement
shall require the Guarantee 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 the Guarantee Trustee shall have reasonable
grounds for believing that the repayment of such funds
or liability is not reasonably assured to it under the
terms of this Guarantee Agreement or adequate
indemnity, reasonably satisfactory to the Guarantee
Trustee, against such risk or liability is not
reasonably assured to it.
(d) Whether or not therein expressly provided, every
provision of this Guarantee Agreement relating to the conduct or
affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of Sections 3.01(b) and
3.01(c).
SECTION 3.02 CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.01:
(i) the Guarantee Trustee may rely and shall be
fully 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
reasonably believed by it to be genuine and to have
been signed, sent or presented by the proper party or
parties;
(ii) any direction or act of the Guarantor
contemplated by this Guarantee Agreement shall be
sufficiently evidenced by an Officer's Certificate;
(iii) whenever, in the administration of this
Guarantee Agreement, the Guarantee Trustee shall deem
it desirable that a matter be proved or established
before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence
is herein specifically prescribed) may, in the absence
of bad faith on its part, request and rely upon an
Officer's Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly
delivered by the Guarantor;
(iv) the Guarantee Trustee may consult with counsel
of its choice, and the written advice or Opinion of
Counsel with respect to legal matters 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 accordance with such advice or
opinion; such counsel may be counsel to the Guarantor
or any of its Affiliates and may include any of its
employees; the Guarantee Trustee shall have the right
at any time to seek instructions concerning the
administration of this Guarantee Agreement from any
court of competent jurisdiction;
(v) the Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers
vested in it by this Guarantee Agreement at the request
or direction of any Holder, unless such Holder shall
have provided to the Guarantee Trustee such adequate
security and indemnity as would satisfy a reasonable
person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys' fees
and expenses) and liabilities that might be incurred by
it in complying with such request or direction,
including such reasonable advances as may be requested
by the Guarantee Trustee; provided that, nothing
contained in this Section 3.02(a)(v) shall be taken to
relieve the Guarantee Trustee, upon the occurrence and
continuance of an Event of Default, of its obligation
under the last sentence of Section 3.01(b) to exercise
the rights and powers vested in it by this Guarantee
Agreement;
(vi) the Guarantee 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
Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or
matters as it may see fit;
(vii) the Guarantee 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 Guarantee Trustee shall not be
responsible for any misconduct or negligence on the
part of any such agent or attorney appointed with due
care by it hereunder;
(viii) whenever in the administration of this
Guarantee Agreement the Guarantee Trustee shall deem it
desirable to receive instructions with respect to
enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (1) may request
instructions from the Holders of a Majority in
Liquidation Amount of the Capital Securities, (2) may
refrain from enforcing such remedy or right or taking
such other action until such instructions are received,
and (3) shall be protected in relying on or acting in
accordance with such instructions;
(ix) the Guarantee Trustee shall have no duty to
see to any recording, filing or registration of any
instrument (including any financing or continuation
statement or any tax or securities form) (or any
rerecording, refiling or re-registration thereof); and
(x) the Guarantee Trustee shall not be liable for
any action taken, suffered or omitted to be taken by it
in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers
conferred upon it by this Guarantee Agreement.
(b) No provision of this Guarantee Agreement shall be
deemed to impose any duty or obligation on the Guarantee Trustee
to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in
which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable
law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or
authority available to the Guarantee Trustee shall be construed
to be a duty to act in accordance with such power or authority.
SECTION 3.03 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE
OF GUARANTEE.
The recitals contained in this Guarantee Agreement
shall be taken as the statements of the Guarantor, and the
Guarantee Trustee does not assume any responsibility for their
correctness. The Guarantee Trustee makes no representation as to
the validity or sufficiency of this Guarantee Agreement.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01 GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing
business under the laws of the United States of America
or any State or Territory thereof or of the District of
Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000), and
subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority.
If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to
above, then, for the purposes of this Section
4.01(a)(ii), 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.
(b) If at any time the Guarantee Trustee shall cease
to be eligible to so act under Section 4.01(a), the
Guarantee Trustee shall immediately resign in the manner and
with the effect set out in Section 4.03(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b)
of the Trust Indenture Act, the Guarantee Trustee and
Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
SECTION 4.02 COMPENSATION AND REIMBURSEMENT.
The Guarantor agrees:
(a) to pay the Guarantee Trustee from time to time
such reasonable compensation as the Guarantor and the Guarantee
Trustee shall from time to time agree in writing 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, to
reimburse the Guarantee Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made
by the Guarantee Trustee in accordance with the provisions of
this Guarantee Agreement (including the reasonable compensation
and expenses of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence
or bad faith; and
(c) to indemnify each of the Guarantee Trustee and any
predecessor Guarantee Trustee for, and to hold it harmless from
and against, any and all loss, damage, claim, liability or
expense, including taxes (other than taxes based upon the income
of the Guarantee Trustee) incurred without negligence or bad
faith on its part, arising out of or in connection with the
acceptance of the trusts created by, or the administration of,
this Guarantee Agreement, 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.
As security for the performance of the obligations of
the Guarantor under this Section, the Guarantee Trustee shall
have a lien prior to the Capital Securities upon all the property
and funds held or collected by the Guarantee Trustee as such,
except funds held in trust for the payment of principal of, and
premium (if any) or interest on, particular obligations of the
Guarantor under this Guarantee Agreement.
The provisions of this Section shall survive the
termination of this Guarantee Agreement.
SECTION 4.03 APPOINTMENT, REMOVAL AND RESIGNATION OF
GUARANTEE TRUSTEE.
(a) Subject to Section 4.03(b), unless an Event of
Default shall have occurred and be continuing, the Guarantee
Trustee may be appointed or removed without cause at any time by
the Guarantor.
(b) The Guarantee Trustee shall not be removed until a
Successor Guarantee Trustee has been appointed and has accepted
such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall
hold office until a Successor Guarantee Trustee shall have been
appointed or until its removal or resignation. The Guarantee
Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by
the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Guarantee
Trustee and delivered to the Guarantor and the resigning
Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section
4.03 within 60 days after delivery to the Guarantor of an
instrument of resignation or removal, the Guarantee Trustee
resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Guarantee Trustee.
Such court may thereupon, after prescribing such notice, if any,
as it may deem proper, appoint a Successor Guarantee Trustee.
(e) The Guarantor shall give notice of each
resignation and each removal of the Guarantee Trustee and each
appointment of a successor Guarantee Trustee to all Holders in
the manner provided in Section 8.03 hereof. Each notice shall
include the name of the successor Guarantee Trustee and the
address of its Corporate Trust Office.
(f) No Guarantee Trustee shall be liable for the acts
or omissions to act of any Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.01 GUARANTEE. The Guarantor
irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts
theretofore paid by or on behalf of the Issuer), as and when due,
regardless of any defense, right of set-off or counterclaim which
the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of
the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 5.02 WAIVER OF NOTICE AND DEMAND. The
Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a
proceeding first against the Guarantee Trustee, Issuer or any
other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption
and all other notices and demands.
SECTION 5.03 OBLIGATIONS NOT AFFECTED. The
obligation of the Guarantor to make the Guarantee Payments under
this Guarantee Agreement shall in no way be affected or impaired
by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of
any express or implied agreement, covenant, term or
condition relating to the Capital Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the
Issuer of all or any portion of the Distributions,
Redemption Price, Liquidation Distribution or any other sums
payable under the terms of the Capital Securities or the
extension of time for the performance of any other
obligation under, arising out of, or in connection with, the
Capital Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the
extension of any interest payment period on the Debentures
permitted by the Subordinated Indenture);
(c) any failure, omission, delay or lack of diligence
on the part of the Property Trustee or the Holders to
enforce, assert or exercise any right, privilege, power or
remedy conferred on the Property Trustee or the Holders
pursuant to the terms of the Capital Securities, or any
action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership,
insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Capital Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or
defense of a guarantor, it being the intent of this Section
5.03 that the obligations of the Guarantor hereunder shall
be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Guarantee Trustee, the
Property Trustee or the Holders to give notice to, or obtain
consent of, the Guarantor or any other Person with respect to the
happening of any of the foregoing.
SECTION 5.04 RIGHTS OF HOLDERS. The Guarantor
expressly acknowledges that: (i) this Guarantee Agreement will be
deposited with the Guarantee Trustee to be held for the benefit
of the Holders; (ii) if an Event of Default has occurred and is
continuing, the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders
of a Majority in Liquidation Amount of the Capital Securities
have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee
in respect of this Guarantee Agreement or exercising any trust or
power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) if the Guarantee Trustee fails to enforce
this Guarantee Agreement, any Holder may enforce this Guarantee
Agreement, or institute a legal proceeding directly against the
Guarantor to enforce the Guarantee Trustee's rights under this
Guarantee Agreement without first instituting a legal proceeding
against the Issuer, the Guarantee Trustee, or any other Person.
SECTION 5.05 GUARANTEE OF PAYMENT. This
Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged
except by payment of the Guarantee Payments in full (without
duplication).
SECTION 5.06 SUBROGATION. The Guarantor shall
be subrogated to all, if any, rights of the Holders against the
Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement; provided, however, that
the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise
any rights which it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a
result of payment under this Guarantee Agreement, if, at the time
of any such payment, any amounts of Guarantee Payments are due
and unpaid under this Guarantee Agreement. If any amount shall
be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders
and to pay over such amount to the Holders.
SECTION 5.07 INDEPENDENT OBLIGATIONS. The
Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the
Capital Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding
the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.03.
ARTICLE VI
SUBORDINATION
SECTION 6.01 SUBORDINATION. This Guarantee
Agreement will constitute an unsecured obligation of the
Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, including the
Debentures, except those made pari passu or subordinate by their
terms, (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued by the Guarantor and
with any guarantee now or hereafter entered into by the Guarantor
in respect of any preferred or preference stock of any Affiliate
of the Guarantor, and (iii) senior to all common stock of the
Guarantor. Nothing in this Section 6.01 shall apply to claims
of, or payments to, the Guarantee Trustee under or pursuant to
Section 4.02 hereof.
ARTICLE VII
TERMINATION
SECTION 7.01 TERMINATION. Subject to Section
4.02 hereof, this Guarantee Agreement shall terminate and be of
no further force and effect upon: (i) full payment of the
Redemption Price of all Capital Securities, and all accrued and
unpaid Distributions to the date of redemption, (ii) the
distribution of Debentures to Holders in exchange for all of the
Capital Securities, or (iii) full payment of the amounts payable
in accordance with the Trust Agreement upon liquidation of the
Issuer. Notwithstanding the foregoing, this Guarantee Agreement
will continue to be effective or will be reinstated, as the case
may be, if at any time any Holder must restore payment of any
sums paid with respect to Capital Securities or under this
Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 SUCCESSORS AND ASSIGNS. All
guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit
of the Holders of the Capital Securities then outstanding.
Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under Article Eleven of
the Subordinated Indenture, the Guarantor shall not assign its
obligations hereunder.
SECTION 8.02 AMENDMENTS. This Guarantee
Agreement may be amended only by an instrument in writing entered
into by the Guarantor and the Guarantee Trustee. Except with
respect to any changes which do not materially adversely affect
the rights of Holders (in which case no consent of Holders will
be required), this Guarantee Agreement may only be amended with
the prior approval of the Holders of not less than 66 2/3% in
aggregate Liquidation Amount of all the outstanding Capital
Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of Holders shall apply to the giving of such
approval. Nothing herein contained shall be deemed to require
that the Guarantee Trustee enter into any amendment of this
Guarantee Agreement.
SECTION 8.03 NOTICES. Any notice, request or
other communication required or permitted to be given hereunder
shall be in writing, duly signed by the party giving such notice,
and delivered, telecopied or mailed by first class mail as
follows:
(a) if given to the Guarantor, to the address set
forth below or such other address as the Guarantor may give
notice of to the Guarantee Trustee and the Holders of the
Capital Securities:
ENSERCH Corporation
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Facsimile No: 214-812-2488
Attention: Treasurer
(b) if given to the Issuer, in care of the
Administrative Trustees, at the Issuer's (and the
Administrative Trustees') address set forth below or such
other address as the Administrative Trustees on behalf of
the Issuer may give notice of to the Guarantee Trustee and
the Holders:
ENSERCH Capital I
c/o ENSERCH Corporation
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Facsimile No: 214-812-2488
Attention: Administrative Trustees
(c) if given to the Guarantee Trustee, to the address
set forth below or such other address as the Guarantee
Trustee may give notice of to the Guarantor and the Holders
of the Capital Securities:
The Bank of New York
101 Barclay Street
21 West
New York, New York 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Trustee Administration
(d) if given to any Holder, at the address set forth
on the books and records of the Issuer.
All notices hereunder shall be deemed to have been
given when received in person, telecopied with receipt confirmed,
or mailed by first class mail, postage prepaid, except that if a
notice or other document is refused delivery or cannot be
delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 8.04 BENEFIT. This Guarantee Agreement
is solely for the benefit of the Holders and, subject to Section
3.01(a), is not separately transferable from the Capital
Securities.
SECTION 8.05 INTERPRETATION. In this Guarantee
Agreement, unless the context otherwise requires:
(a) a term defined anywhere in this Guarantee
Agreement has the same meaning throughout;
(b) all references to "the Guarantee Agreement" or
"this Guarantee Agreement" are to this Guarantee Agreement
as modified, supplemented or amended from time to time;
(c) all references in this Guarantee Agreement to
Articles and Sections are to Articles and Sections of this
Guarantee Agreement unless otherwise specified;
(d) a term defined in the Trust Indenture Act has the
same meaning when used in this Guarantee Agreement unless
otherwise defined in this Guarantee Agreement or unless the
context otherwise requires;
(e) a reference to the singular includes the plural
and vice versa; and
(f) the masculine, feminine or neuter genders used
herein shall include the masculine, feminine and neuter
genders.
SECTION 8.06 GOVERNING LAW. THIS GUARANTEE
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but
one and the same instrument.
<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and
year first above written.
ENSERCH Corporation
By: /s/ Robert S. Shapard
---------------------------------
Name: Robert S. Shapard
Title: Treasurer and Assistant
Secretary
The Bank of New York,
as Guarantee Trustee
By: /s/ Walter N. Gitlin
---------------------------------
Name: Walter N. Gitlin
Title: Vice President
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of July 2, 1998 between ENSERCH
Corporation, a Texas corporation ("ENSERCH"), and ENSERCH Capital
I, a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common
Securities (the "Common Securities") to and receive Debentures
from ENSERCH and to issue its Floating Rate Capital Securities
(the "Capital Securities") with such powers, preferences and
special rights and restrictions as are set forth in the Amended
and Restated Trust Agreement of the Trust dated as of July 2,
1998 as the same may be amended from time to time (the "Trust
Agreement");
WHEREAS, ENSERCH is the issuer of the Debentures;
NOW, THEREFORE, in consideration of the acceptance of
the Capital Securities by each holder thereof, which acceptance
ENSERCH hereby agrees shall benefit ENSERCH and which acceptance
ENSERCH acknowledges will be made in reliance upon the execution
and delivery of this Agreement, ENSERCH, including in its
capacity as holder of the Common Securities, and the Trust hereby
agree as follows:
ARTICLE I
Section 1.01. Assumption by ENSERCH. Subject to the
---------------------
terms and conditions hereof, ENSERCH hereby irrevocably and
unconditionally assumes the full payment, when and as due, of any
and all Obligations (as hereinafter defined) to each person or
entity to whom the Trust is now or hereafter becomes indebted or
liable (the "Beneficiaries"). As used herein, "Obligations"
means any indebtedness, expenses or liabilities of the Trust,
other than obligations of the Trust to pay to holders of any
Capital Securities the amounts due such holders pursuant to the
terms of the Capital Securities. This Agreement is intended to
be for the benefit of, and to be enforceable by, all such
Beneficiaries, whether or not such Beneficiaries have received
notice hereof.
Section 1.02. Term of Agreement. This Agreement shall
-----------------
terminate and be of no further force and effect upon the date on
which there are no Beneficiaries remaining; provided, however,
that this Agreement shall continue to be effective or shall be
reinstated, as the case may be, if at any time any holder of
Capital Securities or any Beneficiary must restore payment of any
sums paid under the Capital Securities, under any Obligation,
under the Guarantee Agreement dated the date hereof by and
between ENSERCH and The Bank of New York, as guarantee trustee,
or under this Agreement for any reason whatsoever. This
Agreement is continuing, irrevocable, unconditional and absolute.
Section 1.03. Waiver of Notice. ENSERCH hereby waives
----------------
notice of acceptance of this Agreement and of any Obligation to
which it applies or may apply, and ENSERCH hereby waives
presentment, demand for payment, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices
and demands.
Section 1.04. No Impairment. The obligations,
-------------
covenants, agreements and duties of ENSERCH under this Agreement
shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust
of all or any portion of the Obligations or for the performance
of any other obligation under, arising out of, or in connection
with, the Obligations;
(b) any failure, omission, delay or lack of diligence
on the part of the Beneficiaries to enforce, assert or exercise
any right, privilege, power or remedy conferred on the
Beneficiaries with respect to the Obligations or any action on
the part of the Trust granting indulgence or extension of any
kind; or
(c) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Trust or any of
the assets of the Trust.
Neither the Trust nor any Beneficiary shall have any obligation
to give notice to, or obtain the consent of, ENSERCH with respect
to the happening of any of the foregoing.
Section 1.05. Enforcement. A Beneficiary may enforce
-----------
this Agreement directly against ENSERCH and ENSERCH waives any
right or remedy to require that any action be brought against the
Trust or any other person or entity before proceeding against
ENSERCH.
ARTICLE II
Section 2.01. Binding Effect. All of the obligations,
--------------
covenants and agreements contained in this Agreement shall bind
the successors, assigns, receivers, trustees and representatives
of ENSERCH and shall inure to the benefit of the Beneficiaries
and their successors and assigns.
Section 2.02. Amendment. So long as there remains any
---------
Beneficiary or any Capital Securities of any series shall be
outstanding, this Agreement shall not be modified or amended in
any manner adverse to such Beneficiary or to the holders of the
Capital Securities.
Section 2.03. Notices. Any notice, request or other
-------
communication required or permitted to be given hereunder shall
be given in writing by delivering the same against receipt
therefor by facsimile transmission (confirmed by mail), telex or
by registered or certified mail, addressed as follows (and if so
given, shall be deemed given when mailed or upon receipt of an
answer-back, if sent by telex), to wit:
ENSERCH Capital I
c/o Robert S. Shapard, Administrative Trustee
1601 Bryan Street
Dallas, Texas 75201
Facsimile No.: 214-812-2488
ENSERCH Corporation
1601 Bryan Street
Dallas, Texas 75201
Facsimile No.: 214-812-2488
Attention: Treasurer
Section 2.04 THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES).
<PAGE>
THIS AGREEMENT is executed as of the day and year first
above written.
ENSERCH CORPORATION
By: /s/ Diane J. Kubin
---------------------------------
Name: Diane J. Kubin
Title: Secretary and Assistant
Treasurer
ENSERCH CAPITAL I
By: /s/ Jay Rhodes
---------------------------------
not in his individual capacity, but
solely as Administrative Trustee
------------------------------------------
TEXAS UTILITIES COMPANY
TO
THE BANK OF NEW YORK
TRUSTEE
---------
INDENTURE
(FOR UNSECURED DEBT SECURITIES SERIES D AND SERIES E)
DATED AS OF JULY 1, 1998
------------------------------------------
<PAGE>
TABLE OF CONTENTS
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITAL OF THE COMPANY
ARTICLE ONE
Definitions and Other Provisions of General Application
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
Note: This table of contents shall not, for any purpose, be
deemed to be part of the Indenture.
<PAGE>
Responsible Officer . . . . . . . . . . . . . . . . 6
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
Security Forms
SECTION 201. Forms Generally . . . . . . . . . . . . . 13
SECTION 202. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . 14
ARTICLE THREE
The Securities
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
Redemption of Securities
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
Sinking Funds
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
Covenants
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
Satisfaction and Discharge
SECTION 701. Satisfaction and Discharge of Securities . 37
SECTION 702. Satisfaction and Discharge of Indenture . 40
SECTION 703. Application of Trust Money . . . . . . . . 41
ARTICLE EIGHT
Events of Default; Remedies
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
The Trustee
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 . . . . . . . . . . 57
SECTION 913. Preferential Collection of Claims Against
Company . . . . . . . . . . . . . . . . . 57
SECTION 914. Co-trustees and Separate Trustees. . . . . 57
SECTION 915. Appointment of Authenticating Agent . . . 59
ARTICLE TEN
Holders' Lists and Reports by Trustee and Company
SECTION 1001. Lists of Holders . . . . . . . . . . . . 61
SECTION 1002. Reports by Trustee and Company . . . . . 61
ARTICLE ELEVEN
Consolidation, Merger, Conveyance or Other Transfer
SECTION 1101. Company May Consolidate, etc., Only on
Certain Terms . . . . . . . . . . . . . . 61
SECTION 1102. Successor Corporation Substituted . . . . 62
ARTICLE TWELVE
Supplemental Indentures
SECTION 1201. Supplemental Indentures Without Consent
of Holders . . . . . . . . . . . . . . . 62
SECTION 1202. Supplemental Indentures With Consent of
Holders . . . . . . . . . . . . . . . . . 64
SECTION 1203. Execution of Supplemental Indentures . . 66
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
Meetings of Holders; Action Without Meeting
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
Immunity of Incorporators, Shareholders, Officers and Directors
SECTION 1401. Liability Solely Corporate . . . . . . . 70
ARTICLE FIFTEEN
Series D Notes and Series E Notes
SECTION 1501. Designation of Series D Notes . . . . . . 71
SECTION 1502. Designation of Securities of the Series
E Notes . . . . . . . . . . . . . . . . . 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 JULY 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 July 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 governmental 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
defined 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
request 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, compa-
ny, limited liability 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 princi-
pal 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
obligations 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 Sec-
tion 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 Outstanding, 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,
notice, 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
service 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
designated 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 premi-
um, 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 in-
terest, 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 Inden-
ture 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
Periodic 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 satisfactory 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 govern-
mental charge that may be imposed in connection with any regis-
tration 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
Trustee (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
Securities 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
proposed 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
Securities 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
satisfied, 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
mandatory 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 Com-
pany, 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
provided 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 deposit-
ed 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 inter-
est, 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
payable; 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
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; or
(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 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
Article 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
unpaid 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
proceeding, 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
redemption, 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.
The provisions of this Section 907 shall survive the
termination of this Indenture.
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 Bank of New York, as
trustee, the Indenture (For Unsecured Debt Securities Series B)
dated as of October 1, 1997 of the Company to The Bank of New
York, as trustee, the Indenture (For Unsecured Debt Securities
Series C), dated as of January 1, 1998 of the Company to The Bank
of New York, as trustee, or the Purchase Contract Agreement dated
as of July 1, 1998 of the Company to The Bank of New York, as
agent, attorney-in-fact and 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 Person into which the Trustee may be merged or
converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any Person succeeding to all or
substantially all the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder, provided such
Person shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case
any 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
satisfactory 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
performed 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
SERIES D NOTES AND SERIES E NOTES
SECTION 1501. DESIGNATION OF SERIES D NOTES.
There is hereby created a series of Securities designated
"6.37% Series D Senior Notes due 2003" (herein sometimes referred
to as "Series D Notes") and limited in aggregate principal amount
(except as contemplated in Section 301(b) hereof) to
$373,750,000. The form and terms of the Series D Notes shall be
established in an Officer's Certificate pursuant to Sections 201
and 301.
SECTION 1502. DESIGNATION OF SECURITIES OF THE SERIES E NOTES.
There is hereby created a series of Securities designated
"6.50% Series E Senior Notes due 2004" (herein sometimes referred
to as "Series E Notes") and limited in aggregate principal amount
(except as contemplated in Section 301(b) hereof) to
$373,750,000. The form and terms of the Series E Notes shall be
established in an Officer's Certificate pursuant to Sections 201
and 301.
_________________________
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but
one and the same instrument.
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: /s/ Robert S. Shapard
--------------------------------------
ROBERT S. SHAPARD
Treasurer
<PAGE>
THE BANK OF NEW YORK, Trustee
By: /s/ W.N. Gitlin
--------------------------------------
W.N. GITLIN
Vice President
<PAGE>
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 20th day of July, 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.
/s/ Jan Sharp
----------------------------------
Jan Sharp
Notary Public
State of Texas
Com. Exp. 11-5-2000
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 22nd day of July, 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.
/s/ Moira Feeney
--------------------------------
MOIRA FEENEY
Notary Public, State of New York
No. 31-4991961
Qualified in New York County
Commission Expires Feb. 20, 2000
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 February 19 and 20, 1998, and
Sections 201, 301, 1501 and 1502 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 and Series E) dated as of July 1, 1998 (the
"Indenture") that:
1. The securities of the first series to be issued under the
Indenture shall be designated "6.37% Series D Senior Notes
due 2003" (the "Series D Notes"). The securities of the
second series to be issued under the Indenture shall be
designated "6.50% Series E Senior Notes due 2004" (the
"Series E Notes" and, together with the Series D Notes,
hereinafter sometimes referred to as the "Senior Notes").
All capitalized terms used in this certificate which are not
defined herein shall have the meanings set forth in the
Indenture.
2. The Series D Notes shall be limited in aggregate principal
amount to $373,750,000 at any time Outstanding, except as
contemplated in Section 301(b) of the Indenture. The Series
E Notes shall be limited in aggregate principal amount to
$373,750,000 at any time Outstanding, except as contemplated
in Section 301(b) of the Indenture.
3. The Series D Notes shall mature and the principal shall be
due and payable together with all accrued and unpaid
interest thereon on August 16, 2003. The Series E Notes
shall mature and the principal shall be due and payable
together with all accrued and unpaid interest thereon on
August 16, 2004.
4. The Series D Notes and the Series E Notes shall be issued in
the denominations of $25 and integral multiples thereof.
5. The Series D Notes shall bear interest initially at the rate
of 6.37% per annum payable quarterly in arrears on February
16, May 16, August 16 and November 16 of each year (each, an
"Interest Payment Date") commencing August 16, 1998. The
Series E Notes shall bear interest initially at the rate of
6.50% per annum payable quarterly in arrears on each
Interest Payment Date commencing August 16, 1998.
The amount of interest payable on the Series D Notes and the
Series E Notes will be computed on the basis of a 360-day
year of twelve 30-day months. Interest on the Series D Notes
and the Series E Notes will accrue from the date of original
issuance, but if interest has been paid on such Series D
Notes or Series E Notes, as applicable, 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), except that, if such Business Day
is in the next succeeding calendar year, then such payment
shall be made on the immediately preceding Business Day, in
each case, with the same force and effect as if made on such
Interest Payment Date.
The interest rate on the Series D Notes that remain
Outstanding on and after August 16, 2001 (the "First
Purchase Contract Settlement Date") will be reset on the
third Business Day immediately preceding the First Purchase
Contract Settlement Date to the rate (the "Series D Reset
Rate") determined by a Reset Agent, appointed by the Company
(the "Reset Agent"), in the manner described below. From
and after the First Purchase Contract Settlement Date, the
Series D Notes will bear interest at the Series D Reset
Rate.
The interest rate on the Series E Notes that remain
Outstanding on and after August 16, 2002 (the "Second
Purchase Contract Settlement Date" and with the First
Purchase Contract Settlement Date, each a "Purchase Contract
Settlement Date") will be reset on the third Business Day
immediately preceding the Second Purchase Contract
Settlement Date to the rate (the "Series E Reset Rate")
determined by the applicable Reset Agent in the manner
described below. From and after the Second Purchase
Contract Settlement Date, the Series E Notes will bear
interest at the Series E Reset Rate.
On the tenth Business Day immediately preceding the
applicable Purchase Contract Settlement Date, the Reset
Agent will select the Two-Year Benchmark Treasury, as
defined below, to be used to determine the applicable Reset
Rate (which will be the Series D Reset Rate in connection
with the First Purchase Contract Settlement Date and the
Series E Reset Rate in connection with the Second Purchase
Contract Settlement Date). On the same day, the Reset Agent
will determine the spread (the "Reset Spread") which, in the
opinion of such Reset Agent, when added to the rate on the
Two-Year Benchmark Treasury on the third Business Day prior
to the applicable Purchase Contract Settlement Date, will
equal the interest rate the Senior Notes of the applicable
series (which will be the Series D Notes in connection with
the First Purchase Contract Settlement Date and the Series E
Notes in connection with the Second Purchase Contract
Settlement Date) should bear in order to have an approximate
market value on the third Business Day preceding the
applicable Purchase Contract Settlement Date of 100.5% of
their aggregate principal amount, plus accrued and unpaid
interest, if any; provided, that the Company may limit the
Series D Reset Rate to be no higher than the rate on the
Two-Year Benchmark Treasury on third Business Day
immediately preceding the First Purchase Contract Settlement
Date plus 200 basis points (2.0%) and the Series E Reset
Rate to be no higher than the rate on the Two-Year Treasury
on the third Business Day immediately preceding the Second
Purchase Contract Settlement Date plus 200 basis points
(2.0%). In no event shall the Series D Reset Rate or the
Series E Reset Rate exceed the maximum permitted by
applicable law.
On such tenth Business Day immediately preceding the
applicable Purchase Contract Settlement Date, the Company
shall announce the applicable Reset Spread and the
applicable Two-Year Benchmark Treasury (the "Reset
Announcement Date"). The Company will cause a notice of the
applicable Reset Spread and applicable Two-Year Benchmark
Treasury to be published on the Business Day following the
applicable Reset Announcement Date by publication in a
newspaper in the English language of general circulation in
The City of New York and generally published each Business
Day, which is expected to be The Wall Street Journal.
Pursuant to one or more Remarketing Agreements ("Remarketing
Agreements") to be entered into by the Company and one or
more nationally recognized investment banking firms chosen
by the Company, as the remarketing agent (the "Remarketing
Agent"), in connection with each Purchase Contract
Settlement Date, on or prior to the fifth Business Day
immediately preceding the applicable Purchase Contract
Settlement Date, but not earlier than the Interest Payment
Date immediately preceding such Purchase Contract Settlement
Date, each Holder of Senior Notes of the applicable series
(which in the case of the First Purchase Contract Settlement
Date shall be the Series D Notes and in the case of the
Second Purchase Contract Settlement Date shall be the Series
E Notes) may elect to have such Senior Notes of such series
remarketed (the applicable "Remarketing") by tendering such
Senior Notes, along with a notice of such election, to the
Custodial Agent under, and in accordance with, the Pledge
Agreement, defined below. Holders of Senior Notes that are
not components of Income PRIDES, defined below, electing to
have their Senior Notes remarketed will also have the right
to withdraw such election on or prior to the fifth Business
day immediately preceding the applicable Purchase Contract
Settlement Date by notice to the Custodial Agent in
accordance with the provisions of the Pledge Agreement.
The Company will request, not later than 7 nor more than 15
calendar days prior to each Reset Announcement Date that
DTC, defined below, notify its participants holding
beneficial interests in the Senior Notes of such applicable
Reset Announcement Date and of the procedures that must be
followed by the holders of such beneficial interests in such
Senior Notes electing to have their Senior Notes of the
appropriate series (which in the case of the First Purchase
Contract Settlement Date will be the Series D Notes, and in
the case of the Second Purchase Contract Settlement Date
will be the Series E Notes) remarketed in the applicable
Remarketing.
On the third Business Day immediately preceding the First
Purchase Contract Settlement Date, the applicable Reset
Agent shall determine the Series D Reset Rate for the Series
D Notes by adding the applicable Reset Spread to the rate
for Two-Year Benchmark Treasury on such date. On the third
Business Day immediately preceding the Second Purchase
Contract Settlement Date, the applicable Reset Agent shall
determine the Series E Reset Rate for the Series E Notes by
adding the applicable Reset Spread to the rate for the Two-
Year Benchmark Treasury on such date.
The Remarketing Agent will use its reasonable efforts to
remarket, on the third Business Day immediately preceding
the applicable Purchase Contract Settlement Date, the Senior
Notes of the applicable series tendered for such Remarketing
for settlement on such Purchase Contract Settlement Date at
a price of approximately 100.5% of the aggregate principal
amount of such tendered Senior Notes, plus accrued and
unpaid interest, if any. After deducting as the remarketing
fee an amount not exceeding 25 basis points (.25%) of the
aggregate principal amount of the Senior Notes so remarketed
from any amount of the proceeds of such Remarketing in
excess of the aggregate principal amount of the Senior Notes
so remarketed, plus such accrued and unpaid interest, the
Remarketing Agent will remit the entire amount of the
proceeds of such Remarketing to the Collateral Agent (with
respect to Senior Notes that had been components of Income
PRIDES) or the Custodial Agent (with respect to other Senior
Notes) in each case under the Pledge Agreement to be
distributed to holders as provided in the Pledge Agreement.
If the Remarketing Agent cannot remarket the Senior Notes
tendered for a Remarketing at a price not less than the
aggregate principal amount of such tendered Senior Notes,
plus accrued and unpaid interest, if any, or if a condition
precedent to a Remarketing shall not have been fulfilled,
then such Remarketing shall be deemed to be a Failed
Remarketing with respect to such series of Senior Notes.
The "Two-Year Benchmark Treasury" on a particular
determination date shall mean direct obligations of the
United States (which may be obligations traded on a
when-issued basis only) having a maturity comparable to the
remaining term to maturity of the applicable series of
Senior Notes, as agreed upon by the Company and the
applicable Reset Agent. The rate for the Two-Year Benchmark
Treasury will be the bid side rate displayed at 10:00 A.M.,
New York City time, on the third Business Day immediately
preceding the applicable Purchase Contract Settlement Date
in the Telerate system (or if the Telerate system is (a) no
longer available on the third Business Day immediately
preceding such Purchase Contract Settlement Date or (b) in
the opinion of the applicable Reset Agent (after
consultation with the Company) no longer an appropriate
system from which to obtain such rate, such other nationally
recognized quotation system as, in the opinion of the
applicable Reset Agent (after consultation with the
Company), is appropriate). If such rate is not so
displayed, the rate for the Two-Year Benchmark Treasury
shall be, as calculated by the applicable Reset Agent, the
yield to maturity for the Two-Year Benchmark Treasury,
expressed as a bond equivalent on the basis of a year of 365
or 366 days, as applicable, and applied on a daily basis,
and computed by taking the arithmetic mean of the secondary
market bid rates, as of 10:30 A.M., New York City time, on
the third Business Day immediately preceding the applicable
Purchase Contract Settlement Date of three leading United
States government securities dealers selected by the
applicable Reset Agent (after consultation with the Company)
(which may include the applicable Reset Agent or an
affiliate thereof).
6. Each installment of interest on a Series D Note and on a
Series E Note shall be payable to the Person in whose name
such Series D Note or such Series D Note is registered at
the close of business on the Regular Record Date for such
interest installment, which shall be the Business Day next
preceding the corresponding Interest Payment Date for the
Senior Notes. The Security Registrar may, but shall not be
required to, register the transfer of Senior Notes during
the ten days immediately preceding an Interest Payment Date.
Any installment of interest on the Series D Notes or on the
Series E Notes not punctually paid or duly provided for
shall forthwith cease to be payable to the Holders of such
Series D Notes or of the Series E Notes on such Regular
Record Date, and may be paid to the Persons in whose name
such Series D Notes or such Series E Notes, respectively,
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
Series D Notes and Series E Notes not less than 10 days
prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Series
D Notes and the Series E Notes 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 Series
D Notes and on the Series E Notes shall be payable at, and
registration and registration of transfers and exchanges in
respect of the Series D Notes and the Series E Notes 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 or by wire transfer to an
account designated by the person entitled thereto. Notices
and demands to or upon the Company in respect of the Series
D Notes and the Series E Notes 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 initially be the
Security Registrar and the Paying Agent for the Series D
Notes and for the Series E Notes.
8. If a Tax Event shall occur and be continuing, the Company
may, at its option, redeem the Senior Notes in whole (but
not in part) at any time at a Redemption Price equal to, for
each Senior Note, the Redemption Amount plus accrued and
unpaid interest thereon, to the date of redemption (the "Tax
Event Redemption Date"). If such Tax Event Redemption
occurs prior to the Second Purchase Contract Settlement
Date, the Redemption Price payable with respect to the
Senior Notes pledged to the Collateral Agent under the
Pledge Agreement dated as of July 1, 1998 by and among the
Company, The Chase Manhattan Bank, as Collateral Agent,
Custodial Agent and Securities Intermediary, and The Bank of
New York, as Purchase Contract Agent, (the "Pledge
Agreement") will be paid to the Collateral Agent on the Tax
Event Redemption Date 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
Senior Notes pledged to the Collateral Agent.
"Tax Event" means the receipt by the Company of an opinion
of a nationally recognized independent tax counsel
experienced in such matters to the effect that, as a result
of (a) any amendment to, change in, or announced proposed
change in, the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing
authority thereof or therein affecting taxation, (b) any
amendment to or change in an interpretation or application
of such laws or regulations by any legislative body, court,
governmental agency or regulatory authority or (c) any
interpretation or pronouncement by any such legislative
body, court, governmental agency or regulatory authority
that provides for a position with respect to such laws or
regulations that differs from the generally accepted
position on the date the Senior Notes are issued, which
amendment, change or proposed change is effective or which
interpretation or pronouncement is announced on or after the
date of issuance of the Senior Notes, there is more than an
insubstantial risk that interest payable by the Company on
the Senior Notes would not be deductible, in whole or in
part, by the Company for United States federal income tax
purposes.
Notice of any redemption will be mailed at least 30 days but
not more than 60 days before the Tax Event Redemption Date
to each registered Holder of Senior Notes to be redeemed at
its registered address as more fully provided in the
Indenture. Unless the Company defaults in payment of the
Redemption Price, on and after the Tax Event Redemption Date
interest shall cease to accrue on such Senior Notes.
"Applicable Principal Amount" means either (i) if the Tax
Event Redemption Date occurs prior to the Second Purchase
Contract Settlement Date, the aggregate principal amount of
the Senior Notes which are components of Income PRIDES, as
defined below, on the Tax Event Redemption Date or (ii) if
the Tax Event Redemption occurs on or after the Second
Purchase Contract Settlement Date, the aggregate principal
amount of the Senior Notes Outstanding on such Tax Event
Redemption Date.
"Primary Treasury Dealer" means a primary U.S. government
securities dealer in New York City.
"Quotation Agent" means (i) Merrill Lynch, Pierce, Fenner &
Smith Incorporated and its respective successors, provided,
however, that, if the foregoing shall cease to be a Primary
Treasury Dealer, the Company shall substitute therefor
another Primary Treasury Dealer, and (ii) any other Primary
Treasury Dealer selected by the Company.
"Redemption Amount" means for each Senior Note, the product
of (i) the principal amount of such Senior Note and (ii) a
fraction whose numerator is the Treasury Portfolio Purchase
Price and whose denominator is the Applicable Principal
Amount.
"Treasury Portfolio" means, with respect to the Applicable
Principal Amount of Senior Notes (a) if the Tax Event
Redemption Date occurs prior to the Second Purchase Contract
Settlement Date, a portfolio of zero-coupon U.S. Treasury
Securities consisting of (i) interest or principal strips of
U.S. Treasury Securities which mature on or prior to August
15, 2001 in an aggregate amount equal to the Applicable
Principal Amount of the Series D Notes and interest or
principal strips of U.S. Treasury Securities which mature on
or prior to August 15, 2002 in an aggregate amount equal to
the Applicable Principal Amount of the Series E Notes and
(ii) with respect to each scheduled interest payment date on
the Senior Notes of each series that occurs after the Tax
Event Redemption Date, interest or principal strips of U.S.
Treasury Securities which mature on or prior to such dates
in an aggregate amount equal to the aggregate interest
payment that would be due on the Applicable Principal Amount
of the Senior Notes on such date, and (b) if the Tax Event
Redemption Date occurs after the Second Purchase Contract
Settlement Date, a portfolio of zero-coupon U.S. Treasury
Securities consisting of (i) principal or interest strips of
U.S. Treasury Securities which mature on or prior to August
15, 2003 in an aggregate principal amount equal to the
Applicable Principal Amount of the Series D Notes and
principal or interest strips of U.S. Treasury Securities
which mature on or prior to August 15, 2004 in an aggregate
principal amount equal to the Applicable Principal Amount of
the Series E Notes and (ii) with respect to each scheduled
interest payment date on the Senior Notes that occurs after
the Tax Event Redemption Date, interest or principal strips
of U.S. Treasury Securities which mature on or prior to such
date in an aggregate amount equal to the aggregate interest
payment that would be due on the Applicable Principal Amount
of the Senior Notes on such date.
"Treasury Portfolio Purchase Price" means the lowest
aggregate price quoted by a Primary Treasury Dealer to the
Quotation Agent on the third Business Day immediately
preceding the Tax Event Redemption Date for the purchase of
the Treasury Portfolio for settlement on the Tax Event
Redemption Date.
9. Upon a Failed Remarketing with respect to the First Purchase
Contract Settlement Date, holders of Series D Notes will
have the right to put their Series D Notes to the Company on
September 1, 2001 for repayment as provided in the form of
Series D Notes; and (ii) upon a Failed Remarketing with
respect to the Second Purchase Contract Settlement Date,
holders of Series E Notes will have the right to put their
Series E Notes directly to the Company on September 1, 2002
for repayment as provided in the form of Series E Notes.
10. Initially the Senior Notes will be issued in certificated
form registered in the name of The Bank of New York, as
Agent under the Purchase Contract Agreement dated as of July
1, 1998 between the Company and The Bank of New York, as
Agent (the "Purchase Contract Agreement") as components of
certain securities of the Company referred to as Income
PRIDES, or in the name of Cede & Co. (as nominee for the
Depository Trust Company ("DTC"), the initial securities
depository for the Senior Notes that are not components of
Income PRIDES, and may bear such legends as either the Agent
or DTC, respectively, may reasonably request.
Notwithstanding section 6 hereof, if the Senior Notes are
registered in the names of additional Holders, the Company
shall have the right to select a Regular Record Date for
such Senior Notes, which shall be at least one Business Day
but not more than 60 Business Days prior to the relevant
Interest Payment Date; provided that, unless the Purchase
Contracts described in such Purchase Contract Agreement have
been terminated, such Regular Record Date must be the same
as the record date for the Income PRIDES described in such
Purchase Contract Agreement.
11. No service charge shall be made for the registration of
transfer or exchange of the Series D Notes or of the Series
E Notes; 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, 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 Series D Notes and the Series E Notes, 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 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, 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 Series D Notes and the Series E Notes shall have such
other terms and provisions as are provided in the forms
thereof set forth in Exhibit A and Exhibit B hereto,
respectively, and shall be issued in substantially such
forms.
14. The undersigned has read all of the covenants and conditions
contained in the Indenture relating to the issuance of the
Series D Notes and the Series E Notes and the definitions in
the Indenture relating thereto and in respect of which this
certificate is made.
15. 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.
16. 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.
17. 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
$325,000,000 aggregate principal amount of Series D Notes
and $325,000,000 aggregate principal amount of Series E
Notes, as requested in the accompanying Company Order 1-D-1
have been complied with.
<PAGE>
IN WITNESS WHEREOF, I have executed this Officer's
Certificate this 22nd day of July, 1998.
----
/s/ Robert S. Shapard
-----------------------------------
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 SERIES D NOTE]
TEXAS UTILITIES COMPANY
6.37% SERIES D SENIOR NOTE DUE 2003
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 August 16, 2003, and to pay interest on said principal sum
quarterly on February 16, May 16, August 16 and November 16 of
each year (each an Interest Payment Date) commencing August 16,
1998, initially at the rate of 6.37% per annum until August 16,
2001, and at the Series D Reset Rate thereafter until the
principal hereof is paid or made available for payment. Interest
on the Securities of this series will accrue from July 22, 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), except that, if such Business Day is in
the next succeeding calendar year, then such payment shall be
made on the immediately preceding Business Day, in each case,
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 [__] Business Day next preceding the
corresponding Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either
be paid to the Person in whose name this 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 may 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 or by wire
transfer to an account designated by the person entitled thereto.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee 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.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
TEXAS UTILITIES COMPANY
By:
----------------------------
ATTEST:
-----------------------------------
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 SERIES D 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 and Series E), dated as
of July 1, 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
July 22, 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 $373,750,000.
If a Tax Event shall occur and be continuing, the
Company may, at its option, redeem the Securities of this series
in whole (but not in part) at any time at a Redemption Price
equal to the Redemption Amount plus accrued and unpaid interest
thereon to the Tax Event Redemption Date.
The Holder of this Security may, on or prior to the
fifth Business Day immediately preceding August 16, 2001, tender
this Security to The Chase Manhattan Bank, as Custodial Agent,
for remarketing in accordance with the Pledge Agreement dated as
of July 1, 1998 among the Company, The Bank of New York and The
Chase Manhattan Bank, as Collateral Agent, Custodial Agent and
Securities Intermediary.
If a Failed Remarketing has occurred with respect to
Securities of this series, each holder of Securities of this
series who holds such Securities on the day immediately following
the First Purchase Contract Settlement Date shall have the right
to put such holder's Securities of this series to the Company on
September 1, 2001 (the "Put Option Exercise Date"), upon at least
three Business Days' prior notice, at a price equal to the
principal amount of such Securities, plus accrued and unpaid
interest, if any thereon (the "Repayment Price").
In order for the Securities to be so repurchased, the
Company must receive, on or prior to 5:00 p.m. New York City Time
on the third Business Day immediately preceding the Put Option
Exercise Date, at the then principal executive offices of the
Company, the Securities of this series to be repurchased with the
form entitled "Option to Elect Repayment" on the reverse of or
otherwise accompanying such Securities duly completed. Any such
notice received by the Company shall be irrevocable. All
questions as to the validity, eligibility (including time of
receipt) and acceptance of the Securities of this series for
repayment shall be determined by the Company, whose determination
shall be final and binding. The payment of the Repayment Price
in respect of such Securities of this series shall be made,
either through the Trustee or the Company acting as Paying Agent,
no later than 12:00 noon, New York City time, on the Put Option
Exercise Date.
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 contains provisions permitting the Holders of a
majority in aggregate principal amount of the Securities of all
series then Outstanding to waive compliance by the Company with
certain provisions of the Indenture. 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 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.
The Securities of this series are issuable only in
registered form without coupons in denominations of $25. 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.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture and in the Officer's Certificate establishing the terms
of the Securities of this series.
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs
the Company to repay $ principal amount of the within
------
Security, pursuant to its terms, on the "Put Option Exercise
Date," together with any interest thereon accrued but unpaid to
the date of repayment, to the undersigned at:
-----------------------------------------------------------------
(Please print or type name and address of the undersigned)
and to issue to the undersigned, pursuant to the terms of the
Security, a new Security or Securities representing the remaining
aggregate principal amount of this Security.
For this Option to Elect Repayment to be effective, this Security
with the Option to Elect Repayment duly completed must be
received by the Company at its principal executive office, Attn:
Secretary, no later than 5:00 p.m. on the third Business Day
prior to September 1, 2001.
Dated: Signature:
-------------------------
Signature Guarantee:
---------------
Note: The signature to this Option to Elect Repayment must
correspond with the name as written upon the face of the within
Security without alternation 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>
----------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
6.37% Series D Senior Note due 2003 to:
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
(Insert assignee's social security or tax identification number)
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
agent to transfer this Security on the Security Register. The
agent may substitute another to act for him or her.
Date:
-------------------------
Signature:
------------------------
Signature Guarantee:
--------------
(Sign exactly as your name appears on the other side of this
Security)
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>
EXHIBIT B
[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 SERIES E NOTE]
TEXAS UTILITIES COMPANY
6.50% SERIES E SENIOR NOTE DUE 2004
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 August 16, 2004, and to pay interest on said principal
sum quarterly on February 16, May 16, August 16 and November 16
of each year (each an Interest Payment Date) commencing August
16, 1998, initially at the rate of 6.50% per annum until August
16, 2002, and at the Series E Reset Rate thereafter until the
principal hereof is paid or made available for payment. Interest
on the Securities of this series will accrue from July 22, 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), except that, if such Business Day is in
the next succeeding calendar year, then such payment shall be
made on the immediately preceding Business Day, in each case,
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 [__] Business Day next preceding the
corresponding Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either
be paid to the Person in whose name this 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 may 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 or by wire
transfer to an account designated by the person entitled thereto.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee 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.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
TEXAS UTILITIES COMPANY
By:
------------------------
ATTEST:
-------------------------------
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 SERIES E 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 and Series E), dated as
of July 1, 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
July 22, 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 $373,750,000.
If a Tax Event shall occur and be continuing, the
Company may, at its option, redeem the Securities of this series
in whole (but not in part) at any time at a Redemption Price
equal to the Redemption Amount plus accrued and unpaid interest
thereon to the Tax Event Redemption Date.
The Holder of this Security may, on or prior to the
fifth Business Day immediately preceding August 16, 2002, tender
this Security to The Chase Manhattan Bank, as Custodial Agent,
for remarketing in accordance with the Pledge Agreement dated as
of July 1, 1998 among the Company, The Bank of New York and The
Chase Manhattan Bank, as Collateral Agent, Custodial Agent and
Securities Intermediary.
If a Failed Remarketing has occurred with respect to
Securities of this series, each holder of Securities of this
series who holds such Securities on the day immediately following
the Second Purchase Contract Settlement Date shall have the right
to put such holder's Securities of this series to the Company on
September 1, 2002 (the "Put Option Exercise Date"), upon at least
three Business Days' prior notice, at a price equal to the
principal amount of such Securities, plus accrued and unpaid
interest, if any thereon (the "Repayment Price").
In order for the Securities to be so repurchased, the
Company must receive, on or prior to 5:00 p.m. New York City Time
on the third Business Day immediately preceding the Put Option
Exercise Date, at the then principal executive offices of the
Company, the Securities of this series to be repurchased with the
form entitled "Option to Elect Repayment" on the reverse of or
otherwise accompanying such Securities duly completed. Any such
notice received by the Company shall be irrevocable. All
questions as to the validity, eligibility (including time of
receipt) and acceptance of the Securities of this series for
repayment shall be determined by the Company, whose determination
shall be final and binding. The payment of the Repayment Price
in respect of such Securities of this series shall be made,
either through the Trustee or the Company acting as Paying Agent,
no later than 12:00 noon, New York City time, on the Put Option
Exercise Date.
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 contains provisions permitting the Holders of a
majority in aggregate principal amount of the Securities of all
series then Outstanding to waive compliance by the Company with
certain provisions of the Indenture. 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 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.
The Securities of this series are issuable only in
registered form without coupons in denominations of $25. 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.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture and in the Officer's Certificate establishing the terms
of the Securities of this series.
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs
the Company to repay $ principal amount of the within
-----
Security, pursuant to its terms, on the "Put Option Exercise
Date," together with any interest thereon accrued but unpaid to
the date of repayment, to the undersigned at:
---------------------------------------------------------------
(Please print or type name and address of the undersigned)
and to issue to the undersigned, pursuant to the terms of the
Security, a new Security or Securities representing the remaining
aggregate principal amount of this Security.
For this Option to Elect Repayment to be effective, this Security
with the Option to Elect Repayment duly completed must be
received by the Company at its principal executive office, Attn:
Secretary, no later than 5:00 p.m. on the third Business Day
prior to September 1, 2002.
Dated:
Signature:
------------------------
Signature Guarantee:
--------------
Note: The signature to this Option to Elect Repayment must
correspond with the name as written upon the face of the within
Security without alternation 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>
----------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
6.50% Series E Senior Note due 2004 to:
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
(Insert assignee's social security or tax identification number)
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
agent to transfer this Security on the books of the Security
Register. The agent may substitute another to act for him or
her.
Date:
-----------------------------
Signature:
-----------------------
Signature Guarantee:
-------------
(Sign exactly as your name appears on the other side of this
Security)
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.
=================================================================
TEXAS UTILITIES COMPANY
AND
THE BANK OF NEW YORK,
AS PURCHASE CONTRACT AGENT
AND TRUSTEE
-----------------------
PURCHASE CONTRACT AGREEMENT
-----------------------
Dated as of July 1, 1998
=================================================================
<PAGE>
TIE SHEET
---------
Section of Section of
Trust Indenture Act Purchase Contract
of 1939, as amended Agreement
------------------- ------------------
310(a) . . . . . . . . . . . . . . . . 7.8
310(b) . . . . . . . . . . . . . . . . 7.9(g), 11.8
310(c) . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . 11.2(b)
311(b) . . . . . . . . . . . . . . . . 11.2(b)
311(c) . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . 11.2(a)
312(b) . . . . . . . . . . . . . . . . 11.2(b)
313 . . . . . . . . . . . . . . . . . . 11.3
314(a) . . . . . . . . . . . . . . . . 11.4
314(b) . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . 11.5
314(d) . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . 1.1, 1.3, 11.5
314(f) . . . . . . . . . . . . . . . . 11.1
315(a) . . . . . . . . . . . . . . . . 7.1(a)
315(b) . . . . . . . . . . . . . . . . 7.2
315(c) . . . . . . . . . . . . . . . . 7.1(e)
315(d) . . . . . . . . . . . . . . . . 7.1(b)
316(a) . . . . . . . . . . . . . . . . 11.6
316(b) . . . . . . . . . . . . . . . . 6.1
316(c) . . . . . . . . . . . . . . . . 11.2
317(a) . . . . . . . . . . . . . . . . Inapplicable
317(b) . . . . . . . . . . . . . . . . Inapplicable
318(a) . . . . . . . . . . . . . . . . 11.1(b)
318(b) . . . . . . . . . . . . . . . . 11.1
318(c) . . . . . . . . . . . . . . . . 11.1(a)
-------------
* This Cross-Reference Table does not constitute part of the
Purchase Contract Agreement and shall not affect the
interpretation of any of its terms or provisions.
<PAGE>
TABLE OF CONTENTS
Page No.
--------
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
Definitions and Other Provisions
of General Applications . . . . . . . . 1
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . 1
SECTION 1.2. Compliance Certificates and Opinions . . . 13
SECTION 1.3. Form of Documents Delivered to Agent . . . 13
SECTION 1.4. Acts of Holders; Record Dates . . . . . . . 14
SECTION 1.5. Notices . . . . . . . . . . . . . . . . . . 15
SECTION 1.6. Notice to Holders; Waiver . . . . . . . . . 16
SECTION 1.7. Effect of Headings and Table of Contents . 16
SECTION 1.8. Successors and Assigns . . . . . . . . . . 16
SECTION 1.9. Separability Clause . . . . . . . . . . . . 16
SECTION 1.10. Benefits of Agreement . . . . . . . . . . . 16
SECTION 1.11. Governing Law . . . . . . . . . . . . . . . 16
SECTION 1.12. Legal Holidays . . . . . . . . . . . . . . 17
SECTION 1.13. Counterparts . . . . . . . . . . . . . . . 17
SECTION 1.14. Inspection of Agreement . . . . . . . . . . 17
ARTICLE II
Certificate Forms . . . . . . . . . . 17
SECTION 2.1. Forms of Certificates Generally . . . . . . 17
SECTION 2.2. Form of Agent's Certificate of
Authentication . . . . . . . . . . . . . . 18
ARTICLE III
The Securities . . . . . . . . . . 18
SECTION 3.1. Title and Terms; Denominations . . . . . . 18
SECTION 3.2. Rights and Obligations Evidenced by the
Certificates . . . . . . . . . . . . . . . 19
SECTION 3.3. Execution, Authentication, Delivery and
Dating . . . . . . . . . . . . . . . . . . 19
SECTION 3.4. Temporary Certificates . . . . . . . . . . 20
SECTION 3.5. Registration; Registration of Transfer and
Exchange . . . . . . . . . . . . . . . . . 20
SECTION 3.6. Book-Entry Interests . . . . . . . . . . . 21
SECTION 3.7. Notices to Holders . . . . . . . . . . . . 22
SECTION 3.8. Appointment of Successor Clearing Agency . 22
SECTION 3.9. Definitive Certificates . . . . . . . . . . 22
SECTION 3.10. Mutilated, Destroyed, Lost and Stolen
Certificates . . . . . . . . . . . . . . . 23
SECTION 3.11. Persons Deemed Owners . . . . . . . . . . . 24
SECTION 3.12. Cancellation . . . . . . . . . . . . . . . 24
SECTION 3.13. Establishment or Reestablishment of Growth
PRIDES . . . . . . . . . . . . . . . . . . 24
SECTION 3.14. Establishment or Reestablishment of Income
PRIDES . . . . . . . . . . . . . . . . . . 26
SECTION 3.15. Transfer of Collateral upon Occurrence of
Termination Event . . . . . . . . . . . . . 28
ARTICLE IV
The Debt Securities . . . . . . . . . 29
SECTION 4.1. Payment of Interest; Rights to Interest
Preserved; Interest Rate Reset; Notice . . 29
SECTION 4.2. Notice and Voting . . . . . . . . . . . . . 30
SECTION 4.3. Tax Event Redemption . . . . . . . . . . . 31
SECTION 4.4. Consent to Treatment for Tax Purposes . . . 31
ARTICLE V
The Purchase Contracts . . . . . . . . 32
SECTION 5.1. Purchase of Shares of Common Stock . . . . 32
SECTION 5.2. Contract Adjustment Payments . . . . . . . 33
SECTION 5.3. Deferral of Payment Dates For Contract
Adjustment Payments . . . . . . . . . . . . 34
SECTION 5.4. Payment of Purchase Price . . . . . . . . . 35
SECTION 5.5. Issuance of Shares of Common Stock . . . . 38
SECTION 5.6. Adjustment of Settlement Rate . . . . . . . 39
SECTION 5.7. Notice of Adjustments and Certain Other
Events . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.8. Termination Event; Notice . . . . . . . . . 44
SECTION 5.9. Early Settlement . . . . . . . . . . . . . 45
SECTION 5.10. No Fractional Shares . . . . . . . . . . . 47
SECTION 5.11. Charges and Taxes . . . . . . . . . . . . . 47
ARTICLE VI
Remedies . . . . . . . . . . . . 47
SECTION 6.1. Unconditional Right of Holders to Receive
Contract Adjustment Payments
and to Purchase Common Stock . . . . . . . 47
SECTION 6.2. Restoration of Rights and Remedies . . . . 48
SECTION 6.3. Rights and Remedies Cumulative . . . . . . 48
SECTION 6.4. Delay or Omission Not Waiver . . . . . . . 48
SECTION 6.5. Undertaking for Costs . . . . . . . . . . . 48
SECTION 6.6. Waiver of Stay or Extension Laws . . . . . 48
ARTICLE VII
The Agent . . . . . . . . . . . . 49
SECTION 7.1. Certain Duties and Responsibilities . . . . 49
SECTION 7.2. Notice of Default . . . . . . . . . . . . . 50
SECTION 7.3. Certain Rights of Agent . . . . . . . . . . 50
SECTION 7.4. Not Responsible for Recitals or Issuance of
Securities . . . . . . . . . . . . . . . . 51
SECTION 7.5. May Hold Securities . . . . . . . . . . . . 51
SECTION 7.6. Money Held in Custody . . . . . . . . . . . 51
SECTION 7.7. Compensation and Reimbursement . . . . . . 51
SECTION 7.8. Corporate Agent Required; Eligibility . . . 52
SECTION 7.9. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . . 52
SECTION 7.10. Acceptance of Appointment by Successor . . 53
SECTION 7.11. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . 54
SECTION 7.12. Preservation of Information; Communications
to Holders . . . . . . . . . . . . . . . . 54
SECTION 7.13. No Obligations of Agent . . . . . . . . . . 54
SECTION 7.14. Tax Compliance . . . . . . . . . . . . . . 55
ARTICLE VIII
Supplemental Agreements . . . . . . . . 55
SECTION 8.1. Supplemental Agreements Without Consent of
Holders . . . . . . . . . . . . . . . . . . 55
SECTION 8.2. Supplemental Agreements with Consent of
Holders . . . . . . . . . . . . . . . . . . 56
SECTION 8.3. Execution of Supplemental Agreements . . . 57
SECTION 8.4. Effect of Supplemental Agreements . . . . . 57
SECTION 8.5. Reference to Supplemental Agreements . . . 57
ARTICLE IX
Consolidation, Merger, Sale or Conveyance . . . . 57
SECTION 9.1. Covenant Not to Merge, Consolidate, Sell or
Convey Property Except Under Certain
Conditions . . . . . . . . . . . . . . . . 57
SECTION 9.2. Rights and Duties of Successor Corporation 58
SECTION 9.3. Opinion of Counsel Given to Agent . . . . . 58
ARTICLE X
Covenants . . . . . . . . . . . . 58
SECTION 10.1. Performance Under Purchase Contracts . . . 58
SECTION 10.2. Maintenance of Office or Agency . . . . . . 58
SECTION 10.3. Company to Reserve Common Stock . . . . . . 59
SECTION 10.4. Covenants as to Common Stock . . . . . . . 59
ARTICLE XI
Trust Indenture Act . . . . . . . . . 59
SECTION 11.1. Trust Indenture Act; Application . . . . . 59
SECTION 11.2. Lists of Holders of Securities . . . . . . 60
SECTION 11.3. Reports by the Agent . . . . . . . . . . . 60
SECTION 11.4. Periodic Reports to Agent . . . . . . . . . 60
SECTION 11.5. Evidence of Compliance with Conditions
Precedent . . . . . . . . . . . . . . . . . 60
SECTION 11.6. Defaults; Waiver . . . . . . . . . . . . . 60
SECTION 11.7. Agent's Knowledge of Defaults . . . . . . . 61
SECTION 11.8. Conflicting Interests . . . . . . . . . . . 61
SECTION 11.9. Direction of Agent. . . . . . . . . . . . . 61
EXHIBIT A: FORM OF INCOME PRIDES CERTIFICATE . . . . . . . . A-1
EXHIBIT B: FORM OF GROWTH PRIDES CERTIFICATE . . . . . . . . B-1
EXHIBIT C: NOTICE TO SETTLE BY SEPARATE CASH . . . . . . . . C-1
<PAGE>
PURCHASE CONTRACT AGREEMENT, dated as of July 1, 1998,
between Texas Utilities Company, a Texas corporation (the
"Company"), and The Bank of New York, acting as purchase contract
agent, attorney-in-fact and trustee for the Holders of Securities
from time to time (in any one or more of such capacities, 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 the Holders, and to constitute these presents
a valid agreement of the Company, in accordance with its terms,
have been done.
WITNESSETH:
For and in consideration of the premises and the
purchase of the 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; and
(d) the following terms have the meanings given to
them in this Section 1.1(d):
"3-YEAR TREASURY SECURITY" means a 5.43% zero-coupon
U.S. Treasury Security having a principal amount at maturity
equal to $1,000 and maturing on August 15, 2001 (CUSIP No. 912820
BB 2).
"4-YEAR TREASURY SECURITY" means a 5.45% zero-coupon
U.S. Treasury Security having a principal amount at maturity
equal to $1,000 and maturing on August 15, 2002 (CUSIP No. 912820
BE 6).
"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 of 1933, as amended, 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.
"APPLICABLE OWNERSHIP INTEREST" means, with respect to
each Income PRIDES and the U.S. Treasury Securities in the
Treasury Portfolio, (A) prior to the First Purchase Contract
Settlement Date, (i) a 1/40, or 2.5%, undivided beneficial
ownership interest in a $1,000 principal or interest amount of a
principal or interest strip in a U.S. Treasury Security included
in such Treasury Portfolio which matures on or prior to August
15, 2001 and a 1/40, or 2.5%, undivided beneficial ownership
interest in a $1,000 principal or interest amount of a principal
or interest strip in a U.S. Treasury Security included in such
Treasury Portfolio which matures on or prior to August 15, 2002,
and (ii) for each scheduled interest payment date on the Debt
Securities of each series that occurs after the Tax Event
Redemption Date, a .0804% undivided beneficial ownership interest
in a $1,000 face amount of each such U.S. Treasury Security which
is a principal or interest strip maturing on such date or (B)
from the First Purchase Contract Settlement Date to the Second
Purchase Contract Settlement Date, (i) a 1/40, or 2.5%, undivided
beneficial ownership interest in a $1,000 principal or interest
strip in a U.S. Treasury Security included in such Treasury
Portfolio which matures on or prior to August 15, 2002 and (ii)
for each scheduled interest payment date on the Series E Notes
that occurs after a Tax Event Redemption Date, a .0406%
undivided beneficial ownership interest in a $1,000 face amount
of such U.S. Treasury Security which is a principal or interest
strip maturing on such date.
"APPLICABLE PRINCIPAL AMOUNT" means either (i) if the
Tax Event Redemption Date occurs prior to the Second Purchase
Contract Settlement Date, the aggregate principal amount of the
Debt Securities which are components of Income PRIDES on the Tax
Event Redemption Date or (ii) if the Tax Event Redemption occurs
on or after the Second Purchase Contract Settlement Date, the
aggregate principal amount of the Debt Securities outstanding on
such Tax Event Redemption Date.
"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.
"AUTHORIZED NEWSPAPER" means a newspaper in the English
language of general circulation in the City of New York and
generally published each Business Day. As of the date of this
Agreement, the Company anticipates that for purposes of each
Reset Announcement Date, the Authorized Newspaper will be the
Wall Street Journal.
"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 an Income PRIDES Certificate or a
Growth PRIDES 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 The Chase Manhattan Bank, as
Collateral Agent under the Pledge Agreement until a successor
Collateral Agent shall have become such pursuant to the
applicable provisions of the Pledge Agreement, and thereafter
"Collateral Agent" shall mean the Person who is then the
Collateral Agent thereunder.
"COLLATERAL SUBSTITUTION" means the substitution of the
pledged components of one type of Security for pledged components
of the other type of Security in connection with establishment or
reestablishment of Growth PRIDES or Income PRIDES, as described
in Sections 3.13 and 3.14 hereof.
"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 amounts
payable by the Company in respect of each Purchase Contract
issued in connection with the Income PRIDES and the Growth
PRIDES, which amounts shall be equal to (A) in the case of each
Purchase Contract issued in connection with Income PRIDES (i) for
the period prior to the First Purchase Contract Settlement Date,
2.815% per annum of the Stated Amount, and (ii) for the period
from and after the First Purchase Contract Settlement Date until
the Second Purchase Contract Settlement Date, 2.75% per annum of
the Remaining Stated Amount, and (B) in the case of each Purchase
Contract issued in connection with Growth PRIDES (i) for the
period prior to the First Purchase Contract Settlement Date,
3.315% per annum of the Stated Amount of such Growth PRIDES, and
(ii) for the period from and after the First Purchase Contract
Settlement Date until the Second Purchase Contract Settlement
Date, 3.25% per annum of the Remaining Stated Amount of such
Growth PRIDES; in each case 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 101 Barclay Street, New York, New
York 10286.
"COUPON RATE" with respect to a Debt Security means the
percentage rate per annum at which such Debt Security will bear
interest.
"CURRENT MARKET PRICE" has the meaning specified in
Section 5.6(a)(8).
"DEBT SECURITIES" means the Series D Notes and the
Series E Notes.
"DEFAULT" means a default by the Company in any of its
obligations under this Agreement.
"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" is either the First Early
Settlement Rate or the Second Early Settlement Rate, as
applicable.
"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).
"FIRST EARLY SETTLEMENT RATE" has the meaning specified
in Section 5.9(b).
"FIRST PURCHASE CONTRACT SETTLEMENT DATE" means August
16, 2001.
"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.
"GROWTH PRIDES" means a Security, initially issued in
substantially the form set forth as Exhibit B hereto in a Stated
Amount of $50, which represents (i)(a) prior to the First
Purchase Contract Settlement Date, a 1/40 undivided beneficial
ownership in a 3-year Treasury Security having a principal amount
at maturity equal to $1,000 and a 1/40 undivided beneficial
interest in a 4-year Treasury Security having a principal amount
of maturity equal to $1,000, and (b) from the First Purchase
Contract Settlement Date to the Second Purchase Contract
Settlement Date, a 1/40 undivided beneficial interest in a 4-year
Treasury Security having a principal amount at maturity equal to
$1,000, subject to the Pledge of each such Treasury Security by
the Holder pursuant to the Pledge Agreement, and (ii) the rights
and obligations of the Company and the Holder under one Purchase
Contract.
"GROWTH PRIDES CERTIFICATE" means a certificate
evidencing the rights and obligations of a Holder in respect of
the number of Growth PRIDES specified on such certificate.
"GROWTH PRIDES REGISTER" and "GROWTH PRIDES REGISTRAR"
have the respective meanings specified in Section 3.5.
"HOLDER," when used with respect to a Security, means
the Person in whose name the Security evidenced by an Income
PRIDES Certificate and/or a Growth PRIDES Certificate is
registered on the Income PRIDES Register and/or the Growth PRIDES
Register, as the case may be.
"INCOME PRIDES" means a Security initially issued in
substantially the form set forth as Exhibit A hereto in the
Stated Amount of $50 which represents (i) beneficial ownership by
the Holder of either (a) one Series E Note and, prior to the
First Purchase Contract Settlement Date, one Series D Note, each
in an aggregate principal amount of $25, subject to the Pledge of
such Debt Securities by the Holder pursuant to the Pledge
Agreement or (b) upon the occurrence of a Tax Event Redemption
prior to the Second Purchase Contract Settlement Date, the
appropriate Applicable Ownership Interest in the Treasury
Portfolio, subject to the Pledge of such Applicable Ownership
Interest in the Treasury Portfolio by the Holder pursuant to the
Pledge Agreement, and (ii) the rights and obligations of the
Holder under one Purchase Contract.
"INCOME PRIDES CERTIFICATE" means a certificate
evidencing the rights and obligations of a Holder in respect of
the number of Income PRIDES specified on such certificate.
"INCOME PRIDES REGISTER" and "INCOME PRIDES REGISTRAR"
have the respective meanings specified in Section 3.5.
"INDENTURE" means the Indenture dated as of July 1,
1998 between the Company and the Indenture Trustee pursuant to
which the Debt Securities are to be issued, as originally
executed and delivered and as it may from time to time be
supplemented or amended by one or more indentures supplemental
thereto entered into pursuant to the applicable provisions
thereof and shall include the terms of a particular series of
securities established as contemplated by Section 301 thereof.
"INDENTURE TRUSTEE" means The Bank of New York, 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," with respect to any Income PRIDES or
Growth PRIDES means, as of the date of determination, all Income
PRIDES or Growth PRIDES evidenced by Certificates theretofore
authenticated, executed and delivered under this Agreement,
except:
(i) If a Termination Event has occurred, (A)
Growth PRIDES for which Treasury Securities have been
deposited with the Agent in trust for the Holders of
such Growth PRIDES and (B) Income PRIDES for which Debt
Securities or the appropriate Applicable Ownership
Interest in the Treasury Portfolio, (or as contemplated
in Section 3.15 hereto with respect to a Holder's
interest in the Treasury Portfolio, cash) as the case
may be, has been theretofore deposited with the Agent
in trust for the Holders of such Income PRIDES;
(ii) Income PRIDES and Growth PRIDES evidenced by
Certificates theretofore canceled by the Agent or
delivered to the Agent for cancellation or deemed
canceled pursuant to the provisions of this Agreement;
and
(iii) Income PRIDES and Growth PRIDES 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 Income
PRIDES or Growth PRIDES evidenced by such Certificate
are valid obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite number of the Income PRIDES or Growth PRIDES have given
any request, demand, authorization, direction, notice, consent or
waiver hereunder, Income PRIDES or Growth PRIDES 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
Income PRIDES or Growth PRIDES which a Responsible Officer of the
Agent knows to be so owned shall be so disregarded. Income PRIDES
or Growth PRIDES 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 Income PRIDES or Growth PRIDES and
that the pledgee is not the Company or any Affiliate of the
Company.
"PAYMENT DATE" means each February 16, May 16, August
16 and November 16, commencing August 16, 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 in 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 Agent, as
purchase contract agent and as attorney-in-fact for the Holders
from time to time of Securities, the Collateral Agent, the
Custodial Agent and the Securities Intermediary.
"PREDECESSOR CERTIFICATE" means a Predecessor Income
PRIDES Certificate or a Predecessor Growth PRIDES Certificate.
"PREDECESSOR INCOME PRIDES CERTIFICATE" of any
particular Income PRIDES Certificate means every previous Income
PRIDES Certificate evidencing all or a portion of the rights and
obligations of the Company and the Holder under the Income PRIDES
Certificate evidenced thereby; and, for the purposes of this
definition, any Income PRIDES Certificate authenticated and
delivered under Section 3.10 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Income PRIDES Certificate
shall be deemed to evidence the same rights and obligations of
the Company and the Holder as the mutilated, destroyed, lost or
stolen Income PRIDES Certificate.
"PREDECESSOR GROWTH PRIDES CERTIFICATE" of any
particular Growth PRIDES Certificate means every previous Growth
PRIDES Certificate evidencing all or a portion of the rights and
obligations of the Company and the Holder under the Growth PRIDES
Certificate evidenced thereby; and, for the purposes of this
definition, any Growth PRIDES Certificate authenticated and
delivered under Section 3.10 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Growth PRIDES Certificate
shall be deemed to evidence the same rights and obligations of
the Company and the Holder as the mutilated, destroyed, lost or
stolen Growth PRIDES Certificate.
"PRIMARY TREASURY DEALER" means a primary U.S.
government securities dealer in New York City.
"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
(A) obligating the Company to sell to the Holder of such Security
and the Holder of such Security to purchase (i) not later than
the First Purchase Contract Settlement Date, for $25 in cash, a
number of newly issued shares of Common Stock equal to the
applicable Settlement Rate and (ii) not later than the Second
Purchase Contract Settlement Date, for $25 in cash, a number of
newly issued shares of Common Stock equal to the applicable
Settlement Rate, and (B) obligating the Company to pay the Holder
Contract Adjustment Payments, on the terms and subject to the
conditions set forth in Article Five hereof.
"PURCHASE CONTRACT SETTLEMENT DATE" means, as
applicable, the First Purchase Contract Settlement Date or the
Second Purchase Contract Settlement Date.
"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).
"QUOTATION AGENT" means (i) Merrill Lynch, Pierce,
Fenner & Smith Incorporated and its respective successors,
provided, however, that, if the foregoing shall cease to be a
Primary Treasury Dealer, the Company shall substitute therefor
another Primary Treasury Dealer, and (ii) any other Primary
Treasury Dealer selected by the Company.
"RECORD DATE" for the payment of interest, 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 at least one Business
Day but less than 60 Business Days prior to such Payment Date
(and which shall correspond to the related record date for the
Debt Securities).
"REDEMPTION AMOUNT" means for each Debt Security, the
product of (i) the principal amount of such Debt Security and
(ii) a fraction whose numerator is the Treasury Portfolio
Purchase Price and whose denominator is the Applicable Principal
Amount.
"REDEMPTION PRICE" means an amount per Debt Security
equal to the Redemption Amount plus accrued and unpaid interest,
if any, to the date of redemption.
"REGISTER" means the Income PRIDES Register and the
Growth PRIDES Register.
"REGISTRAR" means the Income PRIDES Registrar and the
Growth PRIDES Registrar.
"REMAINING STATED AMOUNT" means $25, which is equal to
one-half of the Stated Amount of the Income PRIDES and the face
amount of the Growth PRIDES, and is intended to reflect the
settlement of one-half of each Purchase Contract on or prior to
the First Purchase Contract Settlement Date.
"REMARKETING AGENT" has the meaning specified in
Section 5.4.
"REMARKETING AGREEMENT" means a Remarketing Agreement
contemplated by Section 5.4 by and between the Company, a
Remarketing Agent and the Purchase Contract Agent, including any
supplements thereto.
"REMARKETING FEE" has the meaning specified in Section
5.4.
"REORGANIZATION EVENT" has the meaning specified in
Section 5.6(b).
"RESET AGENT" means Merrill Lynch, Pierce, Fenner &
Smith, or such other Reset Agent as the Company shall select from
time to time.
"RESET RATE" means, as applicable, the Series D Reset
Rate or the Series E Reset Rate.
"RESET ANNOUNCEMENT DATE" means the tenth Business Day
immediately preceding the applicable Purchase Contract Settlement
Date, the date on which Series D Reset Spread or Series E Reset
Spread, as applicable, and the applicable Two-Year Benchmark
Treasury will be announced by the Company.
"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.
"SECOND EARLY SETTLEMENT RATE" has the meaning
specified in Section 5.9(b).
"SECOND PURCHASE CONTRACT SETTLEMENT DATE" means August
16, 2002.
"SECURITY" means an Income PRIDES or a Growth PRIDES.
"SENIOR INDEBTEDNESS" means indebtedness of any kind of
the Company (including the Debt Securities) unless the instrument
under which such indebtedness is incurred expressly provides that
it is in parity or subordinate in right of payment to the
Contract Adjustment Payments.
"SERIES D NOTES" means the series of Debt Securities of
the Company designated 6.37% Series D Senior Notes due 2003 to be
issued under the Indenture.
"SERIES D RESET RATE" means the Coupon Rate to be in
effect for the Series D Notes on and after the First Purchase
Contract Settlement Date and determined as provided in
Section 4.1.
"SERIES D RESET SPREAD" means, an amount determined by
the Reset Agent which, when added to the Two-Year Benchmark
Treasury in effect on the third Business Day immediately
preceding the First Purchase Contract Settlement Date, will
produce the rate the Series D Notes should bear in order to have
an approximate market value on the third Business Day immediately
preceding the First Purchase Contract Settlement Date of 100.5%
of their aggregate principal amount; provided that (i) the
Company may limit the Series D Reset Rate to be no higher than
the rate on the Two-Year Benchmark Treasury on such Business Day
plus 200 basis points (2.0%); (ii) such market value may be less
than 100.5% if the Company exercises such right to limit the
Series D Reset Rate; and (iii) the Series D Reset Rate shall in
no event exceed the maximum permitted by applicable law.
"SERIES E NOTES" means the series of Debt Securities of
the Company designated 6.50% Series E Senior Notes due 2004 to be
issued under the Indenture.
"SERIES E RESET RATE" means the Coupon Rate to be in
effect for the Series E Notes on and after the Second Purchase
Contract Settlement Date and determined as provided in Section
4.1.
"SERIES E RESET SPREAD" means an amount determined by
the Reset Agent which, when added to the Two-Year Benchmark
Treasury in effect on the third Business Day immediately
preceding the Second Purchase Contract Settlement Date, will
produce the rate the Series E Notes should bear in order to have
an approximate market value on the third Business Day immediately
preceding the Second Purchase Contract Settlement Date of 100.5%
of their aggregate principal amount; provided that (i) the
Company may limit the Series E Reset Rate to be no higher than
the rate on the Two-Year Benchmark Treasury on such Business Day
plus 200 basis points (2.0%); (ii) such market value may be less
than 100.5% if the Company exercises such right to limit the
Series E Reset Rate; and (iii) the Series E Reset Rate shall in
no event exceed the maximum permitted by applicable law.
"SETTLEMENT RATE" has the meaning specified in Section
5.1.
"STATED AMOUNT" means $50, which is equal to the stated
amount of the Income PRIDES and the face amount of the Growth
PRIDES.
"TAX EVENT" means the receipt by the Company of an
opinion of a nationally recognized independent tax counsel
experienced in such matters to the effect that, as a result of
(a) any amendment to, change in, or announced proposed change in,
the laws (or any regulations thereunder) of the United States or
any political subdivision or taxing authority thereof or therein
affecting taxation, (b) any amendment to or change in an
interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory
authority or (c) any interpretation or pronouncement by any such
legislative body, court, governmental agency or regulatory
authority that provides for a position with respect to such laws
or regulations that differs from the generally accepted position
on the date the Debt Securities are issued, which amendment,
change or proposed change is effective or which interpretation or
pronouncement is announced on or after the date of issuance of
the Debt Securities, there is more than an insubstantial risk
that interest payable by the Company on the Debt Securities would
not be deductible, in whole or in part, by the Company for United
States federal income tax purposes.
"TAX EVENT REDEMPTION" means, if a Tax Event shall
occur and be continuing, the redemption of Debt Securities, in
whole but not in part, at the option of the Company on not less
than 30 days or more than 60 days notice.
"TAX EVENT REDEMPTION DATE" means the date on which a
Tax Event Redemption is to occur.
"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 Second
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 Second
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 Second 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 Second 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 Second 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, as of any time, the Trust Indenture Act of
1939, as amended, or any successor statute, as in effect at such
time.
"TRADING DAY" has the meaning specified in Section 5.1.
"TREASURY PORTFOLIO" means, with respect to the
Applicable Principal Amount of Debt Securities (a) if the Tax
Event Redemption Date occurs prior to the Second Purchase
Contract Settlement Date, a portfolio of zero-coupon U.S.
Treasury Securities consisting of (i) interest or principal
strips of U.S. Treasury Securities which mature on or prior to
August 15, 2001 in an aggregate amount equal to the Applicable
Principal Amount of Series D Notes and interest or principal
strips of U.S. Treasury Securities which mature on or prior to
August 15, 2002 in an aggregate amount equal to the Applicable
Principal Amount of Series E Notes and (ii) with respect to each
scheduled interest payment date on the Debt Securities of each
series that occurs after the Tax Event Redemption Date, interest
or principal strips of U.S. Treasury Securities which mature on
or prior to such dates in an aggregate amount equal to the
aggregate interest payment that would be due on the Applicable
Principal Amount of the Debt Securities on such date, and (b) if
the Tax Event Redemption Date occurs after the Second Purchase
Contract Settlement Date, a portfolio of zero-coupon U.S.
Treasury Securities consisting of (i) principal or interest
strips of U.S. Treasury Securities which mature on or prior to
August 15, 2003 in an aggregate principal amount equal to the
Applicable Principal Amount of Series D Notes and principal or
interest strips of U.S. Treasury Securities which mature on or
prior to August 15, 2004 in an aggregate principal amount equal
to the Applicable Principal Amount of the Series E Notes and (ii)
with respect to each scheduled interest payment date on the Debt
Securities that occurs after the Tax Event Redemption Date,
interest or principal strips of U.S. Treasury Securities which
mature on or prior to such date in an aggregate amount equal to
the aggregate interest payment that would be due on the
Applicable Principal Amount of the Debt Securities on such date.
"TREASURY PORTFOLIO PURCHASE PRICE" means the lowest
aggregate price quoted by a Primary Treasury Dealer to the
Quotation Agent on the third Business Day immediately preceding
the Tax Event Redemption Date for the purchase of the Treasury
Portfolio for settlement on the Tax Event Redemption Date.
"TREASURY SECURITY" means, as applicable, the 3-Year
Treasury Security or the 4-Year Treasury Security.
"TWO-YEAR BENCHMARK TREASURY" on a particular
determination date shall mean direct obligations of the United
States (which may be obligations traded on a when-issued basis
only) having a maturity comparable to the remaining term to
maturity of the applicable series of Debt Securities, as agreed
upon by the Company and the Reset Agent. The rate for the
Two-Year Benchmark Treasury will be the bid side rate displayed
at 10:00 A.M., New York City time, on the third Business Day
immediately preceding the applicable Purchase Contract Settlement
Date in the Telerate system (or if the Telerate system is (a) no
longer available on the third Business Day immediately preceding
such Purchase Contract Settlement Date or (b) in the opinion of
the applicable Reset Agent (after consultation with the Company)
no longer an appropriate system from which to obtain such rate,
such other nationally recognized quotation system as, in the
opinion of the applicable Reset Agent (after consultation with
the Company), is appropriate). If such rate is not so displayed,
the rate for the Two-Year Benchmark Treasury shall be, as
calculated by the Reset Agent, the yield to maturity for the
Two-Year Benchmark Treasury, expressed as a bond equivalent on
the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis, and computed by taking the arithmetic
mean of the secondary market bid rates, as of 10:30 A.M., New
York City time, on the third Business Day immediately preceding
the applicable Purchase Contract Settlement Date of three leading
United States government securities dealers selected by the Reset
Agent (after consultation with the Company) (which may include
the applicable Reset Agent or an affiliate thereof).
"UNDERWRITING AGREEMENT" means the Underwriting
Agreement dated July 17, 1998 among the Company, Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Lehman Brothers Inc.
"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 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
Income PRIDES Register or the Growth PRIDES 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 Income PRIDES and the Outstanding Growth PRIDES,
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 Income PRIDES or the Growth PRIDES 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 canceled
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 The Bank of New
York, 101 Barclay Street, New York, New York 10286,
Attention: Vice President, Corporate Trust Administration,
or at any other address previously furnished in writing by
the Agent to the Holders and the Company;
(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, Energy Plaza, 1601 Bryan Street, Dallas,
Texas 75201, Attention: Secretary, or at any other address
previously furnished in writing to the Agent by the Company;
(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 The Chase Manhattan Bank at 450 West
33rd Street, New York, New York 10001, Attention: Global
Trust Services, 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 The Bank of New York, 101 Barclay Street, New
York, New York 10286, Attention: Vice President, Corporate
Trust Administration, 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 Income PRIDES Certificates or the Growth PRIDES
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, and no interest shall
accrue or be payable by the Company or any Holder for the period
from and after any such Payment Date, except that, if such next
succeeding Business Day is in the next succeeding calendar year,
such payment shall be made on the immediately preceding Business
Day with the same force and effect as if made on such Payment
Date.
In any case where any Purchase Contract Settlement Date
shall not be a Business Day, then (notwithstanding any other
provision of this Agreement, the Income PRIDES Certificates or
the Growth PRIDES 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 Income PRIDES Certificates (including the form of
Purchase Contract forming part of the Income PRIDES 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 Income PRIDES
are listed or any depositary therefor, or as may, consistently
herewith, be determined by the officers of the Company executing
such Income PRIDES Certificates, as evidenced by their execution
of the Income PRIDES Certificates.
The definitive Income PRIDES 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 Income PRIDES evidenced by
such Income PRIDES Certificates, consistent with the provisions
of this Agreement, as evidenced by their execution thereof.
The Growth PRIDES Certificates (including the form of
Purchase Contracts forming part of the Growth PRIDES 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 Growth PRIDES
may be listed or any depositary therefor, or as may, consistently
herewith, be determined by the officers of the Company executing
such Growth PRIDES Certificates, as evidenced by their execution
of the Growth PRIDES Certificates.
The definitive Growth PRIDES 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 Growth PRIDES evidenced by
such Growth PRIDES 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 Income PRIDES shall be in substantially the form set forth
on the form of the Income PRIDES Certificates set forth as
Exhibit A hereto.
The form of the Agent's certificate of authentication
of the Growth PRIDES shall be in substantially the form set forth
on the form of the Growth PRIDES Certificates set forth as
Exhibit B hereto..
ARTICLE III
THE SECURITIES
SECTION 3.1. TITLE AND TERMS; DENOMINATIONS.
The aggregate number of Income PRIDES and Growth PRIDES
evidenced by Certificates authenticated, executed on behalf of
the Holders and delivered hereunder is limited to 14,950,000
units except for Certificates authenticated, executed and
delivered upon registration of transfer of, in exchange for, or
in lieu of, other Certificates pursuant to Section 3.4, 3.5,
3.10, 3.12, 3.13, 5.9 or 8.5.
The Certificates shall be issuable only in registered
form and only in denominations of a single Income PRIDES or
Growth PRIDES and any integral multiple thereof.
SECTION 3.2. RIGHTS AND OBLIGATIONS EVIDENCED BY THE
CERTIFICATES.
Each Income PRIDES Certificate shall evidence the
number of Income PRIDES specified therein, with each such Income
PRIDES representing the ownership by the Holder thereof of a
beneficial interest in the Debt Securities or Applicable
Ownership Interest in the Treasury Portfolio, as the case may be,
subject to the Pledge of such Debt Securities or Applicable
Ownership Interest in 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 Income PRIDES shall pledge,
pursuant to the Pledge Agreement, each Debt Security or the
Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, forming a part of such Income PRIDES, 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 Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, for the benefit of the Company, to
secure the obligation of the Holder under one Purchase Contract
to purchase the Common Stock of the Company.
Each Growth PRIDES Certificate shall evidence the
number of Growth PRIDES specified therein, with each such Growth
PRIDES representing the ownership by the Holder thereof, prior to
the First Purchase Contract Settlement Date, of a 1/40 undivided
beneficial interest in both a 3-Year Treasury Security and a 4-
Year Treasury Security and, on and after the First Purchase
Contract Settlement Date, of a 1/40 undivided beneficial interest
in a 4-Year Treasury Security, and each 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. The Agent as
attorney-in-fact for, and on behalf of, the Holder of each Growth
PRIDES shall pledge, pursuant to the Pledge Agreement, each
Treasury Security forming a part of such Growth PRIDES, to the
Collateral Agent and grant to the Collateral Agent a security
interest in the right, title, and interest of such Holder in such
Treasury Security for the benefit of the Company, to secure the
obligation of the Holder under one Purchase Contract to purchase
the Common Stock of the Company.
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, one of its
Vice Presidents, its Treasurer, one of its Assistant Treasurers,
its Secretary or one of its Assistant Secretaries. The signature
of any of these officers on the Certificates may be manual or
facsimile.
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 forms set forth in
Exhibit A and Exhibit B hereto, with such letters, numbers or
other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be
required by the rules of any securities exchange on which the
Income PRIDES or Growth PRIDES 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 Income PRIDES or Growth PRIDES, 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 Income PRIDES or Growth PRIDES,
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 "Income PRIDES Register") in which, subject to such
reasonable regulations as it may prescribe, the Agent shall
provide for the registration of Income PRIDES Certificates and of
transfers of Income PRIDES Certificates (the Agent, in such
capacity, the "Income PRIDES Registrar") and a register (the
"Growth PRIDES Register") in which, subject to such reasonable
regulations as it may prescribe, the Agent shall provide for the
registration of the Growth PRIDES Certificates and transfers of
Growth PRIDES Certificates (the Agent, in such capacity, the
"Growth PRIDES 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 Income PRIDES or Growth PRIDES 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 Income PRIDES or Growth PRIDES,
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 Income PRIDES or Growth PRIDES,
as the case may be, and be entitled to the same benefits and
subject to the same obligations, under this Agreement as the
Income PRIDES or Growth PRIDES, 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 during the period
commencing on the Business Day immediately preceding a Purchase
Contract Settlement Date and ending on such Purchase Contract
Settlement Date or on or after the Termination Date.
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 Certificates 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, or (ii) the
Company elects to terminate the book-entry system through the
Clearing Agency with respect to the Securities, 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 Income PRIDES or
Growth PRIDES, 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 either 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
Income PRIDES or Growth PRIDES, 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 during the
period commencing on the Business Day immediately preceding a
Purchase Contract Settlement Date and ending on such Purchase
Contract Settlement Date or on or after the Termination Date. In
addition, in lieu of delivery of a new Certificate, upon
satisfaction of the applicable conditions specified above in this
Section and receipt of appropriate registration or transfer
instructions from such Holder, the Agent may (i) if the Second
Purchase Contract Settlement Date has occurred, deliver the
shares of Common Stock issuable in respect of the applicable
portion of the Purchase Contracts forming a part of the
Securities evidenced by such Certificate, or (ii) if a
Termination Event shall have occurred, transfer the Debt
Securities, the appropriate Applicable Ownership Interest in the
Treasury Portfolio or the Treasury Securities, as the case may
be, forming a part of the Securities represented by such
Certificate to such Holder, 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 on the Income PRIDES Register
or the Growth PRIDES Register, as applicable, as the owner of the
Income PRIDES or Growth PRIDES 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 Income
PRIDES or Growth PRIDES 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 treating the
Clearing Agency as the sole Holder of such Global Certificate or
from giving effect to any written certification, proxy or other
authorization furnished by any Clearing Agency (or its nominee),
as 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 Second Purchase Contract Settlement
Date, upon the transfer of Debt Securities, the appropriate
Applicable Ownership Interest in 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 an Income
PRIDES shall, if surrendered to any Person other than the Agent,
be delivered to the Agent and, if not already canceled, shall be
promptly canceled 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 canceled 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 canceled as provided in this Section, except as
expressly permitted by this Agreement. All canceled 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 canceled or for
cancellation.
SECTION 3.13. ESTABLISHMENT OR REESTABLISHMENT OF GROWTH PRIDES.
A Holder of an Income PRIDES may, at any time on or
prior to the fifth Business Day immediately preceding the Second
Purchase Contract Settlement Date, create or recreate a Growth
PRIDES and separate the Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as
applicable, from the related Purchase Contract in respect of such
Income PRIDES by substituting 3-Year Treasury Securities and 4-
Year Treasury Securities for all, but not less than all, of the
Series D Note and the Series E Note, respectively, or appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, that form a part of such Income PRIDES in accordance
with this Section 3.13; provided, however, that such Collateral
Substitutions may not be made during the period from the fifth
Business Day immediately preceding the First Purchase Contract
Settlement Date through the First Purchase Contract Settlement
Date, except that if a Tax Event Redemption has occurred and the
Treasury Portfolio has become a component of the Income PRIDES,
Holders of such Income PRIDES may make such Collateral
Substitutions at any time on or prior to the second Business Day
immediately preceding the Second Purchase Contract Settlement
Date (but not during the period from the second Business Day
immediately preceding the First Purchase Contract Settlement Date
through the First Purchase Contract Settlement Date). Holders
may make Collateral Substitutions (i) only in integral multiples
of 40 Income PRIDES if Debt Securities are being substituted by
Treasury Securities, or (ii) only in integral multiples of
1,600,000 Income PRIDES if the appropriate Applicable Ownership
Interests in the Treasury Portfolio are being substituted by
Treasury Securities. To create 40 Growth PRIDES (if a Tax Event
Redemption has not occurred), or 1,600,000 Growth PRIDES (if a
Tax Event Redemption has occurred), the Income PRIDES Holder
shall
(a) if a Tax Event Redemption has not occurred, (i)
prior to the fifth Business Day preceding the First Purchase
Contract Settlement Date, deposit with the Collateral Agent
a 3-Year Treasury Security having a principal amount at
maturity of $1,000 and a 4-Year Treasury Security having a
principal amount at maturity of $1,000, or (ii) after the
First Purchase Contract Settlement Date and prior to the
fifth Business Day preceding the Second Purchase Contract
Settlement Date, deposit with the Collateral Agent a 4-Year
Treasury Security having a principal amount at maturity of
$1,000; or
(b) if a Tax Event Redemption has occurred, (i) prior
to the second Business Day immediately preceding the First
Purchase Contract Settlement Date, deposit with the
Collateral Agent 3-Year Treasury Securities having an
aggregate principal amount at maturity of $40,000,000 and 4-
Year Treasury Securities having an aggregate principal
amount at maturity of $40,000,000, or (ii) after the First
Purchase Contract Settlement Date and prior to the second
Business Day immediately preceding the Second Purchase
Contract Settlement Date, 4-Year Treasury Securities having
an aggregate principal amount at maturity of $40,000,000;
and
(c) in either case, (i) deliver cash to the Agent in
an amount equal to the excess of the Contract Adjustment
Payments that would have accrued on the Growth PRIDES being
created by the Holder since the last Payment Date through
the date of Collateral Substitution, over the Contract
Adjustment Payments that have accrued over the same time
period on the Income PRIDES being surrendered in connection
with such Collateral Substitution, which amount the Agent
shall promptly remit to the Company, and (ii) transfer the
40 Income PRIDES, or, in the event a Tax Event Redemption
has occurred, 1,600,000 Income PRIDES, to the Agent
accompanied by a notice to the Agent, substantially in the
form of Exhibit B to the Pledge Agreement, stating that the
Holder has transferred the relevant types and amounts of
Treasury Securities to the Collateral Agent and requesting
that the Agent instruct the Collateral Agent to release the
applicable Debt Securities or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case
may be, underlying such Income PRIDES, whereupon the Agent
shall promptly give such instruction to the Collateral
Agent, substantially in the form of Exhibit A to the Pledge
Agreement.
Upon receipt of the Treasury Securities described in clause (a)
or (b) above and the instructions described in clause (c) above,
in accordance with the terms of the Pledge Agreement, the
Collateral Agent will release from the Pledge, to the Agent, on
behalf of the Holder, Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, that had been components of such Income PRIDES, free
and clear of the Company's security interest therein, and upon
receipt thereof the Agent shall promptly:
(i) cancel the related Income PRIDES surrendered
and transferred;
(ii) transfer the Debt Securities or the
appropriate Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, that had been
components of such Income PRIDES to the Holder; and
(iii) authenticate, execute on behalf of such
Holder and deliver a Growth PRIDES Certificate executed
by the Company in accordance with Section 3.3
evidencing the same number of Purchase Contracts as
were evidenced by the canceled Income PRIDES.
Holders who elect to separate the Debt Securities or
the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, from the related Purchase
Contracts and to substitute Treasury Securities for such Debt
Securities or the appropriate Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, shall be responsible
for any fees or expenses payable to the Collateral Agent for its
services as Collateral Agent in respect of the substitution, and
the Company shall not be responsible for any such fees or
expenses.
In the event a Holder making a Collateral Substitution
pursuant to this Section 3.13 fails to effect a book-entry
transfer of the Income PRIDES or fails to deliver an Income
PRIDES Certificate to the Agent after depositing the appropriate
Treasury Securities with the Collateral Agent, the Debt
Securities or the appropriate Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, constituting a part
of such Income PRIDES, and any interest on such Debt Securities
or distributions with respect to the Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, shall be
held in the name of the Agent or its nominee in trust for the
benefit of such Holder, until such Income PRIDES is so
transferred or the Income PRIDES Certificate is so delivered, as
the case may be, or, until such Holder provides evidence
satisfactory to the Company and the Agent that such Income PRIDES
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 an Income PRIDES remains in
effect, such Income PRIDES 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 in the Treasury Portfolio, as the case may be,
and Purchase Contract comprising such Income PRIDES may be
acquired, and may be transferred and exchanged, only as an entire
Income PRIDES.
SECTION 3.14. ESTABLISHMENT OR REESTABLISHMENT OF INCOME PRIDES.
A Holder of a Growth PRIDES may, at any time on or
prior to the fifth Business Day immediately preceding the Second
Purchase Contract Settlement Date, create or recreate Income
PRIDES by depositing with the Collateral Agent Debt Securities or
the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, having an aggregate principal
amount equal to the aggregate principal amount at maturity of,
and in substitution for all, but not less than all, of the
Treasury Securities comprising part of the Growth PRIDES in
accordance with this Section 3.14; provided, however, that such
substitutions may not be made during the period from the fifth
Business Day immediately preceding the First Purchase Contract
Settlement Date through the First Purchase Contract Settlement
Date, except that if a Tax Event Redemption has occurred and the
Treasury Portfolio has become a component of the Income PRIDES,
Holders of Growth PRIDES may make such Collateral Substitutions
at any time on or prior to the second Business Day immediately
preceding the Second Purchase Contract Settlement Date (but not
during the period from the second Business Day immediately
preceding the First Purchase Contract Settlement Date through the
First Purchase Contract Settlement Date). Holders of Growth
PRIDES may make such Collateral Substitutions and establish
Income PRIDES only (i) in integral multiples of 40 Growth PRIDES
for 40 Income PRIDES if a Tax Event Redemption has not occurred,
or (ii) in integral multiples of 1,600,000 Growth PRIDES for
1,600,000 Income PRIDES if a Tax Event Redemption has occurred.
To create 40 Income PRIDES (if a Tax Event Redemption has not
occurred), or 1,600,000 Income PRIDES (if a Tax Event Redemption
has occurred), the Growth PRIDES Holder shall
(a) if a Tax Event Redemption has not occurred, (i)
prior to the fifth Business Day preceding the First Purchase
Contract Settlement Date, deposit with the Collateral Agent
$1,000 in aggregate principal amount of Series D Notes and
$1,000 in aggregate principal amount of Series E Notes, or
(ii) after the First Purchase Contract Settlement Date,
deposit with the Collateral Agent $1,000 in aggregate
principal amount of Series E Notes, or
(b) if a Tax Event Redemption has occurred prior to
the second Business Day immediately preceding the Second
Purchase Contract Settlement Date, deposit with the
Collateral Agent the Applicable Ownership Interest in the
Treasury Portfolio for each Income PRIDES being created by
the Holder, and having an aggregate principal amount of
$80,000,000, or if, after the First Purchase Contract
Settlement Date $40,000,000, and
(c) in either case, transfer and surrender the related
40 Growth PRIDES, or in the event a Tax Event Redemption has
occurred, 1,600,000 Income PRIDES, to the Agent accompanied
by a notice to the Agent, substantially in the form of
Exhibit B to the Pledge Agreement, stating that the Holder
has transferred the relevant amount of Debt Securities or
the appropriate Applicable Ownership Interest in 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
Growth PRIDES, whereupon the Agent shall promptly give such
instruction to the Collateral Agent, substantially in the
form of Exhibit A to the Pledge Agreement.
Upon receipt of the Debt Securities or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be,
described in clause (a) or (b) above and the instructions
described in clause (c) above, in accordance with the terms of
the Pledge Agreement, the Collateral Agent will 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 Growth PRIDES surrendered
and transferred;
(ii) transfer the Treasury Securities that had
been components of such Growth PRIDES to the Holder;
and
(iii) authenticate, execute on behalf of such
Holder and deliver an Income PRIDES Certificate
executed by the Company in accordance with Section 3.3
evidencing the same number of Purchase Contracts as
were evidenced by the canceled Growth PRIDES.
Holders who elect to separate Treasury Securities from
the related Purchase Contract and to substitute Debt Securities
or the Applicable Ownership Interest in the Treasury Portfolio,
as the case may be, for such Treasury Securities shall be
responsible for any fees or expenses payable to the Collateral
Agent for its services as Collateral Agent in respect of the
substitution, and the Company shall not be responsible for any
such fees or expenses.
In the event a Holder making a Collateral Substitution
pursuant to this Section 3.14 fails to effect a book-entry
transfer of the Growth PRIDES or fails to deliver a Growth PRIDES
Certificate to the Agent after depositing the appropriate Debt
Securities or Applicable Ownership Interest in the Treasury
Portfolio with the Collateral Agent, the Treasury Securities
constituting a part of such Growth PRIDES Certificate, 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 Growth PRIDES is so transferred or the Growth
PRIDES is so delivered, or until such Holder provides evidence
satisfactory to the Company and the Agent that such Growth PRIDES
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 Growth PRIDES remains in
effect, such Growth PRIDES shall not be separable into its
constituent parts and the rights and obligations of the Holder of
such Growth PRIDES in respect of the Treasury Security and
Purchase Contract comprising such Growth PRIDES may be acquired,
and may be transferred and exchanged only as an entire Growth
PRIDES.
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 in the Treasury Portfolio or the
Treasury Securities, as the case may be, underlying the Income
PRIDES and the Growth PRIDES 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 in the Treasury Portfolio or Treasury
Securities, as the case may be, from each Holder by written
request mailed to such Holder at its address as it appears in the
Income PRIDES Register or the Growth PRIDES Register, as the case
may be. Upon book-entry transfer of the Income PRIDES Certificate
or Growth PRIDES Certificate or delivery of an Income PRIDES or
Growth PRIDES 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
Income PRIDES or Growth PRIDES, 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
Income PRIDES or Growth PRIDES fails to effect such transfer or
delivery, the Debt Securities, the appropriate Applicable
Ownership Interest in the Treasury Portfolio or Treasury
Securities, as the case may be, underlying such Income PRIDES or
Growth PRIDES, 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 Income PRIDES or
Growth PRIDES are transferred or the Income PRIDES Certificate or
Growth PRIDES Certificate is surrendered or such Holder provides
satisfactory evidence that such Income PRIDES Certificate or
Growth PRIDES Certificate has been destroyed, lost or stolen,
together with any indemnity that may be required by the Agent and
the Company. In the case of the Treasury Portfolio or any
Treasury Securities, the Purchase Contract Agent may dispose of
the subject securities for cash and pay the applicable portion of
such cash to the Holders in lieu of such Holders' Applicable
Ownership Interest in such Treasury Portfolio, or any Treasury
Securities, where such Holder would otherwise have been entitled
to receive less than $1,000 of any such security.
SECTION 3.16. NO CONSENT TO ASSUMPTION.
Each Holder of a 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, its trustee in
bankruptcy, receiver, liquidator or a person or entity performing
similar functions, in the event that the Company becomes a debtor
under the Bankruptcy Code or subject to other similar 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 Income
PRIDES Certificate (or one or more Predecessor Income PRIDES
Certificates) of which such Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, are a part is registered at the close of business on
the Record Date for such Payment Date.
Each Income PRIDES Certificate evidencing Debt
Securities delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of any other Income
PRIDES 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 Income PRIDES
Certificate.
In the case of any Income PRIDES with respect to which
Cash Settlement of the underlying applicable portion of the
Purchase Contract is effected on the Business Day immediately
preceding the applicable 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 in the
Treasury Portfolio, as the case may be, underlying such Income
PRIDES 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 Income PRIDES Certificate (or one or more
Predecessor Income PRIDES Certificate) 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 Income PRIDES with respect to which Cash Settlement
or Early Settlement of the underlying Purchase Contract is
effected on the Business Day immediately preceding the applicable
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 in the Treasury
Portfolio, as the case may be, that would otherwise be payable
after the applicable Purchase Contract Settlement Date or Early
Settlement Date shall not be payable hereunder to the Holder of
such Income PRIDES; 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 Income PRIDES, such
Holder shall be entitled to receive the payment of interest on
such separated Debt Securities.
The applicable Coupon Rate on the Series D Notes to be
in effect on and after the First Purchase Contract Settlement
Date will be reset on the third Business Day immediately
preceding the First Purchase Contract Settlement Date to the
Series D Reset Rate (such Series D Reset Rate to be effective
from and after the First Purchase Contract Settlement Date). On
the Reset Announcement Date, the Series D Reset Spread and the
Two-Year Benchmark Treasury to be used to determine the Series D
Reset Rate will be announced by the Company. On the Business Day
immediately following the Reset Announcement Date, the Company
will cause a notice of such Series D Reset Spread and Two-Year
Benchmark Treasury to be published in an Authorized Newspaper.
The applicable Coupon Rate on the Series E Notes to be
in effect on and after the Second Purchase Contract Settlement
Date will be reset on the third Business Day immediately
preceding the Second Purchase Contract Settlement Date to the
Series E Reset Rate (such Series E Reset Rate to be in effect
from and after the Second Purchase Contract Settlement Date). On
the Reset Announcement Date the Series E Reset Spread and the
Two-Year Benchmark Treasury to be used to determine the Series E
Reset Rate will be announced by the Company. On the Business Day
immediately following the Reset Announcement Date, the Company
will cause a notice of such Series E Reset Spread and Two-Year
Benchmark Treasury to be published in an Authorized Newspaper.
Not later than 7 calendar days nor more than 15
calendar days prior to each Reset Announcement Date, the Company
will request that the Depositary notify (or any successor
Clearing Agency or its nominee) by first-class mail, postage
prepaid, the Beneficial Owners or Clearing Agency Participants
holding Income PRIDES or Growth PRIDES, of such Reset
Announcement Date and any procedures to be followed by such
Holders of Securities, who intend to settle their obligation
under the applicable portion of the Purchase Contract with
separate cash on the applicable Purchase Contract Settlement
Date.
SECTION 4.2. NOTICE AND VOTING.
Under and subject to 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 Income PRIDES 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 Income PRIDES and (c)
stating the manner in which such instructions may be given. Upon
the written request of the Holders of Income PRIDES 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 Income
PRIDES, the Agent shall abstain from voting the Debt Security
underlying such Income PRIDES. The Company hereby agrees, if
applicable, to solicit Holders of Income PRIDES to timely
instruct the Agent in order to enable the Agent to vote such Debt
Securities.
SECTION 4.3. TAX EVENT REDEMPTION.
Upon the occurrence of a Tax Event Redemption prior to
the Second 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. 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 Income PRIDES the Treasury Portfolio and promptly
remit the remaining portion of such Redemption Price to the Agent
for payment to the Holders of such Income PRIDES. The Treasury
Portfolio will be substituted for the outstanding 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 an Income PRIDES to purchase the
Common Stock of the Company on the applicable Purchase Contract
Settlement Date under the Purchase Contract constituting a part
of such Income PRIDES. Following the occurrence of a Tax Event
Redemption prior to the Second Purchase Contract Settlement Date,
the Holders of Income PRIDES and the Collateral Agent shall have
such security interests, rights and obligations with respect to
the Treasury Portfolio as the Holder of Income PRIDES and the
Collateral Agent had in respect of the Debt Securities subject to
the Pledge thereof as provided in Sections 2, 3, 4, 5 and 6 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 Income PRIDES
Certificates thereafter to be issued such change in phraseology
and form (but not in substance) as may be appropriate to reflect
the substitution of the Treasury Portfolio for Debt Securities as
collateral.
SECTION 4.4. CONSENT TO TREATMENT FOR TAX PURPOSES.
Each Holder of an Income PRIDES or a Growth PRIDES, by
its acceptance thereof, covenants and agrees to treat itself as
the owner, for United States federal, state and local income and
franchise tax purposes, of (i) the related Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury
Portfolio, in the case of the Income PRIDES, or (ii) the Treasury
Securities, in the case of the Growth PRIDES. Each Holder of an
Income PRIDES, by its acceptance thereof, further covenants and
agrees to treat the Debt Securities as indebtedness of the
Company for United States federal, state and local income and
franchise tax purposes.
ARTICLE V
THE PURCHASE CONTRACTS
SECTION 5.1. PURCHASE OF SHARES OF COMMON STOCK.
Each Purchase Contract shall, unless a Termination
Event or an Early Settlement in accordance with Section 5.9
hereof has occurred, obligate the Holder of the related Security
to purchase, and the Company to sell, on each of the First
Purchase Contract Settlement Date and the Second Purchase
Contract Settlement Date, for $25 in cash on each such date (the
"Purchase Price"), a number of newly issued shares of Common
Stock equal to the applicable Settlement Rate. The "Settlement
Rate" as determined with respect to a Purchase Contract
Settlement Date is equal to (a) if the Applicable Market Value
(as defined below) is equal to or greater than $ 49.19 (the
"Threshold Appreciation Price"), .5082 shares of Common Stock
per Purchase Contract, (b) if the Applicable Market Value is less
than the Threshold Appreciation Price, but is greater than
$41.6875, the number of shares of Common Stock equal to $25
divided by the Applicable Market Value and (c) if the Applicable
Market Value is less than or equal to $ 41.6875, .5997 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" with respect to a
Purchase Contract Settlement Date means the average of the
Closing Price per share of Common Stock on each of the twenty
consecutive Trading Days ending on the third Trading Day
immediately preceding such 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 at the close
of business that is the primary market for the trading of the
Common Stock.
Each Holder of an Income PRIDES or a Growth PRIDES, 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. Each Holder of an Income PRIDES or a Growth PRIDES,
by its acceptance thereof, further covenants and agrees, that, to
the extent and in the manner provided in Section 5.4 and the
Pledge Agreement, but subject to the terms thereof, payments in
respect of the principal of and interest on Debt Securities or
the Proceeds of the Treasury Securities or Applicable Ownership
Interest in the Treasury Portfolio on a 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 Contract 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 Income
PRIDES Register or Growth PRIDES 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 any
other Certificate (including as a result of a Collateral
Substitution or the re-establishment of an Income PRIDES) shall
carry the rights to Contract Adjustment Payments accrued and
unpaid, and to accrue Contract Adjustment Payments, which were
carried by the Purchase Contracts which were represented by such
other Certificates.
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 Second Purchase Contract Settlement Date, to defer the
payment of any or all of the Contract Adjustment Payments
otherwise payable on any Payment Date to a date no later than the
Purchase Contract Settlement Date next succeeding the date such
deferral commences, 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. In connection with any Contract Adjustment
Payments so deferred, additional Contract Adjustment Payments on
the amounts so deferred will accrue at the rate of 9.75% 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 accrued additional Contract Adjustment
Payments 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 next succeeding the
date such deferral commences. 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 next succeeding Purchase Contract Settlement Date, each
Holder will receive on such 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
applicable 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 a 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 capital stock of the Company in
connection with the satisfaction by the Company of its
obligations under any employee or agent 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 its capital stock, (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).
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 an Income
PRIDES must notify the Agent by use of a notice in
substantially the form of Exhibit C hereto of its intention
to pay in cash ("Cash Settlement") the Purchase Price for
the shares of Common Stock to be purchased pursuant to the
applicable portion of a Purchase Contract on a Purchase
Contract Settlement Date. 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 applicable 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 an Income PRIDES 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 applicable
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 applicable Purchase Contract Settlement
Date in settlement of the applicable portion 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 an Income PRIDES fails to
notify the Agent of its intention to make a Cash Settlement
in accordance with paragraph (a)(i) above, such failure
shall constitute a default under the related Purchase
Contract and the Holder shall be deemed to have consented to
the disposition of the applicable Pledged Debt Securities
(as defined in the Pledge Agreement, and which shall be
Series D Notes in connection with the First Purchase
Contract Settlement Date and Series E Notes in connection
with the Second Purchase Contract Settlement Date) pursuant
to the remarketing as described in paragraph (b) below. If a
Holder of an Income PRIDES 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 applicable Debt
Securities (which shall be Series D Notes in connection with
the First Purchase Contract Settlement Date and Series E
Notes in connection with the Second Purchase Contract
Settlement Date) of Income PRIDES Holders who have not
notified the Agent of their intention to effect a Cash
Settlement with respect to a Purchase Contract Settlement
Date as provided in paragraph (a)(i) above, the Company
shall engage one or more nationally recognized investment
banking firms (the "Remarketing Agent") pursuant to a
Remarketing Agreement to sell such Debt Securities. In order
to facilitate the remarketing, the Agent shall notify the
Remarketing Agent, by 10:00 a.m., New York City time, on the
fourth Business Day immediately preceding such Purchase
Contract Settlement Date, 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 such 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,
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 of such series from any amount of such
proceeds in excess of the aggregate principal amount of such
remarketed Debt Securities of such series plus accrued and
unpaid interest, if any, then the Remarketing Agent will
remit the remaining portion of the proceeds from such
remarketing to the Collateral Agent. Such portion of the
proceeds, equal to the aggregate principal amount of such
Debt Securities, will automatically be applied by the
Collateral Agent, in accordance with the Pledge Agreement,
to satisfy in full such Income PRIDES holders' obligations
to pay the Purchase Price for the Common Stock under the
applicable portions of the related Purchase Contracts on
such 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 Income PRIDES. Income PRIDES
Holders whose Debt Securities are so remarketed will not
otherwise be responsible for the payment of any Remarketing
Fee in connection therewith. If such a remarketing does not
occur because a condition precedent to such remarketing
shall not have been fulfilled, or if in spite of using its
reasonable efforts, the Remarketing Agent cannot remarket
the related Debt Securities of such Holders of Income PRIDES
at a price not less than 100% of the aggregate principal
amount of such Debt Securities plus accrued and unpaid
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 on such Debt Securities will become payable by the
Company to the Agent for payment to the Holder of the Income
PRIDES to which such Debt Securities relate. Such payment
will be made by the Company on or prior to 11 a.m. New York
City time on the applicable 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
such Purchase Contract Settlement Date in an Authorized
Newspaper.
(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 such Debt
Securities in full satisfaction of the Holders obligations
under the applicable portions of the Purchase Contracts or
(ii) sell such Debt Securities in one or more public or
private sales and apply the proceeds of such sale in full
satisfaction of the Holders obligations under the
applicable portions of the Purchase Contracts.
(d) (i) Unless a Holder of Growth PRIDES or, if a Tax
Event Redemption has occurred, an Income PRIDES, 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 Growth PRIDES or, if a Tax
Event Redemption has occurred, Income PRIDES must notify the
Agent by use of a notice in substantially the form of
Exhibit C hereto of its intention to pay in cash the
Purchase Price for the shares of Common Stock to be
purchased pursuant to the applicable portion of a Purchase
Contract on or prior to 5:00 p.m., New York City time, on
the second Business Day immediately preceding the applicable
Purchase Contract Settlement Date.
(ii) A Holder of a Growth PRIDES or, if a Tax
Event Redemption has occurred, an Income PRIDES, 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 applicable 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
applicable Purchase Contract Settlement Date in settlement
of the applicable portion 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 Growth PRIDES or, if a
Tax Event Redemption has occurred, an Income PRIDES, 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 Growth PRIDES or an Income PRIDES (if a Tax
Event Redemption has occurred) does notify the Agent as
provided in paragraph (d)(i) above of its intention to pay
the Purchase Price in cash, but fails to make such payment
as required by paragraph (d)(ii) above, then such failure
shall constitute a default under the related Purchase
Contract and upon the maturity of the Pledged Treasury
Securities or the appropriate Applicable Ownership Interest
in the Treasury Portfolio, as the case may be, held by the
Collateral Agent on the Business Day immediately prior to
the applicable Purchase Contract Settlement Date, the
principal amount of the Treasury Securities or the
appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, received by the Collateral
Agent will be invested promptly in overnight Permitted
Investments. On the applicable 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 in the Treasury
Portfolio, as the case may be, and the investment earnings
earned from such investments is in excess of the aggregate
Purchase Price of the applicable portions 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 Growth PRIDES or Income PRIDES 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 with respect to a Purchase Contract
Settlement Date in the manner described herein, the Company
shall not be obligated to issue any shares of Common Stock
in respect of the relevant portion of the 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 with respect to the
applicable portion of any Purchase Contract, (i) the
Collateral Agent will, in accordance with the terms of the
Pledge Agreement, cause the corresponding Pledged Debt
Securities or appropriate Applicable Ownership Interest in
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 in 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 on each Purchase Contract Settlement Date 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 with respect to such
Purchase Price, and in no event will Holders be liable for
any deficiency between the proceeds of Collateral
disposition and the Purchase Price. A default by a Holder
in the performance of its obligations under a Purchase
Contract in connection with the First Purchase Contract
Settlement Date shall not in itself be a default in the
performance of its obligations under such Purchase Contract
in connection with the Second Purchase Contract Settlement
Date (except in connection with Early Settlement).
SECTION 5.5. ISSUANCE OF SHARES OF COMMON STOCK.
Unless a Termination Event or an Early Settlement shall
have occurred, on a Purchase Contract Settlement Date, upon its
receipt of payment in full of the applicable Purchase Price for
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 a 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 canceled. 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
that are not available on an equivalent basis to
Holders of the Securities upon settlement of the
Purchase Contracts underlying such Securities entitling
such holders of the Common Stock, 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, including such a plan that provides
for purchases of Common Stock by non-shareholders), 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 five 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 the effect of any income tax to any
holders of shares of Common Stock resulting from any
dividend or distribution of stock or issuance of rights
or warrants to purchase or subscribe for stock or from
any event treated as such for income tax purposes or
for any other reasons.
(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 applicable 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 such 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, 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 Second 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 in the Treasury
Portfolio, as the case may be, forming a part of such Securities
in the case of Income PRIDES, or Treasury Securities in the case
of Growth PRIDES, 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 thereof to the
Agent, the Collateral Agent and to the Holders, at their
addresses as they appear in the applicable Register.
SECTION 5.9. EARLY SETTLEMENT.
(a) A holder of Income PRIDES may settle the related
Purchase Contracts in their entirety on or prior to the
fifth Business Day immediately preceding either Purchase
Contract Settlement Date in the manner described herein, but
only in integral multiples of 40 Income PRIDES; provided,
however, that such settlements may not be made during the
period from the fifth Business Day immediately preceding the
First Purchase Contract Settlement Date through the First
Purchase Contract Settlement Date, and provided, further, if
a Tax Event Redemption has occurred prior to such Purchase
Contract Settlement Date and the Treasury Portfolio has
become a component of the Income PRIDES, holders of Income
PRIDES may settle early only in integral multiples of
1,600,000 Income PRIDES at any time on or prior to the
second Business Day immediately preceding such Purchase
Contract Settlement Date (but not during the period two
Business Days immediately preceding the First Purchase
Contract Settlement Date through the First Purchase Contract
Settlement Date). A holder of Growth PRIDES may settle the
related Purchase Contracts in their entirety on or prior to
the second Business Day immediately preceding each Purchase
Contract Settlement Date in the manner described herein (in
either case, an Early Settlement) but only in integral
multiples of 40 Growth PRIDES. Upon Early Settlement, (i)
the holder's rights to receive Deferred Contract Adjustment
Payments on the Purchase Contracts being settled will be
forfeited, (ii) the holder's right to receive additional
Contract Adjustment Payments in respect of such Purchase
Contracts will terminate and (iii) no adjustment will be
made to or for the holder on account of Deferred Contract
Adjustment Payments, or any amount accrued in respect of
Contract Adjustment Payments. In order to exercise the
right to effect any such early settlement ("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 the sum of (i)(A)
$50 times the number of Purchase Contracts being settled if
settled on or prior to the First Purchase Contract
Settlement Date or (B) $25 times the number of Purchase
Contracts being settled if settled after the First Purchase
Contract Settlement Date, plus, in either case, (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
Contract Adjustment Payments payable on such Payment Date
with respect to such Purchase Contracts. 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. In order for any of the foregoing requirements
to be considered satisfied or effective with respect to a
Purchase Contract underlying any Security on or by a
particular Business Day, such requirement must be met at or
prior to 5:00 p.m., New York City time, on such Business
Day; the first Business Day on which all of the foregoing
requirements have been satisfied by 5:00 p.m., New York City
time.shall be the "Early Settlement Date" with respect to
such Security.
(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 (i) if settled
prior to the First Purchase Contract Settlement Date, 1.0164
newly issued shares of Common Stock per Income PRIDES or
Growth PRIDES (the "First Early Settlement Rate") or (ii) if
settled after the First Purchase Contract Settlement Date
and before the Second Purchase Contract Settlement Date,
.5082 newly issued shares of Common stock per Income PRIDES
or Growth PRIDES (the "Second Early Settlement Rate"),
(regardless in either case of the market price of the Common
Stock on the date of such Early Settlement); 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 in the Treasury Portfolio, in the case of
Income PRIDES, or the related Treasury Securities, in the
case of Growth PRIDES, 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 in 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 a 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 a 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.
The Holder of any Income PRIDES or Growth PRIDES 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
Income PRIDES or Growth PRIDES, by its acceptance of such Income
PRIDES or Growth PRIDES 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 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) Prior to a Default and after the curing or waiving
of all such Defaults that may have occurred,
(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 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, in the absence of bad faith on the
part of the Agent, 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, deliver and
perform the Pledge Agreement in its capacity as Agent and to
grant the Pledge. The Agent shall be entitled to all of the
rights, privileges, immunities and indemnities contained in
this Agreement with respect to any duties of the Agent
under, or actions taken by the Agent pursuant to, such
Pledge Agreement.
(e) In case a Default has occurred (that has not been
cured or waived), and is actually known by a Responsible
Officer of the Agent, the Agent shall exercise such of the
rights and powers vested in it by this Agreement, and use
the same degree of care and skill in its exercise thereof,
as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(f) At the request of the Company, the Agent is
authorized to execute and deliver one or more Remarketing
Agreements to, among other things, effectuate Section 5.4
SECTION 7.2. NOTICE OF DEFAULT.
Within 90 days after the occurrence of any Default
hereunder of which a Responsible Officer of the 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; provided that, except
-------------
for a default in any payment obligation hereunder, the Agent
shall be protected in withholding such notice if and so long as
the Responsible Officer of the Agent in good faith determines
that the withholding of such notice is in the interests of the
Holders of the Securities.
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;
(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:
(a) 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 (which
compensation shall not be limited by any provisions of law
in regards to the compensation of a trustee of an express
trust);
(b) except as otherwise expressly provided herein, to
reimburse the 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
(c) 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 or the performance 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.
"Agent" for purposes of this Section 7.7 shall include
any predecessor Agent; provided, however, that the negligence or
bad faith of any Agent hereunder shall not affect the rights of
any other Agent hereunder.
When the Agent incurs expenses or renders services in
an action or proceeding commenced pursuant to Section 4.3 of the
Pledge Agreement upon the occurrence of a Termination Event, the
expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to
constitute expenses of administration under any applicable
Federal or State bankruptcy, insolvency or other similar law.
The provisions of this Section 7.7 shall survive the
termination of this Agreement and the Pledge Agreement.
SECTION 7.8. CORPORATE AGENT REQUIRED; ELIGIBILITY.
There shall at all times be an Agent hereunder which
shall be (i) not an Affiliate of the Company and (ii) a
corporation organized and doing business under the laws of the
United States of America, any State thereof or the District of
Columbia, authorized under such laws to exercise corporate trust
powers, having (or being a member of a bank holding company
having) a combined capital and surplus of at least $50,000,000
and subject to supervision or examination by Federal or State
authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at
any time the 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, 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, the Agent or 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.
(g) If the Agent has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Agent and the Company shall in all
respects comply with the provisions of Section 310(b) of the
Trust Indenture Act.
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 Person into which the Agent may be merged or
converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which
the Agent shall be a party, or any Person succeeding to all or
substantially all the corporate trust business of the Agent,
shall be the successor of the Agent hereunder, provided such
Person shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any
Certificates shall have been authenticated and executed on behalf
of the Holders, but not delivered, by the 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:
(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 Certificates; or
(b) 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
(c) to evidence and provide for the acceptance of
appointment hereunder by a successor Agent; or
(d) to make provision with respect to the rights of
Holders pursuant to the requirements of Section 5.6(b); or
(e) 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,
(a) change any Payment Date;
(b) change the amount or the type of Collateral
required to be Pledged to secure a Holder's Obligations
under 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
Income PRIDES to substitute the Treasury Securities for the
Pledged Debt Securities or the rights of holders of Growth
PRIDES to substitute Debt Securities or the Applicable
Ownership Interest in the Treasury Portfolio for the Pledged
Treasury Securities) or otherwise adversely affect the
Holder's rights in or to such Collateral or adversely alter
the rights in or to such Collateral;
(c) 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;
(d) impair the right to institute suit for the
enforcement of any Purchase Contract;
(e) 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 a Purchase Contract Settlement
Date or the right to Early Settlement or otherwise adversely
affect the Holder's rights under any Purchase Contract; or
(f) 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 Income PRIDES or the Growth
PRIDES, then only the Holders of the affected class of Security
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;
provided further, however, that no such agreement, whether with
or without the consent of the Holders, shall affect Section 3.16
hereof.
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, the Debt Securities, 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 its
payment obligations or in any material default in the performance
of any of its other obligations hereunder, or under any of the
Securities or 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 establishment of an
Income PRIDES 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 Second
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.
ARTICLE XI
TRUST INDENTURE ACT
SECTION 11.1. TRUST INDENTURE ACT; APPLICATION.
(a) This Agreement is subject to the provisions of the
TIA that are required or deemed to be part of this Agreement
and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this
Agreement limits, qualifies or conflicts with the duties
imposed by Section 310 to 317, inclusive, of the TIA, such
imposed duties shall control.
SECTION 11.2. LISTS OF HOLDERS OF SECURITIES.
(a) The Company shall furnish or cause to be furnished
to the Agent (a) semiannually, not later than June 1 and
December 1 in each year, commencing December 1, 1998, a
list, in such form as the Agent may reasonably require, of
the names and addresses of the Holders ("List of Holders")
as of a date not more than 15 days prior to the delivery
thereof, and (b) at such other times as the Agent may
request in writing, within 30 days after the receipt by the
Company of any such request, a List of Holders as of a date
not more than 15 days prior to the time such list is
furnished; provided that, the Company shall not be obligated
to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders
given to the Agent by the Company. The Agent may destroy
any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Agent shall comply with its obligations under
Section 311(a) of the TIA, subject to the provisions of
Section 311(b) and Section 312(b) of the TIA.
SECTION 11.3. REPORTS BY THE AGENT.
Not later than November 1 of each year, commencing
November 1, 1998, the Agent shall provide to the Holders such
reports, if any, as are required by Section 313(a) of the TIA in
the form and in the manner provided by Section 313(a) of the TIA.
Such reports shall be as of the preceding September 15. The
Agent shall also comply with the requirements of Sections 313(b),
(c) and (d) of the TIA.
SECTION 11.4. PERIODIC REPORTS TO AGENT.
The Company shall provide to the Agent such documents,
reports and information as required by Section 314 (if any) and
the compliance certificate required by Section 314 of the TIA in
the form, in the manner and at the times required by Section 314
of the TIA.
SECTION 11.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Company shall provide to the Agent such evidence of
compliance with any conditions precedent provided for in this
Agreement as and to the extent required by Section 314(c) of the
TIA. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) of the TIA may be given in
the form of a Company's Certificate. Any opinion required to be
given pursuant to Section 314(c)(2) of the TIA may be given in
the form of an Opinion of Counsel.
SECTION 11.6. DEFAULTS; WAIVER.
The Holders of a majority of the Outstanding Purchase
Contracts voting together as one class may, by vote, on behalf of
all of the Holders, waive any past Default and its consequences,
except a default
(a) in the payment on any Security, or
(b) in respect of a provision hereof which under
Section 8.2 cannot be modified or amended without the
consent of the Holder of each Outstanding Security affected.
Upon such waiver, any such Default shall cease to exist, and any
Default arising therefrom shall be deemed to have been cured, for
every purpose of this Agreement, but no such waiver shall extend
to any subsequent or other Default or impair any right consequent
thereon.
SECTION 11.7. AGENT'S KNOWLEDGE OF DEFAULTS.
The Agent shall not be deemed to have knowledge of any
Default unless a Responsible Officer charged with the
administration of this Agreement shall have obtained written
notice of such Default.
SECTION 11.8. CONFLICTING INTERESTS.
The Indenture, the Indenture (For Unsecured Debt
Securities Series A) dated as of October 1, 1997 of the Company
to The Bank of New York, as trustee, the Indenture (For Unsecured
Debt Securities Series B) dated as of October 1, 1997 of the
Company to The Bank of New York, as trustee, and the Indenture
(For Unsecured Debt Securities Series C) dated as of January 1,
1998 of the Company to The Bank of New York, as trustee, shall be
deemed to be specifically described in this Agreement for the
purposes of clause (i) of the first proviso contained in Section
310(b) of the TIA.
SECTION 11.9. DIRECTION OF AGENT.
Section 316(a)(1)(A) of the TIA is hereby expressly
excluded from this Agreement, as permitted by the TIA.
<PAGE>
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: /s/ Robert S. Shapard
--------------------------------
Name: Robert S. Shapard
Title: Treasurer
<PAGE>
THE BANK OF NEW YORK,
as Purchase Contract Agent and
Trustee
By: /s/ Walter N. Gitlin
--------------------------------
Name: Walter N. Gitlin
Title: Vice President
<PAGE>
EXHIBIT A
FORM OF INCOME PRIDES CERTIFICATE
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. 882848203
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Number of Income PRIDES
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TEXAS UTILITIES COMPANY
9.25% Income PRIDES
($50 Stated Amount)
This Income PRIDES Certificate certifies that is
-----------
the registered Holder of the number of Income PRIDES set forth
above. Each Income PRIDES represents (i) beneficial ownership by
the Holder of either (a) one 6.50% Series E Senior Note due 2004
("Series E Note") and, prior to the First Purchase Contract
Settlement Date, one 6.37% Series D Senior Note due 2003 (Series
D Note, and each Series E Note and Series D Note are collectively
referred to herein as the "Debt Securities") of Texas Utilities
Company, a Texas corporation (the "Company"), each in an
aggregate principal amount of $25, 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
Second Purchase Contract Settlement Date, the appropriate
Applicable Ownership Interest in the Treasury Portfolio, subject
to the Pledge of such Applicable Ownership Interest in 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 without definition herein shall have the
meaning set forth in the Purchase Contract Agreement referred to
below.
Pursuant to the Pledge Agreement, the Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, constituting part of each Income
PRIDES 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 Income PRIDES.
The Pledge Agreement provides that all payments of principal
or interest on or cash distributions in respect of any Pledged
Debt Securities, or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be, constituting part
of the Income PRIDES received by the Collateral Agent shall be
paid by the Collateral Agent by wire transfer in same day funds
(i) in the case of (A) payments of interest with respect to
Pledged Debt Securities or cash distributions on the appropriate
Applicable Ownership Interest (as specified in clauses (A)(ii)
and (B)(ii) of the definition of such term) of the Treasury
Portfolio, as the case may be, and (B) any payments of the
principal with respect to any Debt Securities or on the
appropriate Applicable Ownership Interest (as specified in
clauses (A)(i) and (B)(i) of the definition of such term) in 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 principal of any Pledged Debt Securities
or on the appropriate Applicable Ownership Interest (as specified
in clauses (A)(i) and (B)(i) 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
Income PRIDES 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 Income PRIDES. Payment
of interest on any Debt Security or distributions on the
appropriate Applicable Ownership Interest (as specified in
clauses (A)(ii) and (B)(ii) of the definition of such term) of
the Treasury Portfolio, as the case may be, forming part of an
Income PRIDES evidenced hereby which are payable quarterly in
arrears on February 16, May 16, August 16 and November 16 each
year, commencing August 16, 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 Income PRIDES
Certificate (or a Predecessor Income PRIDES 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 Income PRIDES Certificate to purchase, and the Company to
sell, (i) not later than August 16, 2001 (the "First Purchase
Contract Settlement Date"), at a price of $25 in cash (the
"Purchase Price"), a number of newly issued shares of Common
Stock, no par value, of the Company ("Common Stock"), equal to
the applicable Settlement Rate (as defined below) and (ii) not
later than August 16, 2002 (the "Second Purchase Contract
Settlement Date" and with the First Purchase Contract Settlement
Date, each, a "Purchase Contract Settlement Date"), at a price of
$25 in cash, a number of newly issued shares of Common Stock,
equal to the applicable Settlement Rate, unless on or prior to
the applicable Purchase Contract Settlement Date there shall have
occurred a Termination Event or an Early Settlement with respect
to the Income PRIDES of which such Purchase Contract is a part,
all as provided in the Purchase Contract Agreement and more fully
described below.
The "Settlement Rate" with respect to a Purchase Contract
Settlement Date is equal to (a) if the Applicable Market Value
(as defined below) determined with respect to such Purchase
Contract Settlement Date is equal to or greater than $49.19 (the
"Threshold Appreciation Price"), .5082 shares of Common Stock per
Purchase Contract, (b) if such Applicable Market Value is less
than the Threshold Appreciation Price but is greater than
$41.6875, the number of shares of Common Stock per Purchase
Contract equal to $25 divided by such Applicable Market Value and
(c) if the Applicable Market Value is less than or equal to
$41.6875, .5997 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 Company shall pay, on each Payment Date, in respect of
each Purchase Contract evidenced hereby an amount (the "Contract
Adjustment Payments") equal to (A) for the period prior to the
First Purchase Contract Settlement Date, 2.815% per annum of the
Stated Amount, and (B) for the period from and after the First
Purchase Contract Settlement Date, 2.75% per annum of the
Remaining Stated Amount, computed, in each case, 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 below. Such Contract
Adjustment Payments shall be payable to the Person in whose name
this Income PRIDES Certificate (or a Predecessor Income PRIDES
Certificate) is registered at the close of business on the Record
Date for such Payment Date.
Payment of interest on the Debt Securities or distributions
on the appropriate Applicable Ownership Interest (as specified in
clauses (A)(ii) and (B)(ii) of the definition of such term) in
the Treasury Portfolio, as the case may be, and Contract
Adjustment Payments will be payable at the office of the Agent
referred to below 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 Income PRIDES
Register.
Unless the context otherwise requires, each provision of
this Security shall be part of the Purchase Contracts evidenced
hereby. This Security and each Purchase Contract evidenced
hereby is governed by a Purchase Contract Agreement, dated as of
July 1, 1998 (as may be supplemented from time to time, the
"Purchase Contract Agreement"), between the Company and The Bank
of New York, as Purchase Contract Agent and trustee (including
any successor thereunder, 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 Income PRIDES Certificates are, and are to
be, executed and delivered.
Each Purchase Contract evidenced hereby, which is settled
either through Early Settlement or Cash Settlement, shall
obligate the Holder of the related Income PRIDES to purchase at
the applicable Purchase Price, and the Company to sell, a number
of newly issued shares of Common Stock equal to the applicable
Early Settlement Rate or the applicable Settlement Rate, as
applicable.
The "Applicable Market Value" with respect to a Purchase
Contract Settlement Date 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 such
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 the Income PRIDES evidenced hereby shall
pay, on each Purchase Contract Settlement Date, the applicable
Purchase Price for the shares of Common Stock purchased pursuant
to each Purchase Contract evidenced hereby by effecting a Cash
Settlement or, an Early Settlement. A Holder of Income PRIDES who
does not make such payment in accordance with the Purchase
Contract Agreement or who does not notify the Agent of such
Holder's intention, on or prior to 5:00 p.m. New York City time
on the fifth Business Day immediately preceding a Purchase
Contract Settlement Date, to make an effective Cash Settlement or
an Early Settlement, shall have defaulted in its obligations
under the applicable portion of the related Purchase Contract,
and the Collateral Agent shall exercise its rights as a secured
creditor for the benefit of the Company under the Purchase
Contract Agreement and the Pledge Agreement and shall apply the
Proceeds of the sale of the applicable related Pledged Debt
Securities (which shall be the Series D Notes in connection with
the First Purchase Contract Settlement Date and Series E Notes in
connection with the Second Purchase Contract Settlement Date)
held by the Collateral Agent to satisfy the Holder's obligation
under such Purchase Contract to purchase Common Stock at the
Purchase Price.
The Company shall not be obligated to issue any shares of
Common Stock in respect of any portion of a Purchase Contract on
a Purchase Contract Settlement Date 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.
Under the terms of the Pledge Agreement and the Purchase
Contract 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 Income PRIDES holders a notice (a) containing such
information as is contained in the notice or solicitation, (b)
stating that each Income PRIDES Holder on the record date set by
the Agent therefor 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 Income PRIDES and
(c) stating the manner in which such instructions may be given.
Upon the written request of the Income PRIDES 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 an Income
PRIDES, the Agent shall abstain from voting any Debt Securities
evidenced by such Income PRIDES.
Upon the occurrence of a Tax Event Redemption prior to the
Second Purchase Contract Settlement Date, the Redemption Price
payable on the Tax Event Redemption Date with respect to the
Pledged Debt Securities shall be delivered to the Collateral
Agent in exchange for the Pledged Debt Securities. Pursuant to
the terms of the Pledge Agreement, the Collateral Agent for the
benefit of the Company will apply an amount equal to the
applicable Redemption Amount of such Redemption Price to purchase
the Treasury Portfolio and will promptly remit the remaining
portion of such Redemption Price to the Agent for payment to the
Holders of such Income PRIDES. Following the occurrence of a Tax
Event Redemption prior to the Second Purchase Contract Settlement
Date, the Holders of Income PRIDES and the Collateral Agent shall
have such security interests rights and obligations with respect
to the Treasury Portfolio as the Holder of Income PRIDES and the
Collateral Agent had in respect of the Debt Securities, as the
case may be, subject to the Pledge thereof as provided in the
Pledge Agreement and any reference herein to the Debt Securities
shall be deemed to be a reference to such Treasury Portfolio.
The Income PRIDES are issuable only in registered form and
only in denominations of a single Income PRIDES and any integral
multiple thereof. The transfer of any Income PRIDES Certificate
will be registered and Income PRIDES Certificates may be
exchanged as provided in the Purchase Contract Agreement. The
Income PRIDES 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 of an Income PRIDES may, at any time on or prior to
the fifth Business Day immediately preceding the Second Purchase
Contract Settlement Date, create or recreate a Growth PRIDES and
separate the Debt Securities or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as applicable, from
the related Purchase Contract in respect of such Income PRIDES by
substituting 3-Year Treasury Securities and 4-Year Treasury
Securities for all, but not less than all, of the Series D Note
and the Series E Note, respectively, or appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be,
that form a part of such Income PRIDES in accordance with the
Purchase Contract Agreement; provided, however, that such
Collateral Substitutions may not be made during the period from
the fifth Business Day immediately preceding the First Purchase
Contract Settlement Date through the First Purchase Contract
Settlement Date, except that if a Tax Event Redemption has
occurred and the Treasury Portfolio has become a component of the
Income PRIDES, Holders of such Income PRIDES may make such
Collateral Substitutions at any time on or prior to the second
Business Day immediately preceding the Second Purchase Contract
Settlement Date (but not during the period from the second
Business Day immediately preceding the First Purchase Contract
Settlement Date through the First Purchase Contract Settlement
Date). Holders may make Collateral Substitutions (i) only in
integral multiples of 40 Income PRIDES if Debt Securities are
being substituted by Treasury Securities, or (ii) only in
integral multiples of 1,600,000 Income PRIDES if the appropriate
Applicable Ownership Interests in the Treasury Portfolio are
being substituted by Treasury Securities. To create 40 Growth
PRIDES (if a Tax Event Redemption has not occurred), or 1,600,000
Growth PRIDES (if a Tax Event Redemption has occurred), the
Income PRIDES Holder shall
(a) if a Tax Event Redemption has not occurred, (i)
prior to the fifth Business Day preceding the First Purchase
Contract Settlement Date, deposit with the Collateral Agent
a 3-Year Treasury Security having a principal amount at
maturity of $1,000 and a 4-Year Treasury Security having a
principal amount at maturity of $1,000, or (ii) after the
First Purchase Contract Settlement Date and prior to the
fifth Business Day preceding the Second Purchase Contract
Settlement Date, deposit with the Collateral Agent a 4-Year
Treasury Security having a principal amount at maturity of
$1,000; or
(b) if a Tax Event Redemption has occurred, (i) prior
to the second Business Day immediately preceding the First
Purchase Contract Settlement Date, deposit with the
Collateral Agent 3-Year Treasury Securities having an
aggregate principal amount at maturity of $40,000,000 and 4-
Year Treasury Securities having an aggregate principal
amount at maturity of $40,000,000, or (ii) after the First
Purchase Contract Settlement Date and prior to the second
Business Day immediately preceding the Second Purchase
Contract Settlement Date, 4-Year Treasury Securities having
an aggregate principal amount at maturity of $40,000,000;
and
(c) in either case, (i) deliver cash to the Agent in an
amount equal to the excess of the Contract Adjustment
Payments that would have accrued on the Growth PRIDES being
created by the Holder since the last Payment Date through
the date of Collateral Substitution, over the Contract
Adjustment Payments that have accrued over the same time
period on the Income PRIDES being surrendered in connection
with such Collateral Substitution, which amount the Agent
shall promptly remit to the Company, and (ii) transfer the
40 Income PRIDES, or, in the event a Tax Event Redemption
has occurred, 1,600,000 Income PRIDES, to the Agent
accompanied by a notice to the Agent, substantially in the
form of Exhibit B to the Pledge Agreement, stating that the
Holder has transferred the relevant types and amounts of
Treasury Securities to the Collateral Agent and requesting
that the Agent instruct the Collateral Agent to release the
applicable Debt Securities or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case
may be, underlying such Income PRIDES, whereupon the Agent
shall promptly give such instructions to the Collateral
Agent, substantially in the form of Exhibit A to the Pledge
Agreement.
Upon receipt of the Treasury Securities described in clause (a)
or (b) above and the instructions described in clause (c) above,
in accordance with the terms of the Pledge Agreement, the
Collateral Agent will release from the Pledge to the Agent, on
behalf of the Holder, Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, that had been components of such Income PRIDES, free
and clear of the Company's security interest therein, and upon
receipt thereof the Agent shall promptly:
(i) cancel the related Income PRIDES surrendered
and transferred;
(ii) transfer the Debt Securities or the
appropriate Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, that had been
components of such Income PRIDES to the Holder; and
(iii) authenticate, execute on behalf of such
Holder and deliver a Growth PRIDES Certificate executed
by the Company in accordance with the Purchase Contract
Agreement evidencing the same number of Purchase
Contracts as were evidenced by the canceled Income
PRIDES.
Holders who elect to separate the Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, from the related Purchase
Contracts and to substitute Treasury Securities for such Debt
Securities or the appropriate Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, shall be responsible
for any fees or expenses payable to the Collateral Agent for its
services as Collateral Agent in respect of the substitution, and
the Company shall not be responsible for any such fees or
expenses.
A Holder of Growth PRIDES may create or recreate Income
PRIDES by depositing with the Collateral Agent Debt Securities
having an aggregate principal amount, in the case of the Series D
Notes and the Series E Notes, equal to the aggregate principal
amount at maturity, of the 3-Year Treasury Securities and 4-Year
Treasury Securities, respectively, comprising part of the Growth
PRIDES, or by so depositing the appropriate Applicable Ownership
Interest in the Treasury Portfolio, in exchange for the release
of such Pledged Treasury Securities, in accordance with the terms
of the Purchase Contract Agreement and the Pledge Agreement.
The Company shall have the right, at any time prior to the
Second Purchase Contract Settlement Date, to defer the payment of
any or all of the Contract Adjustment Payments otherwise payable
on any Payment Date to a date no later than the Purchase Contract
Settlement Date next succeeding the date such deferral commences,
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. In connection with any Contract Adjustment Payments
so deferred, additional Contract Adjustment Payments will accrue
on the amounts so deferred at the rate of 9.75% 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 next succeeding the date such
deferral commences.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the
next succeeding Purchase Contract Settlement Date, the Holder of
this Income PRIDES Certificate will receive on such 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 Income PRIDES Certificate divided by (y) the Applicable
Market Value related to such Purchase Contract Settlement Date.
In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments, then, until the Deferred
Contract Adjustment Payments have been paid, the Company shall
not declare or pay dividends on, make distributions with respect
to, or redeem, purchase or acquire, or make a liquidation payment
with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases
or acquisitions of capital stock of the Company in connection
with the satisfaction by the Company of its obligations under any
employee or agent 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 its capital stock, (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).
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without
limitation, the rights of the Holders to receive and the
obligation of the Company to pay any Contract Adjustment Payments
or any Deferred Contract Adjustment Payments, and the rights and
obligations of the Holders to purchase 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 Second 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 Income PRIDES Register. Upon and
after the occurrence of a Termination Event, the Collateral Agent
shall release the Debt Securities or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be,
forming a part of the Income PRIDES evidenced hereby from the
Pledge in accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the
Purchase Contract Agreement, a Holder of Income PRIDES may settle
the related Purchase Contracts in their entirety on or prior to
the fifth Business Day immediately preceding either Purchase
Contract Settlement Date, but only in integral multiples of 40
Income PRIDES; provided, however, that such settlements may not
be made during the fifth Business Day immediately preceding the
First Purchase Contract Settlement Date through the First
Purchase Contract Settlement Date; and provided, further, that if
a Tax Event Redemption has occurred and the Treasury Portfolio
has become a component of the Income PRIDES, Holders may settle
early only in integral multiples of 1,600,000 Income PRIDES at
any time on or prior to the second Business Day immediately
preceding such Purchase Contract Settlement Date (but not during
the period two Business Days immediately preceding the First
Purchase Contract Settlement Date through the First Purchase
Contract Settlement Date). In order to exercise the right to
effect any such early settlement an ("Early Settlement") with
respect to any Purchase Contracts evidenced by this Income PRIDES
Certificate, the Holder of this Income PRIDES Certificate shall
deliver this Income PRIDES 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 the sum of
(i)(A) $50 times the number of Purchase Contracts being settled,
if settled on or prior to the fifth Business Day immediately
preceding the First Purchase Contract Settlement Date or (B) $25
times the number of Purchase Contracts being settled, if settled
after the First Purchase Contract Settlement Date plus, in either
case, (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 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 Debt Securities or the appropriate Applicable Ownership
Interest in 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 an Income PRIDES as to which Early Settlement is
effected equal to the applicable Early Settlement Rate which
shall be equal to 1.0164 newly issued shares of Common Stock per
Purchase Contract (the "First Early Settlement Rate") if settled
prior to the First Purchase Contract Settlement Date, and equal
to .5082 newly issued shares of Common Stock per Purchase
Contract (the "Second Early Settlement Rate" and with the First
Early Settlement Rate, each, an "Early Settlement Rate") if
settled after the First Purchase Contract Settlement Date;
provided however, that upon the Early Settlement of the Purchase
Contracts, (i) the Holder thereof will forfeit the right to
receive any Deferred Contract Adjustment Payments, if any, on
such Purchase Contracts, (ii) the Holder's right to receive
additional Contract Adjustment Payments in respect of such
Purchase Contracts will terminate, and (iii) no adjustment will
be made to or for the Holder on account of Deferred Contract
Adjustment Payments, or any amount accrued in respect of Contract
Adjustment Payments. Each 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 Income PRIDES
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 Income PRIDES Certificate. The
Company covenants and agrees, and the Holder, by its acceptance
hereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
The Holder of this Income PRIDES Certificate, by its
acceptance hereof, authorizes the Agent to enter into and perform
the related Purchase Contracts forming part of the Income PRIDES
evidenced hereby on its 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 Debt
Securities or the appropriate Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, underlying this
Income PRIDES 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 of the Pledged Debt Securities, or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, on each
Purchase Contract Settlement Date shall be paid by the Collateral
Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no
right, title or interest in such payments.
The Holder of this Income PRIDES Certificate, by its
acceptance hereof, covenants and agrees to treat itself as the
owner, for United States federal, state and local income and
franchise tax purposes, of the Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio forming
part of the Income PRIDES evidenced hereby. The Holder of this
Income PRIDES Certificate, by its acceptance hereof, further
covenants and agrees to treat the Debt Securities forming part of
the Income PRIDES evidenced hereby as indebtedness of the Company
for United States federal, state and local income and franchise
tax purposes.
Subject to certain exceptions, the provisions of the
Purchase Contract Agreement may be amended with the consent of
the Holders of a majority of the Purchase Contracts. In
addition, certain amendments to the Purchase Contract Agreement
may be made without any consent of the Holders as provided in the
Purchase Contract Agreement.
THE PURCHASE CONTRACTS EVIDENCED HEREBY SHALL FOR ALL
PURPOSES BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
The Company and the Agent and any agent of the Company or
the Agent may treat the Person in whose name this Income PRIDES
Certificate is registered on the Income PRIDES Register as the
owner of the Income PRIDES 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 in accordance with the Purchase Contract Agreement,
entitle the Holder to any of the rights of a holder of shares of
Common Stock.
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Agent during regular business
hours of the Agent.
Unless the certificate of authentication hereon has been
executed by the Agent by manual signature, this Income PRIDES
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: Robert S. Shapard
Title: Treasurer
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: The Bank of New York,
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 Income PRIDES Certificates referred to in
the within mentioned Purchase Contract Agreement.
THE BANK OF NEW YORK,
as Purchase Contract Agent and Trustee
By:
-------------------------------------
Authorized Signatory
<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 Income PRIDES Certificate and all rights
thereunder, hereby irrevocably constituting and appointing
-----------------------------------------------------------------
attorney to transfer said Income PRIDES Certificate 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
Income PRIDES 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
[First] [Second] Purchase Contract Settlement Date of the
Purchase Contracts underlying the number of Income PRIDES
evidenced by this Income PRIDES 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 in REGISTERED HOLDER
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 Income PRIDES 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 Income PRIDES evidenced by this Income PRIDES
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
Income PRIDES Certificate representing any Income PRIDES
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 in 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 REGISTERED HOLDER
Income PRIDES Certificates
are to be registered in the
name of and delivered to,
and Pledged Debt Securities,
or the Treasury Portfolio,
as the case may be, are to
be transferred to, a Person
other than the Holder, please
print such Person's name and
address:
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:
-----------------------------------------------------------------
-----------------------------------------------------------------
<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:
===============================================================
PRINCIPAL
AMOUNT OF SIGNATURE
AMOUNT OF AMOUNT OF THIS GLOBAL OF AUTHO-
DECREASE IN INCREASE IN CERTIFICATE RIZED
PRINCIPAL PRINCIPAL FOLLOWING OFFICER OF
AMOUNT OF AMOUNT OF SUCH TRUSTEE OR
THE GLOBAL THE GLOBAL DECREASE OR SECURITIES
DATE CERTIFICATE CERTIFICATE INCREASE CUSTODIAN
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
===============================================================
<PAGE>
EXHIBIT B
FORM OF GROWTH PRIDES CERTIFICATE
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. 882848401
--------------------
Number of Growth PRIDES
-------------------
TEXAS UTILITIES COMPANY
Growth PRIDES
($50 Stated Amount)
This Growth PRIDES Certificate certifies that is
----------
the registered Holder of the number of Growth PRIDES set forth
above. Each Growth PRIDES represents (i)(a) prior to the First
Purchase Contract Settlement Date, a 1/40 undivided beneficial
ownership interest in a 3-Year Treasury Security having a
principal amount at maturity equal to $1,000 and a 1/40 undivided
beneficial ownership interest in a 4-Year Treasury Security
having a principal amount of maturity equal to $1,000, and (b)
from the First Purchase Contract Settlement Date to the Second
Purchase Contract Settlement Date, a 1/40 undivided beneficial
ownership interest in a 4-Year Treasury Security having a
principal amount at maturity equal to $1,000, subject to the
Pledge of each 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 without definition herein have the meaning set forth in
the Purchase Contract Agreement referred to below.
Pursuant to the Pledge Agreement, the Treasury Securities
constituting part of each Growth PRIDES 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 Growth PRIDES.
The Pledge Agreement provides that all payments of the
principal of any Treasury Securities received by the Collateral
Agent shall be paid by the Collateral Agent by wire transfer of
same day funds (i) in the case of any principal payments with
respect to any Treasury Securities that have been released from
the Pledge pursuant to the Pledge Agreement, to the Holders of
the applicable Growth PRIDES to the accounts designated by them
in writing for such purpose no later than 2:00 p.m. New York City
time, on the Business Day such payment is received by the
Collateral Agent (provided that in the event such payment is
received by the Collateral Agent on a day that is not a Business
Day or after 12:30 p.m., New York City time, on a Business Day,
then such payment shall be made no later than 10:30 a.m., New
York City time, on the next succeeding Business Day), and (ii) in
the case of the principal of any Pledged Treasury Securities, to
the Company on the Purchase Contract Settlement Date (as defined
herein) in accordance with the terms of the Pledge Agreement, in
full satisfaction of the respective obligations of the Holders of
the Growth PRIDES of which such Pledged Treasury Securities are a
part under the Purchaser Contracts forming a part of such Growth
PRIDES.
Each Purchase Contract evidenced hereby obligates the Holder
of this Growth PRIDES Certificate to purchase, and the Company,
to sell, (i) not later than August 16, 2001 (the "First Purchase
Contract Settlement Date"), at a price of $25 in cash (the
"Purchase Price"), a number of newly issued shares of Common
Stock, no par value, of the Company ("Common Stock"), equal to
the applicable Settlement Rate (as defined below) and (ii), not
later than August 16, 2002 (the "Second Purchase Contract
Settlement Date" and with the First Purchase Contract Settlement
Date, each a "Purchase Contract Settlement Date") at a price of
$25 in cash, a number of newly issued shares of Common stock
equal to the applicable Settlement Rate, unless, in either case
on or prior to the applicable Purchase Contract Settlement Date
there shall have occurred a Termination Event or an Early
Settlement with respect to the Growth PRIDES of which such
Purchase Contract is a part, all as provided in the Purchase
Contract Agreement and more fully described below.
The "Settlement Rate" with respect to a Purchase Contract
Settlement Date is equal to (a) if the Applicable Market Value
(as defined below) determined with respect to such Purchase
Contract Settlement Date is equal to or greater than $49.19 (the
"Threshold Appreciation Price"), .5082 shares of Common Stock per
Purchase Contract, (b) if such Applicable Market Value is less
than the Threshold Appreciation Price but is greater than
$41.6875, the number of shares of Common Stock per Purchase
Contract equal to $25 divided by such Applicable Market Value and
(c) if the Applicable Market Value is less than or equal to
$41.6875, .5997 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 Company shall pay on each Payment Date in respect of
each Purchase Contract evidenced hereby an amount (the "Contract
Adjustment Payments") equal to (A) for the period prior to the
First Purchase Contract Settlement Date, 3.315% per annum of the
Stated Amount, or, and (B) for the period from and after the
First Purchase Contract Settlement Date, 3.25% per annum of the
Remaining Stated Amount, computed, in each case, 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 below. Such Contract
Adjustment Payments shall be payable to the Person in whose name
this Growth PRIDES Certificate (or a Predecessor Growth PRIDES
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 referred to below 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 Growth
PRIDES Register.
Unless the context otherwise requires, each provision of
this Security shall be part of the Purchase Contracts evidenced
hereby. This Security and each Purchase Contract evidenced
hereby is governed by a Purchase Contract Agreement, dated as of
July 1, 1998 (as may be supplemented from time to time, the
"Purchase Contract Agreement") between the Company and The Bank
of New York, as Purchase Contract Agent and trustee (including
any successor thereunder, 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 Growth PRIDES Certificates are, and are to
be, executed and delivered.
Each Purchase Contract evidenced hereby, which is settled
either through Early Settlement or Cash Settlement, shall
obligate the Holder of the related Growth PRIDES to purchase at
the applicable Purchase Price, and the Company to sell, a number
of newly issued shares of Common Stock equal to the applicable
Early Settlement Rate or the applicable Settlement Rate, as
applicable.
The "Applicable Market Value" with respect to a Purchase
Contract Settlement Date means the average of the Closing Price
per share of Common Stock on each of the twenty consecutive
Trading Days ending on the third Trading Day immediately
preceding such 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 the Growth PRIDES evidenced hereby shall
pay, on each Purchase Contract Settlement Date, the applicable
Purchase Price for the shares of Common Stock purchased pursuant
to each Purchase Contract evidenced hereby by effecting a Cash
Settlement or an Early Settlement. A Holder of Growth PRIDES who
does not make such payment in accordance with the Purchase
Contract Agreement or does not notify the Agent of such Holder's
intention, on or prior to 5:00 p.m. New York City time on the
fifth Business Day immediately preceding a Purchase Contract
Settlement Date, to make an effective Cash Settlement or an Early
Settlement, shall have defaulted in its obligations under the
applicable portion of the related Purchase Contract, and the
Collateral Agent shall exercise its rights as a secured creditor
for the benefit of the Company under the Purchase Contract
Agreement and the Pledge Agreement and shall apply the principal
amount at maturity of the related Pledged Treasury Securities
(which shall be the 3-Year Treasury Security in the case of the
First Purchase Contract Settlement Date, and the 4-Year Treasury
Security in the case of the Second Purchase Contract Settlement
Date) held by the Collateral Agent to the Purchase Price of the
Common Stock on such Purchase Contract Settlement Date.
The Company shall not be obligated to issue any shares of
Common Stock in respect of any portion of a Purchase Contract on
a Purchase Contract Settlement Date 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.
The Growth PRIDES are issuable only in registered form and
only in denominations of a single Growth PRIDES and any integral
multiple thereof. The transfer of any Growth PRIDES Certificate
will be registered and Growth PRIDES Certificates may be
exchanged as provided in the Purchase Contract Agreement. The
Growth PRIDES 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 of a Growth PRIDES may, at any time on or prior to
the fifth Business Day immediately preceding the Second Purchase
Contract Settlement Date, create or recreate an Income PRIDES by
(a) depositing with the Collateral Agent Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, having an aggregate principal
amount equal to the aggregate principal amount at maturity of,
and in substitution for all, but not less than all, of the
Treasury Securities comprising part of the Growth PRIDES in
accordance with the Purchase Contract Agreement; provided,
however, that such Collateral Substitutions may not be made
during the period from the fifth Business Day immediately
preceding the First Purchase Contract Settlement Date through the
First Purchase Contract Settlement Date, except that if a Tax
Event Redemption has occurred and the Treasury Portfolio has
become a component of the Income PRIDES, Holders of Growth PRIDES
may make Collateral Substitutions, at any time on or prior to the
second Business Day immediately preceding the Second Purchase
Contract Settlement Date (but not during the period from the
second Business Day immediately preceding the First Purchase
Contract Settlement Date through the First Purchase Contract
Settlement Date). Holders of Growth PRIDES may make such
Collateral Substitutions and establish Income PRIDES only (i) in
integral multiples of 40 Growth PRIDES for 40 Income PRIDES if a
Tax Event Redemption has not occurred, or (ii) in integral
multiples of 1,600,000 Growth PRIDES for 1,600,000 Income PRIDES
if a Tax Event Redemption has occurred. To create 40 Income
PRIDES (if a Tax Event Redemption has not occurred), or 1,600,000
Income PRIDES (if a Tax Event Redemption has occurred), the
Growth PRIDES Holder shall
(a) if a Tax Event Redemption has not occurred, (i)
prior to the fifth Business Day preceding the First Purchase
Contract Settlement Date, deposit with the Collateral Agent
$1,000 in aggregate principal amount of Series D Notes and
$1,000 in aggregate principal amount of Series E Notes, or
(ii) after the First Purchase Contract Settlement Date,
deposit with the Collateral Agent $1,000 in aggregate
principal amount of Series E Notes, or
(b) if a Tax Event Redemption has occurred prior to the
second Business Day immediately preceding the Second
Purchase Contract Settlement Date, deposit with the
Collateral Agent the Applicable Ownership Interest in the
Treasury Portfolio for each Income PRIDES being created by
the Holder and having an aggregate principal amount of
$80,000,000, or if, after the First Purchase Contract
Settlement Date $40,000,000, and
(c) in either case, transfer and surrender the related
40 Growth PRIDES, or in the event a Tax Event Redemption has
occurred, 1,600,000 Income PRIDES, to the Agent accompanied
by a notice to the Agent, substantially in the form of
Exhibit B to the Pledge Agreement, stating that the Holder
has transferred the relevant amount of Debt Securities or
the appropriate Applicable Ownership Interest in 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
Growth PRIDES, whereupon the Agent shall promptly give such
instructions to the Collateral Agent, substantially in the
form of Exhibit A to the Pledge Agreement.
Upon receipt of the Debt Securities or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be,
described in clause (a) or (b) above and the instructions
described in clause (c) above, in accordance with the terms of
the Pledge Agreement, the Collateral Agent will 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 Growth PRIDES surrendered
and transferred;
(ii) transfer the Treasury Securities that had
been components of such Growth PRIDES to the Holder;
and
(iii) authenticate, execute on behalf of such
Holder and deliver an Income PRIDES Certificate
executed by the Company in accordance with the Purchase
Contract Agreement evidencing the same number of
Purchase Contracts as were evidenced by the canceled
Growth PRIDES.
Holders who elect to separate Treasury Securities from the
related Purchase Contract and to substitute Debt Securities or
the Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, for such Treasury Securities shall be
responsible for any fees or expenses payable to the Collateral
Agent for its services as Collateral Agent in respect of the
substitution, and the Company shall not be responsible for any
such fees or expenses.
A Holder of Income PRIDES may create or recreate Growth
PRIDES by depositing with the Collateral Agent 3-Year Treasury
Securities and 4-Year Treasury Securities, having an aggregate
principal amount at maturity equal to the aggregate principal
amount of the Series D Notes and the Series E Notes,
respectively, or, the appropriate Applicable Ownership Interest
in the Treasury Portfolio equal to the aggregate principal amount
of the Pledged Treasury Securities at maturity, in exchange for
the release of such Pledged Debt Securities or appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement.
The Company shall have the right, at any time prior to the
Second Purchase Contract Settlement Date, to defer the payment of
any or all of the Contract Adjustment Payments otherwise payable
on any Payment Date to a date no later than the Purchase Contract
Settlement Date next succeeding the date such deferral commences,
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. In connection with any Contract Adjustment Payments
so deferred, additional Contract Adjustment Payments will accrue
on the amounts so deferred at the rate of 9.75% 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 next succeeding the date such
deferral commences.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the
next succeeding Purchase Contract Settlement Date, the Holder of
this Growth PRIDES Certificate will receive on such 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 Growth PRIDES Certificate divided by (y) the Applicable
Market Value related to such Purchase Contract Settlement Date.
In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments, then, until the Deferred
Contract Adjustment Payments have been paid, the Company shall
not declare or pay dividends on, make distributions with respect
to, or redeem, purchase or acquire, or make a liquidation payment
with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases
or acquisitions of capital stock of the Company in connection
with the satisfaction by the Company of its obligations under any
employee or agent 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 its capital stock, (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).
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, and the rights and
obligations of the 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 Second 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 Growth PRIDES Register. Upon and
after the occurrence of a Termination Event, the Collateral Agent
shall release the Treasury Securities forming a part of the
Growth PRIDES evidenced hereby from the Pledge in accordance with
the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the
Purchase Contract Agreement, a Holder of Growth PRIDES may settle
the related Purchase Contracts in their entirety on or prior to
the second Business Day immediately preceding either Purchase
Contract Settlement Date, but only in integral multiples of 40
Growth PRIDES. In order to exercise the right to effect any such
early settlement (an "Early Settlement") with respect to any
Purchase Contracts evidenced by this Growth PRIDES Certificate,
the Holder of this Growth PRIDES Certificate shall deliver this
Growth PRIDES 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 the sum of (i)(A) $50
times the number of Purchase Contracts being settled, if settled
on or prior to the second Business Day immediately preceding the
First Purchase Contract Settlement Date, or (B) $25 times the
number of Purchase Contracts being settled, if settled between
the First Purchase Contract Settlement Date and the second
Business Day immediately preceding the Second Purchase Contract
Settlement Date, plus in either case, (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 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 Growth PRIDES as to which Early
Settlement is effected equal to the applicable Early Settlement
Rate which shall be equal to 1.0164 newly issued shares of Common
Stock per Purchase Contract (the "First Early Settlement Rate")
if settled prior to the First Purchase Contract Settlement Date,
and equal to .5082 newly issued shares of Common Stock per
Purchase Contract (the "Second Early Settlement Rate" and with
the First Early Settlement Rate, each, an "Early Settlement
Rate") if settled after the First Purchase Contract Settlement
Date; provided however, that upon the Early Settlement of the
Purchase Contracts, (i) the Holder thereof will forfeit the right
to receive any Deferred Contract Adjustment Payments, if any, on
such Purchase Contracts, (ii) the Holder's right to receive
additional Contract Adjustment Payments in respect of such
Purchase Contracts will terminate, and (iii) no adjustment will
be made to or for the Holder on account of Deferred Contract
Adjustment Payments, or any amount accrued in respect of Contract
Adjustment Payments. Each 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 Growth PRIDES
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 Growth PRIDES Certificate. The
Company covenants and agrees, and the Holder, by its acceptance
hereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
The Holder of this Growth PRIDES Certificate, by its
acceptance hereof, authorizes the Agent to enter into and perform
the related Purchase Contracts forming part of the Growth PRIDES
evidenced hereby on its 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 Growth PRIDES 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 of the Pledged Treasury
Securities on each Purchase Contract Settlement Date shall be
paid by the Collateral Agent to the Company in satisfaction of
such Holder's obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such
payments.
The Holder of this Growth PRIDES Certificate, by its
acceptance hereof, covenants and agrees to treat itself as the
owner, for United States federal, state and local income and
franchise tax purposes, of the Treasury Securities forming part
of the Growth PRIDES evidenced hereby.
Subject to certain exceptions, the provisions of the
Purchase Contract Agreement may be amended with the consent of
the Holders of a majority of the Purchase Contracts. In
addition, certain amendments to the Purchase Contract Agreement
may be made without any consent of the Holders as provided in the
Purchase Contract Agreement.
THE PURCHASE CONTRACTS EVIDENCED HEREBY SHALL FOR ALL
PURPOSES BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
The Company and the Agent and any agent of the Company or
the Agent may treat the Person in whose name this Growth PRIDES
Certificate is registered on the Growth PRIDES Register as the
owner of the Growth PRIDES 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, in accordance with the Purchase Agreement, entitle the
Holder to any of the rights of a holder of shares of Common
Stock.
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Agent during regular business
hours of the Agent.
Unless the certificate of authentication hereon has been
executed by the Agent by manual signature, this Growth PRIDES
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.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed.
TEXAS UTILITIES COMPANY
By:
--------------------------
Name: Robert S. Shapard
Title:Treasurer
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder
under the Purchase Contracts
evidenced hereby)
By: The Bank of New York,
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 Growth PRIDES Certificates referred to in
the within-mentioned Purchase Contract Agreement.
THE BANK OF NEW YORK,
as Purchase Contract Agent
and Trustee
By:
--------------------------
Authorized Signatory
<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 Growth PRIDES Certificate and all rights thereunder,
hereby irrevocably constituting and appointing
-----------------------------------------------------------------
attorney to transfer said Growth PRIDES Certificate 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 Growth PRIDES
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
[First] [Second] Purchase Contract Settlement Date of the
Purchase Contracts underlying the number of Growth PRIDES
evidenced by this Growth PRIDES 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 Growth PRIDES 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 Growth PRIDES evidenced by this Growth PRIDES
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
Growth PRIDES Certificate representing any Growth PRIDES
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
Growth PRIDES 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:
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
<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:
=================================================================
PRINCIPAL
AMOUNT OF SIGNATURE
AMOUNT OF AMOUNT OF THIS GLOBAL OF AUTHO-
DECREASE IN INCREASE IN CERTIFICATE RIZED
PRINCIPAL PRINCIPAL FOLLOWING OFFICER OF
AMOUNT OF AMOUNT OF SUCH TRUSTEE OR
THE GLOBAL THE GLOBAL DECREASE OR SECURITIES
DATE CERTIFICATE CERTIFICATE INCREASE CUSTODIAN
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
=================================================================
<PAGE>
EXHIBIT C
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
[First] [Second] Purchase Contract Settlement Date, (in lawful
money of the United States by [certified or cashiers check or]
wire transfer, 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
[First] [Second] 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 [Income PRIDES] [Growth PRIDES].
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.
Please print name and address of Registered Holder:
-------------------- -----------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
------------------------
------------------------
=================================================================
TEXAS UTILITIES COMPANY,
THE CHASE MANHATTAN BANK
AS COLLATERAL AGENT, CUSTODIAL AGENT
AND SECURITIES INTERMEDIARY
AND
THE BANK OF NEW YORK
AS PURCHASE CONTRACT AGENT
----------------------
PLEDGE AGREEMENT
----------------------
DATED AS OF JULY 1, 1998
=================================================================
<PAGE>
TABLE OF CONTENTS
Page No.
--------
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. Definitions . . . . . . . . . . . . . . . . . 2
SECTION 2. Pledge; Control and Perfection . . . . . . . . 5
SECTION 2.1. The Pledge. . . . . . . . . . . . . . . . 6
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 Growth PRIDES. . . . . . . . 9
SECTION 4.2. Substitution for Treasury Securities and
the Creation of Income PRIDES. . . . . . 11
SECTION 4.3. Termination Event . . . . . . . . . . . . 12
SECTION 4.4. Cash Settlement . . . . . . . . . . . . . 12
SECTION 4.5. Early Settlement . . . . . . . . . . . . 14
SECTION 4.6. Application of Proceeds; Settlement . . . 15
SECTION 5. Voting Rights -- Debt Securities . . . . . . . 17
SECTION 6. Rights and Remedies; Tax Event Redemption . . 17
SECTION 6.1. Rights and Remedies of the Collateral
Agent . . . . . . . . . . . . . . . . . . 17
SECTION 6.2. Tax Event Redemption . . . . . . . . . . 18
SECTION 6.3. Substitutions . . . . . . . . . . . . . . 19
SECTION 7. Representations and Warranties; Covenants . . 19
SECTION 7.1. Representations and Warranties . . . . . 19
SECTION 7.2. Covenants . . . . . . . . . . . . . . . . 19
SECTION 8. The Collateral Agent . . . . . . . . . . . . . 20
SECTION 8.1. Appointment, Powers and Immunities . . . 20
SECTION 8.2. Instructions of the Company . . . . . . . 21
SECTION 8.3. Reliance by Collateral Agent . . . . . . 21
SECTION 8.4. Rights in Other Capacities . . . . . . . 21
SECTION 8.5. Non-Reliance on Collateral Agent . . . . 21
SECTION 8.6. Compensation and Indemnity. . . . . . . . 22
SECTION 8.7. Failure to Act. . . . . . . . . . . . . . 22
SECTION 8.8. Resignation of Collateral Agent. . . . . 23
SECTION 8.9. Right to Appoint Agent or Advisor . . . . 23
SECTION 8.10. Survival . . . . . . . . . . . . . . . . 24
SECTION 8.11. Exculpation . . . . . . . . . . . . . . . 24
SECTION 9. Amendment . . . . . . . . . . . . . . . . . . 24
SECTION 9.1. Amendment Without Consent of Holders . . 24
SECTION 9.2. Amendment with Consent of Holders . . . . 24
SECTION 9.3. Execution of Amendments . . . . . . . . . 25
SECTION 9.4. Effect of Amendments . . . . . . . . . . 25
SECTION 9.5. Reference to Amendments . . . . . . . . . 25
SECTION 10. Miscellaneous . . . . . . . . . . . . . . . . 26
SECTION 10.1. No Waiver . . . . . . . . . . . . . . . . 26
SECTION 10.2. Governing Law . . . . . . . . . . . . . . 26
SECTION 10.3. Notices . . . . . . . . . . . . . . . . . 26
SECTION 10.4. Successors and Assigns . . . . . . . . . 27
SECTION 10.5. Counterparts . . . . . . . . . . . . . . 27
SECTION 10.6. Severability . . . . . . . . . . . . . . 27
SECTION 10.7. Expenses, etc. . . . . . . . . . . . . . 27
SECTION 10.8. Security Interest Absolute . . . . . . . 27
EXHIBIT A: Instruction From Purchase Contract Agent to
Collateral Agent . . . . . . . . . . . . . . A-1
EXHIBIT B: Instruction to Purchase Contract Agent . . . B-1
EXHIBIT C: Instruction to Custodial Agent Regarding
Remarketing . . . . . . . . . . . . . . . . C-1
EXHIBIT D: Instruction to Custodial Agent Regarding
Withdrawal From Remarketing . . . . . . . . D-1
<PAGE>
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of July 1, 1998 (this
"Agreement"), by and among Texas Utilities Company, a Texas
corporation (the "Company"), as pledgee, The Chase Manhattan
Bank, a New York banking corporation, 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 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 The Bank of
New York, a New York banking corporation, 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 14,950,000 new securities (the "Securities") of
the Company.
The Securities will initially consist of 13,000,000
units and include (A) 11,700,000 units (referred to as "Income
PRIDES") with a stated amount, per Income PRIDES, equal to $50
(the "Stated Amount") and (B) 1,300,000 units (referred to as
"Growth PRIDES") with a face amount, per Growth PRIDES, equal to
the Stated Amount. Each Income PRIDES will initially be comprised
of (a) a stock purchase contract (as modified and supplemented
and in effect from time to time, a "Purchase Contract") under
which (i) the Holder will purchase from the Company not later
than August 16, 2001 ("First Purchase Contract Settlement Date"),
for $25 in cash, a number of newly issued shares of common stock,
without par value, of the Company ("Common Stock") equal to the
applicable Settlement Rate (as defined in the Purchase Contract
Agreement), (ii) the Holder will purchase from the Company not
later than August 16, 2002 ("Second Purchase Contract Settlement
Date", and with the First Purchase Contract Settlement Date, each
a "Purchase Contract Settlement Date"), for $25 in cash, a number
of newly issued shares of Common Stock equal to the applicable
Settlement Rate and (iii) the Company will pay certain Contract
Adjustment Payments to the Holders as provided in the Purchase
Contract Agreement, and (b) either (A)(i) prior to the First
Purchase Contract Settlement Date, beneficial ownership of a
6.37% Series D Senior Note due 2003 of the Company ("Series D
Note"), having a principal amount of $25, and a 6.50% Series E
Senior Note due 2004 of the Company ("Series E Note", and
together with the Series D Note, the "Debt Securities"), having a
principal amount of $25, and (ii) from the First Purchase
Contract Settlement Date to the Second Purchase Contract
Settlement Date, beneficial ownership of a Series E Note, having
a principal amount of $25 or (B) upon the occurrence of a Tax
Event Redemption prior to the Second Purchase Contract Settlement
Date, the appropriate Applicable Ownership Interest in the
Treasury Portfolio (in each case, as defined herein). Each
Growth PRIDES will initially consist of a unit with a face amount
equal to the Stated Amount comprised of (a) a Purchase Contract
under which (i) the Holder will purchase from the Company not
later than the First Purchase Contract Settlement Date, for $25
in cash, a number of newly issued shares of Common Stock equal to
the applicable Settlement Rate, (ii) the Holder will purchase
from the Company not later than the Second Purchase Contract
Settlement Date, for $25 in cash, a number of newly issued shares
of Common Stock of the Company equal to the applicable Settlement
Rate and (iii) the Company will pay certain Contract Adjustment
Payments to the Holders as provided in the Purchase Contract
Agreement, and (b) (i) prior to the First Purchase Contract
Settlement Date, a 1/40 undivided beneficial ownership interest
in a 5.43% zero-coupon U.S. Treasury Security having a principal
amount at maturity equal to $1,000 and maturing on August 15,
2001 (CUSIP No. 912820 BB 2) ("3-Year Treasury Security") and a
1/40 undivided beneficial ownership interest in a 5.45% zero
coupon U.S. Treasury Security having a principal amount at
maturity equal to $1,000 and maturing on August 15, 2002 (CUSIP
No. 912820 BE 6) ("4-Year Treasury Security" and with the 3-Year
Treasury Security, each a "Treasury Security") and (ii) from the
First Purchase Contract Settlement Date to the Second Purchase
Contract Settlement Date, a 1/40 undivided beneficial interest in
a 4-Year Treasury Security.
Pursuant to the terms of the Purchase Contract
Agreement, the Company may issue up to 1,950,000 additional
Securities and, if the Company issues such additional Securities,
the related Debt Securities or Treasury Securities will be
pledged hereunder.
Pursuant to the terms of the Indenture (as defined
below), the Company will issue the Series D Notes and the Series
E Notes in equal aggregate principal amounts which together will
be equal to or greater than the aggregate Stated Amount of all
Income PRIDES.
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, and the Treasury Securities (and the
applicable Ownership Interest in the Treasury Portfolio) will be
beneficially owned by the Holders but will be held in book-entry
form by the Securities Intermediary 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) terms not otherwise defined herein are used herein
with the meaning ascribed to them in the Purchase Contract
Agreement.
"3-YEAR TREASURY SECURITY" has the meaning specified in
the Recitals.
"4-YEAR TREASURY SECURITY" has the meaning specified in
the Recitals.
"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 C 27865) maintained at The Chase Manhattan Bank in the
name "The Bank of New York, as Purchase Contract Agent on behalf
of the holders of Securities subject to the security interest of
The Chase Manhattan Bank as Collateral Agent under the Pledge
Agreement, 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 Agreement.
"COMMON STOCK" has the meaning specified in the
Recitals.
"COMPANY" means the Person named as the "Company" in
the first paragraph of this Agreement until a successor shall
have become such, and thereafter "Company" shall mean such
successor.
"CUSTODIAL AGENT" has the meaning specified in the
first paragraph of this Agreement.
"DEBT SECURITIES" has the meaning specified in the
Recitals.
"INDENTURE" means the Indenture, dated as of July 1,
1998 between the Company and the Trustee under which the Debt
Securities are to be issued.
"INTERMEDIARY" means any entity that in the ordinary
course of its business maintains securities accounts for others
and is acting in that capacity.
"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 U.S. $200 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.
"REMAINING STATED AMOUNT" means $25.
"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) except as otherwise provided in Section 2.1
hereof, 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" has the meaning specified in the
Recitals.
"TRUSTEE" means The Bank of New York, 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 of either series, 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, and the
Purchase Contract Agent, as such 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 and the Purchase Contract
Agent (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 Income
PRIDES 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 Income PRIDES, and the Treasury
Securities comprising a part of the Growth PRIDES, to be
Transferred to the Collateral Agent for the benefit of the
Company. Such Debt Securities shall be Transferred by physically
delivering such Debt Securities to the Collateral Agent endorsed
in blank. 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, Treasury Securities or Treasury Portfolio subject to
the Pledge, excluding any Debt Securities or Treasury Securities
or interest in the Treasury Portfolio released from the Pledge as
provided in Section 4 hereof, are hereinafter referred to as
"Pledged Debt Securities", the "Pledged Treasury Securities," or
"Pledged Applicable Ownership Interest in the Treasury
Portfolio," respectively, and collectively, the "Pledged
Securities." 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. The Collateral Agent
shall have the right to have the Debt Securities or any other
Securities held in physical form reregistered in its name or in
the name of its agent or the Securities Intermediary and credited
to the Collateral Account.
Except as may be required in order to release Debt
Securities (or if a Tax Event Redemption has occurred, the
Applicable Ownership Interest in the Treasury Portfolio) or
Treasury Securities in connection with a Holder's election to
convert its investment from Income PRIDES to Growth PRIDES, or
from Growth PRIDES to Income PRIDES, as the case may be, or
except as otherwise required to release Pledged Securities as
specified herein, neither the Collateral Agent nor the Securities
Intermediary shall relinquish physical possession of any
certificate evidencing Debt Securities (or if a Tax Event
Redemption has occurred, the Applicable Ownership Interest in the
Treasury Portfolio) or Treasury Securities prior to the
termination of this Agreement. If it becomes necessary for the
Collateral Agent to relinquish physical possession of a
certificate in order to release a portion of the Debt Securities
evidenced thereby from the Pledge, the Collateral Agent 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
ten days of the date it relinquished possession. The Collateral
Agent shall promptly notify the Company of its 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
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 Purchase Contract Agent and
the Holders from time to time, acting through the Purchase
Contract Agent, each 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 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 Company, the Collateral Agent or the Purchase Contract
Agent 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.
(e) The Purchase Contract Agent hereby irrevocably
constitutes and appoints the Collateral Agent and the
Company, and each of them severally, with full power of
substitution, as the Purchase Contract Agent's attorney-in-
fact to take on behalf of, and in the name, place and stead
of the Purchase Contract Agent and the Holders, any action
necessary or desirable to perfect and to keep perfected the
security interest in the Collateral referred to in Section
2.1. The grant of such power-of-attorney shall not be
deemed to require of the Collateral Agent any specific
duties or obligations not otherwise assumed by the
Collateral Agent hereunder.
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 principal or interest on such
Pledged Debt Securities, together with any payments of principal
or interest or cash distributions in respect of any other Pledged
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 (A)(ii) or (B)(ii) of
the definition of such term) in the Treasury Portfolio,
as the case may be, and (B) any payments of principal
with respect to any Debt Securities or the appropriate
Applicable Ownership Interest (as specified in clause
(A)(i) or (B)(i) of the definition of such term) in 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 Income PRIDES, 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 Growth PRIDES 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 on the appropriate
Applicable Ownership Interest (as specified in clause
(A)(i) or (B)(i) of the definition of such term) in the
Treasury Portfolio, as the case may be, or the
principal of any Pledged Treasury Securities, to the
Company on the applicable 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
applicable portion of 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 principal on account of any Debt Security
or, if applicable, the appropriate Applicable Ownership Interest
(as specified in clause (A)(i) or (B)(i) of the definition of
such term) that, at the time of such payment, is a Pledged Debt
Security or the appropriate Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, or a Holder of a Growth
PRIDES 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, as the case may be, shall transfer the Proceeds of such
payment of principal on such Pledged Debt Security, appropriate
Applicable Ownership Interest in the Treasury Portfolio so
pledged, or Pledged Treasury Securities, as the case may be, to
the Collateral Agent and the Collateral Agent shall hold such
Proceeds for the benefit of the Company as Collateral Security
for the performance when due by such Holder of its obligations
under the related Purchase Contracts.
SECTION 4. SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF
DEBT SECURITIES.
SECTION 4.1. SUBSTITUTION FOR DEBT SECURITIES AND THE
CREATION OF GROWTH PRIDES.
A Holder of an Income PRIDES may, at any time on or
prior to the fifth Business Day immediately preceding the Second
Purchase Contract Settlement Date, create a Growth PRIDES by
substituting 3-Year Treasury Securities and 4-Year Treasury
Securities for the Series D Notes and the Series E Notes, or for
the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, that form a part of such Income
PRIDES (a "Collateral Substitution") in accordance with this
Section 4.1 and Section 3.13 of the Purchase Contract Agreement;
provided, however, that such Collateral Substitutions may not be
made during the period from the fifth Business Day immediately
preceding the First Purchase Contract Settlement Date through the
First Purchase Contract Settlement Date, except that if a Tax
Event Redemption has occurred and the Treasury Portfolio has
become a component of the Income PRIDES, Holders of such Income
PRIDES may make Collateral Substitutions at any time on or prior
to the second Business Day immediately preceding the Second
Purchase Contract Settlement Date (but not during the period from
the second Business Day immediately preceding the First Purchase
Contract Settlement Date through the First Purchase Contract
Settlement Date). Holders may make Collateral Substitutions (i)
only in integral multiples of 40 Income PRIDES if Debt Securities
are being substituted by Treasury Securities, or (ii) only in
integral multiples of 1,600,000 Income PRIDES if the appropriate
Applicable Ownership Interests in the Treasury Portfolio are
being substituted by Treasury Securities. To create 40 Growth
PRIDES (if a Tax Event Redemption has not occurred), or 1,600,000
Growth PRIDES (if a Tax Event Redemption has occurred), the
Income PRIDES Holder shall
(a) if a Tax Event Redemption has not occurred, (i)
prior to the fifth Business Day preceding the First Purchase
Contract Settlement Date, deposit with the Collateral Agent
a 3-Year Treasury Security having a principal amount at
maturity of $1,000 and a 4-Year Treasury Security having a
principal amount at maturity of $1,000, or (ii) after the
First Purchase Contract Settlement Date and prior to the
fifth Business Day preceding the Second Purchase Contract
Settlement Date, deposit with the Collateral Agent a 4-Year
Treasury Security having a principal amount at maturity of
$1,000, or
(b) if a Tax Event Redemption has occurred, (i) prior
to the second Business Day immediately preceding the First
Purchase Contract Settlement Date, deposit with the
Collateral Agent 3-Year Treasury Securities having an
aggregate principal amount at maturity of $40,000,000 and 4-
Year Treasury Securities having an aggregate principal
amount at maturity of $40,000,000, or (ii) after the First
Purchase Contract Settlement Date and prior to the second
Business Day immediately preceding the Second Purchase
Contract Settlement Date, 4-Year Treasury Securities having
an aggregate principal amount at maturity of $40,000,000,
and
(c) in either case, (i) deliver to the Purchase
Contract Agent cash in an amount equal to the excess of the
Contract Adjustment Payments that would have accrued on the
Growth PRIDES being created by the Holder since the last
Payment Date through the date of such Collateral
Substitution, over the Contract Adjustment Payments that
have accrued over the same time period on the Income PRIDES
being surrendered in connection with such Collateral
Substitution, which amount the Purchase Contract Agent shall
promptly remit to the Company, and (ii) surrender and
transfer 40 Income PRIDES, or in the event a Tax Event
Redemption has occurred, 1,600,000 Income PRIDES to the
Purchase Contract Agent accompanied by a notice to the
Purchase Contract Agent, substantially in the form of
Exhibit B hereto, stating that the Holder has transferred
the relevant types and amounts of Treasury Securities to the
Collateral Agent and requesting that the Purchase Contract
Agent instruct the Collateral Agent to release the
applicable Debt Securities or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case
may be, underlying such Income PRIDES, whereupon the
Purchase Contract Agent shall promptly give such instruction
to the Collateral Agent, substantially in the form of
Exhibit A hereto.
Upon receipt of Treasury Securities described in (a) or
(b) above, as appropriate, from a Holder of Income PRIDES and the
related instruction from the Purchase Contract Agent described in
(c) above, the Collateral Agent shall release the Pledged Debt
Securities or the appropriate Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, and shall promptly
Transfer such Pledged Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, free and clear of the lien, pledge or security
interest created hereby, to the Purchase Contract Agent.
SECTION 4.2. SUBSTITUTION FOR TREASURY SECURITIES AND THE
CREATION OF INCOME PRIDES.
A Holder of a Growth PRIDES may, at any time on or
prior to the fifth Business Day immediately preceding the Second
Purchase Contract Settlement Date, create Income PRIDES by (a)
depositing with the Collateral Agent Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, having an aggregate principal
amount equal to the aggregate principal amount of the Treasury
Securities comprising part of the Growth PRIDES in accordance
with this Section 4.2 and Section 3.14 of the Purchase Contract
Agreement; provided, however, that such Collateral Substitutions
may not be made during the period from the fifth Business Day
immediately preceding the First Purchase Contract Settlement Date
through the First Purchase Contract Settlement Date, except that
if a Tax Event Redemption has occurred and the Treasury Portfolio
has become a component of the Income PRIDES, Holders of Growth
PRIDES may make Collateral Substitutions at any time on or prior
to the second Business Day immediately preceding the Second
Purchase Contract Settlement Date (but not during the period from
the second Business Day immediately preceding the First Purchase
Contract Settlement Date through the First Purchase Contract
Settlement Date). Holders of Growth PRIDES may establish Income
PRIDES only (i) in integral multiples of 40 Growth PRIDES for 40
Income PRIDES if a Tax Event Redemption has not occurred, or (ii)
in integral multiples of 1,600,000 Growth PRIDES for 1,600,000
Income PRIDES if a Tax Event Redemption has occurred. To create
40 Income PRIDES (if a Tax Event Redemption has not occurred), or
1,600,000 Income PRIDES (if a Tax Event Redemption has occurred),
the Growth PRIDES Holder shall
(a) if a Tax Event Redemption has not occurred, (i)
prior to the fifth Business Day preceding the First Purchase
Contract Settlement Date, deposit with the Collateral Agent
$1,000 in aggregate principal amount of Series D Notes and
$1,000 in aggregate principal amount of Series E Notes, or
(ii) after the First Purchase Contract Settlement Date,
deposit with the Collateral Agent $1,000 in aggregate
principal amount of Series E Notes, or
(b) if a Tax Event Redemption has occurred prior to
the second Business Day immediately preceding the Second
Purchase Contract Settlement Date, deposit with the
Collateral Agent the Applicable Ownership Interest in
Treasury Portfolio for each Income PRIDES being created by
the Holder, and having an aggregate principal amount of
$80,000,000, or if after the First Purchase Contract
Settlement Date, $40,000,000, and
(c) in either case, transfer and surrender the 40
related Growth PRIDES, or in the event a Tax Event
Redemption has occurred, the 1,600,000 related Growth PRIDES
to the Purchase Contract Agent accompanied by a notice to
the Purchase Contract Agent, substantially in the form of
Exhibit B hereto, stating that the Holder has transferred
the relevant amount of Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, to the Collateral Agent and requesting that
the Purchase Contract Agent instruct the Collateral Agent to
release the Treasury Securities underlying such Growth
PRIDES, whereupon the Purchase Contract Agent shall promptly
give such instruction to the Collateral Agent, substantially
in the form of Exhibit A hereto.
Upon receipt of Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, described in (a) or (b) above, as appropriate from a
Holder of Growth PRIDES and the related instruction described in
(c) above from the Purchase Contract Agent, the Collateral Agent
shall release the related Pledged Treasury Securities and shall
promptly Transfer such Pledged Treasury Securities, free and
clear of the 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 in
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 Income PRIDES and the
Growth PRIDES, 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 the Pledged Treasury Securities, as the
case may be, as provided by this Section 4.3, any Holder may, and
the Purchase Contract Agent shall, upon receipt from the Holders
of reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by the Purchase Contract
Agent in compliance with this paragraph, (i) use its reasonable
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) any such Holder or 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 any Holder may, and 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 the Pledged Treasury Securities, as the case may be,
as provided by this Section 4.3 or (ii) commence an action or
proceeding in the court with jurisdiction of the Company's case
under the Bankruptcy Code 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 Income PRIDES or Growth PRIDES 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 the applicable portion of its
Purchase Contract with Cash and (ii) payment by such Holder
of the amount required to settle the applicable portion of
such Purchase Contract on or prior to 11:00 a.m., New York
City time, on the Business Day immediately preceding a
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 such 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 such 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 Holder.
(b) If in connection with a Purchase Contract
Settlement Date a Holder of an Income PRIDES (unless a Tax
Event Redemption has occurred) 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 a default under the
related Purchase Contract and hereunder, the Holder shall be
deemed to have consented to the disposition of the related
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, and
Section 4.6 hereof, and the Collateral Agent, for the
benefit of the Company, will exercise its rights as a
secured party with respect to applicable Pledged Debt
Securities (which shall be the Series D Notes in connection
with the First Purchase Contract Settlement Date and the
Series E Notes in connection with the Second Purchase
Contract Settlement Date) at the direction of the Company to
cause the remarketing of such Pledged Debt Securities. If a
Holder of an Income PRIDES (unless a Tax Event Redemption
has occurred) does notify the Purchase Contract 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, such failure shall
constitute a default under the related Purchase Contract and
hereunder, and the applicable Pledged 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 a
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 in connection with a Purchase Contract
Settlement Date a Holder of a Growth PRIDES or, if a Tax
Event Redemption has occurred, an Income PRIDES, 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 Growth PRIDES or, if a Tax Event Redemption
has occurred, an Income PRIDES, notifies the Purchase
Contract 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 a default under the related
Purchase Contract and hereunder by such Holder and upon the
maturity of the related Pledged Treasury Securities or the
Treasury Portfolio, if any, held by the Collateral Agent on
the Business Day immediately preceding the applicable
Purchase Contract Settlement Date, the principal amount of
such Pledged Treasury Securities or the portion of the
Treasury Portfolio corresponding to such Purchase Contract
received by the Collateral Agent shall, upon written
direction of the Company, be invested promptly in Permitted
Investments. On the applicable 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 appropriate related Pledged Treasury
Securities or Applicable Ownership Interest in the Treasury
Portfolio (which shall be, in the case of the First Purchase
Contract Settlement Date, the 3-Year Treasury Securities or
the portion of the Applicable Ownership Interest in the
Treasury Portfolio (as specified in clause (A) of the
definition thereof), and in the case of the Second Purchase
Contract Settlement Date, the 4-Year Treasury Securities or
the Applicable Ownership Interest in the Treasury Portfolio
(specified in clause (B) of such definition), 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 Growth
PRIDES or Income PRIDES when received.
(d) Series D Notes, 3-Year Treasury Securities and the
Applicable Ownership Interest in the Treasury Portfolio in
U.S. Treasury Securities maturing on or prior to August 15,
2001 are pledged to secure Holders' obligations under the
Purchase Contracts on the First Purchase Contract Settlement
Date. Series E Notes, 4-Year Treasury Securities and the
Applicable Ownership Interest in the Treasury Portfolio in
U.S. Treasury Securities maturing on or prior to August 15,
2002 are pledged to secure Holders' obligations under the
Purchase Contracts on the Second Purchase Contract
Settlement Date.
On the First Purchase Contract Settlement Date, the
Collateral Agent shall exercise remedies with respect to
(and have remarketed or otherwise sell in accordance with
this Agreement) only the Series D Notes, 3-Year Treasury
Securities (or the corresponding Applicable Ownership
Interest in the Treasury Portfolio) and associated payments
and Proceeds; on the Second Purchase Contract Settlement
Date the Collateral Agent may exercise remedies with respect
to all then remaining Collateral.
A default by a Holder in the performance of its
obligations under a Purchase Contract in connection with the
First Purchase Contract Settlement shall not in itself
constitute a default in the performance of its obligations
under such Purchase Contract on the Second Purchase Contract
Settlement Date (except in connection with Early
Settlement).
SECTION 4.5. EARLY SETTLEMENT.
Upon written notice to the Collateral Agent by the
Purchase Contract Agent that a Holder of a Security has elected
to effect Early Settlement of its entire obligation under the
Purchase Contract forming a part of such Security in accordance
with the terms of the Purchase Contracts and the Purchase
Contract Agreement, and that the Purchase Contract Agent has
received from such Holder, and paid to the Company as confirmed
in writing by the Company, the related Early Settlement Amount
pursuant to the terms of the Purchase Contract 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) the Pledged Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury
Portfolio in the case of a Holder of Income PRIDES or (b) the
Pledged Treasury Securities in the case of a Holder of Growth
PRIDES, that had been components of such Security and shall
Transfer such Pledged Debt Securities, Applicable Ownership
Interest in 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
such Holder.
SECTION 4.6. APPLICATION OF PROCEEDS; SETTLEMENT.
(a) In connection with a Purchase Contract Settlement
Date, in the event a Holder of Income PRIDES (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 Income
PRIDES, 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 such Purchase Contract Settlement
Date, without any instruction from such Holder of Income
PRIDES, present the applicable related Pledged Debt
Securities (i.e., Series D Notes in the case of the First
Purchase Contract Settlement Date and Series E Notes in the
case of the Second Purchase Contract Settlement Date) to the
Remarketing Agent for remarketing. Upon receiving such
Pledged Debt Securities, the Remarketing Agent, pursuant to
the terms of the Remarketing 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 interest, if any, thereon. After
deducting as the Remarketing Fee an amount not exceeding 25
basis points (.25%) of the aggregate Value of the related
Pledged Debt Securities from any amount of such Proceeds in
excess of the aggregate Value of such Debt Securities, plus
such accrued and unpaid interest on 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 applicable Purchase Contract Settlement Date,
the Collateral Agent shall apply that portion of the
Proceeds from such remarketing equal to the aggregate Value
to satisfy in full the obligations of such Holders of Income
PRIDES to pay the Purchase Price on such Purchase Contract
Settlement Date 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 Income PRIDES at a price
not less than 100% of the aggregate Value of such Pledged
Debt Securities plus any accrued and unpaid interest, or if
the remarketing does not occur because a condition precedent
to it has not been fulfilled, thus resulting in a Failed
Remarketing, the Collateral Agent, for the benefit of the
Company will, at the written direction of the Company,
retain or dispose of such 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 Growth PRIDES or, if a
Tax Event Redemption has occurred, an Income PRIDES, has not
made an Early Settlement of the Purchase Contract(s)
underlying its Growth PRIDES or Income PRIDES, as the case
may be, such Holder shall be deemed to have elected to pay
for the shares of Common Stock to be issued under the
applicable portions of 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 a 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 Growth PRIDES or Income PRIDES, the Collateral
Agent shall apply the Proceeds of the related Pledged
Treasury Securities or Treasury Portfolio to the related
settlement of such Purchase Contracts on the applicable
Purchase Contract Settlement Date. In the event the sum of
the Proceeds from the related Pledged Treasury Securities or
related Applicable Ownership Interest in the Treasury
Portfolio and the investment earnings from the investment in
overnight Permitted Investments is in excess of the
aggregate Purchase Price of the applicable portions of the
Purchase Contracts being settled thereby on a Purchase
Contract Settlement Date, 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, on or prior
to the fifth Business Day immediately preceding a Purchase
Contract Settlement Date, but no earlier than the Payment
Date immediately preceding such Purchase Contract Settlement
Date, holders of Separate Debt Securities may elect to have
their Separate Debt Securities of the appropriate series (in
the case of the First Purchase Contract Settlement Date, the
Series D Notes, and in the case of the Second Purchase
Contract Settlement Date, the Series E Notes), remarketed by
delivering such 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
applicable 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 applicable Purchase Contract
Settlement Date, the Custodial Agent will deliver to the
Remarketing Agent for remarketing all Separate Debt
Securities of the applicable series 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 interest thereon, 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 the applicable series of such holders at a price not less
than 100% of the aggregate Value of such Separate Debt
Securities plus accrued and unpaid interest or, if a
condition to the remarketing shall not have been fulfilled,
thus in either case 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; 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 (or any successor thereto) as in effect in
the State of New York from time to time (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. Wherever reference is made in this Agreement to
any section of the Code, such reference shall be deemed to
include a reference to any provision of the Code which is a
successor to, or amendment of, such section. 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 and application of the proceeds in full
satisfaction of the Holders' obligations under the Purchase
Contracts.
(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)(i) or B(i) 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)(i)
or B(i) 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)(i)
or B(i) 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) principal of, or interest
on, the Pledged Debt Securities, (ii) the principal amount
of the Pledged Treasury Securities, or (iii) the appropriate
Applicable Ownership Interest in the Treasury Portfolio,
subject, in each case, to the provisions of Section 3, and
as otherwise granted herein.
(d) The Purchase Contract Agent individually and as
attorney-in-fact for each Holder of Securities, in the event
such Holder becomes the Holder of Growth PRIDES or Income
PRIDES, 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 Second Purchase Contract Settlement Date, the Collateral
Agent will, upon the written instruction of the Company and the
Purchase Contract Agent, deliver the Applicable Principal Amount
of Pledged Debt Securities to the Trustee for payment of the
Redemption Price. The Collateral Agent shall, or in the event
the Pledged Debt Securities are registered in the name of the
Purchase Contract Agent, the Purchase Contract Agent shall,
direct the Trustee to pay the Redemption Price therefor payable
on the Tax Event Redemption Date on or prior to 12:30 p.m., New
York City time, such Redemption Price to be paid 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 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 Income PRIDES. 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 Income PRIDES to purchase Common
Stock of the Company under the Purchase Contracts constituting a
part of such Income PRIDES, 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 in 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 or physical delivery of the Debt
Securities to the Collateral Agent, 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.
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. The
Collateral Agent, the Custodial Agent and the Securities
Intermediary shall each promptly notify the Company of any third
party claim which may give rise to indemnity hereunder and give
the Company the opportunity to participate in the defense of such
claim with counsel reasonably satisfactory to the indemnified
party, and no such claim shall be settled without the written
consent of the Company, which consent shall not be unreasonably
withheld.
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 without negligence,
willful misconduct, or bad faith on its part 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,
Custodial 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, 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 (subject to the rights of Holders to make
Collateral Substitutions as contemplated by Sections 4.1 and
4.2), 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 in the case of Holders, may be
made and deemed given as provided in Sections 1.5 and 1.6 of the
Purchase Contract Agreement) 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 (except 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: /s/ Robert S. Shapard
-------------------------------
Name: Robert S. Shapard
Title: Treasurer and Assistant
Secretary
Address for Notices:
Texas Utilities Company
1601 Bryan Street
Dallas, Texas 75201
Attention: Treasurer
Telecopy:
<PAGE>
THE BANK OF NEW YORK
as Purchase Contract Agent and as
attorney-in-fact of the Holders
from time to time of the Securities
By: /s/ Walter N. Gitlin
--------------------------------
Name: Walter N. Gitlin
Title: Vice President
Address for Notices:
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust
Administration
Telecopy: (212) 815-5915
THE CHASE MANHATTAN BANK
as Collateral Agent, Custodial
Agent and as Securities
Intermediary
By: /s/ L. O'Brien
--------------------------------
Name: L. O'Brien
Title: Senior Trust Officer
Address for Notices:
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Global Trust Services
Telecopy: (212) 946-8159
<PAGE>
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
The Chase Manhattan Bank, as Collateral Agent
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Global Trust Services
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 July 1, 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 [Income PRIDES] [Growth PRIDES] from time to time,
that the Holder of Securities listed below (the "Holder") has
elected to substitute [$ principal amount at maturity of
-----
Treasury Securities] [$ principal amount of [Series D
-------
Notes] [Series E Notes] [the appropriate Applicable Ownership
Interest in the Treasury Portfolio] in exchange for an equal
Value of Pledged [Series D Notes] [Series E Notes] [the
appropriate Applicable Ownership Interest in the Treasury
Portfolio] [3-Year/4-Year Treasury Securities] held by you in
accordance with the Pledge Agreement and has delivered to us a
notice stating that the Holder has Transferred [Series D Notes]
[Series E Notes] [appropriate Applicable Ownership Interest in
the Treasury Portfolio] [3-Year/4-Year Treasury Securities] to
you, as Collateral Agent. We hereby instruct you, upon receipt of
such [Treasury Securities] [Series D Notes] [Series E Notes]
[appropriate Applicable Ownership Interest in the Treasury
Portfolio] so Transferred, to release the Pledged [Series D
Notes] [Series E Notes] [appropriate Applicable Ownership
Interest in the Treasury Portfolio] [3-Year/4-Year] Treasury
Securities] related to such [Income PRIDES] [Growth PRIDES] 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:
-----
<PAGE>
Please print name and address of registered Holder electing to
substitute [Treasury Securities] [Debt Securities] [appropriate
Applicable Ownership Interest in the Treasury Portfolio] for
[Pledged Debt Securities] [Treasury Portfolio] [Pledged Treasury
Securities]:
------------------------------ ------------------------------
Name Social Security or other
Taxpayer Identification
Number, if any
Address
------------------------------
------------------------------
------------------------------
<PAGE>
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Administration
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,
[$ principal amount at maturity of [3-Year] [4-Year]
-------
Treasury Securities] [$ principal amount of [Series D
-------
Notes] [Series E Notes] [Stated Amount of the appropriate
Applicable Ownership Interest in the Treasury Portfolio] in
exchange for an equal Value of [Pledged [Series D Notes] [Series
E Notes] or the appropriate Applicable Ownership Interest in the
Treasury Portfolio] [Pledged [3-Year] [4-Year] Treasury
Securities] held by the Collateral Agent, in accordance with
Section [4.1] [4.2] of the Pledge Agreement, dated as of July 1,
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 in the Treasury
Portfolio] [Pledged [3-Year] [4-Year] Treasury Securities]
related to such [Income PRIDES] [Growth PRIDES]. Capitalized
terms used herein but not defined shall have the meaning set
forth in the Pledge Agreement.
Dated:
----------------------- ------------------------------
Signature
Signature Guarantee:
----------
<PAGE>
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 July 1, 1998
(the "Pledge Agreement"), among the Company, yourselves, as
Collateral Agent, Securities Intermediary and Custodial Agent,
and The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Income PRIDES and Growth
PRIDES from time to time, that the undersigned elects to deliver
$ principal amount of [Series D Notes] [Series E Notes]
--------
for delivery to the Remarketing Agent on the fourth Business Day
immediately preceding the [First] [Second] 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
[Series D Notes] [Series E Notes] 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 [Series D Notes] [Series E
Notes] 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 [Series D Notes] [Series E
Notes] tendered hereby and that the undersigned is the record
owner of any [Series D Notes] [Series E Notes] 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:
-----
<PAGE>
Please print name and address:
------------------------------ ------------------------------
Name Social Security or other
Taxpayer Identification
Number, if any
Address
------------------------------
------------------------------
------------------------------
<PAGE>
A. PAYMENT INSTRUCTIONS B. DELIVERY INSTRUCTIONS
Proceeds of the remarketing In the event of a Failed
should be paid by check in the Remarketing, [Series D
name of the person(s) set Notes] [Series E Notes]
forth below and mailed to the which are in physical form
address set forth below. should be delivered to the
person(s) set forth below
Name(s) and mailed to the address
----------------------- set forth below.
(Please Print)
Name(s)
Address --------------------
(Please Print)
------------------------------
Address
------------------------------
(Please Print) ---------------------------
------------------------------ ---------------------------
(Zip Code) (Please Print)
------------------------------ ---------------------------
(Tax Identification or (Zip Code)
Social Security Number)
---------------------------
(Tax Identification or
Social Security Number)
In the event of a Failed
Remarketing, [Series D
Notes] [Series E Notes]
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
The Chase Manhattan Bank, as Custodial Agent
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Global Trust Services
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 July 1, 1998
(the "Pledge Agreement") among the Company, yourselves, as
Collateral Agent, Securities Intermediary and Custodial Agent and
The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Income PRIDES and Growth
PRIDES from time to time, that the undersigned elects to withdraw
the $ principal amount of [Series D Notes] [Series E Notes]
-----
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 [Series D Notes]
[Series E Notes] 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:
-----
<PAGE>
Please print name and address:
------------------------------ ------------------------------
Name Social Security or other
Taxpayer Identification
Number, if any
Address
------------------------------
------------------------------
------------------------------
