Registration No. 333-56055
========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------------
TEXAS UTILITIES COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 75-2669310
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1601 Bryan Street
Dallas, Texas 75201
(214) 812-4600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ROBERT A. WOOLDRIDGE, Esq. PETER B. TINKHAM ROBERT J. REGER, JR.,
Worsham, Forsythe Texas Utilities Esq.
& Wooldridge, L.L.P. Company Thelen Reid & Priest LLP
1601 Bryan Street Secretary and 40 West 57th Street
Dallas, Texas 75201 Assistant New York, New York 10019
(214) 979-3000 Treasurer (212) 603-2000
1601 Bryan Street
Dallas, Texas
75201
(214) 812-4600
(NAMES AND ADDRESSES, INCLUDING ZIP CODES, AND TELEPHONE NUMBERS, INCLUDING
AREA CODES, OF AGENTS FOR SERVICE)
--------------------
It is respectfully requested that the Commission send copies of all
notices, orders and communications to:
STEPHEN K. WAITE, Esq.
Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, New York 10004-1490
(212) 858-1000
--------------------
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS.
PREVIOUSLY FILED*
______________________
WITH
FILE AS
EXHIBIT NUMBER EXHIBIT
_______ _______ _______
1(a) ** 1(a) -- Form of Underwriting Agreement
with respect to Common Stock.
1(b) ** 1(b) -- Form of Underwriting Agreement
with respect to Stock Purchase
Units.
1(c) ** 1(c) -- Form of Underwriting Agreement
with respect to Unsecured Senior
Notes.
4(a) 333-12391 3(a) -- Restated Articles of Incorporation
of the Company
4(b) 333-45657 4(b) -- Bylaws of the Company, as amended.
4(c) ** 4(c) -- Form of Indenture relating to the
Debt Securities.
4(d) ** 4(d) -- Form of Officers' Certificate
establishing a series of the Debt
Securities, including Form of the
Debt Securities.
4(e) 4(e) -- Revised form of Purchase Contract
Agreement.
4(f) ** 4(f) -- Form of Pledge Agreement.
4(g) ** 4(g) -- Form of Remarketing Agreement.
5(a) *** -- Opinion of Worsham, Forsythe &
Wooldridge, L.L.P., General
Counsel for the Company.
5(b) *** -- Opinion of Reid & Priest LLP, of
counsel to the Company.
12 ** 12 -- Computation of Ratio of Earnings
to Fixed Charges of the Company.
15 ** 15 -- Letter of Deloitte & Touche LLP
regarding unaudited condensed
interim financial information.
23(a) ** 23(a) -- Independent Auditors' Consent.
23(b) *** 23(b) -- Consents of Worsham, Forsythe &
Wooldridge, L.L.P. and Reid &
Priest LLP are contained in
Exhibits 5(a) and 5(b),
respectively.
24 ** Page II-7 -- Power of Attorney.
25(a) ** 25(a) -- Statement of Eligibility on Form
T-1 of The Bank of New York
relating to Indenture for the
Debt Securities.
25(b) 25(b) -- Statement of Eligibility on Form
T-1 of The Bank of New York as
Purchase Contract Agent and
Trustee under the Purchase
Contract Agreement.
___________________
* Incorporated herein by reference.
** Previously filed with the original Registration Statement (333-56055)
on June 4, 1998.
*** Previously filed with Amendment No. 1 to the Registration Statement
(333-56055) on June 29, 1998.
II-1
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED
THIS AMENDMENT TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY
THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK, AND
STATE OF NEW YORK, ON THE 10TH OF JULY, 1998.
TEXAS UTILITIES COMPANY
BY /s/ Robet J. Reger, Jr.
------------------------------
(ROBERT J. REGER, JR., ESQ.,
ATTORNEY-IN-FACT)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
AMENDMENT TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.
Signature Title Date
--------- ----- ----
Erle Nye* Principal
------------------------------------- Executive
(ERLE NYE, CHAIRMAN OF THE BOARD Officer and
AND CHIEF EXECUTIVE) Director
Michael J. McNally* Principal
------------------------------------- Financial
(MICHAEL J. MCNALLY, EXECUTIVE VICE Officer
PRESIDENT AND CHIEF FINANCIAL
OFFICER)
Jerry W. Pinkerton* Principal
------------------------------------- Accounting
(JERRY W. PINKERTON, CONTROLLER) Officer
J. S. Farrington* Director
-------------------------------------
(J. S. FARRINGTON)
Bayard H. Friedman* Director
-------------------------------------
(BAYARD H. FRIEDMAN)
William M. Griffin* Director July 10, 1998
-------------------------------------
(WILLIAM M. GRIFFIN)
Kerney Laday* Director
-------------------------------------
(KERNEY LADAY)
Margaret N. Maxey* Director
-------------------------------------
(MARGARET N. MAXEY)
James A. Middleton* Director
-------------------------------------
(JAMES A. MIDDLETON)
J. E. Oesterreicher* Director
-------------------------------------
(J. E. OESTERREICHER)
Charles R. Perry* Director
-------------------------------------
(CHARLES R. PERRY)
Herbert H. Richardson* Director
-------------------------------------
(HERBERT H. RICHARDSON)
*BY: /s/ Robert J. Reger, Jr.
------------------------------------------------
(ROBERT J. REGER, JR., ATTORNEY-IN-FACT)
II-2
<PAGE>
EXHIBIT INDEX
PREVIOUSLY FILED*
______________________
WITH
FILE AS
EXHIBIT NUMBER EXHIBIT
_______ _______ _______
1(a) ** 1(a) -- Form of Underwriting Agreement
with respect to Common Stock.
1(b) ** 1(b) -- Form of Underwriting Agreement
with respect to Stock Purchase
Units.
1(c) ** 1(c) -- Form of Underwriting Agreement
with respect to Unsecured Senior
Notes.
4(a) 333-12391 3(a) -- Restated Articles of Incorporation
of the Company
4(b) 333-45657 4(b) -- Bylaws of the Company, as amended.
4(c) ** 4(c) -- Form of Indenture relating to the
Debt Securities.
4(d) ** 4(d) -- Form of Officers' Certificate
establishing a series of the Debt
Securities, including Form of the
Debt Securities.
4(e) 4(e) -- Revised form of Purchase Contract
Agreement.
4(f) ** 4(f) -- Form of Pledge Agreement.
4(g) ** 4(g) -- Form of Remarketing Agreement.
5(a) *** -- Opinion of Worsham, Forsythe &
Wooldridge, L.L.P., General
Counsel for the Company.
5(b) *** -- Opinion of Reid & Priest LLP, of
counsel to the Company.
12 ** 12 -- Computation of Ratio of Earnings
to Fixed Charges of the Company.
15 ** 15 -- Letter of Deloitte & Touche LLP
regarding unaudited condensed
interim financial information.
23(a) ** 23(a) -- Independent Auditors' Consent.
23(b) *** 23(b) -- Consents of Worsham, Forsythe &
Wooldridge, L.L.P. and Reid &
Priest LLP are contained in
Exhibits 5(a) and 5(b),
respectively.
24 ** Page II-7 -- Power of Attorney.
25(a) ** 25(a) -- Statement of Eligibility on Form
T-1 of The Bank of New York
relating to Indenture for the
Debt Securities.
25(b) 25(b) -- Statement of Eligibility on Form
T-1 of The Bank of New York as
Purchase Contract Agent and
Trustee under the Purchase
Contract Agreement.
___________________
* Incorporated herein by reference.
** Previously filed with the original Registration Statement (333-56055)
on June 4, 1998.
*** Previously filed with Amendment No. 1 to the Registration Statement
(333-56055) on June 29, 1998.
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TEXAS UTILITIES COMPANY
AND
THE BANK OF NEW YORK,
AS PURCHASE CONTRACT AGENT
AND TRUSTEE
--------------------------
FORM OF PURCHASE CONTRACT AGREEMENT
--------------------------
DATED AS OF , 1998
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<PAGE>
TABLE OF CONTENTS
[TO BE REVISED]
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 . . . . -14-
Section 1.3 Form of Documents Delivered to Agent . . . . -15-
Section 1.4 Acts of Holders; Record Dates . . . . . . . -15-
Section 1.5 Notices . . . . . . . . . . . . . . . . . . -17-
Section 1.6 Notice to Holders; Waiver . . . . . . . . . -17-
Section 1.7 Effect of Headings and Table of Contents . . -18-
Section 1.8 Successors and Assigns . . . . . . . . . . . -18-
Section 1.9 Separability Clause . . . . . . . . . . . . -18-
Section 1.10 Benefits of Agreement . . . . . . . . . . -18-
Section 1.11 Governing Law . . . . . . . . . . . . . . -19-
Section 1.12 Legal Holidays . . . . . . . . . . . . . -19-
Section 1.13 Counterparts . . . . . . . . . . . . . . -19-
Section 1.14 Inspection of Agreement . . . . . . . . . -19-
ARTICLE II Certificate Forms . . . . . . . . . . . . . . -19-
Section 2.1 Forms of Certificates Generally . . . . . . -19-
Section 2.2 Form of Agent's Certificate of
Authentication . . . . . . . . . . . . . . . -21-
ARTICLE III The Securities . . . . . . . . . . . . . . . . -21-
Section 3.1 Title and Terms; Denominations . . . . . . . -21-
Section 3.2 Rights and Obligations Evidenced by the
Certificates . . . . . . . . . . . . . . . . -21-
Section 3.3 Execution, Authentication, Delivery
and Dating . . . . . . . . . . . . . . . . . -22-
Section 3.4 Temporary Certificates . . . . . . . . . . . -23-
Section 3.5 Registration; Registration of Transfer and
Exchange . . . . . . . . . . . . . . . . . . -23-
Section 3.6 Book-Entry Interests . . . . . . . . . . . . -25-
Section 3.7 Notices to Holders . . . . . . . . . . . . . -25-
Section 3.8 Appointment of Successor Clearing Agency . . -25-
Section 3.9 Definitive Certificates . . . . . . . . . . -26-
Section 3.10 Mutilated, Destroyed, Lost and Stolen
Certificates . . . . . . . . . . . . . . -26-
Section 3.11 Persons Deemed Owners . . . . . . . . . . -27-
Section 3.12 Cancellation . . . . . . . . . . . . . . -28-
Section 3.13 Establishment of Growth PRIDES . . . . . -28-
Section 3.14 Establishment or Reestablishment of
Income PRIDES . . . . . . . . . . . . . . -30-
Section 3.15 Transfer of Collateral upon Occurrence
of Termination Event . . . . . . . . . . -32-
Section 3.16 No Consent to Assumption . . . . . . . . -33-
ARTICLE IV The Debt Securities . . . . . . . . . . . . . -33-
Section 4.1 Payment of Interest; Rights to Interest
Preserved; Interest Rate Reset; Notice . . . -33-
Section 4.2 Notice and Voting . . . . . . . . . . . . . -35-
Section 4.3 Tax Event Redemption . . . . . . . . . . . . -35-
ARTICLE V The Purchase Contracts . . . . . . . . . . . . . -36-
Section 5.1 Purchase of Shares of Common Stock . . . . . -36-
Section 5.2 Contract Adjustment Payments . . . . . . . . -37-
Section 5.3 Deferral of Payment Dates For Contract
Adjustment Payments . . . . . . . . . . . . -38-
Section 5.4 Payment of Purchase Price . . . . . . . . . -39-
Section 5.5 Issuance of Shares of Common Stock . . . . . -44-
Section 5.6 Adjustment of Settlement Rate . . . . . . . -44-
Section 5.7 Notice of Adjustments and Certain Other
Events . . . . . . . . . . . . . . . . . . . -50-
Section 5.8 Termination Event; Notice . . . . . . . . . -50-
Section 5.9 Early Settlement . . . . . . . . . . . . . . -51-
Section 5.10 No Fractional Shares . . . . . . . . . . -53-
Section 5.11 Charges and Taxes . . . . . . . . . . . . -53-
ARTICLE VI Remedies . . . . . . . . . . . . . . . . . . . -54-
Section 6.1 Unconditional Right of Holders to Receive
Contract Adjustment Payments and to
Purchase Common Stock . . . . . . . . . . . -54-
Section 6.2 Restoration of Rights and Remedies . . . . . -54-
Section 6.3 Rights and Remedies Cumulative . . . . . . . -54-
Section 6.4 Delay or Omission Not Waiver . . . . . . . . -54-
Section 6.5 Undertaking for Costs . . . . . . . . . . . -55-
Section 6.6 Waiver of Stay or Extension Laws . . . . . . -55-
Section 6.7 Suits for Enforcement by Agent . . . . . . . -55-
ARTICLE VII The Agent . . . . . . . . . . . . . . . . . . -56-
Section 7.1 Certain Duties and Responsibilities . . . . -56-
Section 7.2 Notice of Default . . . . . . . . . . . . . -57-
Section 7.3 Certain Rights of Agent . . . . . . . . . . -57-
Section 7.4 Not Responsible for Recitals or Issuance
of Securities . . . . . . . . . . . . . . . -58-
Section 7.5 May Hold Securities . . . . . . . . . . . . -58-
Section 7.6 Money Held in Custody . . . . . . . . . . . -58-
Section 7.7 Compensation and Reimbursement . . . . . . . -58-
Section 7.8 Corporate Agent Required; Eligibility . . . -59-
Section 7.9 Resignation and Removal; Appointment
of Successor . . . . . . . . . . . . . . . . -59-
Section 7.10 Acceptance of Appointment by Successor . -60-
Section 7.11 Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . -61-
Section 7.12 Preservation of Information; Communications
to Holders . . . . . . . . . . . . . . . -61-
Section 7.13 No Obligations of Agent . . . . . . . . . -62-
Section 7.14 Tax Compliance . . . . . . . . . . . . . -62-
ARTICLE VIII Supplemental Agreements . . . . . . . . . . -62-
Section 8.1 Supplemental Agreements Without Consent
of Holders . . . . . . . . . . . . . . . . . -62-
Section 8.2 Supplemental Agreements with Consent
of Holders . . . . . . . . . . . . . . . . . -63-
Section 8.3 Execution of Supplemental Agreements . . . . -64-
Section 8.4 Effect of Supplemental Agreements . . . . . -64-
Section 8.5 Reference to Supplemental Agreements . . . . -64-
ARTICLE IX Consolidation, Merger, Sale or Conveyance . . -65-
Section 9.1 Covenant Not to Merge, Consolidate,
Sell or Convey Property Except Under
Certain Conditions . . . . . . . . . . . . . -65-
Section 9.2 Rights and Duties of Successor Corporation . -65-
Section 9.3 Opinion of Counsel Given to Agent . . . . . -66-
ARTICLE X Covenants . . . . . . . . . . . . . . . . . . . . -66-
Section 10.1 Performance Under Purchase Contracts . . -66-
Section 10.2 Maintenance of Office or Agency . . . . . -66-
Section 10.3 Company to Reserve Common Stock . . . . . -67-
Section 10.4 Covenants as to Common Stock . . . . . . -67-
ARTICLE XI TRUST INDENTURE ACT . . . . . . . . . . . . . -67-
Section 11.1 Trust Indenture Act; Application . . . . -67-
Section 11.2 Lists of Holders of Securities . . . . . -67-
Section 11.3 Reports by the Agent . . . . . . . . . . -68-
Section 11.4 Periodic Reports to Agent . . . . . . . . -68-
Section 11.5 Evidence of Compliance with Conditions
Precedent . . . . . . . . . . . . . . . . -68-
Section 11.6 Defaults; Waiver . . . . . . . . . . . . -68-
Section 11.7 Agent's Knowledge of Defaults . . . . . . -69-
Section 11.8 Conflicting Interests . . . . . . . . . . -69-
Section 11.9 Direction of Agent. . . . . . . . . . . . -69-
EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
ABBREVIATIONS . . . . . . . . . . . . . . . . . . . . . A-13
SETTLEMENT INSTRUCTIONS . . . . . . . . . . . . . . . . A-15
ELECTION TO SETTLE EARLY . . . . . . . . . . . . . . . . A-17
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE A-19
EXHIBIT B . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
AGENT'S CERTIFICATE OF AUTHENTICATION . . . . . . . . . . B-4
ABBREVIATIONS . . . . . . . . . . . . . . . . . . . . . B-12
SETTLEMENT INSTRUCTIONS . . . . . . . . . . . . . . . . B-14
ELECTION TO SETTLE EARLY . . . . . . . . . . . . . . . . B-15
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE B-17
EXHIBIT C - INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
COLLATERAL AGENT . . . . . . . . . . . . . . . . C-1
EXHIBIT D - INSTRUCTION TO PURCHASE CONTRACT AGENT . . . . . D-1
EXHIBIT E - NOTICE TO SETTLE BY SEPARATE CASH . . . . . . . . E-1
<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>
PURCHASE CONTRACT AGREEMENT, dated as of , 1998,
between Texas Utilities Company, a Texas corporation (the
"Company"), and The Bank of New York, acting as purchase contract
agent and trustee for the Holders of Securities from time to time
(the "Agent").
RECITALS
The Company has duly authorized the execution and delivery
of this Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when
the Certificates are executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Agent, as
provided in this Agreement, the valid obligations of the Company,
and to constitute these presents a valid agreement of the
Company, in accordance with its terms, have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually agreed as
follows:
ARTICLE I
Definitions and Other Provisions
of General Applications
Section 1.1 Definitions.
For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well
as the singular; and nouns and pronouns of the masculine gender
include the feminine and neuter genders;
(b) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally
accepted accounting principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and
not to any particular Article, Section or other subdivision; and
(d) the following terms have the meanings given to them in
this Section 1.1(d):
"3-Year Treasury Security" means a zero-coupon U.S. Treasury
Security having a principal amount at maturity equal to $1,000
and maturing on August 15, 2001 (CUSIP No. ).
"4-Year Treasury Security" means a zero-coupon U.S. Treasury
Security having a principal amount at maturity equal to $1,000
and maturing on August 15, 2002 (CUSIP No. ).
"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 an
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 on a U.S. Treasury Security included in such Treasury
Portfolio which matures on or prior to August 15, 2001, and (ii)
for each scheduled interest payment date on the Debt Security of
each series that occurs after the Tax Event Redemption Date, a
% 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 % 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.
"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" has the meaning specified in
Section 3.13.
"Common Stock" means the Common Stock, without par value, of
the Company.
"Company" means the Person named as the "Company" in the
first paragraph of this instrument until a successor shall have
become such pursuant to the applicable provision of this
Agreement, and thereafter "Company" shall mean such successor.
"Company Certificate" means a certificate signed by an
Authorized Officer and delivered to the Agent.
"Contract Adjustment Payments" means the fee payable by the
Company in respect of the Purchase Contract issued in connection
with the Income PRIDES and the Growth PRIDES, which fee 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, % per annum of the
Stated Amount of such Income PRIDES, and (ii) for the period from
and after the First Purchase Contract Settlement Date until the
Second Purchase Contract Settlement Date, % per annum of the
Remaining Stated Amount of such Income PRIDES, 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, % 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, % 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" means the percentage rate per annum at which
each 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 Rate" means August 16,
2001.
"Global Debt Security Certificate" means a certificate
evidencing the rights and obligations of a Holder in respect of
the number of Debt Securities specified on such certificate and
which is registered in the name of a Clearing Agency or a nominee
thereof.
"Global Certificate" means a Certificate that evidences all
or part of the Securities and is registered in the name of a
Depositary or a nominee thereof.
"Growth PRIDES" means a Security 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 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 in
the related Income PRIDES Register and/or the Growth PRIDES
Register, as the case may be.
"Income PRIDES" means a Security which represents (i) 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.
"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 and 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 and (B) Income PRIDES for which the
Stated Amount or the Remaining Stated Amount, as the
case may be, of the related Debt Security or the
appropriate Applicable Ownership Interest in the
Treasury Portfolio 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 cancelled by the Agent or
delivered to the Agent for cancellation or deemed
cancelled 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 , 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 Collateral Agent,
the Custodial Agent, the Securities Intermediary and the Agent,
on its own behalf and as attorney-in-fact for the Holders from
time to time of the Securities.
"Predecessor Certificate" means a Predecessor 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 obligating
the Company to (i) sell and the Holder of such Security to
purchase Common Stock and (ii) pay the Holder Contract Adjustment
Payments, if any, on the terms and subject to the conditions set
forth in Article Five hereof.
"Purchase Contract Settlement Date" means, 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 distribution and Contract Adjustment
Payments payable on any Payment Date means, as to any Global
Certificate, the Business Day next preceding such Payment Date,
and as to any other Certificate, a day selected by the Company
which shall be more than one Business Day but less than 60
Business Days prior to such Payment Date.
"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 equal per Debt Security
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.
"Remarketing Agent" has the meaning specified in Section
5.4.
"Remarketing Agreement" means the Remarketing Agreement
dated , 1998 by and between the Company, the
Remarketing Agent and the Purchase Contract Agent.
"Remarketing Fee" has the meaning specified in Section 5.4.
"Reorganization Event" has the meaning specified in Section
5.6(b).
"Reset Agent" means [ ].
"Reset Rate" means, as applicable, the Series D Reset Rate
and 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 the applicable Series D Reset Spread or
Series E Reset Spread and the 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 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 Series D Senior Notes due 2003 to be issued
under the Indenture as of the date hereof.
"Series D Reset Rate" means the Coupon Rate to be determined
for the Series D Notes in connection with the First Purchase
Contract Settlement Date as described in Section 4.1.
"Series D Reset Spread" means, for each series of Debt
Securities, 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 the Company may limit such Series D Reset Rate to
be no higher than the rate on the Two-Year Benchmark Treasury on
such Business Day plus basis points ( %), and
provided further that the Series D Reset Rate shall in no event
exceed the maximum permitted by applicable law. Such market
value may be less than 100.5% if the Company exercises such right
to limit the Series D Reset Spread or if the Series D Reset Rate
were to be limited by applicable law.
"Series E Notes" means the series of Debt Securities of the
Company designated Series E Senior Notes due 2004 to be issued
under the Indenture as of the date hereof.
"Series E Reset Rate" means the Coupon Rate to be determined
for the Series E Notes in connection with the Second Purchase
Contract Settlement Date as described in Section 4.1.
"Series E Reset Spread" means, for each series of Debt
Securities, 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 the Company may limit such Series E Reset Rate to
be no higher than the rate on the Two-Year Benchmark Treasury on
such Business Day plus basis points ( %), and
provided further that the Series E Reset Rate shall in no event
exceed the maximum permitted by applicable law. Such market
value may be less than 100.5% if the Company exercises such right
to limit the Series E Reset Spread or if the Series E Reset Rate
were to be limited by applicable law.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $50.
"Substitution Blackout Period" has the evening specified in
Section 3.13.
"Supplemental Remarketing Agreement" has the meaning
specified in the Remarketing Agreement.
"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 the redemption of Debt
Securities at the option of the Company, in whole but not in
part, on the occurrence of a Tax Event.
"Tax Event Redemption Date" means the date on which Debt
Securities are called for redemption.
"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 , 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, if requested by the Agent, an Opinion of Counsel stating
that, in the opinion of such counsel, all such conditions
precedent, if any, have been complied with, except that in the
case of any such application or request as to which the
furnishing of such documents is specifically required by any
provision of this Agreement relating to such particular
application or request, no additional certificate or opinion need
be furnished.
Every certificate or opinion with respect to compliance with
a condition or covenant provided for in this Agreement shall
include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition
and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
(3) a statement that, in the opinion of each such
individual, he or she has made such examination or
investigation as is necessary to enable such individual to
express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been
complied with.
Section 1.3 Form of Documents Delivered to Agent.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be
so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one
or several documents.
Any certificate or opinion of an officer of the Company may
be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless
such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to the matters upon which his certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect
to such factual matters is in the possession of the Company
unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements,
opinions or other instruments under this Agreement, they may, but
need not, be consolidated and form one instrument.
Section 1.4 Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be
given or taken by Holders may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such
Holders in person or by agent duly appointed in writing;
and,except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are
delivered to the Agent and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such
instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and (subject to
Section 7.1) conclusive in favor of the Agent and the Company, if
made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved in any manner which the
Agent deems sufficient.
(c) The ownership of Securities shall be proved by the
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 cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action
taken by Holders of the requisite number of Outstanding
Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Company, at
its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to
be given to the Agent in writing and to each Holder of Securities
in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this
Section, the Company may designate any date as the "Expiration
Date" and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be
effective unless notice of the proposed new Expiration Date is
given to the Agent in writing, and to each Holder of Securities
in the manner set forth in Section 1.6, on or prior to the
existing Expiration Date. If an Expiration Date is not designated
with respect to any record date set pursuant to this Section, the
Company shall be deemed to have initially designated the 180th
day after such record date as the Expiration Date with respect
thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no
Expiration Date shall be later than the 180th day after the
applicable record date.
Section 1.5 Notices.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or
permitted by this Agreement to be made upon, given or furnished
to, or filed with,
(1) the Agent by any Holder or by the Company shall
be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if made, given, furnished or
filed in writing and personally delivered or mailed,
first-class postage prepaid, to the Agent at 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; or
(2) the Company by the Agent or by any Holder shall
be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if made, given, furnished or
filed in writing and personally delivered or mailed,
first-class postage prepaid, to the Company at Texas
Utilities Company, 1601 Energy Plaza, Dallas, Texas 75201,
Attention: Secretary, or at any other address previously
furnished in writing to the Agent by the Company; or
(3) the Collateral Agent by the Agent, the Company or
any Holder shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if made, given,
furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, addressed to the
Collateral Agent at The Chase Manhattan Bank, 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, provided that no interest
shall accrue or be payable by the Company or any Holder for the
period from and after any such Payment Date, except that, if such
next succeeding Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding
Business Day with the same force and effect as if made on such
Payment Date.
In any case where any Purchase Contract Settlement Date
shall not be a Business Day, then (notwithstanding any other
provision of this Agreement, the 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.
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.
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
except for Certificates authenticated, executed and delivered
upon registration of transfer of, in exchange for, or in lieu of,
other Certificates pursuant to Section 3.4, 3.5, 3.10, 3.13,
3.14, 5.9 or 8.5.
The Certificates shall be issuable only in registered form
and only in denominations of a single 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, each such Treasury Security having
a principal amount equal to $1,000 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.
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 or its Treasurer or one of its Assistant Treasurers,
or its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Certificates may be
manual or facsimile.
Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior
to the authentication and delivery of such Certificates or did
not hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be
valid until such Certificate has been executed on behalf of the
Holder by the manual signature of an authorized signatory of the
Agent, as such Holder's attorney-in-fact. Such signature by an
authorized signatory of the Agent shall be conclusive evidence
that the Holder of such Certificate has entered into the Purchase
Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its
authentication.
No Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there
appears on such Certificate a certificate of authentication
substantially in the form provided for herein executed by an
authorized signatory of the Agent by manual signature, and such
certificate upon any Certificate shall be conclusive evidence,
and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.
Section 3.4 Temporary Certificates.
Pending the preparation of definitive Certificates, the
Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holders, and
deliver, in lieu of such definitive Certificates, temporary
Certificates which are in substantially the form set forth in
Exhibit A or Exhibit B hereto, as the case may be, with such
letters, numbers or other marks of identification or designation
and such legends or endorsements printed, lithographed or
engraved thereon as may be required by the rules of any
securities exchange on which the 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 on or after the Business
Day immediately preceding the earlier of the Purchase Contract
Settlement Date or the Termination Date. In lieu of delivery of
a new Certificate, upon satisfaction of the applicable conditions
specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Agent
shall (i) if a Purchase Contract Settlement Date has occurred,
deliver the shares of Common Stock issuable in respect of the
applicable portions of the Purchase Contracts forming a part of
the Securities evidenced by such Certificate, (ii) in the case of
Income PRIDES, if a Termination Event shall have occurred prior
to a Purchase Contract Settlement Date, transfer the aggregate
Stated Amount or Remaining Stated Amount, as applicable, of the
Debt Securities or the Treasury Portfolio, as applicable,
evidenced thereby, or (iii) in the case of Growth PRIDES, if a
Termination Event shall have occurred prior to the Purchase
Contract Settlement Date, transfer the Treasury Securities
evidenced thereby, in each case subject to the applicable
conditions and in accordance with the applicable provisions of
Article Five hereof.
Section 3.6 Book-Entry Interests.
The Certificates, on original issuance, will be issued in
the form of one or more fully registered Global Certificates, to
be delivered to the Depositary by, or on behalf of, the Company.
Such Global Certificate shall initially be registered on the
books and records of the Company in the name of Cede & Co., the
nominee of the Depositary, and no Beneficial Owner will receive a
definitive Certificate representing such Beneficial Owner's
interest in such Global Certificate, except as provided in
Section 3.9. The Agent shall enter into an agreement with the
Depositary if so requested by the Company. Unless and until
definitive, fully registered Certificates have been issued to
Beneficial Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in
full force and effect;
(b) the Company shall be entitled to deal with the
Clearing Agency for all purposes of this Agreement (including the
payment of Contract Adjustment Payments, if any, and receiving
approvals, votes or consents hereunder) as the Holder of the
Securities and the sole holder of the Global Certificate(s) and
shall have no obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section
3.6 conflict with any other provisions of this Agreement, the
provisions of this Section 3.6 shall control; and
(d) the rights of the Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited
to those established by law and agreements between such
Beneficial Owners and the Clearing Agency and/or the Clearing
Agency Participants. The Clearing Agency will make book entry
transfers among Clearing Agency Participants and receive and
transmit payments of Contract Adjustment Payments to such
Clearing Agency Participants.
Section 3.7 Notices to Holders.
Whenever a notice or other communication to the Holders is
required to be given under this Agreement, the Company or the
Company's agent shall give such notices and communications to the
Holders and, with respect to any Securities registered in the
name of a Clearing Agency or the nominee of a Clearing Agency,
the Company or the Company's agent shall, except as set forth
herein, have no obligations to the Beneficial Owners.
Section 3.8 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities, the Company
may, in its sole discretion, appoint a successor Clearing Agency
with respect to the Securities.
Section 3.9 Definitive Certificates.
If (i) a Clearing Agency elects to discontinue its services
as securities depositary with respect to the Securities and a
successor Clearing Agency is not appointed within 90 days after
such discontinuance pursuant to Section 3.8, (ii) the Company
elects to terminate the book-entry system through the Clearing
Agency with respect to the Securities, or (iii) there shall have
occurred and be continuing a default by the Company in respect of
its obligations under one or more Purchase Contracts, then upon
surrender of the Global Certificates representing the Book-Entry
Interests with respect to the Securities by the Clearing Agency,
accompanied by registration instructions, the Company shall cause
definitive Certificates to be delivered to Beneficial Owners in
accordance with the instructions of the Clearing Agency. The
Company shall not be liable for any delay in delivery of such
instructions and may conclusively rely on and shall be protected
in relying on, such instructions.
Section 3.10 Mutilated, Destroyed, Lost and Stolen
Certificates.
If any mutilated Certificate is surrendered to the Agent,
the Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and deliver
in exchange therefor, a new Certificate at the cost of the
Holder, evidencing the same number of 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 any of them harmless, then, in the absence
of notice to the Company or the Agent that such Certificate has
been acquired by a bona fide purchaser, the Company shall execute
and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver to the Holder, in
lieu of any such destroyed, lost or stolen Certificate, a new
Certificate, evidencing the same number of 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 on or after the
Business Day immediately preceding the earlier of the Second
Purchase Contract Settlement Date or the Termination Date or
after the Purchase Contracts have been terminated. In lieu of
delivery of a new Certificate, upon satisfaction of the
applicable conditions specified above in this Section and receipt
of appropriate registration or transfer instructions from such
Holder, the Agent shall (i) if the Second Purchase Contract
Settlement Date has occurred, deliver the shares of Common Stock
issuable in respect of such portion of the Purchase Contracts
forming a part of the Securities evidenced by such Certificate,
or (ii) if a Termination Event shall have occurred prior to the
Second Purchase Contract Settlement Date, transfer the principal
amount of the Debt Securities, the appropriate Applicable
Ownership Interest in the Treasury Portfolio or the Treasury
Securities, as the case may be, evidenced thereby, in each case
subject to the applicable conditions and in accordance with the
applicable provisions of Article Five hereof.
Upon the issuance of any new Certificate under this Section,
the Company and the Agent may require the payment by the Holder
of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Agent) connected
therewith.
Every new Certificate issued pursuant to this Section in
lieu of any destroyed, lost or stolen Certificate shall
constitute an original additional contractual obligation of the
Company and of the Holder in respect of the Security evidenced
thereby, whether or not the destroyed, lost or stolen Certificate
(and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits
and be subject to all the obligations of this Agreement equally
and proportionately with any and all other Certificates delivered
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Certificates.
Section 3.11 Persons Deemed Owners.
Prior to due presentment of a Certificate for registration
of transfer, the Company and the Agent, and any agent of the
Company or the Agent, may treat the Person in whose name such
Certificate is registered as the owner of the 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 giving effect to
any written certification, proxy or other authorization furnished
by any Clearing Agency (or its nominee), as a Holder, with
respect to such Global Certificate or impair, as between such
Clearing Agency and owners of beneficial interests in such Global
Certificate, the operation of customary practices governing the
exercise of rights of such Clearing Agency (or its nominee) as
Holder of such Global Certificate.
Section 3.12 Cancellation.
All Certificates surrendered for delivery of shares of
Common Stock on or after the 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 cancelled, shall be
promptly cancelled by it. The Company may at any time deliver to
the Agent for cancellation any Certificates previously
authenticated, executed and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Certificates
so delivered shall, upon Issuer Order, be promptly cancelled by
the Agent. No Certificates shall be authenticated, executed on
behalf of the Holder and delivered in lieu of or in exchange for
any Certificates cancelled as provided in this Section, except as
expressly permitted by this Agreement. All cancelled Certificates
held by the Agent shall upon written request be returned to the
Company.
If the Company or any Affiliate of the Company shall acquire
any Certificate, such acquisition shall not operate as a
cancellation of such Certificate unless and until such
Certificate is delivered to the Agent cancelled or for
cancellation.
Section 3.13 Establishment of Growth PRIDES.
A Holder may separate the Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as
applicable, from the related Purchase Contract in respect of an
Income PRIDES by substituting 3-Year Treasury Securities and 4-
Year Treasury Securities for the Series D Note and the Series E
Note, respectively, or for the appropriate Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, which
forms a part of such Income PRIDES (a "Collateral Substitution").
Such 3-Year Treasury Securities shall be in an aggregate
principal amount equal to the aggregate principal amount of the
Series D Notes or the aggregate Stated Amount of the appropriate
Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as
applicable, and shall have a maturity corresponding to the First
Purchase Contract Settlement Date. Such 4-Year Treasury
Securities shall be in an aggregate principal amount equal to the
aggregate principal amount of the Series E Notes or the aggregate
Remaining Stated Amount of the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such
term) in the Treasury Portfolio, as applicable, and shall have a
maturity corresponding to the Second Purchase Contract Settlement
Date. Any such Collateral Substitution may be made at any time
from and after the date of this Agreement and on or prior to the
fifth Business Day immediately preceding the Second Purchase
Contract Settlement Date, in the case of a substitution for Debt
Securities and on or prior to the second Business Day immediately
preceding the Second Purchase Contract Settlement Date, in the
case of a substitution for the appropriate Applicable Ownership
Interest in the Treasury Portfolio, (provided that no Collateral
Substitution may be made during the period from the second
Business Day immediately preceding the First Purchase Contract
Settlement Date through the First Purchase Contract Date
("Substitution Blackout Period")), in each case by (a) depositing
with the Collateral Agent Treasury Securities having an aggregate
principal amount equal to the aggregate principal amount of each
Debt Security comprising part of such Income PRIDES or for the
aggregate Stated Amount, prior to the First Purchase Contract
Settlement Date, or the aggregate Remaining Stated Amount,
subsequent thereto, of the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such
term) in the Treasury Portfolio comprising part of such Income
PRIDES, as the case may be, and (b) (i) by delivering cash in an
amount equal to the excess of the Contract Adjustment Payments
that would have accrued since the last Payment Date through the
date of substitution on the Growth PRIDES being created by the
holder, over the Contract Adjustment Payments that have accrued
over the same time period on the related Income PRIDES, which
amount the Agent shall promptly remit to the Company, and (ii) by
transferring the related Income PRIDES in integral multiples of
40, or in the event a Tax Event Redemption has occurred, in
integral multiples of 1,600,000 Income PRIDES, to the Agent
accompanied by a notice to the Agent, substantially in the form
of Exhibit D hereto, stating that the Holder has transferred the
relevant 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 C hereto.
Upon receipt of the Treasury Securities described in clause (a)
above and the instruction described in clause (b) above, in
accordance with the terms of the Pledge Agreement, the Collateral
Agent will release to the Agent, on behalf of the Holder, Debt
Securities or the appropriate Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, having an aggregate
principal amount corresponding to such Debt Securities or a
corresponding aggregate Stated Amount or Remaining Stated Amount,
as the case may be, of the appropriate Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, from the
Pledge, free and clear of the Company's security interest
therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Income PRIDES;
(ii) transfer the Debt Securities or the
appropriate Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, 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 cancelled 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 Contract
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.
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.
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 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 in 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
is so delivered, as the case may be, or, with respect to an
Income PRIDES, 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.
Holders may make Collateral Substitutions prior to the
Second Purchase Contract Settlement Date (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.
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 Income PRIDES.
Section 3.14 Establishment or Reestablishment of
Income PRIDES.
A Holder of a Growth PRIDES may create or recreate Income
PRIDES at any time, other than during the Substitution Blackout
Period, (i) on or prior to the fifth Business Day immediately
preceding the Second Purchase Contract Settlement Date, if a Tax
Event Redemption has not occurred, and (ii) on or prior to the
second Business Day immediately preceding the Second Purchase
Contract Settlement Date, if a Tax Event Redemption has occurred,
in each case by (a) depositing with the Collateral Agent Debt
Securities or the appropriate Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, having an aggregate
principal amount in the case of the Series D Notes and the Series
E Notes, equal to the aggregate principal amount of the 3-Year
Treasury Securities and 4-Year Treasuries, respectively,
comprising part of the Growth PRIDES or having an aggregate
Stated Amount, prior to the First Purchase Contract Settlement
Date, or aggregate Remaining Stated Rate subsequent thereto, of
the appropriate Applicable Ownership Interest (as defined in
clause (A) of the definition of such term) in the Treasury
Portfolio, as the case may be, and (b) transferring the related
Growth PRIDES in integral multiples of 40, or in the event a Tax
Event Redemption has occurred, in integral multiples of 1,600,000
Income PRIDES, to the Agent accompanied by a notice to the Agent,
substantially in the form of Exhibit D hereto, stating that the
Holder has transferred the relevant amount of Debt Securities or
the appropriate Applicable Ownership Interest 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 C hereto.
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) above and the instruction described in
clause (b) above, in accordance with the terms of the Pledge
Agreement, the Collateral Agent will effect the release of the
Treasury Securities having a corresponding aggregate principal
amount from the Pledge to the Agent free and clear of the
Company's security interest therein, and upon receipt thereof the
Agent shall promptly:
(i) cancel the related Growth PRIDES;
(ii) transfer the Treasury Securities to the Holder;
and
(iii) authenticate, execute on behalf of such
Holder and deliver an Income PRIDES executed by the
Company in accordance with Section 3.3 evidencing the
same number of Purchase Contracts as were evidenced by
the cancelled Growth PRIDES.
Holders who elect to separate Treasury Securities from the
related Purchase Contract and to substitute Debt Securities for
such Treasury Securities shall be responsible for any fees or
expenses payable to the Collateral Agent for its services as
Collateral Agent in respect of the substitution, and the Company
shall not be responsible for any such fees or expenses.
Holders of Growth PRIDES may establish Income PRIDES in
integral multiples of 40 Growth PRIDES for 40 Income PRIDES if a
Tax Event Redemption has not occurred, and in integral multiples
of 1,600,000 Growth PRIDES for 1,600,000 Income PRIDES if a Tax
Event Redemption has occurred.
In the event a Holder making a Collateral Substitution
pursuant to this Section 3.13 fails to effect a book-entry
transfer of the Growth PRIDES or fails to deliver a Growth PRIDES
Certificate to the Agent after depositing Debt Securities with
the Collateral Agent, the Treasury Securities constituting a part
of such Growth PRIDES, 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, with
respect to a Growth PRIDES, 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 a 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 or Growth
PRIDES 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.
Section 3.16 No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be
deemed expressly to have withheld any consent to the assumption
under Section 365 of the Bankruptcy Code or otherwise, of the
Purchase Contract by the Company, receiver, liquidator or a
person or entity performing similar functions, its trustee in the
event that the Company becomes the debtor under the Bankruptcy
Code or subject to other similar state or federal law providing
for reorganization or liquidation.
ARTICLE IV
The Debt Securities
Section 4.1 Payment of Interest; Rights to Interest
Preserved; Interest Rate Reset; Notice.
A payment of interest on any Debt Securities or distribution
with respect to the appropriate Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, which is paid on any
Payment Date shall, subject to receipt thereof by the Agent from
the Collateral Agent as provided by the terms of the Pledge
Agreement, be paid to the Person in whose name the Income PRIDES
Certificate (or one or more Predecessor Income PRIDES
Certificate) 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 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 in effect on 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 Debt Securities
Holders will be notified of such Series D Reset Spread and
Two-Year Benchmark Treasury by the Company. Such notice shall be
sufficiently given to Holders of Debt Securities if published in
an Authorized Newspaper in The City of New York.
The applicable Coupon Rate on the Series E Notes 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 on 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 Debt Securities
Holders will be notified of such Series E Reset Spread and
Two-Year Benchmark Treasury by the Company. Such notice shall be
sufficiently given to Holders of Debt Securities if published in
an Authorized Newspaper in The City of New York.
Not later than 7 calendar days nor more than 15 calendar
days prior to a Reset Announcement Date, the Company will notify
DTC or its nominee (or any successor Clearing Agency or its
nominee) by first-class mail, postage prepaid, to notify the
Beneficial Owners or Clearing Agency Participants holding Income
PRIDES or Growth PRIDES, of such Reset Announcement Date and the
procedures to be followed by such Holders of Series D Notes or
Series E Notes, as applicable, 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 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 and the
Trust shall covenant to such effect in the Declaration.
Section 4.3 Tax Event Redemption.
Upon the occurrence of a Tax Event Redemption prior to the
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. Thereafter, pursuant to the terms of the Pledge
Agreement, the Collateral Agent will apply an amount equal to the
Redemption Amount of such Redemption Price to purchase on behalf
of the Holders of 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 related to such Income PRIDES, 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 Articles II, III, IV, V, and VI of the
Pledge Agreement, and any reference herein to the Debt Securities
shall be deemed to be reference to such Treasury Portfolio. The
Company may cause to be made in any Income PRIDES Certificates
thereafter to be issued such change in phraseology and form (but
not in substance) as may be appropriate to reflect the
liquidation of the Trust and the substitution of the Treasury
Portfolio for Debt Securities as collateral.
ARTICLE V
The Purchase Contracts
Section 5.1 Purchase of Shares of Common Stock.
Each Purchase Contract shall, unless an Early Settlement has
occurred in accordance with Section 5.9 hereof, obligate the
Holder of the related Security to purchase, and the Company to
sell, on each of the First Purchase Contract Settlement Date and
the Second Purchase Contract Settlement Date, for $25 in cash
(the "Purchase Price"), a number of newly issued shares of Common
Stock equal to the Settlement Rate unless, on or prior to the
applicable Purchase Contract Settlement Date, there shall have
occurred a Termination Event with respect to the Security of
which such Purchase Contract is a part. The "Settlement Rate" 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 $ (the "Threshold Appreciation
Price"), shares of Common Stock per Purchase Contract, (b)
if the Applicable Market Value is less than the Threshold
Appreciation Price, but is greater than $ , the number of
shares of Common Stock equal to $25 divided by the Applicable
Market Value and (c) if the Applicable Market Value is less than
or equal to $ , shares of Common Stock per Purchase
Contract, in each case subject to adjustment as provided in
Section 5.6 (and in each case rounded upward or downward to the
nearest 1/10,000th of a share). As provided in Section 5.10, no
fractional shares of Common Stock will be issued upon settlement
of Purchase Contracts.
The "Applicable Market Value" 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; provided that upon a Termination Event, the rights of
the Holder of such Security under the Purchase Contract may be
enforced without regard to any other rights or obligations. Each
Holder of 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 Stated
Amount or Remaining Stated Amount, as the case may be, of the
Debt Securities or the Proceeds of the Treasury Securities or 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
(including as a result of a Collateral Substitution or the
re-establishment of an Income PRIDES) any other Certificate shall
carry the rights to Contract Adjustment Payments accrued and
unpaid, and to accrue Contract Adjustment Payments, which were
carried by the Purchase Contracts underlying such other
Certificates.
Subject to Section 5.9, in the case of any Security with
respect to which Early Settlement of the underlying Purchase
Contract is effected on an Early Settlement Date that is after
any Record Date and on or prior to the next succeeding Payment
Date, Contract Adjustment Payments, if any, otherwise payable on
such Payment Date shall be payable on such Payment Date
notwithstanding such Early Settlement, and such Contract
Adjustment Payments shall be paid to the Person in whose name the
Certificate evidencing such Security (or one or more Predecessor
Certificates) is registered at the close of business on such
Record Date. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Security with
respect to which Early Settlement of the underlying Purchase
Contract is effected on an Early Settlement Date, Contract
Adjustment Payments that would otherwise be payable after the
Early Settlement Date with respect to such Purchase Contract
shall not be payable.
The Company's obligations with respect to Contract
Adjustment Payments, will be subordinated and junior in right of
payment to the Company's obligations under any Senior
Indebtedness.
Section 5.3 Deferral of Payment Dates For Contract
Adjustment Payments.
The Company shall have the right 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 thereon will accrue at
the rate of % per annum (computed on the basis of 360 day year
of twelve 30 day months), compounding on each succeeding Payment
Date, until paid in full (such deferred installments of Contract
Adjustment Payments together with the 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
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 [or the declaration thereunder of a dividend of rights in
the future]).
Section 5.4 Payment of Purchase Price.
(a) (i) Unless a Tax Event Redemption has occurred or a
Holder settles the underlying Purchase Contract through the
early delivery of cash to the Purchase Contract Agent in the
manner described in Section 5.9, each Holder of an Income
PRIDES must notify the Agent by use of a notice in
substantially the form of Exhibit E hereto of its intention
to pay in cash ("Cash Settlement") the Purchase Price for
the shares of Common Stock to be purchased pursuant to the
applicable portion of a Purchase Contract. Such notice shall
be made on or prior to 5:00 p.m., New York City time, on the
fifth Business Day immediately preceding the 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 an event of default and
the Holder shall be deemed to have consented to the
disposition of the applicable pledged Debt Securities
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 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 a nationally recognized investment
banking firm (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, 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 relates. Such payment will be made by the Company on
or prior to 11 a.m. New York City time on the Purchase Contract
Settlement Date in lawful money of the United States by certified
or cashiers' check or wire transfer in immediately available
funds payable to or upon the order of the Agent. The Company will
cause a notice of such Failed Remarketing to be published on the
Second Business Day immediately preceding the Purchase Contract
Settlement Date in a daily newspaper in the English language of
general circulation in The City of New York, which is expected to
be The Wall Street Journal.
(c) With respect to any Debt Securities beneficially owned
by Holders who have elected Cash Settlement but failed to deliver
cash as required in (a)(ii) above, or with respect to Debt
Securities which are subject to a Failed Remarketing, the
Collateral Agent for the benefit of the Company reserves all of
its rights as a secured party with respect thereto and, subject
to applicable law and paragraph (h) below, may, among other
things, (i) retain 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.
(d) (i) Unless a Holder of Growth PRIDES or Income PRIDES
(if a Tax Event Redemption has occurred) settles the
underlying Purchase Contract through the early delivery of
cash to the Purchase Contract Agent in the manner described
in Section 5.9, each Holder of a Growth PRIDES or Income
PRIDES (if a Tax Event Redemption has occurred) must notify
the Agent by use of a notice in substantially the form of
Exhibit E hereto of its intention to pay in cash the
Purchase Price for the shares of Common Stock to be
purchased pursuant to 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 Income
PRIDES (if a Tax Event Redemption has occurred) who has
so notified the Agent of its intention to make a Cash
Settlement in accordance with paragraph (d)(i) above is
required to pay the Purchase Price to the Collateral
Agent prior to 11:00 a.m., New York City time, on the
Business Day immediately preceding the 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 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 an Income PRIDES (if a Tax Event
Redemption has occurred) does notify the Agent as
provided in paragraph (d)(i) above its intention to pay
the Purchase Price in cash, but fails to make such
payment as required by paragraph (d)(ii) above, then
upon the maturity of the Pledged Treasury Securities or
the appropriate Applicable Ownership Interest 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
are non-recourse obligations and are payable solely out of any
Cash Settlement or the proceeds of any Collateral pledged to
secure the obligations of the Holders and in no event will
Holders be liable for any deficiency between the proceeds of
Collateral disposition and the Purchase Price.
Section 5.5 Issuance of Shares of Common Stock.
Unless a Termination Event or an Early Settlement shall have
occurred, on the Purchase Contract Settlement Date, upon its
receipt of payment in full of the 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 cancelled. Such shares shall be
registered in the name of the Holder or the Holder's designee as
specified in the settlement instructions provided by the Holder
to the Agent. If any shares of Common Stock issued in respect of
a Purchase Contract are to be registered to a Person other than
the Person in whose name the Certificate evidencing such Purchase
Contract is registered, no such registration shall be made unless
the Person requesting such registration has paid any transfer and
other taxes required by reason of such registration in a name
other than that of the registered Holder of the Certificate
evidencing such Purchase Contract or has established to the
satisfaction of the Company that such tax either has been paid or
is not payable.
Section 5.6 Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits,
Etc.
(1) In case the Company shall pay or make a dividend
or other distribution on the Common Stock in Common Stock, the
Settlement Rate, as in effect at the opening of business on the
day following the date fixed for the determination of
stockholders entitled to receive such dividend or other
distribution shall be increased by dividing such Settlement Rate
by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on
the date fixed for such determination and the denominator shall
be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such
increase to become effective immediately after the opening of
business on the day following the date fixed for such
determination. For the purposes of this paragraph (1), the number
of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company but shall
include any shares issuable in respect of any scrip certificates
issued in lieu of fractions of shares of Common Stock. The
Company will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Company.
(2) In case the Company shall issue rights, options
or warrants to all holders of its Common Stock 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 Purchase Contract Settlement Date with respect to each
Purchase Contract forming a part thereof, the kind and amount of
securities, cash and other property receivable upon such
Reorganization Event (without any interest thereon, and without
any right to dividends or distribution thereon which have a
record date that is prior to the Purchase Contract Settlement
Date) by a Holder of the number of shares of Common Stock
issuable on account of each Purchase Contract if the Purchase
Contract Settlement Date had occurred immediately prior to such
Reorganization Event assuming such Holder of Common Stock is not
a Person with which the Company consolidated or into which the
Company merged or which merged into the Company or to which such
sale or transfer was made, as the case may be (any such Person, a
"Constituent Person"), or an Affiliate of a Constituent Person to
the extent such Reorganization Event provides for different
treatment of Common Stock held by Affiliates of the Company and
non-affiliates and such Holder failed to exercise its rights of
election, if any, as to the kind or amount of securities, cash
and other property receivable upon such Reorganization Event
(provided that if the kind or amount of securities, cash and
other property receivable upon such Reorganization Event is not
the same for each share of Common Stock held immediately prior to
such Reorganization Event by other than a Constituent Person or
an Affiliate thereof and in respect of which such rights of
election shall not have been exercised ("non-electing share"),
then for the purpose of this Section the kind and amount of
securities, cash and other property receivable upon such
Reorganization Event by each non-electing share shall be deemed
to be the kind and amount so receivable per share by a plurality
of the non-electing shares). In the event of such a
Reorganization Event, the Person formed by such consolidation,
merger or exchange or the Person which acquires the assets of the
Company or, in the event of a liquidation or dissolution of the
Company, the Company or a liquidating trust created in connection
therewith, shall execute and deliver to the Agent an agreement
supplemental hereto providing that the Holders of each
Outstanding Security shall have the rights provided by this
Section 5.6. Such supplemental agreement shall provide for
adjustments which, for events subsequent to the effective date of
such supplemental agreement, shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section.
The above provisions of this Section shall similarly apply to
successive Reorganization Events.
Section 5.7 Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein
provided, the Company shall:
(i) forthwith compute the Settlement Rate in
accordance with Section 5.6 and prepare and transmit to
the Agent a Company Certificate setting forth the
Settlement Rate, the method of calculation thereof in
reasonable detail, and the facts requiring such
adjustment and upon which such adjustment is based; and
(ii) within 10 Business Days following the
occurrence of an event that requires an adjustment to
the Settlement Rate pursuant to Section 5.6 (or if the
Company is not aware of such occurrence, as soon as
practicable after becoming so aware), provide a written
notice to the Holders of the Securities of the
occurrence of such event and a statement in reasonable
detail setting forth the method by which the adjustment
to the Settlement Rate was determined and setting forth
the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether
any facts exist which may require any adjustment of the
Settlement Rate, or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to
the method employed in making the same. The Agent shall not be
accountable with respect to the validity or value (or the kind or
amount) of any shares of Common Stock, or of any securities or
property, which may at the time be issued or delivered with
respect to any Purchase Contract; and the Agent makes no
representation with respect thereto. The Agent shall not be
responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock pursuant to a Purchase
Contract or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article.
Section 5.8 Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without
limitation, the rights of the Holders to receive and the
obligation of the Company to pay any Contract Adjustment Payments
or Deferred Contract Adjustment Payments, if the Company shall
have such obligation, and the rights and obligations of Holders
to purchase Common Stock, shall immediately and automatically
terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the 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 to the Agent, the Collateral Agent and to the Holders, at
their addresses as they appear in the Register.
Section 5.9 Early Settlement.
(a) Subject to and upon compliance with the provisions of
this Section 5.9, at the option of the Holder thereof, Purchase
Contracts underlying Securities, having an aggregate Stated
Amount equal to $2,000 or an integral multiple thereof prior to
the First Purchase Contract Settlement Date, or $1,000 or an
integral multiple thereof after the First Purchase Contract
Settlement Date but prior to the Second Purchase Contract
Settlement Date, may be settled early ("Early Settlement") in the
case of Income PRIDES (unless a Tax Event Redemption has
occurred), on any day that does not occur during a Substitution
Blackout on or prior to the fifth Business Day immediately
preceding the applicable Purchase Contract Settlement Date and in
the case of Growth PRIDES on or prior to the second Business Day
immediately preceding each Purchase Contract Settlement Date, in
each case, as provided herein; provided however, that if a Tax
Event Redemption has occurred and the Treasury Portfolio has
become a component of the Income PRIDES, Purchase Contracts
underlying Income PRIDES may be settled early, on or prior to the
second Business Day immediately preceding the Purchase Contract
Settlement Date, but only in an aggregate amount of $80,000,000
or in an integral multiple thereof prior to the First Purchase
Contract Settlement Date or in an aggregate amount of $40,000,000
or in an integral multiple thereof after the First Purchase
Contract Settlement Date but prior to the Second Purchase
Contract Settlement Date. In order to exercise the right to
effect Early Settlement with respect to any Purchase Contracts,
the Holder of the Certificate evidencing Securities shall deliver
such Certificate to the Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of
Election to Settle Early on the reverse thereof duly completed
and accompanied by payment (payable to the Company in immediately
available funds in an amount (the "Early Settlement Amount")
equal to 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 between the First Purchase Contract
Settlement Date and the fifth 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 sum of (x)
the Contract Adjustment Payments payable on such Payment Date
with respect to such Purchase Contracts plus (y) in the case of
Income PRIDES, the payment of interest on the related Debt
Securities payable on such Payment Date. Except as provided in
the immediately preceding sentence and subject to the second to
last paragraph of Section 5.2, no payment or adjustment shall be
made upon Early Settlement of any Purchase Contract on account of
any Contract Adjustment Payments accrued on such Purchase
Contract or on account of any dividends on the Common Stock
issued upon such Early Settlement. If the foregoing requirements
are first satisfied with respect to Purchase Contracts underlying
any Securities at or prior to 5:00 p.m., New York City time, on a
Business Day, such day shall be the "Early Settlement Date" with
respect to such Securities and if such requirements are first
satisfied after 5:00 p.m., New York City time, on a Business Day
or on a day that is not a Business Day, the "Early Settlement
Date" with respect to such Securities shall be the next
succeeding Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder
of the related Securities, the Company shall issue, and the
Holder shall be entitled to receive (i) if settled prior to the
First Purchase Contract Settlement Date, 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, 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) (the
"Early Settlement Rate"); provided, however, that upon the Early
Settlement of the Purchase Contracts, the Holder of such related
Securities will forfeit the right to receive any Deferred
Contract Adjustment Payments. The Early Settlement Rate shall be
adjusted in the same manner and at the same time as the
Settlement Rate is adjusted. As promptly as practicable after
Early Settlement of Purchase Contracts in accordance with the
provisions of this Section 5.9, the Company shall issue and shall
deliver to the Agent at the Corporate Trust Office a certificate
or certificates for the full number of shares of Common Stock
issuable upon such Early Settlement together with payment in lieu
of any fraction of a share, as provided in Section 5.10.
(c) No later than the third Business Day after the
applicable Early Settlement Date the Company shall cause (i) the
shares of Common Stock issuable upon Early Settlement of Purchase
Contracts to be issued and delivered, and (ii) the related Debt
Securities or the appropriate Applicable Ownership Interest 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.
In the event that Contract Adjustment Payments shall
constitute a component of Income PRIDES or Growth PRIDES, 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, if any, on any Purchase Contract on
or after the respective Payment Date therefor in respect of any
Security held by such Holder, or for enforcement of the right to
purchase shares of Common Stock under the Purchase Contracts
constituting part of any Security held by such Holder.
Section 6.6 Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any
stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted
to the Agent or the Holders, but will suffer and permit the
execution of every such power as though no such law had been
enacted.
Section 6.7. Suits for Enforcement by Agent.
If a Default has occurred and is continuing, the Agent may
in its discretion proceed to protect and enforce the rights of
the Holders of Purchase Contracts by such appropriate proceedings
as the Agent shall deem most effectual to protect and enforce any
such rights or any other proper remedy. The Holders of a
majority of the Outstanding Purchase Contracts have the right to
direct the time, method and place of conducting any proceeding
for any remedy available to the Agent in respect of this
Agreement or exercising any trust or power conferred upon the
Agent under this Agreement.
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 and deliver the
Pledge Agreement in its capacity as Agent.
(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.
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:
(1) to pay to the Agent from time to time such
compensation for all services rendered by it hereunder as
the parties shall agree from time to time (which
compensation shall not be limited by any provisions of law
in regards to the compensation of a trustee of an express
trust);
(2) except as otherwise expressly provided herein,
to reimburse the Agent upon its request for all reasonable
expenses, disbursements and advances incurred or made by the
Agent in accordance with any provision of this Agreement
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to
its negligence or bad faith; and
(3) to indemnify the Agent and any predecessor Agent
for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration 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.
Section 7.8 Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall
be (i) not be 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 corporation into which the Agent may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate
trust business of the Agent, shall be the successor of the Agent
hereunder, provided such corporation shall be otherwise qualified
and eligible under this Article, without the execution or filing
of any paper or any further act on the part of any of the parties
hereto. In case any Certificates shall have been authenticated
and executed on behalf of the Holders, but not delivered, by the
Agent then in office, any successor by merger, conversion or
consolidation to such Agent may adopt such authentication and
execution and deliver the Certificates so authenticated and
executed with the same effect as if such successor Agent had
itself authenticated and executed such Securities.
Section 7.12 Preservation of Information; Communications
to Holders.
(a) The Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders
received by the Agent in its capacity as Registrar.
(b) If three or more Holders (herein referred to as
"applicants") apply in writing to the Agent, and furnish to the
Agent reasonable proof that each such applicant has owned a
Security for a period of at least six months preceding the date
of such application, and such application states that the
applicants desire to communicate with other Holders with respect
to their rights under this Agreement or under the Securities and
is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the
Agent shall mail to all the Holders copies of the form of proxy
or other communication which is specified in such request, with
reasonable promptness after a tender to the Agent of the
materials to be mailed and of payment, or provision for the
payment, of the reasonable expenses of such mailing.
Section 7.13 No Obligations of Agent.
Except to the extent otherwise provided in this Agreement,
the Agent assumes no obligations and shall not be subject to any
liability under this Agreement, the Pledge Agreement or any
Purchase Contract in respect of the obligations of the Holder of
any Security thereunder. The Company agrees, and each Holder of a
Certificate, by his acceptance thereof, shall be deemed to have
agreed, that the Agent's execution of the Certificates on behalf
of the Holders shall be solely as agent and attorney-in-fact for
the Holders, and that the Agent shall have no obligation to
perform such Purchase Contracts on behalf of the Holders, except
to the extent expressly provided in Article Five hereof.
Section 7.14 Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the
Company, will comply with all applicable certification,
information reporting and withholding (including "backup"
withholding) requirements imposed by applicable tax laws,
regulations or administrative practice with respect to (i) any
payments made with respect to the Securities or (ii) the
issuance, delivery, holding, transfer, redemption or exercise of
rights under the Securities. Such compliance shall include,
without limitation, the preparation and timely filing of required
returns and the timely payment of all amounts required to be
withheld to the appropriate taxing authority or its designated
agent.
(b) The Agent shall comply with any written direction
received from the Company with respect to the application of such
requirements to particular payments or Holders or in other
particular circumstances, and may for purposes of this Agreement
rely on any such direction in accordance with the provisions of
Section 7.1(a)(2) hereof.
(c) The Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make
such records available, on written request, to the Company or its
authorized representative within a reasonable period of time
after receipt of such request.
ARTICLE VIII
Supplemental Agreements
Section 8.1 Supplemental Agreements Without Consent of
Holders.
Without the consent of any Holders, the Company and the
Agent, at any time and from time to time, may enter into one or
more agreements supplemental hereto, in form satisfactory to the
Company and the Agent, for any of the following purposes:
(1) to evidence the succession of another Person to
the Company, and the assumption by any such successor of the
covenants of the Company herein and in the Certificates; or
(2) to add to the covenants of the Company for the
benefit of the Holders, or to surrender any right or power herein
conferred upon the Company; or
(3) to evidence and provide for the acceptance of
appointment hereunder by a successor Agent; or
(4) to make provision with respect to the rights of
Holders pursuant to the requirements of Section 5.6(b); or
(5) to cure any ambiguity, to correct or supplement
any provisions herein which may be inconsistent with any other
provisions herein, or to make any other provisions with respect
to such matters or questions arising under this Agreement,
provided such action shall not adversely affect the interests of
the Holders.
Section 8.2 Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority
of the outstanding Purchase Contracts voting together as one
class, by Act of said Holders delivered to the Company and the
Agent, the Company, when authorized by a Board Resolution, and
the Agent may enter into an agreement or agreements supplemental
hereto for the purpose of modifying in any manner the terms of
the Purchase Contracts, or the provisions of this Agreement or
the rights of the Holders in respect of the Securities; provided,
however, that, except as contemplated herein, no such
supplemental agreement shall, without the consent of the Holder
of each Outstanding Security affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral
required to be Pledged to secure a Holder's Obligations under the
Purchase Contract, impair the right of the Holder of any Purchase
Contract to receive distributions on the related Collateral
(except for the rights of Holders of Income PRIDES to substitute
the Treasury Securities for the Pledged Debt Securities or the
rights of holders of Growth PRIDES to substitute Debt Securities
for the Pledged Treasury Securities) or otherwise adversely
affect the Holder's rights in or to such Collateral or adversely
alter the rights in or to such Collateral;
(3) reduce any Contract Adjustment Payments or any
Deferred Contract Adjustment Payment, or change any place where,
or the coin or currency in which, any Contract Adjustment Payment
is payable;
(4) impair the right to institute suit for the
enforcement of any Purchase Contract;
(5) reduce the number of shares of Common Stock to be
purchased pursuant to any Purchase Contract, increase the price
to purchase shares of Common Stock upon settlement of any
Purchase Contract, change the Purchase Contract Settlement Date
or otherwise adversely affect the Holder's rights under any
Purchase Contract; or
(6) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any such
supplemental agreement;
provided, that if any amendment or proposal referred to above
would adversely affect only the Income PRIDES or the Growth
PRIDES, then only the affected class of Holder as of the record
date for the Holders entitled to vote thereon will be entitled to
vote on such amendment or proposal, and such amendment or
proposal shall not be effective except with the consent of
Holders of not less than a majority of such class.
It shall not be necessary for any Act of Holders under this
Section to
approve the particular form of any proposed supplemental
agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 8.3 Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created
by, any supplemental agreement permitted by this Article or the
modifications thereby of the agencies created by this Agreement,
the Agent shall be entitled to receive and (subject to Section
7.1) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental agreement
is authorized or permitted by this Agreement. The Agent may, but
shall not be obligated to, enter into any such supplemental
agreement which affects the Agent's own rights, duties or
immunities under this Agreement or otherwise.
Section 8.4 Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this
Article, this Agreement shall be modified in accordance
therewith, and such supplemental agreement shall form a part of
this Agreement for all purposes; and every Holder of Certificates
theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder shall be bound thereby.
Section 8.5 Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the
Holders and delivered after the execution of any supplemental
agreement pursuant to this Article may, and shall if required by
the Agent, bear a notation in form approved by the Agent as to
any matter provided for in such supplemental agreement. If the
Company shall so determine, new Certificates so modified as to
conform, in the opinion of the Agent and the Company, to any such
supplemental agreement may be prepared and executed by the
Company and authenticated, executed on behalf of the Holders and
delivered by the Agent in exchange for Outstanding Certificates.
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
Section 9.1 Covenant Not to Merge, Consolidate, Sell
or Convey Property Except Under Certain
Conditions.
The Company covenants that it will not merge or consolidate
with any other Person or sell, assign, transfer, lease or convey
all or substantially all of its properties and assets to any
Person or group of affiliated Persons in one transaction or a
series of related transactions, unless (i) either the Company
shall be the continuing corporation, or the successor (if other
than the Company) shall be a corporation organized and existing
under the laws of the United States of America or a State thereof
or the District of Columbia and such corporation shall expressly
assume all the obligations of the Company under the Purchase
Contracts, 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 the performance of any
covenant or condition hereunder, under any of the Securities or
under the Pledge Agreement.
Section 9.2 Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance and upon any such assumption by a
successor corporation in accordance with Section 9.1, such
successor corporation shall succeed to and be substituted for the
Company with the same effect as if it had been named herein as
the Company. Such successor corporation thereupon may cause to be
signed, and may issue either in its own name or in the name of
Texas Utilities Company any or all of the Certificates evidencing
Securities issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Agent; and, upon
the order of such successor corporation, instead of the Company,
and subject to all the terms, conditions and limitations in this
Agreement prescribed, the Agent shall authenticate and execute on
behalf of the Holders and deliver any Certificates which
previously shall have been signed and delivered by the officers
of the Company to the Agent for authentication and execution, and
any Certificate evidencing Securities which such successor
corporation thereafter shall cause to be signed and delivered to
the Agent for that purpose. All the Certificates so issued shall
in all respects have the same legal rank and benefit under this
Agreement as the Certificates theretofore or thereafter issued in
accordance with the terms of this Agreement as though all of such
Certificates had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance such change in phraseology and form
(but not in substance) may be made in the Certificates evidencing
Securities thereafter to be issued as may be appropriate.
Section 9.3 Opinion of Counsel Given to Agent.
The Agent, subject to Sections 7.1 and 7.3, shall receive an
Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale, assignment, transfer, lease or
conveyance, and any such assumption, complies with the provisions
of this Article and that all conditions precedent to the
consummation of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance have been met.
ARTICLE X
Covenants
Section 10.1 Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the
Holders from time to time of the Securities that it will duly and
punctually perform its obligations under the Purchase Contracts
in accordance with the terms of the Purchase Contracts and this
Agreement.
Section 10.2 Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The
City of New York an office or agency where Certificates may be
presented or surrendered for acquisition of shares of Common
Stock upon settlement of the Purchase Contracts on the Purchase
Contract Settlement Date or Early Settlement and for transfer of
Collateral upon occurrence of a Termination Event, where
Certificates may be surrendered for registration of transfer or
exchange, for a Collateral Substitution or re-establishment of 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 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 _____________ and
_____________ in each year, commencing _____________, 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.
Within 60 days after _____________ of each year, commencing
_____________, 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 _____________. 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 an 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
Agent, the Indenture (For Unsecured Debt Securities Series B)
dated as of October 1, 1997 of the Company to the Agent, and the
Indenture (For Unsecured Debt Securities Series C) dated as of
January 1, 1998 of the Company to the Agent 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.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
TEXAS UTILITIES COMPANY
By:____________________________
Name:
Title:
By:____________________________
Name:
Title:
THE BANK OF NEW YORK,
as Purchase Contract Agent and
Trustee
By:____________________________
Name:
Title:
<PAGE>
EXHIBIT A
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND
IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE
THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN
PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS
CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF
ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street,
New York, New York) to the Company or its agent for registration
of transfer, exchange or payment, and any Certificate issued is
registered in the name of Cede & Co., or such other name as
requested by an authorized representative of The Depository Trust
Company, and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co.,
has an interest herein.
No. _____ Cusip No.
Number of Income PRIDES _______
Form of Face of Income PRIDES Certificate
____% Income PRIDES
This Income PRIDES Certificate certifies that ___________ is
the registered Holder of the number of Income PRIDES set forth
above. Each Income PRIDES represents (i) either (a) one Series E
Note due 2004 and prior to the First Purchase Contract Settlement
Date, one Series D Note due 2003 (the "Debt Securities") of Texas
Utilities Company (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 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 which are defined in
the Purchase Contract Agreement have the meaning set forth
therein.
Pursuant to the Pledge Agreement, the Debt Securities or the
appropriate Applicable Ownership Interest 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 the
Stated Amount of $50 prior to the First Purchase Contract
Settlement Date, and the Remaining Stated Amount of $25
thereafter, or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, or payments of interest
on, any Pledged Debt Securities (as defined in the Pledge
Agreement) or the appropriate Applicable Ownership Interest in
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) cash distributions with respect to Pledged Debt
Securities or the appropriate Applicable Ownership Interest (as
specified in clause (B) of the definition of such term) of the
Treasury Portfolio, as the case may be, and (B) any payments of
the Stated Amount, the Remaining Stated Amount or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the
definition of such terms) of the Treasury Portfolio, as the case
may be, with respect to any Debt Securities or the appropriate
Applicable Ownership Interest 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 the Stated Amount, the Remaining Stated Amount or
the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, of any Pledged Debt Securities or
the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, to the Company on the Purchase
Contract Settlement Date (as defined herein) in accordance with
the terms of the Pledge Agreement, in full satisfaction of the
respective obligations of the Holders of the 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 the appropriate Applicable Ownership Interest (as
specified in clause (B) of the definition of such term) of the
Treasury Portfolio, as the case may be, forming part of an Income
PRIDES evidenced hereby which are payable quarterly in arrears on
February 16, May 16, August 16 and November 16 each year,
commencing , 1998 (a "Payment Date"), shall, subject to
receipt thereof by the Agent from the Collateral Agent, be paid
to the Person in whose name this 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, on August 15, 2001 (the "First Purchase Contract Settlement
Date"), at a price equal to $25 and on August 15, 2002 (the
"Second Purchase Contract Settlement Date"), at a price of $25, a
number of shares of Common Stock, no par value ("Common Stock"),
of the Company, 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 on the reverse
hereof. The applicable purchase price (in each case, the
"Purchase Price") for the shares of Common Stock purchased on
either Purchase Contract Settlement Date pursuant to each
Purchase Contract evidenced hereby, if not paid earlier, shall be
paid on the applicable Purchase Contract Settlement Date by
application of payment received in respect of the Stated Amount,
the Remaining Stated Amount or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio, as the case may be, of
the Pledged Debt Securities or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be,
pledged to secure the obligations under such Purchase Contract of
the Holder of the Income PRIDES of which such Purchase Contract
is a part.
The Company shall pay, on each Payment Date, in respect of
each Purchase Contract forming part of an Income PRIDES evidenced
hereby an amount (the "Contract Adjustment Payments") equal to %
per annum of the Stated Amount or, for the period beginning on
the First Purchase Contract Settlement Date, % 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 on the reverse hereof. 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 the
appropriate Applicable Ownership Interest (as specified in clause
(B) of the definition of such term) of the Treasury Portfolio, as
the case may be, and Contract Adjustment Payments will be payable
at the office of the Agent in The City of New York or, at the
option of the Company, by check mailed to the address of the
Person entitled thereto as such address appears on the Income
PRIDES Register.
Reference is hereby made to the further provisions set forth
on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Agent by manual signature, this 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.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
TEXAS UTILITIES COMPANY
By:---------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By:
not individually but solely as
Attorney-in-Fact of such
Holder
By:--------------------------
Name:
Title:
Dated: , 1998
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificate referred to in
the within mentioned Purchase Contract Agreement.
By:
as Purchase Contract Agent and
Trustee
By:
-----------------------------
Authorized Officer
(Form of Reverse of Income PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a
Purchase Contract Agreement, dated as of , 1998 (as may
be supplemented from time to time, the "Purchase Contract
Agreement"), between the Company and The Bank of New York, as
Purchase Contract Agent and trustee (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 obligates the Holder
of this Income PRIDES Certificate to purchase, and the Company to
sell, on the First Purchase Contract Settlement Date at a
Purchase Price of $25 and on the Second Purchase Contract
Settlement Date at a Purchase Price of $25, a number of shares of
Common Stock of the Company 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
Early Settlement with respect to the Security of which such
Purchase Contract is a part. The "Settlement Rate" with respect
to each 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 $ (the "Threshold Appreciation Price"), shares of
Common Stock per Purchase Contract, (b) if such Applicable Market
Value is less than the Threshold Appreciation Price but is
greater than $ , the number of shares of Common Stock per
Purchase Contract equal to the Stated Amount divided by such
Applicable Market Value and (c) if such Applicable Market Amount
is less than or equal to $ , shares of Common Stock per
Purchase Contract, in each case subject to adjustment as provided
in the Purchase Contract Agreement. No fractional shares of
Common Stock will be issued upon settlement of Purchase
Contracts, as provided in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled
either through Early Settlement or Cash Settlement, shall
obligate the Holder of the related 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" means the average of the
Closing Price per share of Common Stock on each of the 20
consecutive Trading Days ending on the third Trading Day
immediately preceding the Purchase Contract Settlement Date. The
"Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Common Stock on
the New York Stock Exchange (the "NYSE") on such date or, if the
Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal
United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United
States national or regional securities exchange, the last quoted
bid price for the Common Stock in the over-the-counter market as
reported on the NYSE, if such bid price is not available, the
market value of the Common Stock on such. A "Trading Day" means a
day on which the Common Stock (A) is not suspended from trading
on any national or regional securities exchange or association at
the close of business and (B) has traded at least once on the
national or regional securities exchange or association that is
the primary market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract
Agreement, the Holder of this Income PRIDES 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 or from the proceeds of a remarketing of
the related Pledged Debt Securities of such holders. A Holder of
Income PRIDES who does not elect, on or prior to 5:00 p.m. New
York City time on the fifth Business Day immediately preceding
the Purchase Contract Settlement Date, to make an effective Cash
Settlement or an Early Settlement, shall have defaulted in its
obligations under the related Purchase Contract and the
Collateral Agent shall exercise its rights as a secured creditor
for the benefit of the Company thereunder and shall pay the
Purchase Price for the shares of Common Stock to be issued under
the related Purchase Contract from the Proceeds of the sale of
the related Pledged Debt Securities held by the Collateral Agent.
Such sale will be made by the Remarketing Agent pursuant to the
terms of the Remarketing Agreement and the Remarketing
Underwriting Agreement on the third Business Day immediately
preceding the Purchase Contract Settlement Date. Upon the
occurrence of a Failed Remarketing the Collateral Agent, for the
benefit of the Company, any accrued and unpaid interest on such
Pledged Debt Securities will become payable by the Company to the
holder of this Income PRIDES Certificate in the manner provided
for in the Purchase Contract Agreement.
The Company shall not be obligated to issue any shares of
Common Stock in respect of a Purchase Contract or deliver any
certificates therefor to the Holder unless it shall have received
payment in full of the aggregate Purchase Price for the shares of
Common Stock to be purchased thereunder in the manner herein set
forth.
Each Purchase Contract evidenced hereby and all obligations
and rights of the Company and the Holder thereunder shall
terminate if a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall give written
notice to the Agent and to the Holders, at their addresses as
they appear in the Income PRIDES Register. Upon and after the
occurrence of a Termination Event, the Collateral Agent shall
release the Pledged Debt Securities (as defined in the Pledge
Agreement) or the appropriate Applicable Ownership Interest in
the Treasury Portfolio forming a part of each Income PRIDES from
the Pledge. An Income PRIDES shall thereafter represent the
right to receive the related Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio forming a
part of such Income PRIDES in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement.
Under the terms of the Pledge Agreement, the Agent will be
entitled to exercise the voting and any other consensual rights
pertaining to the Pledged Debt Securities. Upon receipt of notice
of any meeting at which holders of Debt Securities are entitled
to vote or upon the solicitation of consents, waivers or proxies
of holders of Debt Securities, the Agent shall, as soon as
practicable thereafter, mail to the 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 (which, to
the extent possible, shall be the same date as the record date
for determining the holders of Debt Securities entitled to vote)
shall be entitled to instruct the Agent as to the exercise of the
voting rights pertaining to the Debt Securities constituting a
part of such holder's 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
either Purchase Contract Settlement Date, the Redemption Price
payable on the Tax Event Redemption Date with respect to the
related Debt Securities shall be delivered to the Collateral
Agent in exchange for the Pledged Debt Securities. Thereafter,
pursuant to the terms of the Pledge Agreement, the Collateral
Agent for the benefit of the Company will apply an amount equal
to the 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
either 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 Articles II, III,
IV, V and VI, of the Pledge Agreement and any reference herein to
the Debt Securities shall be deemed to be reference to such
Treasury Portfolio.
The 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 who elects to
substitute Treasury Securities for Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury
Portfolio, thereby creating Growth PRIDES, shall be responsible
for any fees or expenses payable in connection therewith. Except
as provided in the Purchase Contract Agreement, for so long as
the Purchase Contract underlying 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
of such Income PRIDES in respect of Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, and Purchase Contract constituting
such Income PRIDES may create or recreate Growth PRIDES by
substituting 3-Year Treasury Securities and 4-Year Treasury
Securities for the Series D Notes and the Series E Notes,
respectively, or for the appropriate Applicable Ownership Interest
in the Treasury Portfolio, as the case may be, which forms a part
of such Income PRIDES (a "Collateral Substitution"). Such 3-Year
Treasury Securities shall be in an aggregate principal amount equal
to the aggregate principal amount of the Series D Notes or the
aggregate Stated Amount of the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, as applicable, and shall have a maturity
corresponding to the First Purchase Contract Settlement Date.
Such 4-Year Treasury Securities shall be in an aggregate
principal amount equal to the aggregate principal amount of the
Series E Notes or the aggregate Remaining Stated Amount of the
appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) in the Treasury
Portfolio, as applicable, and shall have a maturity corresponding
to the Second Purchase Contract Settlement Date. Any such
Collateral Substitution may be made at any time from and after
the date of this Agreement and on or prior to the fifth Business
Day immediately preceding the Second Purchase Contract Settlement
Date, in the case of a substitution for Debt Securities and on or
prior to the second Business Day immediately preceding the Second
Purchase Contract Settlement Date, in the case of a substitution
for the appropriate Applicable Ownership Interest in the Treasury
Portfolio, (provided that no Collateral Substitution may be made
during the period from the second Business Day immediately
preceding the First Purchase Contract Settlement Date through the
First Purchase Contract Date ("Substitution Blackout Period").
From and after such Collateral Substitution, the Securities for
which such Pledged Treasury Securities secures the holder's
obligation under the Purchase Contracts shall be referred to as
"Growth PRIDES." A Holder may make such Collateral Substitution
only in integral multiples of 40 Income PRIDES for 40 Growth
PRIDES; provided, however, that if a Tax Event Redemption has
occurred and the Treasury Portfolio has become a component of the
Income PRIDES, a Holder may make such Collateral Substitutions
only in integral multiples of 1,600,000 Income PRIDES for
1,600,000 Growth PRIDES. Such Collateral Substitution may cause
the equivalent aggregate Stated Amount of this Certificate prior
to the First Purchase Contract Settlement Date and the aggregate
Remaining Stated Amount of this Certificate on and after such
date to be increased or decreased; provided, however, the
equivalent aggregate Stated Amount outstanding under this Income
PRIDES prior to the First Purchase Contract Settlement Date shall
not exceed $ , and the aggregate Remaining Stated
Amount on and after such date shall not exceed $ . All such
adjustments to the equivalent aggregate Stated Amount or
Remaining Stated Amount of this Income PRIDES shall be duly
recorded by placing an appropriate notation on the Schedule
attached hereto.
A Holder of Growth PRIDES may 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 in the case of the Series D Notes and the Series E Notes,
equal to the aggregate principal amount of the 3-Year Treasury
Securities and 4-Year Treasuries, respectively, comprising part
of the Growth PRIDES or having an aggregate Stated Amount, prior
to the First Purchase Contract Settlement Date, or aggregate
Remaining Stated Rate subsequent thereto, of the appropriate
Applicable Ownership Interest (as defined in clause (A) of the
definition of such term) in the Treasury Portfolio, as the case
may be, equal to the aggregate principal amount of the Pledged
Securities, in exchange for the release of such Pledged Treasury
Securities in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement.
Subject to the next succeeding paragraph, the Company shall
pay, on each Payment Date, the Contract Adjustment Payments
payable in respect of each Purchase Contract to the Person in
whose name the Income PRIDES Certificate evidencing such Purchase
Contract is registered at the close of business on the Record
Date for such Payment Date. Contract Adjustment Payments will be
payable at the office of the Agent in The City of New York or, at
the option of the Company, by check mailed to the address of the
Person entitled thereto at such address as it appears on the
Income PRIDES Register.
The Company shall have the right, at any time prior to the
Purchase Contract Settlement Date, to defer the payment of any or
all of the Contract Adjustment Payments otherwise payable on any
Payment Date 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 thereon will
accrue at the rate of % per annum (computed on the basis of a
360 day year of twelve 30 day months), compounding on each
succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments, if any, together
with the additional Contract Adjustment Payments accrued thereon,
are referred to herein as the "Deferred Contract Adjustment
Payments"). Deferred Contract Adjustment Payments, if any, shall
be due on the next succeeding Payment Date except to the extent
that payment is deferred pursuant to the Purchase Contract
Agreement. No Contract Adjustment Payments may be deferred to a
date that is after the Purchase Contract Settlement Date 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 a
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 benefit plans or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on
the date of such event requiring the Company to purchase capital
stock of the Company, (ii) as a result of a reclassification of
the Company's capital stock or the exchange or conversion of one
class or series of the Company's capital stock for another class
or series of the Company's capital stock, (iii) the purchase of
fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (iv)
dividends or distributions in capital stock of the Company (or
rights to acquire capital stock) or repurchases or redemptions of
capital stock solely from the issuance or exchange of capital
stock or (v) redemptions or repurchases of any rights outstanding
under a shareholder rights plan or a declaration thereunder of a
dividend of rights in the future).
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without
limitation, the rights of the Holders to receive and the
obligation of the Company to pay any Contract Adjustment Payments
or any Deferred Contract Adjustment Payments, shall immediately
and automatically terminate, without the necessity of any notice
or action by any Holder, the Agent or the Company, if, on or
prior to the Purchase Contract Settlement Date, a Termination
Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they
appear in the 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,
from the Pledge in accordance with the provisions of the Pledge
Agreement.
Subject to and upon compliance with the provisions of the
Purchase Contract Agreement, at the option of the Holder thereof,
all, but not less than all, of the remaining Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to
$1,000 or an integral multiple thereof may be settled early,
except on any day during the Substitution Blackout Period ("Early
Settlement") as provided in the Purchase Contract Agreement;
provided, however, that if a Tax Event Redemption has occurred
and the Treasury Portfolio has become a component of the Income
PRIDES, Holders may early settle Income PRIDES only in integral
multiples of 1,600,000 Income PRIDES. In order to exercise the
right to effect Early Settlement with respect to any Purchase
Contracts evidenced by this Income PRIDES, the Holder of this
Income PRIDES shall deliver this Income PRIDES 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 between the First Purchase Contract Settlement Date
and the fifth Business Day immediately preceding the Second
Purchase Contract Settlement Date plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period
from the close of business on any Record Date for any Payment
Date to the opening of business on such Payment Date, an amount
equal to the Contract Adjustment Payments payable on such Payment
Date with respect to such Purchase Contracts. Upon Early
Settlement of Purchase Contracts by a Holder of the related
Securities, the Pledged Debt Securities or the appropriate
Applicable Ownership Interest 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; provided however, that upon the Early Settlement
of the Purchase Contracts, the Holder thereof will forfeit the
right to receive any Deferred Contract Adjustment Payments, if
any, on such Purchase Contracts. The Early Settlement Rate shall
initially be equal to shares of Common Stock and shall be
adjusted in the same manner and at the same time as the
Settlement Rate is adjusted as provided in the Purchase Contract
Agreement.
Upon registration of transfer of this 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
thereof, 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 his behalf as his attorney-in-fact, expressly
withholds any consent to the assumption (i.e., affirmance) of the
Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions
thereof, covenants and agrees to perform its obligations under
such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into
and perform the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to the Pledge of the Debt
Securities or the appropriate Applicable Ownership Interest 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 to the Stated Amount of the Pledged Debt Securities, or
the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury
Portfolio, on the Purchase Contract Settlement Date shall be paid
by the Collateral Agent to the Company in satisfaction of such
Holder's obligations under such Purchase Contract and such Holder
shall acquire no right, title or interest in such payments.
Subject to certain exceptions, the provisions of the
Purchase Contract Agreement may be amended with the consent of
the Holders of a majority of the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed
by, and construed in accordance with, the laws of the State of
New York.
The Company, the Agent and its Affiliates and any agent of
the Company or the Agent may treat the Person in whose name this
Income PRIDES Certificate is registered 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, entitle the Holder to any of the rights of a holder of
shares of Common Stock.
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Agent.
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they
were written out in full according to applicable laws or
regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
----------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
Additional abbreviations may also be used though not in the
above list.
---------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
_______________________________________________________________
_______________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee)
________________________________________________________________
________________________________________________________________
________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip
Code of Assignee) the within 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 REGISTERED HOLDER
in the name of and delivered to
a Person other than the Holder,
please (i) print such Person's
name and address and (ii) provide
a guarantee of your signature:
Please print name and address
of Registered Holder:
________________________ _______________________
Name Name
____________________________ _________________________
Address Address
_____________________________________
______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
Social Security or other
Taxpayer Identification
Number, if any ____________________________
<PAGE>
ELECTION TO SETTLE EARLY
The undersigned Holder of this 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 Income
PRIDES Certificates are to be registered
in the name of and delivered to and REGISTERED HOLDER
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
----------------------------------------------------------------
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================================================================
<PAGE>
EXHIBIT B
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND
IS REGISTERED IN THE NAME OF A CLEARING AGENCY OR A NOMINEE
THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN
PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS
CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF
ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET,
NEW YORK, NEW YORK) TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, AND ANY PAYMENT THEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST THEREIN.
No. ____________ Number of Growth PRIDES ______ Cusip No.
Form of Face of Growth PRIDES Certificate
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 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
such Holder pursuant to the Pledge Agreement, and (ii) the rights
and obligations of the Holder under one Purchase Contract with
Texas Utilities Company, a Texas corporation (the "Company"). All
capitalized terms used herein which are defined in the Purchase
Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities
constituting part of each 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.
Each Purchase Contract evidenced hereby obligates the Holder
of this Growth PRIDES Certificate to purchase, and the Company,
to sell, on August 15, 2001 (the "First Purchase Contract
Settlement Date"), at a price of $25, and on August 15, 2002 (the
"Second Purchase Contract Settlement Date") at a price of $25, a
number of shares of Common stock, no par value per share ("Common
Stock"), of the Company 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 Growth PRIDES of which such
Purchase Contract is a part, all as provided in the Purchase
Contract Agreement and more fully described on the reverse
hereof. The purchase price for the shares of Common Stock
purchased pursuant to each Purchase Contract evidenced hereby
will be paid by application of the Proceeds from the Treasury
Securities pledged to secure the obligations under such Purchase
Contract in accordance with the terms of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of
each Purchase Contract evidenced hereby an amount (the "Contract
Adjustment Payments") equal to __% per annum of the Stated
Amount, or, for the period beginning on the First Purchase
Contract Date, equal to __% per annum of the Remaining Stated
Amount computed, in each case, on the basis of the actual number
of days elapsed in a year of 360 day year of twelve 30 day
months, as the case may be, subject to deferral at the option of
the Company as provided in the Purchase Contract Agreement and
more fully described on the reverse hereof. Such Contract
Adjustment Payments shall be payable to the Person in whose name
this 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 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.
Reference is hereby made to the further provisions set forth
on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Agent by manual signature, this 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:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder
under the Purchase Contracts)
By: ,
not individually but solely
as Attorney-in-Fact of such
Holder
By:________________________
Name:
Title:
Dated: , 1998
<PAGE>
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Growth PRIDES referred to in the
within-mentioned Purchase Contract Agreement.
By: ,
as Purchase Contract
Agent
By:_______________________
Authorized Signatory
<PAGE>
(Reverse of
Growth PRIDES)
Each Purchase Contract evidenced hereby is governed by a
Purchase Contract Agreement, dated as of , 1998 (as may be
supplemented from time to time, the "Purchase Contract
Agreement") between the Company and The First National Bank of
Chicago, as Purchase Contract Agent and trustee (including its
successors thereunder, herein called the "Agent"), to which the
Purchase Contract Agreement and supplemental agreements thereto
reference is hereby made for a description of the respective
rights, limitations of rights, obligations, duties and immunities
thereunder of the Agent, the Company and the Holders and of the
terms upon which the Growth PRIDES Certificates are, and are to
be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder
of this Growth PRIDES Certificate to purchase, and the Company to
sell, on the First Purchase Contract Settlement Date at a
Purchase Price of $25 and on the Second Purchase Contract
Settlement Date at a Purchase Price of $25, a number of shares of
Common Stock of the Company 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
Early Settlement with respect to the Security of which such
Purchase Contract is a part. The "Settlement Rate" with respect
to each 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 $ (the "Threshold Appreciation
Price"), shares of Common Stock per
Purchase Contract, (b) if such Applicable Market Value is less
than the Threshold Appreciation Price but is greater than $ , the
number of shares of Common Stock per Purchase Contract equal to
the Stated Amount divided by such Applicable Market Value and (c)
if such Applicable Market Amount is less than or equal to $,
shares of Common Stock per Purchase Contract, in each case
subject to adjustment as provided in the Purchase Contract
Agreement. No fractional shares of Common Stock will be issued
upon settlement of Purchase Contracts, as provided in the
Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled
either through Early Settlement or Cash Settlement, shall
obligate the Holder of the related 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" means the average of the
Closing Prices per share of Common Stock on each of the twenty
consecutive Trading Days ending on the third Trading Day
immediately preceding the Purchase Contract Settlement Date. The
"Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Common Stock on
the New York Stock Exchange (the "NYSE") on such date or, if the
Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal
United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United
States national or regional securities exchange, the last quoted
bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market
value of the Common Stock on such date as determined by a
nationally recognized independent investment banking firm
retained for this purpose by the Company. A "Trading Day" means a
day on which the Common Stock (A) is not suspended from trading
on any national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the
primary market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract
Agreement, the Holder of this Growth PRIDES Certificate 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 or from the proceeds of a
remarketing of the related Pledged Treasury Securities of such
holders. A Holder of Growth PRIDES who does not elect, on or
prior to 5:00 p.m. New York City time on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, to
make an effective Cash Settlement or an Early Settlement, shall
have defaulted in its obligations under the related Purchase
Contract and the Collateral Agent shall exercise its rights as a
secured creditor for the benefit of the Company thereunder and
shall pay the Purchase Price for the shares of Common Stock to be
issued under the related Purchase Contract from the Proceeds of
the sale of the related Pledged Treasury Securities held by the
Collateral Agent. Such sale will be made by the Remarketing Agent
pursuant to the terms of the Remarketing Agreement and the
Remarketing Underwriting Agreement on the third Business Day
immediately preceding the Purchase Contract Settlement Date.
Upon the occurrence of a Failed Remarketing the Collateral Agent,
for the benefit of the Company, any accrued and unpaid interest
on such Pledged Treasury Securities will become payable by the
Company to the holder of this Growth PRIDES Certificate in the
manner provided for in the Purchase Contract Agreement.
The Company shall not be obligated to issue any shares of
Common Stock in respect of a Purchase Contract or deliver any
certificates therefor to the Holder unless it shall have received
payment in full of the aggregate purchase price for the shares of
Common Stock to be purchased thereunder in the manner herein set
forth.
Each Purchase Contract evidenced hereby and all obligations
and rights of the Company and the Holder thereunder shall
terminate if a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall give written
notice to the Agent and to the Holders, at their addresses as
they appear in the Growth PRIDES Register. Upon and after the
occurrence of a Termination Event, the Collateral Agent shall
release the Pledged Treasury Securities (as defined in the Pledge
Agreement) forming a part of each Growth PRIDES or the
appropriate Applicable Ownership Interest in the Treasury
Portfolio forming a part of each Growth PRIDES from the Pledge.
A Growth PRIDES shall thereafter represent the right to receive
the related Debt Securities or the appropriate Applicable
Ownership Interest in the Treasury Portfolio forming a part of
such Growth PRIDES in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement.
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 will be
registered and Growth PRIDES 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 who elects to substitute Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, for Treasury Securities, thereby
recreating Income PRIDES, shall be responsible for any fees or
expenses associated therewith. Except as provided in the Purchase
Contract Agreement, for so long as the Purchase Contract
underlying a 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 the Purchase Contract constituting such
Growth PRIDES may be transferred and exchanged only as a Growth
PRIDES. A Holder of Growth PRIDES may create or recreate Income
PRIDES by substituting Series D Notes and the Series E Notes for
the 3-Year Treasury Securities and the 4-Year Treasury
Securities, respectively, or for the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be,
which forms a part of such Income PRIDES (a "Collateral
Substitution"). Such Series D Notes or the aggregate Stated
Amount of the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as applicable, Treasury Securities shall be
in an aggregate principal amount equal to the aggregate principal
amount of the 3-Year Treasury Securities. Such Series E Notes or
the aggregate Remaining Stated Amount of the appropriate
Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio, as
applicable, shall be in an aggregate principal amount equal to
the aggregate principal amount of the 4-Year Treasury Securities.
Any such Collateral Substitution may be made at any time from and
after the date of this Agreement and on or prior to the fifth
Business Day immediately preceding the Second Purchase Contract
Settlement Date, in the case of a substitution for Debt
Securities and on or prior to the second Business Day immediately
preceding the Second Purchase Contract Settlement Date, in the
case of a substitution for the appropriate Applicable Ownership
Interest in the Treasury Portfolio, (provided that no Collateral
Substitution may be made during the period from the second
Business Day immediately preceding the First Purchase Contract
Settlement Date through the First Purchase Contract Date
("Substitution Blackout Period"). From and after such Collateral
Substitution, the Security for which such Pledged Debt Securities
secures the holder's obligation under the Purchase Contracts
shall be referred to as an "Income PRIDES." A Holder may make
such Collateral Substitution only in integral multiples of 40
Growth PRIDES for 40 Income PRIDES; provided, however, that if a
Tax Event Redemption has occurred and the Treasury Portfolio has
become a component of the Income PRIDES, a Holder may make such
Collateral Substitutions only in integral multiples of 1,600,000
Income PRIDES for 1,600,000 Growth PRIDES. Such Collateral
Substitution may cause the equivalent aggregate face amount of
this Certificate prior to the First Purchase Contract Settlement
Date and the aggregate face amount of this Certificate on and
after such date to be increased or decreased; provided, however,
the equivalent aggregate face amount outstanding under this
Growth PRIDES prior to the First Purchase Contract Settlement
Date shall not exceed $ , and the aggregate face amount
on and after such date shall not exceed $ . All such
adjustments to the equivalent aggregate face amount of this
Growth PRIDES shall be duly recorded by placing an appropriate
notation on the Schedule attached hereto.
A Holder of Income PRIDES may create or recreate Growth
PRIDES by depositing with the Collateral Agent 3-Year Treasury
Securities and 4-Year Treasuries, having an aggregate principal
amount equal to, in the case of substitutions for the Series D
Notes and the Series E Notes, the aggregate principal amount of
such Debt Securities or, in the case of substitutions for the
appropriate Applicable Ownership Interest in the Treasury
Portfolio, the aggregate Stated Amount, prior to the First
Purchase Contract Settlement Date, or aggregate Remaining Stated
Rate subsequent thereto, of the appropriate Applicable Ownership
Interest (as defined in clause (A) of the definition of such
term) in the Treasury Portfolio 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.
Subject to the next succeeding paragraph, the Company shall
pay, on each Payment Date, the Contract Adjustment Payments
payable in respect of each Purchase Contract to the Person in
whose name the Growth PRIDES Certificate evidencing such Purchase
Contract is registered at the close of business on the Record
Date for such Payment Date. Contract Adjustment Payments will be
payable at the office of the Agent in The City of New York or, at
the option of the Company, by check mailed to the address of the
Person entitled thereto at such address as it appears on the
Growth PRIDES Register.
The Company shall have the right, at any time prior to the
Purchase Contract Settlement Date, to defer the payment of any or
all of the Contract Adjustment Payments otherwise payable on any
Payment Date 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
at the rate of % per annum (computed on the basis of a 360 day
year of twelve 30 day months), compounding on each succeeding
Payment Date, until paid in full (such deferred installments of
Contract Adjustment Payments together with the additional
Contract Adjustment Payments accrued thereon, are referred to
herein as the "Deferred Contract Adjustment Payments"). Deferred
Contract Adjustment Payments, if any, shall be due on the next
succeeding Payment Date except to the extent that payment is
deferred pursuant to the Purchase Contract Agreement. No Contract
Adjustment Payments may be deferred to a date that is after the
Purchase Contract Settlement Date next succeeding the date such
deferrals commence.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until a
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 shares of capital stock of the Company in
connection with the satisfaction by the Company of its
obligations under any employee benefit plans or the satisfaction
by the Company of its obligations pursuant to any contract or
security outstanding on the date of such event requiring the
Company to purchase capital stock of the Company, (ii) as a
result of a reclassification of the Company's capital stock or
the exchange or conversion of one class or series of the
Company's capital stock for another class or series of the
Company's capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to
the conversion or exchange provisions of the Company's capital
stock or the security being converted or exchanged, (iv)
dividends or distributions in capital stock of the Company (or
rights to acquire capital stock) or repurchases or redemptions of
capital stock solely from the issuance or exchange of capital
stock or (v) redemptions or repurchases of any rights outstanding
under a shareholder rights plan or the declaration thereunder of
a dividend of rights in the future).
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without
limitation, the rights of the Holders to receive and the
obligation of the Company to pay Contract Adjustment Payments or
any Deferred Contract Adjustment Payments, shall immediately and
automatically terminate, without the necessity of any notice or
action by any Holder, the Agent or the Company, if, on or prior
to the Purchase Contract Settlement Date, a Termination Event
shall have occurred. Upon the occurrence of a Termination Event,
the Company shall promptly but in no event later than two
business days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they
appear in the Growth PRIDES Register. Upon and after the
occurrence of a Termination Event, the Collateral Agent shall
release the Treasury Securities from the Pledge in accordance
with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the
Purchase Contract Agreement, at the option of the Holder thereof,
Purchase Contracts underlying Securities having an aggregate
Stated Amount equal to $1,000 or an integral multiple thereof may
be settled early, except on any day during the Substitution
Blackout Period ("Early Settlement"), as provided in the Purchase
Contract Agreement. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced
by this 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 fifth
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 fifth Business Day immediately
preceding the Second Purchase Contract Settlement Date, plus (ii)
if such delivery is made with respect to any Purchase Contracts
during the period from the close of business on any Record Date
for any Payment Date to the opening of business on such Payment
Date, an amount equal to the Contract Adjustment Payments
payable, if any, on such Payment Date with respect to such
Purchase Contracts. Upon Early Settlement of Purchase Contracts
by a Holder of the related Securities, the Pledged Treasury
Securities underlying such Securities shall be released from the
Pledge as provided in the Pledge Agreement and the Holder shall
be entitled to receive, a number of shares of Common Stock on
account of each Purchase Contract forming part of a Growth PRIDES
as to which Early Settlement is effected equal to shares of
Common Stock per Purchase Contract (the "Early Settlement Rate");
provided however, that upon the applicable Early Settlement of
the Purchase Contracts, the Holder thereof will forfeit the right
to receive any Deferred Contract Adjustment Payments on such
Purchase Contracts. The Early Settlement Rate shall be adjusted
in the same manner and at the same time as the Settlement Rate is
adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this 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 his 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 his behalf as its attorney-in-fact, expressly
withholds any consent to the assumption (i.e., affirmance) of the
Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions
thereof, covenants and agrees to perform its obligations under
such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into
and perform the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to the Pledge of the Treasury
Securities underlying this 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 to the Stated Amount of the
Pledged Treasury Securities on the Purchase Contract Settlement
Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or
interest in such payments.
Subject to certain exceptions, the provisions of the
Purchase Contract Agreement may be amended with the consent of
the Holders of a majority of the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed
by, and construed in accordance with, the laws of the State of
New York.
The Company, the Agent and its Affiliates and any agent of
the Company or the Agent may treat the Person in whose name this
Growth PRIDES Certificate is registered 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, entitle the Holder to any of the rights of a holder of
shares of Common Stock.
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Agent.
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they
were written out in full according to applicable laws or
regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ----------Custodian-----------
(cust) (minor)
Under Uniform Gifts to Minors Act
----------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants in
common
Additional abbreviations may also be used though not in the
above list.
----------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
-----------------------------------------------------------------
(Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee)
-----------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip Code
of Assignee)
the within 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 option to effect Early
Settlement may be exercised only with respect to Purchase
Contracts underlying Growth PRIDES with an aggregate Stated
Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of
Common Stock deliverable upon such Early Settlement be registered
in the name of, and delivered, together with a check in payment
for any fractional share and any 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 REGISTERED HOLDER
of 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:
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<PAGE>
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
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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
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<PAGE>
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
COLLATERAL AGENT
Attention:
Re: Securities of Texas Utilities
Company (the "Company")
We hereby notify you in accordance with Section [4.1]
[4.2] of the Pledge Agreement, dated as of _______ ___, 1998,
among the Company, yourselves, as Collateral Agent, and
ourselves, as Purchase Contract Agent and as attorney-in-fact for
the holders of [Income PRIDES] [Growth PRIDES] from time to time,
that the holder of securities listed below (the "Holder") has
elected to substitute [$_____ aggregate [principal amount] of
[3-Year Treasury Securities and] [4-Year Treasury Securities]
[$_______ aggregate principal amount of [Series D Notes and]
[Series E Notes] or the appropriate Applicable Ownership Interest
in the Treasury Portfolio, as the case may be,] in exchange for
the [Pledged Debt Securities or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may
be,] [Pledged Treasury Securities] held by you in accordance with
the Pledge Agreement and has delivered to us a notice stating
that the Holder has Transferred [Treasury Securities] [Debt
Securities or the appropriate Applicable Ownership Interest in
the Treasury Portfolio, as the case may be,] to you, as
Collateral Agent. We hereby instruct you, upon receipt of such
[Pledged Treasury Securities] [Pledged Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be], and upon the payment by such
Holder of any applicable fees, to release the [Debt Securities or
the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be,] [Treasury Securities] related to
such [Income PRIDES] [Growth PRIDES] to us in accordance with the
Holder's instructions.
Date: _____________ By: ___________________________
Name:
Title:
Signature Guarantee: _____________________
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which
requirements include membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
<PAGE>
Please print name and address of Registered Holder electing
to substitute [Treasury Securities] [Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be,] for the [Pledged Debt Securities
or the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be,] [Pledged Treasury Securities]:
_______________________ _______________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
___________________________
___________________________
<PAGE>
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
Attention:
Re: Securities of Texas Utilities Company (the
"Company")
The undersigned Holder hereby notifies you that it has
delivered to The Chase Manhattan Bank, as Collateral Agent,
$_______ aggregate principal amount of [3-Year Treasury
Securities and] [4-Year Treasury Securities] [Series D Notes and]
[Series E Notes] or the appropriate Applicable Ownership Interest
in the Treasury Portfolio, as the case may be,] in exchange for
the [Pledged Debt Securities or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may
be,] [Pledged Treasury Securities] held by the Collateral Agent,
in accordance with Section [4.1][4.2] of the Pledge Agreement,
dated _______ ___, 1998, between you, the Company and the
Collateral Agent. The undersigned Holder has paid the Collateral
Agent all applicable fees relating to such exchange. The
undersigned Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the undersigned
Holder the [Pledged Debt Securities or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may
be,] [Pledged Treasury Securities] related to such [Income
PRIDES] [Growth PRIDES].
Dated: _______________ By: ______________________
Name:
Title:
Signature Guarantee: __________________
<PAGE>
Please print name and address of Registered Holder:
____________________________ ____________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
____________________________
____________________________
<PAGE>
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
Attention:
Re: Securities of Texas Utilities Company (the
"Company")
The undersigned Holder hereby irrevocably notifies you
in accordance with Section 5.4 of the Purchase Contract
Agreement, dated as of ______ ___, 1998 among the Company,
yourselves, as Purchase Contract Agent and as Attorney-in-Fact
for the Holders of the Purchase Contracts, that such Holder has
elected to pay to the Collateral Agent, on or prior to 11:00 a.m.
New York City time, on the Business Day immediately preceding the
[First] [Second] Purchase Contract Settlement Date, (in lawful
money of the United States by [certified or cashiers check or]
wire transfer, in each case in immediately available funds),
$_________ as the Purchase Price for the shares of Common Stock
issuable to such Holder by the Company under the related Purchase
Contract on the [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
____________________________
____________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2)
------------
-----------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
48 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
TEXAS UTILITIES COMPANY
(Exact name of obligor as specified in its charter)
Texas 75-1837355
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Energy Plaza, 1601 Bryan Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
-----------------
INCOME PRIDES, GROWTH PRIDES AND FELINE PRIDES
(Title of the indenture securities)
<PAGE>
ITEM 1. GENERAL INFORMATION.*
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Superintendent of Banks of the 2 Rector Street,
State of New York New York, N.Y. 10006
and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza,
New York, N.Y. 10045
Federal Deposit Insurance Corporation 550 17th Street, N.W.,
Washington, D.C. 20429
New York Clearing House Association New York, N.Y. 10005
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee,
describe each such affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file
with the Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture
Act of 1939 (the "Act") and Rule 24 of the Commission's Rules of
Practice.
1. - A copy of the Organization Certificate of The
Bank of New York (formerly Irving Trust
Company) as now in effect, which contains the
authority to commence business and a grant of
powers to exercise corporate trust powers.
(Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-
6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and
Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. - A copy of the existing By-laws of the
Trustee. (Exhibit 4 to Form T-1 filed with
Registration Statement No. 33-31019.)
6. - The consent of the Trustee required by
Section 321(b) of the Act. (Exhibit 6 to
Form T-1 filed with Registration Statement
No. 33-44051.)
7. - A copy of the latest report of condition of
the Trustee published pursuant to law or to
the requirements of its supervising or
examining authority.
----------------------
*Pursuant to General Instruction B, the Trustee has
responded only to Items 1, 2 and 16 of this form since to the
best of the knowledge of the Trustee the obligor is not in
default under any indenture under which the Trustee is a trustee.
<PAGE>
NOTE
Inasmuch as this Form T-1 is being filed prior to the
ascertainment by the Trustee of all facts on which to base a
responsive answer to Item 2, the answer to said Item is based on
incomplete information.
Item 2 may, however, be considered as correct unless
amended by an amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee,
The Bank of New York, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 9th day of July, 1998.
THE BANK OF NEW YORK
By: /s/ WALTER N. GITLIN
---------------------------------
Walter N. Gitlin
Vice President
- 2 -
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal
Reserve System, at the close of business March 31, 1998,
published in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of the Federal
Reserve Act.
Dollar Amounts
ASSETS in Thousands
------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin . . . . . . . . . . . . . $ 6,397,993
Interest-bearing balances . . . . . . . . . . . . 1,138,362
Securities:
Held-to-maturity securities . . . . . . . . . . . 1,062,074
Available-for-sale securities . . . . . . . . . . 4,167,240
Federal funds sold and Securities
purchased under agreements to resell . . . . . 391,650
Loans and lease financing
receivables:
Loans and leases, net of unearned
income . . . . . . . . . . . . . . 36,538,242
LESS: Allowance for loan and
lease losses . . . . . . . . . . . 631,725
LESS: Allocated transfer risk
reserve . . . . . . . . . . . . . . . 0
Loans and leases, net of unearned
income, allowance, and reserve . . . . . . . . 35,906,517
Assets held in trading accounts . . . . . . . . . . 2,145,149
Premises and fixed assets (including
capitalized leases) . . . . . . . . . . . . . . . 663,928
Other real estate owned . . . . . . . . . . . . . . 10,895
Investments in unconsolidated subsid-
iaries and associated companies . . . . . . . . . 237,991
Customers' liability to this bank on
acceptances outstanding . . . . . . . . . . . . . 992,747
Intangible assets . . . . . . . . . . . . . . . . . 1,072,517
Other assets . . . . . . . . . . . . . . . . . . . 1,643,173
-----------
Total assets . . . . . . . . . . . . . . . . . . . $55,830,236
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
-----------
Deposits:
In domestic offices . . . . . . . . . . . . . . . $24,849,054
Noninterest-bearing . . . . . . . . 10,011,442
Interest-bearing . . . . . . . . . 14,837,632
In foreign offices, Edge and
Agreement subsidiaries, and IBFs . . . . . . . . 15,319,002
Noninterest-bearing . . . . . . . . 707,820
Interest-bearing . . . . . . . . . 14,611,182
Federal funds purchased and Securities
sold under agreements to repurchase . . . . . . 1,906,066
Demand notes issued to the U.S.
Treasury . . . . . . . . . . . . . . . . . . . . 215,985
Trading liabilities . . . . . . . . . . . . . . . . 1,591,288
Other borrowed money:
With remaining maturity of one year or less . . . 1,991,119
With remaining maturity of more than
one year through three years . . . . . . . . . 0
With remaining maturity of more than
three years . . . . . . . . . . . . . . . . . . 25,574
Bank's liability on acceptances
executed and outstanding . . . . . . . . . . . . 998,145
Subordinated notes and debentures . . . . . . . . . 1,314,000
Other liabilities . . . . . . . . . . . . . . . . . 2,421,281
----------
Total liabilities . . . . . . . . . . . . . . . . . 50,631,514
----------
EQUITY CAPITAL
--------------
Common stock . . . . . . . . . . . . . . . . . . . 1,135,284
Surplus . . . . . . . . . . . . . . . . . . . . . . 731,319
Undivided profits and capital
reserves . . . . . . . . . . . . . . . . . . . . 3,328,050
Net unrealized holding gains (losses)
on available-for-sale securities . . . . . . . . 40,198
Cumulative foreign currency
translation adjustments . . . . . . . . . . . . . (36,129)
-----------
Total equity capital . . . . . . . . . . . . . . . 5,198,722
-----------
Total liabilities and equity capital . . . . . . . $55,830,236
===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Robert E. Keilman, Senior Vice President and Comptroller of
the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
Thomas A. Renyi )
Alan R. Griffith ) Directors
J. Carter Bacot )
